UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒						QUARTERLY REPORT PURSUANT TO SECTION 13 OR ~~15(d)~~15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2022

~~For the quarterly period ended September 30, 2021~~

orOR


☐						TRANSITION REPORT PURSUANT TO SECTION 13 OR ~~15(d)~~15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to _____________

~~For the transition period from to~~

Commission File Number: 001-38061

Warrior Met Coal, Inc.

(Exact name of registrant as specified in its charter)

Delaware

81-0706839

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

~~16243 Highway 216~~

16243 Highway 216, Brookwood,

Alabama

35444

(Address of Principal Executive Offices)

(Zip Code)

(205) 554-6150

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Exchange Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $.01 per share	HCC	New York Stock Exchange
Rights to Purchase Series A Junior Participating Preferred Stock, par value $0.01 per share	--	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

o☐

Non-accelerated filer

o☐

Smaller reporting company

☐

~~Emerging growth company~~

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ý

Number of shares of common stock outstanding as of October ~~29, 2021: 51,410,971~~31, 2022: 51,653,568

TABLE OF CONTENTS


Forward-Looking Statements		1

Part ~~I-Financial~~I. Financial Information		3
Item 1.	Financial Statements	43
	Condensed Statements of Operations for the three and nine months ended September 30, ~~2021~~2022 (Unaudited) and September 30, ~~2020~~2021 (Unaudited)	4
	Condensed Balance Sheets as of ~~September~~S eptember 30, ~~2021~~2022 (Unaudited) and December 31, ~~2020~~2021	5
	Condensed Statements of Changes in Stockholders' Equity for the three and nine months ended September 30, ~~2021~~2022 (Unaudited) and September 30, ~~2020~~2021 (Unaudited)	6
	Condensed Statements of Cash Flows for the nine months ended September 30, ~~2021~~2022 (Unaudited) and September 30, ~~2020~~2021 (Unaudited)	7
	Notes to Condensed Financial Statements	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	1918
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3433
Item 4.	Controls and Procedures	3534

Part ~~II -~~II. Other Information		3634
Item 1.	Legal Proceedings	3634
Item 1A.	Risk Factors	3635
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36
Item 3.	Defaults on Senior Securities	3736
Item 4.	Mine Safety Disclosures	37
Item 5.	Other Information	37
Item 6.	Exhibits	38

Signatures		39

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this "Form 10-Q" or "this report") includes statements of our expectations, intentions, plans and beliefs that constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and are intended to come within the safe harbor protection provided by those sections. These statements, which involve risks and uncertainties, relate to analyses and other information that are based on forecasts of future results and estimates of amounts not yet determinable and may also relate to our future prospects, developments and business strategies, including any potential changes to our production and sales volumes as a result of our negotiations with ~~our labor union.~~the United Mine Workers of America (the "UMWA"). We have used the words “anticipate,” “approximately,” “assume,” “believe,” “could,” “contemplate,” “continue,” “estimate,” “expect,” “target,” “future,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should” and similar terms and phrases, including in references to assumptions, in this report to identify forward-looking statements. These forward-looking statements are made based on expectations and beliefs concerning future events affecting us and are subject to uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control, that could cause our actual results to differ materially from those matters expressed in or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to:

•the impact of global pandemics, such as the ~~COVID-19 (as defined below)~~novel coronavirus (“COVID-19”) pandemic, including its impact on our business, employees, suppliers and customers, the metallurgical ("met") coal and steel industries, and global economic markets;

•the impacts of inflation on our business, including on our costs and our profitability;

•our relationships with, and other conditions affecting, our customers;

•successful implementation of our business strategies;

•unavailability of, or price increases in, the transportation of our met coal;

•significant cost increases and fluctuations, and delay in the delivery of raw materials, mining equipment and purchased components;

•work stoppages, negotiation of labor contracts, employee relations and workforce availability;

•competition and foreign currency fluctuations;

•litigation, including claims not yet asserted;

•terrorist attacks or security threats, including cybersecurity threats;

•global steel demand and the downstream impact on met coal prices;

•impact of weather and natural disasters on demand and production;

•a substantial or extended decline in pricing or demand for met coal;

•inherent difficulties and challenges in the coal mining industry that are beyond our control;

•our ability to develop or acquire met coal reserves in an economically feasible manner;

•geologic, equipment, permitting, site access, operational risks and new technologies related to mining;

•inaccuracies in our estimates of our met coal reserves;

•costs associated with our workers’ compensation benefits;

•challenges to our licenses, permits and other authorizations;

•challenges associated with environmental, health and safety laws and regulations;

•regulatory requirements associated with federal, state and local regulatory agencies, and such agencies’ authority to order temporary or permanent closure of our mines;

•climate change concerns and our operations’ impact on the environment;

•failure to obtain or renew surety bonds on acceptable terms, which could affect our ability to secure reclamation and coal lease obligations;

•our obligations surrounding reclamation and mine closure;

•our substantial indebtedness and debt service requirements;

��•our ability to comply with covenants in our ~~asset-based revolving credit facility~~ABL Facility (as ~~amended and restated, the "ABL Facility")~~defined below) and the Indenture (as defined below);

•adequate liquidity and the cost, availability and access to capital and financial markets;

•our expectations regarding our future cash tax rate as well as our ability to effectively utilize our net operating loss carry forwards ~~("NOLs"~~(“NOLs”);

•our ability to continue paying our quarterly dividend or pay any special dividend;

•the timing and amount of any stock repurchases we make under our Stock Repurchase Program (as defined below) or otherwise; ~~and~~

•any consequences related to our transfer restrictions under our certificate of incorporation and our NOL rights ~~agreement.~~agreement; and

•geopolitical events, including the effects of the Russia-Ukraine war.

These forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. Forward-looking statements should, therefore, be considered in light of various factors, including those set forth under “Part II, Item 1A. Risk Factors,” “Part I, Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Form 10-Q, and those set forth from time to time in our other filings with the Securities and Exchange Commission (the “SEC”). These documents are available through our website at www.warriormetcoal.com or through the SEC's Electronic Data Gathering and Analysis Retrieval system at http://www.sec.gov. In light of such risks and uncertainties, we caution you not to place undue reliance on these forward-looking statements.

When considering forward-looking statements made by us in this Form 10-Q, or elsewhere, such statements speak only as of the date on which we make them. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect us. We have no duty to, and do not intend to, update or revise the forward-looking statements in this Form 10-Q after the date of this Form 10-Q, except as may be required by law. In light of these risks and uncertainties, you should keep in mind that any forward-looking statement made in this Form 10-Q or elsewhere might not occur.

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

WARRIOR MET COAL, INC.

CONDENSED STATEMENTS OF OPERATIONS

(in thousands, except ~~per share~~per-share amounts)

(Unaudited)


		For the three months ended September 30,				For the nine months ended September 30,					For the three months ended September 30,				For the nine months ended September 30,
		2021		2020		2021		2020			2022		2021		2022		2021
Revenues:	Revenues:									Revenues:
Sales	Sales	$	199,745	$	175,229	$	631,493	$	555,610	Sales	$	371,944	$	199,745	$	1,377,665	$	631,493
Other revenues	Other revenues	2,722		4,835		12,178		14,875		Other revenues	18,236		2,722		16,323		12,178
Total revenues	Total revenues	202,467		180,064		643,671		570,485		Total revenues	390,180		202,467		1,393,988		643,671
Costs and expenses:	Costs and expenses:									Costs and expenses:
Cost of sales (exclusive of items shown separately below)	Cost of sales (exclusive of items shown separately below)	91,973		151,370		399,088		433,661		Cost of sales (exclusive of items shown separately below)	203,441		91,973		529,869		399,088
Cost of other revenues (exclusive of items shown separately below)	Cost of other revenues (exclusive of items shown separately below)	6,654		7,064		22,792		22,267		Cost of other revenues (exclusive of items shown separately below)	8,417		6,654		26,120		22,792
Depreciation and depletion	Depreciation and depletion	28,967		27,965		102,021		78,813		Depreciation and depletion	30,805		28,967		86,973		102,021
Selling, general and administrative	Selling, general and administrative	7,430		8,192		26,182		25,105		Selling, general and administrative	10,557		7,430		36,985		26,182
Business interruption	Business interruption	6,872		—		13,892		—		Business interruption	7,106		6,872		20,084		13,892
Idle mine	Idle mine	9,327		—		20,203		—		Idle mine	5,418		9,327		10,141		20,203
Total costs and expenses	Total costs and expenses	151,223		194,591		584,178		559,846		Total costs and expenses	265,744		151,223		710,172		584,178
Operating income (loss)		51,244		(14,527)		59,493		10,639
Operating income										Operating income	124,436		51,244		683,816		59,493
Interest expense, net	Interest expense, net	(8,784)		(8,059)		(25,954)		(23,847)		Interest expense, net	(5,701)		(8,784)		(20,706)		(25,954)

Other income	Other income	1,400		—		1,291		1,822		Other income	—		1,400		675		1,291
Income (loss) before income tax expense (benefit)		43,860		(22,586)		34,830		(11,386)
Income tax expense (benefit)		5,433		(8,152)		22,439		(9,336)
Net income (loss)		38,427		$	(14,434)	$	12,391	$	(2,050)
Basic and diluted net income (loss) per share:
Net income (loss) per share—basic		$	0.75	$	(0.28)	$	0.24	$	(0.04)
Net income (loss) per share—diluted		$	0.74	$	(0.28)	$	0.24	$	(0.04)
Income before income tax expense										Income before income tax expense	118,735		43,860		663,785		34,830
Income tax expense										Income tax expense	20,332		5,433		122,141		22,439
Net income										Net income	$	98,403	$	38,427	$	541,644	$	12,391
Basic and diluted net income per share:										Basic and diluted net income per share:
Net income per share—basic										Net income per share—basic	$	1.91	$	0.75	$	10.49	$	0.24
Net income per share—diluted										Net income per share—diluted	$	1.90	$	0.74	$	10.48	$	0.24
Weighted average number of shares outstanding—basic	Weighted average number of shares outstanding—basic	51,416		51,190		51,315		51,161		Weighted average number of shares outstanding—basic	51,654		51,416		51,612		51,315
Weighted average number of shares outstanding—diluted	Weighted average number of shares outstanding—diluted	51,585		51,190		51,424		51,161		Weighted average number of shares outstanding—diluted	51,744		51,585		51,699		51,424
Dividends per share:	Dividends per share:	$	0.05	$	0.05	$	0.15	$	0.15	Dividends per share:	$	0.86	$	0.05	$	1.48	$	0.15

The accompanying notes are an integral part of these condensed financial statements.

WARRIOR MET COAL, INC.

CONDENSED BALANCE SHEETS

(in ~~thousands)~~thousands, except share and per-share data)


		September 30, 2021 (Unaudited)		December 31, 2020			September 30, 2022 (Unaudited)		December 31, 2021

ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	268,395	$	211,916	Cash and cash equivalents	$	745,666	$	395,839
Short-term investments	Short-term investments	8,505		8,504		Short-term investments	8,546		8,505
Trade accounts receivable	Trade accounts receivable	73,270		83,298		Trade accounts receivable	215,172		122,150

Inventories, net	Inventories, net	94,026		118,713		Inventories, net	143,789		59,619
Prepaid expenses and other receivables	Prepaid expenses and other receivables	35,034		45,052		Prepaid expenses and other receivables	28,390		41,088
Total current assets	Total current assets	479,230		467,483		Total current assets	1,141,563		627,201
Mineral interests, net	Mineral interests, net	94,894		100,855		Mineral interests, net	90,502		93,180
Property, plant and equipment, net	Property, plant and equipment, net	606,750		637,108		Property, plant and equipment, net	677,718		603,412

Deferred income taxes	Deferred income taxes	151,934		174,372		Deferred income taxes	5,181		125,276
Other long-term assets	Other long-term assets	11,799		14,118		Other long-term assets	20,319		15,142
Total assets	Total assets	$	1,344,607	$	1,393,936	Total assets	$	1,935,283	$	1,464,211
LIABILITIES AND STOCKHOLDERS’ EQUITY	LIABILITIES AND STOCKHOLDERS’ EQUITY					LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable	Accounts payable	$	39,138	$	59,110	Accounts payable	$	51,885	$	33,829
Accrued expenses	Accrued expenses	58,114		86,108		Accrued expenses	78,797		54,847
Short term financing lease liabilities		22,421		14,385
Short-term financing lease liabilities						Short-term financing lease liabilities	23,083		23,622
Other current liabilities	Other current liabilities	14,721		10,715		Other current liabilities	9,184		9,830

Total current liabilities	Total current liabilities	134,394		170,318		Total current liabilities	162,949		122,128
Long-term debt	Long-term debt	340,491		379,908		Long-term debt	303,916		339,806
Asset retirement obligations	Asset retirement obligations	62,340		57,553		Asset retirement obligations	69,583		65,536
Long term financing lease liabilities		34,805		24,091
Long-term financing lease liabilities						Long-term financing lease liabilities	15,033		28,434
Other long-term liabilities	Other long-term liabilities	37,214		36,825		Other long-term liabilities	36,169		36,324
Total liabilities	Total liabilities	609,244		668,695		Total liabilities	587,650		592,228

Stockholders’ Equity:	Stockholders’ Equity:					Stockholders’ Equity:
Common stock, $0.01 par value per share (Authorized -140,000,000 shares as of September 30, 2021 and December 31, 2020, 53,632,812 issued and 51,410,971 outstanding as of September 30, 2021 and 53,408,040 issued and 51,186,199 outstanding as of December 31, 2020)		536		534
Preferred stock, $0.01 par value per share (10,000,000 shares authorized, 0 shares issued and outstanding)		—		—
Treasury stock, at cost (2,221,841 shares as of September 30, 2021 and December 31, 2020)		(50,576)		(50,576)
Common stock, $0.01 par value, (140,000,000 shares authorized as of September 30, 2022 and December 31, 2021; 53,875,409 issued and 51,653,568 outstanding as of September 30, 2022; 53,659,643 issued and 51,437,802 outstanding as of December 31, 2021)						Common stock, $0.01 par value, (140,000,000 shares authorized as of September 30, 2022 and December 31, 2021; 53,875,409 issued and 51,653,568 outstanding as of September 30, 2022; 53,659,643 issued and 51,437,802 outstanding as of December 31, 2021)	539		537
Preferred stock, $0.01 par value per share (10,000,000 shares authorized; no shares issued and outstanding)						Preferred stock, $0.01 par value per share (10,000,000 shares authorized; no shares issued and outstanding)	—		—
Treasury stock, at cost (2,221,841 shares as of September 30, 2022 and December 31, 2021)						Treasury stock, at cost (2,221,841 shares as of September 30, 2022 and December 31, 2021)	(50,576)		(50,576)
Additional paid in capital	Additional paid in capital	255,317		249,746		Additional paid in capital	266,585		256,059
Retained earnings	Retained earnings	530,086		525,537		Retained earnings	1,131,085		665,963
Total stockholders’ equity	Total stockholders’ equity	735,363		725,241		Total stockholders’ equity	1,347,633		871,983
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	1,344,607	$	1,393,936	Total liabilities and stockholders’ equity	$	1,935,283	$	1,464,211

The accompanying notes are an integral part of these condensed financial statements.

WARRIOR MET COAL, INC.

CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(in thousands)

(Unaudited)


		For the three months ended September 30,				For the nine months ended September 30,					For the three months ended September 30,				For the nine months ended September 30,
		2021		2020		2021		2020			2022		2021		2022		2021

Common Stock	Common Stock									Common Stock
Balance, beginning of period	Balance, beginning of period	$	536	$	533	$	534	$	533	Balance, beginning of period	$	537	$	536	$	537	$	534
Issuance of shares	Issuance of shares	—		—		2		—		Issuance of shares	2		—		2		2
Balance, end of period	Balance, end of period	536		533		536		533		Balance, end of period	539		536		539		536
Preferred Stock	Preferred Stock									Preferred Stock
Balance, beginning of period	Balance, beginning of period	—		—		—		—		Balance, beginning of period	—		—		—		—
Balance, end of period	Balance, end of period	—		—		—		—		Balance, end of period	—		—		—		—
Treasury Stock	Treasury Stock									Treasury Stock
Balance, beginning of period	Balance, beginning of period	(50,576)		(50,576)		(50,576)		(50,576)		Balance, beginning of period	(50,576)		(50,576)		(50,576)		(50,576)

Balance, end of period	Balance, end of period	(50,576)		(50,576)		(50,576)		(50,576)		Balance, end of period	(50,576)		(50,576)		(50,576)		(50,576)
Additional Paid in Capital	Additional Paid in Capital									Additional Paid in Capital
Balance, beginning of period	Balance, beginning of period	253,922		246,126		249,746		243,932		Balance, beginning of period	263,991		253,922		256,059		249,746
Stock compensation		1,395		1,781		8,377		5,247
Stock based compensation expense										Stock based compensation expense	2,599		1,395		14,250		8,377

Other	Other	—		—		(2,806)		(1,272)		Other	(5)		—		(3,724)		(2,806)
Balance, end of period	Balance, end of period	255,317		247,907		255,317		247,907		Balance, end of period	266,585		255,317		266,585		255,317
Retained Earnings	Retained Earnings									Retained Earnings
Balance, beginning of period	Balance, beginning of period	494,272		578,880		525,537		571,693		Balance, beginning of period	1,077,105		494,272		665,963		525,537
Net income (loss)		38,427		(14,434)		12,391		(2,050)
Dividends paid		(2,613)		(2,599)		(7,842)		(7,796)
Net income										Net income	98,403		38,427		541,644		12,391
Dividends declared										Dividends declared	(44,423)		(2,613)		(76,522)		(7,842)

Balance, end of period	Balance, end of period	530,086		561,847		530,086		561,847		Balance, end of period	1,131,085		530,086		1,131,085		530,086
Total Stockholders' Equity	Total Stockholders' Equity	$	735,363	$	759,711	$	735,363	$	759,711	Total Stockholders' Equity	$	1,347,633	$	735,363	$	1,347,633	$	735,363

The accompanying notes are an integral part of these condensed financial statements.

WARRIOR MET COAL, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)


		For the nine months ended September 30,			For the nine months ended September 30,
			2021			2020			2022		2021

OPERATING ACTIVITIES	OPERATING ACTIVITIES							OPERATING ACTIVITIES
Net income (loss)			$	12,391		$	(2,050)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Net income								Net income	$	541,644	$	12,391
Adjustments to reconcile net income to net cash provided by operating activities:								Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and depletion	Depreciation and depletion		102,021			78,813		Depreciation and depletion	86,973		102,021
Deferred income tax expense (benefit)			22,439			(9,268)
Deferred income tax expense								Deferred income tax expense	122,208		22,439
Stock based compensation expense	Stock based compensation expense		8,763			5,634		Stock based compensation expense	14,250		8,763
Amortization of debt issuance costs and debt discount/premium, net			1,289			1,125
Amortization of debt issuance costs and debt discount, net								Amortization of debt issuance costs and debt discount, net	2,869		1,289
Accretion of asset retirement obligations	Accretion of asset retirement obligations		2,416			2,198		Accretion of asset retirement obligations	2,666		2,416

Mark-to-market loss on gas hedges	Mark-to-market loss on gas hedges		8,661			—		Mark-to-market loss on gas hedges	4,043		8,661
Changes in operating assets and liabilities:	Changes in operating assets and liabilities:							Changes in operating assets and liabilities:
Trade accounts receivable	Trade accounts receivable		10,028			18,054		Trade accounts receivable	(93,022)		10,028
Income tax receivable			—			24,274

Inventories	Inventories		18,703			(43,887)		Inventories	(73,258)		18,703
Prepaid expenses and other receivables	Prepaid expenses and other receivables		10,548			(5,906)		Prepaid expenses and other receivables	8,879		10,548
Accounts payable	Accounts payable		(16,746)			11,169		Accounts payable	6,609		(16,746)
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities		(10,100)			(4,699)		Accrued expenses and other current liabilities	20,044		(10,100)
Other	Other		6,417			6,696		Other	3,005		6,417
Net cash provided by operating activities	Net cash provided by operating activities		176,830			82,153		Net cash provided by operating activities	646,910		176,830
INVESTING ACTIVITIES	INVESTING ACTIVITIES							INVESTING ACTIVITIES
Purchase of property, plant and equipment	Purchase of property, plant and equipment		(34,149)			(72,059)		Purchase of property, plant and equipment	(120,022)		(34,149)
Deferred mine development costs	Deferred mine development costs		(13,462)			(13,257)		Deferred mine development costs	(35,690)		(13,462)
Acquisition of leased mineral rights								Acquisition of leased mineral rights	(3,500)		—
Acquisition of Black Warrior Methane and Black Warrior Transmission, net of $2.8 million cash acquired								Acquisition of Black Warrior Methane and Black Warrior Transmission, net of $2.8 million cash acquired	2,533		—
Proceeds from sale of property, plant and equipment	Proceeds from sale of property, plant and equipment		192			—		Proceeds from sale of property, plant and equipment	—		192

Sale of short-term investments			—			14,733
Purchases of short-term investments			—			(8,500)

Net cash used in investing activities	Net cash used in investing activities		(47,419)			(79,083)		Net cash used in investing activities	(156,679)		(47,419)
FINANCING ACTIVITIES	FINANCING ACTIVITIES							FINANCING ACTIVITIES
Dividends paid	Dividends paid		(7,842)			(7,796)		Dividends paid	(76,522)		(7,842)
Borrowings under ABL Facility			—			70,000

Repayments under ABL Facility	Repayments under ABL Facility		(40,000)			(30,000)		Repayments under ABL Facility	—		(40,000)

Retirements of debt								Retirements of debt	(37,758)		—
Principal repayments of finance lease obligations	Principal repayments of finance lease obligations		(22,284)			(10,972)		Principal repayments of finance lease obligations	(22,400)		(22,284)

Other	Other		(2,806)			(1,272)		Other	(3,724)		(2,806)
Net cash (used in) provided by financing activities			(72,932)			19,960
Net cash used in financing activities								Net cash used in financing activities	(140,404)		(72,932)
Net increase in cash and cash equivalents	Net increase in cash and cash equivalents		56,479			23,030		Net increase in cash and cash equivalents	349,827		56,479
Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period		211,916			193,383		Cash and cash equivalents at beginning of period	395,839		211,916
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period		$	268,395		$	216,413	Cash and cash equivalents at end of period	$	745,666	$	268,395

The accompanying notes are an integral part of these condensed financial statements.

WARRIOR MET COAL, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

NINE MONTHS ENDED SEPTEMBER 30, ~~2021~~2022 (UNAUDITED)

Note 1—1. Business and Basis of Presentation

Description of the Business

Warrior Met Coal, Inc. (the "Company") is a ~~U.S. based~~U.S.-based environmentally and socially minded supplier to the global steel industry. The Company is dedicated entirely to mining non-thermal met coal used as a critical component of steel production by metal manufacturers in Europe, South America and Asia. The Company is a large-scale, low-cost producer and exporter of premium met coal, also known as hard-coking coal ("HCC"), operating highly efficient longwall operations in its underground mines based in Alabama. The HCC that the Company produces from the Blue Creek coal seam contains very low sulfur, has strong coking properties and is of a similar quality to coal referred to as premium HCC produced in Australia. The Company also generates ancillary revenues from the sale of natural gas extracted as a byproduct from the underground coal mines and royalty revenues from leased properties.

Basis of Presentation

The accompanying financial statements are presented in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by ~~generally accepted accounting principles~~GAAP for complete financial statements. In our opinion, the financial statements include all adjustments (consisting of normal recurring accruals) necessary in order to make the financial statements not misleading. For further information, refer to the financial statements and related notes included in the Company's Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021 (the ~~"2020~~"2021 Annual Report"). Operating results for the three and nine months ended September 30, ~~2021~~2022 are not necessarily indicative of the final results that may be expected for the year ended December 31, ~~2021.~~2022. The balance sheet at December 31, ~~2020~~2021 has been derived from the audited financial statements for the year ended December 31, ~~2020~~2021 included in the ~~2020~~2021 Annual Report.

Collective Bargaining Agreement

The Company's Collective Bargaining Agreement ("CBA") contract with the ~~United Mine Workers of America ("UMWA")~~UMWA expired on April 1, 2021. While the Company continues to engage in good faith negotiations with the UMWA, the Company has not reached a new contract and the UMWA is engaging in a strike. As a result of the strike, the Company ~~has~~initially idled Mine No. 4 and scaled back operations at Mine No. 7. In ~~connection with~~ the ~~idling~~first quarter of 2022, the Company restarted operations at Mine No. 4. Due to the reduced operations at Mine No. 4 and ~~reduced operations at~~ Mine No. 7, the Company incurred idle mine expenses of $5.4 million and $10.1 million, for the three and nine months ended September 30, 2022 and $9.3 million and $20.2 million for the three and nine months ended September 30, 2021, respectively. These expenses are reported separately in the Condensed Statements of Operations and represent expenses incurred, such as electricity, insurance and maintenance labor. The Company has also incurred business interruption expenses of approximately $7.1 million and $20.1 million, for the three and nine months ended September 30, 2022 and $6.9 million and $13.9 million ~~of business interruption expenses~~ for the three and nine months ended September 30, 2021, respectively, which represent non-recurring expenses that are directly attributable to the ongoing UMWA strike for incremental safety and security, labor negotiations and other expenses. These expenses are also presented separately in the Condensed Statements of Operations.

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

On March 1, 2022, the Company acquired the remaining 50% interest in BWM and BWT for $0.3 million. The purchase consideration has been allocated to the assets acquired and liabilities assumed based upon their estimated fair values at the date of acquisition. The acquisition is not deemed to be material to the condensed financial statements.

Note 2—2. Summary of Significant Accounting Policies

The Company's significant accounting policies are consistent with those disclosed in Note 2 to its audited financial statements included in the ~~2020~~2021 Annual Report, except for changes related to new accounting pronouncements described in "New Accounting Pronouncements."

Cash and Cash Equivalents

Cash and cash equivalents include short-term deposits and highly liquid investments that have original maturities of three months or less when purchased and are stated at cost, which approximates fair value.

WARRIOR MET COAL, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS (Continued)

NINE MONTHS ENDED SEPTEMBER 30, 2022 (UNAUDITED)

Short-Term Investments

Instruments with maturities greater than three months, but less than twelve months, are included in short-term investments. The Company purchases United States Treasury bills with maturities ranging from six to twelve months which are classified as held to maturity and are carried at amortized cost, which approximates fair value. The Company also purchases fixed income securities and certificates of deposits with varying maturities that are classified as available for sale and are carried at fair value. Securities classified as held to maturity are those securities that management has the intent and ability to hold to maturity.

~~WARRIOR MET COAL, INC.~~

~~NOTES TO CONDENSED FINANCIAL STATEMENTS (Continued)~~

~~NINE MONTHS ENDED SEPTEMBER 30, 2021 (UNAUDITED)~~

As of September 30, ~~2021~~2022 and December 31, ~~2020,~~2021, short-term investments consisted of $8.5 million in cash and fixed income securities. The short-term investments are posted as collateral for the self-insured black lung related claims asserted by or on behalf of former employees of Walter Energy, Inc. ("Walter Energy") and its subsidiaries, which were assumed by the Company and relate to periods prior to March 31, 2016.

Revenue Recognition

Revenue is recognized when performance obligations under the terms of a contract with the Company's customers are satisfied; for all contracts this occurs when control of the promised goods ~~have~~has been transferred to its customers. For coal shipments to domestic customers via rail, control is transferred when the railcar is loaded. For coal shipments to international customers via ocean vessel, control is transferred when the vessel is loaded at the Port of Mobile, Alabama. For natural gas sales, control is transferred when the gas has been transferred to the pipeline. Revenue is disaggregated between coal sales within the Company's mining segment and natural gas sales which is included in all other revenues, as disclosed in Note ~~14.~~

13.

Since February 2017, the Company has had an arrangement with XCoal Energy & Resources ("XCoal") to serve as XCoal's strategic partner for exports of low-volatility ~~hard coking coal.~~HCC. Under this arrangement, XCoal takes title to and markets coal that the Company would historically have sold on the spot market, in an amount of the greater of (i) 10% of the Company's total production during the applicable term of the arrangement or (ii) 250,000 metric tons. During the three and nine months ended September 30, 2022, XCoal accounted for approximately $69.8 million, or 20.6% of total sales, and $281.3 million, or 20.7% of total sales, respectively. During the three and nine months ended September 30, 2021, ~~and 2020,~~ XCoal accounted for approximately $122.3 million, or 61.1% of total sales, and ~~$38.7 million, or 22.1% of total sales, respectively. During the nine months ended September 30, 2021 and 2020, XCoal accounted for approximately~~ $370.4 million, or 58.5% of total sales, ~~and $82.3 million, or 14.8% of total sales,~~ respectively. ~~The increase in sales to XCoal in the current period is primarily driven by sales into China.~~

Trade Accounts Receivable and Allowance for Credit Losses

Trade accounts receivable represent customer obligations that are derived from revenue recognized from contracts with customers. Credit is extended based on an evaluation of the individual customer's financial condition. The Company maintains trade credit insurance on the majority of its customers and the geographic regions of coal shipments to these customers. In some instances, the Company requires letters of credit, cash collateral or prepayments from its customers on or before shipment to mitigate the risk of loss. These efforts have consistently resulted in the Company recognizing no historical credit losses. The Company also has never had to have a claim against its trade credit insurance policy.

In order to estimate the allowance for credit losses on trade accounts receivable, the Company utilizes an aging approach in which potential impairment is calculated based on how long a receivable has been outstanding (e.g., current, 1-31 days, 31-60 days, etc.). The Company calculates an expected credit loss rate based on the Company’s historical credit loss rate, the risk characteristics of our customers, and the current ~~metallurgical~~met coal and steel market environments. As of September 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the estimated allowance for credit losses was immaterial and did not have a material impact on the Company's financial statements.

New Accounting Pronouncements

In ~~December 2019,~~November 2021, the Financial Accounting Standards Board ("FASB") issued ASU ~~2019-12, “Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes,~~2021-10, “Disclosures by Business Entities about Government Assistance,” which ~~is intended~~requires business entities to ~~simplify various aspects~~make annual disclosures about transactions with a government accounted for by analogizing to a grant or contribution accounting model. The required annual disclosures include the nature of the transaction, the related to accounting ~~for income taxes. This ASU removes certain exceptions to~~policy, the ~~general principles~~financial statement line items affected and the amounts reflected in ~~Topic 740~~the current period financial statements, and ~~also clarifies~~any significant terms and ~~amends existing guidance to improve consistent application.~~conditions. The ASU is effective for fiscal years beginning after December 15, ~~2020.~~2021. The ~~Company adopted the standard as~~adoption of ~~January 1, 2021 with no~~this ASU is not expected to have a material impact to the Company's results of operations, financial condition, cash flows or financial statement presentation.

WARRIOR MET COAL, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS (Continued)

NINE MONTHS ENDED SEPTEMBER 30, ~~2021~~2022 (UNAUDITED)

Note 3—3. Inventories, net

Inventories, net summarized as of September 30, 2022 and December 31, 2021 are ~~summarized~~ as follows (in thousands):


		September 30, 2021		December 31, 2020			September 30, 2022		December 31, 2021
Coal	Coal	$	53,161	$	86,272	Coal	$	101,144	$	24,185
Raw materials, parts, supplies and other, net	Raw materials, parts, supplies and other, net	40,865		32,441		Raw materials, parts, supplies and other, net	42,645		35,434
Total inventories, net	Total inventories, net	$	94,026	$	118,713	Total inventories, net	$	143,789	$	59,619

Note 4—4. Income Taxes

For the three and nine months ended September 30, 2022, the Company estimated its annual effective tax rate and applied this effective tax rate to its year-to-date pretax income at the end of the interim reporting period. The tax effect of unusual or infrequently occurring items, including the effects of changes in tax laws or rates and changes in judgment about the realizability of deferred tax assets, are reported in the interim period in which they occur. For the three and nine months ended September 30, 2022, the Company had an income tax expense of $20.3 million and $122.1 million, respectively.

For the three and nine months ended September 30, 2021, the Company utilized a discrete period method to calculate taxes, as it ~~does~~did not believe that the annual effective tax rate method ~~represents~~represented a reliable estimate given the ~~current~~ uncertainty ~~surrounding~~at the ~~current CBA contract negotiations with the UMWA,~~time surrounding the COVID-19 pandemic, the Chinese ban on Australian coal, the CBA contract negotiations with the UMWA and other potentially disruptive factors and its impact on the Company's annual guidance. For the three and nine months ended September 30, 2021, the Company had an income tax expense of $5.4 million and $22.4 million, respectively.

The income tax expense of $5.4 million for the three months ended September 30, 2021, was primarily due to a pre-tax operating income combined with the Internal Revenue Code Section 45I Marginal Well Credit ("Section 45I Credit"). The Section 45I Credit is a production-based tax credit that provides a credit for qualified natural gas production. The $22.4 million of income tax expense for the nine months ended September 30, 2021 iswas primarily due to the establishment of a non-cash $47.8 million state deferred income tax asset valuation allowance ~~discussed below,~~ offset partially by a net non-cash income tax benefit of $22.9 million due to the remeasurement of state deferred income tax assets and liabilities and $2.5 million of net income tax expense due to pre-tax operating income for the period, the ~~Internal Revenue Code ("IRC")~~ Section 45I ~~Marginal Well~~ Credit, depletion and other adjustments.

On August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 (“IRA”) into law. The ~~Marginal Well Credit is~~IRA contains a ~~production-based~~number of revisions to the Internal Revenue Code, including a 15% corporate minimum income tax ~~credit that provides~~and a 1% excise tax on corporate stock repurchases in tax years beginning after December 31, 2022. While these tax law changes have no immediate effect and are not expected to have a material adverse effect on our results of operations going forward, we will continue to evaluate its impact as further information becomes available.

Note 5. Debt

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


	September 30, 2022		December 31, 2021		Weighted Average Interest Rate	Final Maturity
Senior Secured Notes	$	312,242	$	350,000	7.875%	December 2028
ABL Borrowings	—		—		Varies(1)	December 2026
Debt discount	(8,326)		(10,194)
Total debt	303,916		339,806
Less: current debt	—		—
Total long-term debt	$	303,916	$	339,806

(1) Borrowings under the ABL Facility bear interest at a rate equal to Secured Overnight Financing Rate ("SOFR") ranging from 1.5% to 2.0%, plus a credit ~~for qualified natural gas production. The credit~~adjustment spread, ranging currently from 0.11448% to 0.42826%, or an alternate base rate plus an applicable margin, which is ~~phased out when natural gas prices exceed certain levels. The Company had income tax benefit of $8.2 million and $9.3 million for~~determined based on the three and nine months ended September 30, 2020, respectively. The income tax benefit of $9.3 million was due to a $3.3 million income tax benefit from the Section 45I Marginal Well Credit and other discrete items, a $3.2 million income tax benefit from depletion expense and a $2.9 million income tax benefit from the loss recognized before income taxes.

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

~~The Act makes several changes to the state’s business tax structure. Among the provisions~~average availability of the ~~Act, is~~commitments under the ~~repeal of the so-called corporate income tax “throwback rule.” That rule required all sales originating in Alabama and delivered~~ABL Facility, ranging from 0.5% to a jurisdiction where the seller was not subject to tax, to be included in the seller’s Alabama income tax base. Thus, prior to repeal of the throwback rule, the Company had to rely on its Alabama NOL carryforwards to shelter taxes imposed under such throwback rule. As a result of the now repealed throwback rule, effective January 1, 2021, all such sales should now be excluded from Alabama taxable income without the need to utilize Alabama NOLs. As a result of the repeal of the throwback rule, in the first quarter of 2021, the Company remeasured its Alabama deferred income tax assets and liabilities and recorded the non-cash income tax benefit noted above of $22.9 million. Additionally, the Company determined that it is not more likely than not that the Company would have sufficient taxable income to utilize all of the Company’s Alabama deferred income tax assets prior to expiration. Therefore, in the first quarter of 2021, the Company established a non-cash valuation allowance of $47.8 million against such deferred income tax assets.

~~The following table shows the balance of our state deferred income tax asset valuation allowance and the associated activity during the nine months ended September 30, 2021:~~


1.0%.	~~September 30, 2021~~
~~Beginning balance~~	$	—
~~Addition - current tax expense~~	~~47,787~~
~~Ending balance~~	$	~~47,787~~

WARRIOR MET COAL, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS (Continued)

NINE MONTHS ENDED SEPTEMBER 30, ~~2021~~2022 (UNAUDITED)

~~Note 5—Debt~~

~~Debt consisted of the following (in thousands):~~

September 30,
2021 December 31, 2020 Weighted Average Interest Rate at September 30, 2021 Final Maturity
Senior Secured Notes $ 343,435 $ 343,435 8% 2024
ABL Borrowings — 40,000 4% 2023
Debt discount/premium, net (2,944) (3,527)
Total debt 340,491 379,908
Less: current debt — —
Total long-term debt $ 340,491 $ 379,908

Senior Secured Notes

On ~~November 2, 2017,~~December 6, 2021, the Company issued $350.0 ~~million aggregate principal amount of its 8.00% Senior Secured Notes due 2024 (the "Original Notes"). It then issued an additional $125.0~~ million in aggregate principal amount of ~~its~~7.875% senior secured notes due 2028 (the “Notes”) at an initial price of 99.343% of their face amount. The Notes were issued to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and to certain non-U.S. persons in transactions outside the United States in accordance with Regulation S under the Securities Act. The Company used the net proceeds of the offering of the Notes, together with cash on hand, to fund the redemption of all of the Company’s outstanding 8.00% ~~Senior Secured Notes~~senior secured notes due 2024 (the ~~“New~~“Existing Notes” ~~and, together with the Original Notes, the "Notes") on March 1, 2018. The New Notes were issued as "Additional Notes" under the indenture dated as of November 2, 2017 (the "Original Indenture"~~), ~~among~~including payment of the Company, the subsidiary guarantors party thereto and Wilmington Trust, National Association, as trustee and priority lien collateral trustee, as supplemented by the First Supplemental Indenture, dated as of March 1, 2018 (the "First Supplemental Indenture" and, the Original Indenture as supplemented thereby and by the Second Supplemental Indenture, dated as of March 2, 2018, the "Indenture").redemption premium in connection with such redemption. The Notes will mature on ~~November~~December 1, ~~2024 and interest is payable on May 1 and November 1 of each year.~~2028.

~~ABL Facility~~

On March 24, 2020, the Company borrowed $70.0 million in a partial draw of the ABL Facility (the “ABL Draw”) as a precautionary measure in order to increase the Company’s cash position and preserve financial flexibility in light of the current uncertainty resulting from the COVID-19 outbreak. In June 2020, the Company reduced the outstanding principal amount of the ABL Draw by $30.0 million and duringDuring the three months ended September 30, 2022, the Company repurchased in the open market and extinguished approximately $37.8 million principal amount of our Notes. In connection with the extinguishment of our Notes, we recognized a loss on early extinguishment of debt of $0.5 million which is included in interest expense, net in the Condensed Statements of Operations.

ABL Facility

On December 6, 2021, the Company ~~reduced~~entered into the ~~outstanding principal amount~~Second Amended and Restated Asset-Based Revolving Credit Agreement (the “Second Amended and Restated Credit Agreement”), by and among the Company and certain of its subsidiaries, as borrowers, the guarantors party thereto, the lenders from time to time party thereto and Citibank, as administrative agent (in such capacity, the "Agent"), which amends and restates in its entirety the then existing Amended and Restated Asset-Based Revolving Credit Agreement (as amended, the “ABL Facility”). The Second Amended and Restated Credit Agreement, among other things, (i) extended the maturity date of the ABL ~~Draw by $40.0 million.~~ Facility to December 6, 2026; (ii) changed the calculation of the interest rate payable on borrowings from being based on a London Inter-Bank Offered Rate to be based on a SOFR, with corresponding changes to the applicable interest rate margins with respect to such borrowings, (iii) amended certain definitions related to the calculation of the borrowing base; (iv) increased the commitments that may be used to issue letters of credit to $65.0 million; and (v) amended certain baskets contained in the covenants to conform to the baskets contained in the indenture governing the Notes (the "Indenture"). The Second Amended and Restated Credit Agreement also allows the Company to borrow up to $132.0 million through October 13, 2023, decreasing to $116.0 million through November 2026, subject to availability under the borrowing base and other conditions.

As of September 30, ~~2021,~~2022, no loans were outstanding under the ABL Facility and there were ~~$9.4~~$8.7 million of letters of credit issued and outstanding under the ABL Facility. At September 30, ~~2021,~~2022, the Company had ~~$87.3~~$123.3 million of availability under the ABL Facility (calculated net of ~~$9.4~~$8.7 million of letters of credit outstanding at such time).

Note 6—6. Other Long-Term Liabilities

Other long-term liabilities are summarized as follows (in thousands):


		September 30, 2021		December 31, 2020			September 30, 2022		December 31, 2021
Black lung obligations	Black lung obligations	$	34,229	$	34,567	Black lung obligations	$	34,345	$	34,482
Other	Other	2,985		2,258		Other	1,824		1,842
Total other long-term liabilities	Total other long-term liabilities	$	37,214	$	36,825	Total other long-term liabilities	$	36,169	$	36,324

Note 7—7. Leases

The Company primarily enters into rental agreements for certain mining equipment that are for periods of 12 months or less, some of which include options to extend the leases. Leases that are for periods of 12 months or less are not recorded on the balance sheet. The Company recognizes lease expense on these agreements on a straight-line basis over the lease term. Additionally, the Company has certain finance leases for mining equipment that expire over various contractual periods. ~~The~~These leases have remaining lease terms of one to five years and do not include an option to renew. Amortization expense for finance leases is included in depreciation and depletion expense.

WARRIOR MET COAL, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS (Continued)

NINE MONTHS ENDED SEPTEMBER 30, ~~2021~~2022 (UNAUDITED)

~~leases have remaining lease terms of~~ ~~one~~ ~~to five years. These leases do not include an option to renew. Amortization expense for finance leases is included in depreciation and depletion expense.~~

Supplemental balance sheet information related to leases was as follows (in thousands):


		September 30, 2021			December 31, 2020				September 30, 2022			December 31, 2021
Finance lease right-of-use assets, net(1)	Finance lease right-of-use assets, net(1)	$	77,837		$	46,746		Finance lease right-of-use assets, net(1)	$	71,508		$	75,692
Finance lease liabilities	Finance lease liabilities							Finance lease liabilities
Current	Current	22,421			14,385			Current	23,083			23,622
Noncurrent	Noncurrent	34,805			24,091			Noncurrent	15,033			28,434
Total finance lease liabilities	Total finance lease liabilities	$	57,226		$	38,476		Total finance lease liabilities	$	38,116		$	52,056

Weighted average remaining lease term - finance leases (in months)	Weighted average remaining lease term - finance leases (in months)	38.0			42.9			Weighted average remaining lease term - finance leases (in months)	28.9			35.1
Weighted average discount rate - finance leases(2)	Weighted average discount rate - finance leases(2)	5.89		%	5.77		%	Weighted average discount rate - finance leases(2)	5.90		%	6.11		%

(1) Finance lease right-of-use assets are recorded net of accumulated amortization of ~~$15.6~~$25.9 million and ~~$9.8~~$17.7 million and are included in property, plant and equipment, net in the Condensed Balance ~~Sheet~~Sheets as of September 30, ~~2021~~2022 and the Condensed Balance ~~Sheet~~Sheets as of December 31, ~~2020,~~2021, respectively.

(2) When an implicit discount rate is not readily available in a lease, the Company uses its incremental borrowing rate based on information available at the commencement date when determining the present value of lease payments.

The components of lease expense were as follows (in thousands):


		For the three months ended September 30,				For the nine months ended September 30,					For the three months ended September 30,				For the nine months ended September 30,
		2021		2020		2021		2020			2022		2021		2022		2021
Operating lease cost(1):		$	782	$	801	$	3,572	$	1,594
Operating lease cost(1):										Operating lease cost(1):	$	11,187	$	782	$	29,759	$	3,572
Finance lease cost:	Finance lease cost:									Finance lease cost:
Amortization of leased assets	Amortization of leased assets	3,389		2,943		10,222		8,859		Amortization of leased assets	5,426		3,389		12,737		10,222
Interest on lease liabilities	Interest on lease liabilities	1,019		315		2,935		1,403		Interest on lease liabilities	764		1,019		2,557		2,935
Net lease cost	Net lease cost	$	5,190	$	4,059	$	16,729	$	11,856	Net lease cost	$	17,377	$	5,190	$	45,053	$	16,729

(1) Includes leases that are for periods of 12 months or less.

Maturities of lease liabilities for the Company's finance leases as of September 30, 2022 were as follows (in thousands):


		Finance Leases(1)			Finance Leases(1)
2021		$	7,745
2022	2022	27,885		2022	$	6,315
2023	2023	22,763		2023	28,507
2024	2024	3,195		2024	3,923
2025	2025	1,353		2025	1,918
2026				2026	207
Thereafter	Thereafter	156		Thereafter	—
Total	Total	63,097		Total	40,870
Less: amount representing interest	Less: amount representing interest	(5,871)		Less: amount representing interest	(2,754)
Present value of lease liabilities	Present value of lease liabilities	$	57,226	Present value of lease liabilities	$	38,116

(1) Finance lease payments include ~~$3.9~~$4.9 million of future payments required under signed lease agreements that have not yet commenced.

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

WARRIOR MET COAL, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS (Continued)

NINE MONTHS ENDED SEPTEMBER 30, ~~2021~~2022 (UNAUDITED)

For the nine months ended
September 30,
2021 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases $ 2,935 $ 1,403
Financing cash flows from finance leases $ 22,284 $ 10,972
Non-cash right-of-use assets obtained in exchange for lease obligations:
Finance leases $ 42,842 $ 12,036
Supplemental cash flow information related to the Company's leases was as follows (in thousands):


	For the nine months ended September 30,
	2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	2,557	$	2,935
Financing cash flows from finance leases	$	22,400	$	22,284
Non-cash right-of-use assets obtained in exchange for lease obligations:
Finance leases	$	2,011	$	42,842

As of September 30, ~~2021,~~2022, the Company had additional commitments for finance leases, primarily for mining equipment, that have not yet commenced of ~~$3.9~~$4.9 million. These finance leases will commence during the fiscal ~~years 2021~~year 2022 and ~~2022~~2023 with lease terms of one to two years.

Note 8—8. Net Income ~~(Loss)~~ per Share

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

For the three months ended
September 30, For the nine months ended
September 30,
2021 2020 2021 2020
Numerator:
Net income (loss) $ 38,427 $ (14,434) $ 12,391 $ (2,050)
Denominator:
Weighted-average shares used to compute net income (loss) per share—basic 51,416 51,190 51,315 51,161
Dilutive restrictive stock awards (1)
169 — 109 —
Weighted-average shares used to compute net income (loss) per share—diluted 51,585 51,190 51,424 51,161
Net income (loss) per share—basic $ 0.75 $ (0.28) $ 0.24 $ (0.04)
Net income (loss) per share—diluted $ 0.74 $ (0.28) $ 0.24 $ (0.04)

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

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

On February 16, 2021, the Company awarded 398,945 restricted stock unit awards under the Company's 2017 Equity Incentive Plan (the "2017 Equity Plan"). These awards have certain service-based, performance-based and market-based vesting conditions, as applicable. The service-based awards vest over a period of three years and the performance-based and market-based awards are based on the Company's performance in each of the three years.

~~On April 27, 2021, the Company awarded 31,984 restricted stock unit awards under the Company's 2017 Equity Plan.~~

~~These awards have service-based vesting conditions and vest over a period of three years.~~

As of September 30, 2021, there were 317,915 restricted stock unit awards for which the service-based vesting conditions for these awards were not met as of the measurement date. As such, these awards were excluded from basic earnings per share.

As of September 30, 2021, there were 521,916 restricted stock unit awards for which the performance-based and market-based vesting conditions were not met as of the measurement date and, as such, these awards were excluded from basic and diluted earnings per share. Based on the Company's closing share price on September 30, 2021, there were 87,209 restricted stock unit awards classified as a liability.

~~WARRIOR MET COAL, INC.~~

~~NOTES TO CONDENSED FINANCIAL STATEMENTS (Continued)~~

~~NINE MONTHS ENDED SEPTEMBER 30, 2021 (UNAUDITED)~~

As of September 30, 2021, there were 6,219 restricted stock unit awards granted under the Company's 2016 Equity Incentive Plan (the "2016 Equity Plan") to certain directors and employees, for which the service-based vesting conditions for these awards were not met as of the measurement date. As such, these awards were excluded from basic earnings per share.

As of September 30, 2021, there were 13,157 shares of its common stock contingently issuable upon the settlement of a vested restricted stock unit award under the 2017 Equity Plan. The settlement date for these awards is the earlier of a change in control as described in the 2016 Equity Plan or 2017 Equity Plan, as applicable, or five years from the grant date. These awards are vested and, as such, have been included in the weighted average shares used to compute basic and diluted net income (loss) per share.

During the second quarter of 2021, certain employees and directors reached retirement eligibility, which resulted in incremental stock compensation expense of $4.1 million that is included in selling, general and administrative expenses within the Condensed Statements of Operations.


	For the three months ended September 30,				For the nine months ended September 30,
	2022		2021		2022		2021
Numerator:
Net income	$	98,403	$	38,427	$	541,644	$	12,391
Denominator:
Weighted-average shares used to compute net income per share—basic	51,654		51,416		51,612		51,315
Dilutive restrictive stock awards	90		169		87		109
Weighted-average shares used to compute net income per share—diluted	51,744		51,585		51,699		51,424
Net income per share—basic	$	1.91	$	0.75	$	10.49	$	0.24
Net income per share—diluted	$	1.90	$	0.74	$	10.48	$	0.24

Note ~~9—Related Party Transactions~~

The Company owns a 50% interest in Black Warrior Methane (“BWM”) and Black Warrior Transmission (“BWT”), which are accounted for under the proportionate consolidation method and equity method, respectively. The Company has granted the rights to produce and sell methane gas from its coal mines to BWM and BWT. The Company’s net investments in, advances to/from and equity in earnings or loss of BWT are not material to the Company. The Company supplied labor to BWM and incurred costs, including property and liability insurance, to support the joint venture. The Company charged the joint venture for such costs on a monthly basis, which totaled $0.4 million and $1.7 million for the three and nine months ended September 30, 2021, respectively, and $0.6 million and $1.9 million for the three and nine months ended September 30, 2020, respectively.

~~Note 10—~~9. Commitments and Contingencies

Environmental Matters

The Company is subject to a wide variety of laws and regulations concerning the protection of the environment, both with respect to the construction and operation of its plants, mines and other facilities and with respect to remediating environmental conditions that may exist at its own and other properties.

The Company believes it is in compliance with federal, state and local environmental laws and regulations. The Company accrues for environmental expenses resulting from existing conditions that relate to past operations when the costs are probable and can be reasonably estimated. As of September 30, ~~2021~~2022 and December 31, ~~2020,~~2021, there were no accruals for environmental matters other than asset retirement obligations for mine reclamation.

Miscellaneous Litigation

From time to time, the Company is party to lawsuits arising in the ordinary course of ~~their~~its businesses. The Company records costs relating to these matters when a loss is probable and the amount can be reasonably estimated. The effect of the outcome of these matters on the Company’s future results of operations cannot be predicted with certainty as any such effect depends on future results of operations and the amount and timing of the resolution of such matters. As of September 30, ~~2021~~ 2022

WARRIOR MET COAL, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS (Continued)

NINE MONTHS ENDED SEPTEMBER 30, 2022 (UNAUDITED)

and December 31, ~~2020,~~2021, there were no items accrued for miscellaneous litigation. For the three months ended September 30, 2021, the Company received $1.4 million upon the settlement of a lawsuit which is reflected as other income in the Condensed Statement of Operations.

~~Walter Canada Settlement Proceeds~~

On July 15, 2015, Walter Energy and certain of its wholly owned U.S. subsidiaries, including Jim Walter Resources, Inc. (“JWR”) filed voluntary petitions for relief under Chapter 11 of Title 11 of the U.S. Bankruptcy Code (the “Chapter 11 Cases”) in the Northern District of Alabama, Southern Division. On December 7, 2015, Walter Energy Canada Holdings, Inc., Walter Canadian Coal Partnership and their Canadian affiliates (collectively “Walter Canada”) applied for and were granted protection under the Companies’ Creditors Arrangement Act (the “CCAA”) pursuant to an Initial Order of the Supreme Court of British Columbia.

~~WARRIOR MET COAL, INC.~~

~~NOTES TO CONDENSED FINANCIAL STATEMENTS (Continued)~~

~~NINE MONTHS ENDED SEPTEMBER 30, 2021 (UNAUDITED)~~

~~In connection with~~ As a result of the Company’s acquisition of certain core operating assets of Walter Energy during the Company acquired a receivable owed to Walter Energy by Walter Canada for certain shared services provided by Walter Energy to Walter Canada (the “Shared Services Claim”) and a receivable for unpaid interest owed to Walter Energy from Walter Canada in respect of a promissory note (the “Hybrid Debt Claim”). Each of these claims were asserted by the CompanyChapter 11 Cases, in the Walter Canada CCAA proceedings. Walter Energy deemed these receivables to be impaired for the year ended December 31, 2015 and the Company did not assign any value to these receivables in acquisition accounting as collectability was deemed remote. In March 2020,first quarter of 2022 the Company received ~~approximately $1.8~~$0.7 million, ~~in settlement proceeds for~~from the ~~Shared Services Claim and Hybrid Debt Claim~~Chapter 11 Cases which is reflected as other income in the Condensed Statement of ~~Operations.~~Operations for the nine months ended September 30, 2022. The ~~collectability of additional amounts, if any, related to~~Company received no payments for the ~~Shared Services Claim~~three and ~~Hybrid Debt Claim depends on~~nine months ended September 30, 2021 from the ~~outcome of, and the timing of any resolutions of, the Walter Canada CCAA proceedings and cannot be predicted with certainty.~~Chapter 11 Cases.

Other Commitments and ~~Contingencies—Other~~

Contingencies

The Company is party to various transportation and throughput agreements with rail and barge transportation providers and the Alabama State Port Authority. These agreements contain annual minimum tonnage guarantees with respect to coal transported from the mine sites to the Port of Mobile, Alabama, the unloading of rail cars or barges, and the loading of vessels. If the Company does not meet its minimum throughput obligations, which are based on annual minimum amounts, it is required to pay the transportation providers or the Alabama State Port Authority a contractually specified amount per metric ton for the difference between the actual throughput and the minimum throughput requirement. At September 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the Company had no liability recorded for minimum throughput requirements.

Royalty Obligations

A substantial amount of the coal that the Company mines is produced from mineral reserves leased from third-party ~~land owners.~~landowners. These leases convey mining rights to the Company in exchange for royalties to be paid to the ~~land owner~~landowner as either a fixed amount per ton or as a percentage of the sales price. Although coal leases have varying renewal terms and conditions, they generally last for the economic life of the reserves. Coal royalty expense was $42.4 million and $116.3 million for the three and nine months ended September 30, 2022, respectively, and $13.2 million and $41.6 million for the three and nine months ended September 30, 2021, ~~respectively, and $12.0 million and $39.8 million for~~respectively. Coal royalty expense has increased in the ~~three and nine months ended September 30, 2020, respectively.~~current year as compared to the prior year periods due to the increase in the average net selling price of our coal.

Note ~~11—~~10. Stockholders' Equity

Common Shares

The Company is authorized to issue up to 140,000,000 common shares, $0.01 par value per share. Holders of common shares are entitled to receive dividends when authorized by the Company's Board of Directors (the "Board").

Stock Repurchase Program

On March 26, 2019, the ~~Company's board of directors (the "Board")~~Board approved the Company's second stock repurchase program (the “Stock Repurchase Program”) that authorizes repurchases of up to an aggregate of approximately $70.0 million of the Company's outstanding common stock. The Company fully exhausted its previous stock repurchase program of $40.0 million of its outstanding common stock. The Stock Repurchase Program does not require the Company to repurchase a specific number of shares or have an expiration date. The Stock Repurchase Program may be suspended or discontinued by the Board at any time without prior notice.

Under the Stock Repurchase Program, the Company may repurchase shares of its common stock from time to time, in amounts, at prices and at such times as the Company deems appropriate, subject to market and industry conditions, share price, regulatory requirements as determined from time to time by the Company and other considerations. 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

WARRIOR MET COAL, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS (Continued)

NINE MONTHS ENDED SEPTEMBER 30, 2022 (UNAUDITED)

10b5-1 under the Exchange Act. Repurchases will be subject to limitations in the ABL Facility and the Indenture. The Company intends to fund repurchases under the Stock Repurchase Program from cash on hand and/or other sources of liquidity.

As of September 30, 2022 and December 31, 2021, the Company has repurchased 500,000 shares for approximately $10.6 million, leaving approximately ~~$58.8~~$59.4 million of share repurchases authorized under the Stock Repurchase Program.

Dividends

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


Dividend per Share		Dividends Paid		Dividend Type	Declaration Date	Record Date	Payable Date
		(in millions)
$	0.06	$	3.1	Quarterly	February 18, 2022	March 3, 2022	March 10, 2022
$	0.06	$	3.1	Quarterly	April 26, 2022	May 6, 2022	May 13, 2022
$	0.50	$	25.8	Special	May 3, 2022	May 13, 2022	May 20, 2022
$	0.06	$	3.1	Quarterly	August 1, 2022	August 11, 2022	August 18, 2022
$	0.80	$	41.3	Special	August 1, 2022	August 22, 2022	August 29, 2022
$	0.06	$	—	Quarterly	October 24, 2022	November 4, 2022	November 11, 2022

Preferred Shares

The Company is authorized to issue up to 10,000,000 shares of preferred stock, $0.01 par value per share.

Note 11. Derivative Instruments

The Company enters into natural gas swap contracts from time to time to hedge the exposure to variability in expected future cash flows associated with the fluctuations in the price of natural gas related to the Company’s forecasted sales. As of September 30, 2022, the Company had no natural gas swap contracts outstanding as all swap contracts scheduled to mature in early 2023 were settled during the quarter ended June 30, 2022. As of December 31, 2021, the Company had 6,100,000 metric million British thermal unit natural gas swap contracts outstanding.

The Company’s natural gas swap contracts economically hedge certain risks 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 Condensed Statements of Operations. The Company recognized a loss related to natural gas swap contracts of $27.7 million, for the nine months ended September 30, 2022 and recognized no gains or losses for the three months ended September 30, 2022. For the three and nine months ended September 30, 2021, the Company recognized a loss of $5.8 million and $8.7 million, respectively related to natural gas swap contracts. The Company records all derivative instruments at fair value and had no asset or liability recorded as of September 30, 2022 and had an asset of $4.0 million as of December 31, 2021 in prepaid expenses and other in the accompanying Condensed Balance Sheets.

Note 12. Fair Value of Financial Instruments

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

Due to the uncertainties resulting from COVID-19 and as a precautionary measure to preserve liquidity, the Company has temporarily suspended its share repurchase program. The Company will continue to monitor its liquidity in light of the

Fair Value Measurements as of September 30, 2022 Using:

Level 1

Level 2

Level 3

Total

Assets/Liabilities:

Natural gas swap contracts

—

WARRIOR MET COAL, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS (Continued)

NINE MONTHS ENDED SEPTEMBER 30, ~~2021~~2022 (UNAUDITED)

~~COVID-19 pandemic, the Chinese ban on Australian coal and the current CBA contract negotiations with the UMWA and will consider when to reinstate the program.~~

~~Regular Quarterly Dividend~~

On February 18, 2021, the Board declared a regular quarterly cash dividend of $0.05 per share, totaling $2.6 million, which was paid on March 8, 2021, to stockholders of record as of the close of business on March 1, 2021.

On April 27, 2021, the Board declared a regular quarterly cash dividend of $0.05 per share, totaling $2.6 million, which was paid on May 12, 2021 to stockholders of record as of the close of business on May 7, 2021.

On July 30, 2021, the Board declared a regular quarterly cash dividend of $0.05 per share, totaling $2.6 million, which was paid on August 16, 2021 to stockholders of record as of the close of business on August 9, 2021.

~~Note 12—Derivative Instruments~~

~~The Company enters into natural gas swap contracts from time to time to hedge the exposure to variability in expected~~

future cash flows associated with the fluctuations in the price of natural gas related to the Company’s forecasted sales. As of September 30, 2021, the Company had natural gas swap contracts outstanding with notional amounts totaling 2,500 million British thermal units maturing in the first quarter of 2022. As of December 31, 2020, the Company had no natural gas swap contracts outstanding.

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

~~financial reporting purposes. All changes in the fair value of these derivative instruments are recorded as other revenues in the~~

Condensed Statements of Operations. The Company recognized a loss of $5.8 million and $8.7 million for the three and nine ended September 30, 2021, respectively. The Company records all derivative instruments at fair value and had a liability of $5.8 million as of September 30, 2021 in other current liabilities in the accompanying Condensed Balance Sheets and no asset or liability as of December 31, 2020.

~~Note 13—Fair Value of Financial Instruments~~

The following table presents information about the Company’s financial liabilities measured at fair value on a recurring basis as of September 30, 2021 and indicates the level of the fair value hierarchy utilized to determine such fair value (in thousands):


		Fair Value Measurements as of September 30, 2021 Using:									Fair Value Measurements as of December 31, 2021 Using:
		Level 1		Level 2		Level 3		Total			Level 1		Level 2		Level 3		Total
Liabilities:
Assets:										Assets:
Natural gas swap contracts	Natural gas swap contracts	$	—	$	5,806	$	—	$	5,806	Natural gas swap contracts	$	—	$	4,043	$	—	$	4,043

The Company had no significant assets or any other liabilities measured at fair value on a recurring basis as of September 30, 2022 or December 31, ~~2020.~~2021. During the nine months ended September 30, ~~2021,~~2022, there were no transfers between Level 1, Level 2 and Level 3. The Company uses quoted dealer prices for similar contracts in active over-the-counter markets for determining fair value of Level 2 liabilities. There were no changes to the valuation techniques used to measure liability fair values on a recurring basis during the nine months ended September 30, ~~2021.~~2022.

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

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

~~Debt—~~Debt — The Company's outstanding debt is carried at cost. As of September 30, ~~2021,~~2022, there were no borrowings outstanding under the ABL Facility, with ~~$87.3~~$123.3 million available, net of outstanding letters of credit of $8.7 million. As of December 31, 2021, the Company had no borrowings outstanding under the ABL Facility, with $83.2 million available, net of outstanding letters of credit of $9.4 million. As of

~~WARRIOR MET COAL, INC.~~

~~NOTES TO CONDENSED FINANCIAL STATEMENTS (Continued)~~

~~NINE MONTHS ENDED SEPTEMBER 30, 2021 (UNAUDITED)~~

~~December 31, 2020, the Company had $40.0 million outstanding under the ABL Facility and $9.4 million of letters of credit issued and outstanding under the ABL Facility. As of~~ September 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the estimated fair value of the Notes based upon observable market data (Level 2) was approximately ~~$349.9~~$298.2 million and ~~$352.5~~$359.6 million, respectively.

Note ~~14—~~13. Segment Information

The Company identifies a business as an operating segment if: (i) it engages in business activities from which it may earn revenues and incur expenses; (ii) its operating results are regularly reviewed by the Chief Operating Decision Maker (“CODM”), who is the Company’s Chief Executive Officer, to make decisions about resources to be allocated to the segment and assess its performance; and (iii) it has available discrete financial information. The Company has determined that its 2two underground mining operations are its operating segments. The CODM reviews financial information at the operating segment level to allocate resources and to assess the operating results and financial performance for each operating segment. Operating segments are aggregated into a reportable segment if the operating segments have similar quantitative economic characteristics and if the operating segments are similar in the following qualitative characteristics: (i) nature of products and services; (ii) nature of production processes; (iii) type or class of customer for their products and services; (iv) methods used to distribute the products or provide services; and (v) if applicable, the nature of the regulatory environment.

The Company has determined that the 2two operating segments are similar in both quantitative and qualitative characteristics and thus the 2two operating segments have been aggregated into 1one reportable segment. The Company has determined that its natural gas and royalty businesses and the Blue Creek mine development did not meet the criteria in ASC 280 to be considered as operating or reportable segments. Therefore, the Company has included their results in an “all other” category as a reconciling item to consolidated amounts.

The Company does not allocate all of its assets, or its depreciation and depletion expense, selling, general and administrative expenses, transactions costs, interest expense, and income tax expense or benefit by segment.

The following tables include reconciliations of segment information to consolidated amounts (in thousands):


		For the three months ended September 30,				For the nine months ended September 30,					For the three months ended September 30,				For the nine months ended September 30,
		2021		2020		2021		2020			2022		2021		2022		2021
Revenues	Revenues									Revenues
Mining	Mining	$	199,745	$	175,229	$	631,493	$	555,610	Mining	$	371,944	$	199,745	$	1,377,665	$	631,493
All other	All other	2,722		4,835		12,178		14,875		All other	18,236		2,722		16,323		12,178
Total revenues	Total revenues	$	202,467	$	180,064	$	643,671	$	570,485	Total revenues	$	390,180	$	202,467	$	1,393,988	$	643,671

For the three months ended
September 30, For the nine months ended
September 30,
2021 2020 2021 2020
Capital Expenditures
Mining $ 9,785 $ 20,660 $ 32,277 $ 65,687
All other 713 2,645 1,872 6,372
Total capital expenditures $ 10,498 $ 23,305 $ 34,149 $ 72,059

WARRIOR MET COAL, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS (Continued)

NINE MONTHS ENDED SEPTEMBER 30, 2022 (UNAUDITED)


	For the three months ended September 30,				For the nine months ended September 30,
	2022		2021		2022		2021
Capital Expenditures
Mining	$	28,031	$	9,785	$	94,921	$	32,277
All other	13,289		713		25,101		1,872
Total capital expenditures	$	41,320	$	10,498	$	120,022	$	34,149

The Company evaluates the performance of its segment based on Segment Adjusted EBITDA, which is defined as net income ~~(loss)~~ adjusted for other revenues, cost of other revenues, depreciation and depletion, selling, general and administrative, business interruption, idle mine, other income, ~~net~~ interest expense, net, income tax ~~benefit (expense),~~expense, and certain transactions or adjustments that the CODM does not consider for the purposes of making decisions to allocate resources among segments or assessing segment performance. Segment Adjusted EBITDA does not represent and should not be considered as an

~~WARRIOR MET COAL, INC.~~

~~NOTES TO CONDENSED FINANCIAL STATEMENTS (Continued)~~

~~NINE MONTHS ENDED SEPTEMBER 30, 2021 (UNAUDITED)~~

alternative to cost of sales under GAAP and may not be comparable to other similarly titled measures used by other companies. Below is a reconciliation of Segment Adjusted EBITDA to net income, ~~(loss),~~ which is its most directly comparable financial measure calculated and presented in accordance with GAAP (in thousands):


		For the three months ended September 30,				For the nine months ended September 30,					For the three months ended September 30,				For the nine months ended September 30,
		2021		2020		2021		2020			2022		2021		2022		2021
Segment Adjusted EBITDA	Segment Adjusted EBITDA	$	107,772	$	23,859	$	232,405	$	121,949	Segment Adjusted EBITDA	$	168,503	$	107,772	$	847,796	$	232,405
Other revenues	Other revenues	2,722		4,835		12,178		14,875		Other revenues	18,236		2,722		16,323		12,178
Cost of other revenues	Cost of other revenues	(6,654)		(7,064)		(22,792)		(22,267)		Cost of other revenues	(8,417)		(6,654)		(26,120)		(22,792)
Depreciation and depletion	Depreciation and depletion	(28,967)		(27,965)		(102,021)		(78,813)		Depreciation and depletion	(30,805)		(28,967)		(86,973)		(102,021)
Selling, general and administrative	Selling, general and administrative	(7,430)		(8,192)		(26,182)		(25,105)		Selling, general and administrative	(10,557)		(7,430)		(36,985)		(26,182)
Business interruption	Business interruption	(6,872)		—		(13,892)		—		Business interruption	(7,106)		(6,872)		(20,084)		(13,892)
Idle mine	Idle mine	(9,327)		—		(20,203)		—		Idle mine	(5,418)		(9,327)		(10,141)		(20,203)
Other income	Other income	1,400		—		1,291		1,822		Other income	—		1,400		675		1,291
Interest expense, net	Interest expense, net	(8,784)		(8,059)		(25,954)		(23,847)		Interest expense, net	(5,701)		(8,784)		(20,706)		(25,954)
Income tax (expense) benefit		(5,433)		8,152		(22,439)		9,336
Net income (loss)		$	38,427	$	(14,434)	$	12,391	$	(2,050)
Income tax expense										Income tax expense	(20,332)		(5,433)		(122,141)		(22,439)
Net income										Net income	$	98,403	$	38,427	$	541,644	$	12,391

1817

ITEM 2. 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 three and nine months ended September 30, ~~2021~~2022 and September 30, ~~2020.~~2021. You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and related notes appearing in this Form 10-Q and the audited financial statements for the year ended December 31, ~~2020~~2021 included in our Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021 (the ~~"2020~~"2021 Annual Report"). Some of the information contained in this discussion and analysis or set forth elsewhere in this Form 10-Q, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, our actual results could differ materially from the results described in, or implied by, the forward-looking statements contained in the following discussion and analysis. Please see “Forward-Looking Statements.”

Overview

We are a ~~U.S. based,~~U.S.-based, environmentally and socially minded supplier to the global steel industry. We are dedicated entirely to mining non-thermal ~~met~~metallurgical ("met") coal used as a critical component of steel production by metal manufacturers in Europe, South America and Asia. We are a large-scale, low-cost producer and exporter of premium met 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.

As of December 31, ~~2020,~~2021, based on a reserve report prepared by Marshall Miller & Associates, Inc. ("Marshall Miller"), Mine No. 4 and Mine No. 7, our two operating mines, had approximately ~~97.5~~90.2 million metric tons of recoverable reserves and ~~based on a reserve report prepared by Stantec Consulting Services, Inc. ("Stantec")~~ our undeveloped Blue Creek mine contained ~~103.0~~63.3 million metric tons of recoverable ~~reserves.~~reserves and 44.9 million metric tons of coal resources exclusive of reserves, which total 108.2 million metric tons. As a result of our high quality coal, our realized price has historically been in line with, or at a slight discount to, the Platts Premium Low Volatility ("LV") Free On Board ("FOB") Australia Index Price ("Platts Index"). Our HCC, mined from the Southern Appalachian portion of the Blue Creek coal seam, is characterized by low sulfur, low-to-medium ash, and LV to mid-volatility ("MV"). These qualities make our coal ideally suited as a coking coal for the manufacture of steel.

We sell substantially all of our met coal production to steel producers. Met coal, which is converted to coke, is a critical input in the steel production process. Met coal is both consumed domestically in the countries where it is produced and exported by several of the largest producing countries, such as China, Australia, the United States, Canada and Russia. Therefore, demand for our coal will be highly correlated to conditions in the global steelmaking industry. The steelmaking industry’s demand for met coal is affected by a number of factors, including the cyclical nature of that industry’s business, technological developments in the steelmaking process and the availability of substitutes for steel such as aluminum, composites and plastics. A significant reduction in the demand for steel products would reduce the demand for met coal, which would have a material adverse effect upon our business. Similarly, if alternative ingredients are used in substitution for met coal in the integrated steel mill process, the demand for met coal would materially decrease, which could also materially adversely affect demand for our met coal.

The global steelmaking industry's demand for met coal is also affected by pandemics, epidemics or other public health emergencies, such as the outbreak of the novel coronavirus ("COVID-19"). As of the filing of this Form 10-Q, we have not had to idle or temporarily idle our mines as a result of COVID-19.

~~While~~In addition, future governmental policy changes in foreign countries may be detrimental to the global ~~economy~~coal market and could thus impact our business, financial condition or results of operation. For example, the Chinese government has ~~seen improvement due~~from time to time implemented regulations and promulgated new laws or restrictions, such as the continued distribution of effective vaccines, COVID-19 and new COVID-19 variants may have further negative impacts on our two operating mines, supply chain, transportation networks and customers, which may compress our margins, and reduce demand for the met coal that we produce, including as a result of preventative and precautionary measures that we, other businesses and governments are taking.

~~In light of the uncertainties regarding COVID-19, the Chinese~~unofficial ban on Australian coal in November 2020, on their domestic coal industry, sometimes with little advance notice, which has impacted worldwide coal demand, supply and prices. The ban on Australian coal has significantly impacted the ~~Collective Bargaining Agreement ("CBA") negotiations, discussed~~global met coal market in ~~further detail below, we are~~recent years. During the past several years, the Chinese government has initiated a number of anti-smog measures aimed at reducing hazardous air emissions through temporary production capacity restrictions with the steel, coal and coal-fired power sectors.

In February 2022, the war in Ukraine pushed seaborne met coal export prices to record levels. After the invasion began, spot cargo requests for Australian met coals could not ~~providing full year 2021 guidance~~be filled. The U.S., Canada and Indonesia were also not able to step up at ~~this time. We continue~~short notice. These supply shortages combined with the urgent purchases of non-Russian coal against a backdrop of mounting sanctions, trade finance problems and seaborne logistical constraints pushed the Queensland PLV HCC index price to ~~appropriately adjust our operational needs, including managing our expenses, capital expenditures, working capital, liquidity and cash flows. We also delayed spending~~over $660.00 per metric ton by mid-March. On August 10, 2022, the ~~$25.0 million that we budgeted for~~European Union ban on the ~~development~~importation of ~~Blue Creek until there is clarity on these uncertainties and temporarily suspended our Stock Repurchase Program. Our financial approach continues~~Russian coal became effective which significantly impacted coking coal markets by disrupting previously existing trading patterns. The Queensland PLV HCC index price started the quarter at approximately $302.00 per metric ton falling to ~~focus on cash flow management and protecting the balance sheet in order to strategically move through this period~~a floor of ~~uncertainty and mitigate potential long-term impacts to the business (see~~ ~~Liquidity and Capital Resources~~ ~~below).~~

$188.00 per

1918

metric ton on August 2, 2022 and finishing the quarter at $270.50. The resulting volatility, including market expectations of potential changes in coal prices and inflationary pressures on steel products, may significantly affect prices for our coal or the cost of supplies and equipment.

U.S. inflation surged to a new four decade record high of 9.1% in July 2022 and remained at 8.2% in September 2022, driven by increased energy and food costs, supply constraints and strong consumer demand. High inflation has been driven by growth in the economy as it bounces back from COVID-19, powered in part by low interest rates and government stimulus to counter the pandemic's impact. We expect COVID-19 to continue to impact global supply markets and supply chains, resulting in shortages, extended lead times and increased inflation impacting our operations and profitability. We are applying a number of different strategies to mitigate the impact of these challenges on our operations, including placing purchase orders earlier, utilizing short term contracts and leveraging our supplier relationships. In 2022, we expect inflation to have a larger negative impact on our profitability, as we expect increases in steel prices, freight rates, labor and other materials and supplies. These increases affect, among others, the costs of belt structure, roof bolts, cable, magnetite, rock dust and other supplies, plus labor and parts on equipment repair and rebuilds.

Within the seaborne metallurgical coal market, the three months ended September 30, 2022 were characterized by significant volatility, primarily driven by a weakening global macroeconomic environment, inflation and trade disruptions following the previously mentioned sanctions imposed on Russian coal imports. The Chinese ban on Australian coal, the ongoing war in Ukraine, additional sanctions against Russia and a broader economic weakening as inflation rises and stimulus falls are all likely to continue to impact the global met coal market and impact our business, financial condition or results of operations.

Collective Bargaining Agreement

Our ~~CBA contract~~Collective Bargaining Agreement ("CBA") with the United Mine Workers of America ~~("UMWA"~~(the "UMWA") expired on April 1, 2021, and the UMWA initiated a ~~strike.~~strike which continues through today. We ~~believe that~~continue to negotiate in good faith to reach a new union contract. During the strike, we ~~are well positioned~~continue to ~~fulfill anticipated customer volume commitments for 2021~~successfully execute our business continuity plans, allowing us to meet the needs of ~~approximately 4.4 to 5.0 million metric tons through~~our valued customers. As a ~~combination~~result of ~~existing coal inventory of 536 thousand metric tons and expected production during~~ the ~~rest of 2021. For now,~~strike, we ~~have~~initially idled Mine No. 4 and scaled back operations at Mine No. 7. ~~We expect production to continue~~In the first quarter of 2022, we restarted operations at Mine No. ~~7, although~~4. Due to the reduced operations at ~~lower than usual rates. In connection with the idling of~~ Mine No. 4 and ~~reduced operations at~~ Mine No. 7, we incurred idle mine expenses of $5.4 million and $10.1 million, for the three and nine months ended September 30, 2022, respectively, and $9.3 million and $20.2 million for the three and nine months ended September 30, 2021, ~~respectively,~~respectively. These expenses are reported separately in the Condensed Statements of Operations and represent expenses incurred, such as electricity, insurance and maintenance labor. ~~Due to the strike, we~~We have also incurred business interruption expenses of approximately $7.1 million and $20.1 million, for the three and nine months ended September 30, 2022, respectively, and $6.9 million and $13.9 million ~~of business interruption expenses~~ for the three and nine months ended September 30, 2021, ~~respectively. These~~respectively, which represent non-recurring expenses ~~represent~~that are directly attributable to the ongoing UMWA strike for incremental ~~expenses incurred as a direct result of the strike.~~safety and security, labor negotiations and other expenses. These expenses are also presented separately in the Condensed Statements of Operations. Despite incurring costs associated with the strike, we have been able to manage our working capital and spending to deliver strong results in the current markets. While we have business continuity plans in place, the strike may still cause disruption to production and shipping activities, and our plans may vary significantly from quarter to quarter in ~~2021.~~

In the current operating environment and without a new contract, we believe that our production and sales volume over a twelve-month period could be between 5.0 million and 6.0 million metric tons, which volumes could possibly include restarting Mine 4. Similarly, with a new contract, we believe that our production and sales volume over a twelve-month period could ramp up to a run rate of approximately 6.8 million metric tons within three to four months.2022.

How We Evaluate Our Operations

Our primary business, the mining and exporting of met coal for the steel industry, is conducted in one reportable business segment: mining. All other operations and results are reported under the “All Other” category as a reconciling item to consolidated amounts, which includes the business results from our sale of natural gas extracted as a byproduct from our underground coal mines and royalties from our leased properties. Our natural gas and royalty businesses do not meet the criteria in ASC 280, Segment Reporting, to be considered as operating or reportable segments.

Our management uses a variety of financial and operating metrics to analyze our performance. These metrics are significant factors in assessing our operating results and profitability and include: (i) Segment Adjusted EBITDA (as defined below), a non-GAAP financial measure; (ii) sales volumes and average net 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.

For the three months ended
September 30, For the nine months ended
September 30,
2021 2020 2021 2020
(in thousands)
Segment Adjusted EBITDA $ 107,772 $ 23,859 $ 232,405 $ 121,949
Metric tons sold 961 1,753 4,385 4,734
Metric tons produced 1,024 1,712 4,079 5,536
Gross price realization(1)
81 % 90 % 94 % 92 %
Average selling price per metric ton $ 207.85 $ 99.96 $ 144.01 $ 117.37
Cash cost of sales per metric ton $ 94.68 $ 85.92 $ 90.37 $ 91.09
Adjusted EBITDA $ 104,942 $ 16,801 $ 216,823 $ 99,126

~~(1)~~ ~~For the three and nine months ended September 30, 2021 and 2020, our gross price realization represents~~ The following table presents supplementary data on a ~~volume weighted-average calculation of our daily realized price per ton based on gross sales, which excludes demurrage and other charges, as a percentage~~historical basis for each of the ~~Platts Index price.~~periods indicated.


	For the three months ended September 30,				For the nine months ended September 30,
(in thousands)	2022		2021		2022		2021

Segment Adjusted EBITDA	$	168,503	$	107,772	$	847,796	$	232,405
Metric tons sold	1,360		961		3,782		4,385
Metric tons produced	1,490		1,024		4,397		4,079
Average net selling price per metric ton	$	273.49	$	207.85	$	364.27	$	144.01
Cash cost of sales per metric ton	$	148.56	$	94.68	$	139.15	$	90.37
Adjusted EBITDA	$	171,612	$	104,942	$	846,680	$	216,823

Segment Adjusted EBITDA

We define Segment Adjusted EBITDA as net income ~~(loss)~~ adjusted for other revenues, cost of other revenues, depreciation and depletion, selling, general and administrative, business interruption, idle mine ~~net~~expense, interest expense, net, income tax ~~benefit (expense),~~expense, other income ~~(expense)~~ and certain transactions or adjustments that the Chief Executive Officer, our Chief Operating Decision Maker, does not consider for the purposes of making decisions to allocate resources among segments or

assessing segment performance. 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 dividends;

•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.

Sales Volumes ~~Gross Price Realization~~ 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 coal. Our sales volume and sales prices are largely dependent upon the terms of our annual coal sales contracts, for which prices generally are set on daily index averages. The volume of coal we sell is also a function of the pricing environment in the international met coal markets and the amounts of LV and MV coal that we sell. We evaluate the price we receive for our coal based on ~~two primary metrics: first, our gross price realization and second,~~ our average net selling price per metric ton.

Our gross price realization represents a volume weighted-average calculation of our daily realized price per ton based on the blended gross sales of our LV and MV coal, excluding demurrage and quality specification adjustments, as a percentage of the Platts Index daily price. Our gross price realizations reflect the premiums and discounts we achieve on our LV and MV coal versus the Platts Index price because of the high quality premium products we sell into the export markets. In addition, the premiums and discounts in a quarter or year can be impacted by a rising or falling price environment.

On a quarterly basis, our blended gross selling price per metric ton may differ from the Platts Index price per metric ton, primarily due to our gross sales price per ton being based on a blended average of gross sales price on our LV and MV coals as compared to the Platts Index price due to the fact that many of our met coal supply agreements are based on a variety of indices such as the Platts Index and the Steel Index and due to the timing of shipments.

Our average net selling price per metric ton represents our coal net sales revenue divided by total metric tons of coal sold. In addition, our average net selling price per metric ton is net of ~~the previously mentioned~~ demurrage and quality specification adjustments.

Cash Cost of Sales

We evaluate our cash cost of sales on a cost per metric ton basis. 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 accounting principles generally accepted in the United States ("GAAP"), are classified in the Condensed Statements of Operations as costs other than cost of sales, but relate directly to the costs incurred to produce met coal and sell it FOB at the Port of Mobile, Alabama. Our cash cost of sales per metric ton is calculated as cash cost of sales divided by the metric tons sold. 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

•the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities.

We believe that this non-GAAP financial measure provides additional insight into our operating performance, and reflects how management analyzes our operating performance and compares that performance against other companies for purposes of business decision making by excluding the impact of certain items that management does not believe are indicative of our core operating performance. We believe that cash cost of sales presents a useful measure of our controllable costs and our operational results by including all costs incurred to produce met coal and sell it FOB at the Port of Mobile, Alabama. Period-to-period comparisons of cash cost of sales are intended to help management identify and assess additional trends that

potentially impact us and that may not be shown solely by period-to-period comparisons of cost of sales. Cash cost of sales should not be considered an alternative to cost of sales or any other measure of financial performance or liquidity presented in accordance with GAAP. Cash cost of sales excludes some, but not all, items that affect cost of sales, and our presentation may vary from the presentations of other companies. 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.


(in thousands)										(in thousands)	For the three months ended September 30,				For the nine months ended September 30,
											2022		2021		2022		2021
		For the three months ended September 30,				For the nine months ended September 30,
		2021		2020		2021		2020
(in thousands)
Cost of sales		$	91,973	$	151,370	$	399,088	$	433,661
Cost of sales (exclusive of depreciation and depletion)										Cost of sales (exclusive of depreciation and depletion)	$	203,441	$	91,973	$	529,869	$	399,088
Asset retirement obligation accretion	Asset retirement obligation accretion	(432)		(368)		(1,297)		(1,106)		Asset retirement obligation accretion	(493)		(432)		(1,480)		(1,297)
Stock compensation expense	Stock compensation expense	(555)		(385)		(1,536)		(1,312)		Stock compensation expense	(909)		(555)		(2,136)		(1,536)
Cash cost of sales	Cash cost of sales	$	90,986	$	150,617	$	396,255	$	431,243	Cash cost of sales	$	202,039	$	90,986	$	526,253	$	396,255

Adjusted EBITDA

We define Adjusted EBITDA as net income ~~(loss)~~ before interest expense, net, income ~~tax expense (benefit),~~taxes, depreciation and depletion, ~~non-cash stock compensation expense,~~ non-cash asset retirement obligation accretion, non-cash stock compensation expense, other non-cash accretion, ~~non-cash~~ mark-to-market loss on gas hedges, business interruption, idle mine and other ~~(income) expense.~~income. 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.

We believe that the presentation of Adjusted EBITDA in this report provides information useful to investors in assessing our financial condition and results of operations. The GAAP measure most directly comparable to Adjusted EBITDA is net ~~income (loss).~~income. Adjusted EBITDA should not be considered an alternative to net income ~~(loss)~~ or any other measure of financial performance or liquidity presented in accordance with GAAP. Adjustments exclude some, but not all, items that affect net income ~~(loss)~~ and our presentation of Adjusted EBITDA may vary from that presented by other companies.

The following table presents a reconciliation of Adjusted EBITDA to net income, ~~(loss) ,~~ the most directly comparable GAAP financial measure, on a historical basis for each of the periods indicated.

2221


		For the three months ended September 30,				For the nine months ended September 30,					For the three months ended September 30,				For the nine months ended September 30,
		2021		2020		2021		2020			2022		2021		2022		2021
Net income (loss)		38,427		$	(14,434)	$	12,391	$	(2,050)
Net income										Net income	$	98,403	$	38,427	$	541,644	$	12,391
Interest expense, net	Interest expense, net	8,784		8,059		25,954		23,847		Interest expense, net	5,701		8,784		20,706		25,954
Income tax (benefit) expense		5,433		(8,152)		22,439		(9,336)
Income tax expense										Income tax expense	20,332		5,433		122,141		22,439
Depreciation and depletion	Depreciation and depletion	28,967		27,965		102,021		78,813		Depreciation and depletion	30,805		28,967		86,973		102,021
Asset retirement obligation accretion (1)	Asset retirement obligation accretion (1)	805		732		2,416		2,198		Asset retirement obligation accretion (1)	900		805		2,666		2,416
Stock compensation expense (2)	Stock compensation expense (2)	1,524		1,910		8,763		5,634		Stock compensation expense (2)	2,599		1,524		14,250		8,763
Other non-cash accretion (3)	Other non-cash accretion (3)	360		353		1,081		1,059		Other non-cash accretion (3)	348		360		1,042		1,081
Non-cash mark-to-market loss on gas hedges (4)		5,843		—		8,661		—
Mark-to-market loss on gas hedges (4)										Mark-to-market loss on gas hedges (4)	—		5,843		27,708		8,661
Business interruption (5)	Business interruption (5)	6,872		—		13,892		—		Business interruption (5)	7,106		6,872		20,084		13,892
Idle mine costs (6)		9,327		—		20,203		—
Other (income) expense (7)		(1,400)		368		(998)		(1,039)
Idle mine expense (6)										Idle mine expense (6)	5,418		9,327		10,141		20,203
Other income (7)										Other income (7)	—		(1,400)		(675)		(998)
Adjusted EBITDA	Adjusted EBITDA	$	104,942	$	16,801	$	216,823	$	99,126	Adjusted EBITDA	$	171,612	$	104,942	$	846,680	$	216,823

(1)Represents non-cash accretion expense associated with our asset retirement obligations.

(2)Represents non-cash stock compensation expense associated with equity awards.

(3)Represents non-cash accretion expense associated with our black lung obligations.

(4)Represents ~~non-cash~~ mark-to-market loss recognized on gas hedges.

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

(6)Represents idle mine expenses incurred in connection with ~~the idling of~~reduced operations at Mine No. 4 and ~~reduced operations at~~ Mine No. 7.

(7)Represents proceeds received upon settlement of a lawsuit, COVID-19 pandemic related expenses and settlement proceeds received for the Shared Services Claim and Hybrid Debt Claim associated with the Walter Canada CCAA proceedings (discussed below).

Results of Operations

Three Months Ended September 30, ~~2021~~2022 and ~~2020~~2021

The following table summarizes certain unaudited financial information for ~~the three months ended September 30, 2021 and 2020.~~these periods.


	For the three months ended September 30,
($ in thousands)	2022		% of Total Revenues		2021		% of Total Revenues
Revenues:
Sales	$	371,944	95.3	%	$	199,745	98.7	%
Other revenues	18,236		4.7	%	2,722		1.3	%
Total revenues	390,180		100.0	%	202,467		100.0	%
Costs and expenses:
Cost of sales (exclusive of items shown separately below)	203,441		52.1	%	91,973		45.4	%
Cost of other revenues (exclusive of items shown separately below)	8,417		2.2	%	6,654		3.3	%
Depreciation and depletion	30,805		7.9	%	28,967		14.3	%
Selling, general and administrative	10,557		2.7	%	7,430		3.7	%
Business interruption	7,106		1.8	%	6,872		3.4	%
Idle mine	5,418		1.4	%	9,327		4.6	%
Total costs and expenses	265,744		68.1	%	151,223		74.7	%
Operating income	124,436		31.9	%	51,244		25.3	%
Interest expense, net	(5,701)		(1.5)	%	(8,784)		(4.3)	%

Other income	—		—	%	1,400		0.7	%
Income before income tax expense	118,735		30.4	%	43,860		21.7	%
Income tax expense	20,332		5.2	%	5,433		2.7	%
Net income	$	98,403	25.2	%	$	38,427	19.0	%

2322

For the three months ended
September 30,
(in thousands) 2021 % of Total Revenues 2020 % of Total Revenues
Revenues:
Sales $ 199,745 98.7 % $ 175,229 97.3 %
Other revenues 2,722 1.3 % 4,835 2.7 %
Total revenues 202,467 100.0 % 180,064 100.0 %
Costs and expenses:
Cost of sales (exclusive of items shown separately below) 91,973 45.4 % 151,370 84.1 %
Cost of other revenues (exclusive of items shown separately below) 6,654 3.3 % 7,064 3.9 %
Depreciation and depletion 28,967 14.3 % 27,965 15.5 %
Selling, general and administrative 7,430 3.7 % 8,192 4.5 %
Business interruption 6,872 3.4 % — — %
Idle mine 9,327 4.6 % — — %
Total costs and expenses 151,223 74.7 % 194,591 108.1 %
Operating income (loss) 51,244 25.3 % (14,527) (8.1) %
Interest expense, net (8,784) (4.3) % (8,059) (4.5) %
Other income 1,400 0.7 % — — %
Income (loss) before income tax expense (benefit) 43,860 21.7 % (22,586) (12.5) %
Income tax expense (benefit) 5,433 2.7 % (8,152) (4.5) %
Net income (loss) $ 38,427 19.0 % $ (14,434) (8.0) %

Sales and cost of sales components on a per unit basis ~~for the three months ended September 30, 2021 and 2020~~ were as follows:

For the three months ended
September 30,
2021 2020
Met Coal (metric tons in thousands)
Metric tons sold 961 1,753
Metric tons produced 1,024 1,712
Gross price realization(1)
81 % 90 %
Average selling price per metric ton $ 207.85 $ 99.96
Cash cost of sales per metric ton $ 94.68 $ 85.92

~~(1)~~ For the three months ended September 30, 2021 and 2020, our gross price realization represents a volume weighted-average calculation of our daily realized price per ton based on gross sales, which excludes demurrage and other charges, as a percentage of the Platts Index price.


	For the three months ended September 30,
	2022		2021
Met Coal (metric tons in thousands)
Metric tons sold	1,360		961
Metric tons produced	1,490		1,024
Average net selling price per metric ton	$	273.49	$	207.85
Cash cost of sales per metric ton	$	148.56	$	94.68

We produced ~~1.0~~1.5 million metric tons of met coal for the three months ended September 30, ~~2021~~2022 compared to ~~1.7~~1.0 million metric tons for the three months ended September 30, ~~2020.~~2021. The tons produced in the third quarter of ~~2021~~2022 resulted from us running both longwalls and five continuous miner units at Mine No. 7 and the longwall and three continuous miner units at Mine No. 4. In the prior year comparable period, Mine No. 7 was running both longwalls and four continuous miner units ~~at Mine No. 7. By running the four continuous miner units, our lead days or float time has not materially changed since the strike commenced in April 2021~~ and ~~are still several months out into the future.~~ Mine No. 4 ~~remained idled during the three months ended September 30, 2021.~~was idled.

Sales for the three months ended September 30, ~~2021~~2022 were ~~$199.7~~$371.9 million compared to ~~$175.2~~$199.7 million for the three months ended September 30, ~~2020.~~2021. The ~~$24.5~~$172.2 million increase in sales was primarily driven by a ~~$103.7~~$89.3 million increase in sales related to a ~~$107.89~~$65.64 per metric ton increase in the average net selling price per metric ton of met coal ~~offset partially by $79.2~~combined with a $82.9 million ~~decrease~~increase in sales due to a ~~792 thousand~~0.4 million metric ton ~~decrease~~increase in met coal sales volume. Sales volume for the three months ended September 30, 2022 continued to be impacted by shipment delays attributed to the lack of available rail transportation, port maintenance and port congestion.

For the three months ended September 30, 2022, our geographic customer mix was 62% in Europe, 21% in Asia, and 17% in South America. For the three months ended September 30, 2021, our geographic customer mix was 49% in Asia, 47% in Europe and 4% in South America. ~~For the three months ended September 30, 2020, our geographic customer mix was 51% in Europe, 27% in South America and 22% in Asia.~~ The higher mix of sales into Asia is the result of us taking advantage of opportunities with new Chinese customers due to the impact of the Chinese ban on Australian coal. Our geographic customer mix typically varies each period based on the timing of customer orders and shipments.

Other revenues for the three months ended September 30, 2021 were $2.7 million compared to $4.8 million for the three months ended September 30, 2020. Other revenues are comprised of revenue derived from our natural gas operations, gains on sales and disposals of property, plant and equipment and land, changes in the fair value of our natural gas swap contracts, as well as earned royalty revenue. The $2.1 million decrease in other revenues is primarily due to a $5.8 million loss recognized on the fair value adjustment related to our natural gas swap contracts due to an increase in natural gas futures offset partially by a $3.7 million increase in gas revenues due to a $2.05, or 106.6%, increase in average gas selling prices. Cost of other revenues for the period was consistent with the prior year ~~period.~~

~~Cost of sales (exclusive of items shown separately below)~~period was $91.9 million, or 45.4% of total revenues, for the three months ended September 30, 2021, compared to $151.4 million, or 84.1% of total revenues for the three months ended September 30, 2020. The $59.4 million decrease is primarily driven by a $68.0 million decrease due to a 792 thousand metric ton decrease in met coal sales volumes offset partially by an $8.5 million increase due to higher costs on price sensitive transportation and royalty costs.

Depreciation and depletion expenses were $29.0 million, or 14.3% of total revenues, for the three months ended September 30, 2021, compared to $28.0 million, or 15.5% for the three months ended September 30, 2020. The $1.0 million increase in depreciation and depletion is primarily driven by the immediate recognition of $7.8 million of depreciation expense that would normally be capitalized into coal inventory but was not due to the idled status of Mine No. 4 offset partially by a $6.8 million decrease due to a 792 thousand metric ton decrease in met coal sales volume as depreciation and depletion is first capitalized into coal inventory and relieved when the tons are sold.

Selling, general and administrative expenses were $7.4 million, or 3.7% of total revenues, for the three months ended September 30, 2021, compared to $8.2 million, or 4.5% of total revenues, for the three months ended September 30, 2020. The $0.8 million decrease in selling, general and administrative expenses for the period is primarily driven by a decrease in employee related costs and professional service fees.

Business interruption expenses were $6.9 million for the three months ended September 30, 2021. These expenses represent non-recurring expenses that are directly attributable to the ongoing UMWA strike for incremental safety and security, labor negotiations and other expenses.

Idle mine expenses were $9.3 million for the three months ended September 30, 2021. These expenses represent idle expenses incurred in connection with the idling of Mine No. 4 and reduced operations at Mine No. 7, such as electricity, insurance and maintenance labor.

Interest expense, net was $8.8 million, or 4.3% of total revenues, for the three months ended September 30, 2021, compared to $8.1 million, or 4.5% of total revenues, for the three months ended September 30, 2020. The $0.7 million increase is primarily driven by an increase in interest on new equipment financing leases.

~~Other income represents proceeds received of $1.4 million upon the settlement of a lawsuit.~~

For the three months ended September 30, 2021, we utilized a discrete period method to calculate income taxes, as we do not believe that the annual effective tax rate method represents a reliable estimate given the current uncertainty surrounding the current CBA contract negotiations with the UMWA, the COVID-19 pandemic, the Chinese ban on Australian coal and other potentially disruptive factors and their impact on the Company's annual guidance. We recognized income tax expense of $5.4 million for the three months ended September 30, 2021, primarily due to pre-tax operating income offset partially by depletion and the Internal Revenue Code ("IRC") Section 45I Marginal Well Credit. The Marginal Well Credit is a production-based credit that provides a credit for qualified natural gas production. For the three months ended September 30, 2020, we recognized income tax benefit of $8.2 million primarily due to a loss recognized before income taxes and a $3.3 million income tax effect from the IRC Section 451 Marginal Well Credit and other discrete items.

~~Nine Months Ended September 30, 2021 and 2020~~

~~The following table summarizes certain unaudited financial information for the nine months ended September 30, 2021 and 2020.~~

For the nine months ended September 30,
(in thousands) 2021 % of Total Revenues 2020 % of Total Revenues
Revenues:
Sales $ 631,493 98.1 % $ 555,610 97.4 %
Other revenues 12,178 1.9 % 14,875 2.6 %
Total revenues 643,671 100.0 % 570,485 100.0 %
Costs and expenses:
Cost of sales (exclusive of items shown separately below) 399,088 62.0 % 433,661 76.0 %
Cost of other revenues (exclusive of items shown separately below) 22,792 3.5 % 22,267 3.9 %
Depreciation and depletion 102,021 15.8 % 78,813 13.8 %
Selling, general and administrative 26,182 4.1 % 25,105 4.4 %
Business interruption 13,892 2.2 % — — %
Idle mine 20,203 3.1 % — — %
Total costs and expenses 584,178 100.8 % 559,846 103.3 %
Operating income 59,493 9.2 % 10,639 1.9 %
Interest expense, net (25,954) (4.0) % (23,847) (4.2) %
Other income 1,291 0.2 % 1,822 0.3 %
Income (loss) before income tax expense (benefit) 34,830 5.4 % (11,386) (2.0) %
Income tax expense (benefit) 22,439 3.5 % (9,336) (1.6) %
Net income (loss) $ 12,391 1.9 % $ (2,050) (0.4) %

~~Sales and cost of sales components on a per unit basis for the nine months ended September 30, 2021 and 2020 were as follows:~~

For the nine months ended
September 30,
2021 2020
Met Coal (metric tons in thousands)
Metric tons sold 4,385 4,734
Metric tons produced 4,079 5,536
Gross price realization(1)
94 % 92 %
Average selling price per metric ton $ 144.01 $ 117.37
Cash cost of sales per metric ton $ 90.37 $ 91.09

~~(1)~~ For the nine months ended September 30, 2021 and 2020, our gross price realization represents a volume weighted-average calculation of our daily realized price per ton based on gross sales, which excludes demurrage and other charges, as a percentage of the Platts Index price.

We produced 4.1 metric tons of met coal for the nine months ended September 30, 2021 compared to 5.5 metric tons for the nine months ended September 30, 2020. The tons produced resulted from full operations at both mines in the first three months of the year plus both longwalls and four continuous miner units at Mine No. 7 for the period from April 2021 to September 2021, while Mine No 4. was idled during this period. By running the four continuous miner units, our lead days or float time has not materially changed since the strike commenced in April 2021 and are still several months out into the future.

Sales for the nine months ended September 30, 2021 were $631.5 million compared to $555.6 million for the nine months ended September 30, 2020. The $75.9 million increase in sales was primarily driven by a $116.8 million increase in sales related to a $26.64 increase in the average selling price per metric ton of met coal offset partially by a $41.0 million decrease in sales due to a 349 thousand metric ton decrease in met coal sales volume.

For the nine months ended September 30, 2021, our geographic customer mix was 56% in Asia, 36% in Europe and 8% in South America. For the nine months ended September 30, 2020, our geographic customer mix was 59% in Europe, 26% in South America and 15% in Asia. The higher mix of sales into Asia is the result of us taking advantage of opportunities with new Chinese customers during the COVID-19 pandemic and the impact of the Chinese ban on Australian coal. Our geographic customer mix typically varies each period based on the timing of customer orders and shipments.

Other revenues for the ~~nine~~three months ended September 30, ~~2021~~2022 were ~~$12.2~~$18.2 million compared to ~~$14.9~~$2.7 million for the ~~nine~~three months ended September 30, ~~2020.~~2021. Other revenues are comprised of revenue derived from our natural gas operations, gains on sales and disposals of property, plant and equipment and land, changes in the fair value of our natural gas swap contracts, as well as earned royalty revenue. The ~~$2.7~~$15.5 million ~~decrease~~increase in other revenues is primarily due to an ~~$8.7~~increase in gas revenues due to a $5.75, or 145%, increase in the natural gas average selling prices combined with the prior year period including a $5.8 million loss recognized on the fair value adjustment related to our natural gas swap contracts due to an increase in natural gas futures ~~offset partially by a $6.0 million increase in gas revenues due to a $1.31, or 71.9%, increase in average gas selling prices. Cost of other revenues for~~at the ~~period was consistent with the prior year period.~~time.

Cost of sales (exclusive of items shown separately below) was ~~$399.1~~$203.4 million, or ~~62.0%~~52.1% of total revenues, for the ~~nine~~three months ended September 30, ~~2021,~~2022, compared to ~~$433.7~~$92.0 million, or ~~76.0%~~45.4% of total revenues for the ~~nine~~three months ended September 30, ~~2020.~~2021. The ~~$34.6~~$111.4 million ~~decrease~~increase is primarily driven by a ~~$31.7~~$73.3 million ~~decrease~~increase due to higher costs on price sensitive transportation and royalty costs, and the impact of inflation combined with a $38.1 million increase due to a ~~349 thousand~~0.4 million metric ton ~~decrease~~increase in met coal sales ~~volumes combined with a $2.9~~volumes. Inflation accounted for approximately $6.8 million, ~~decrease~~or $4.55 per metric ton, due to ~~a concerted effort to reduce operating~~increases in the costs ~~during the strike~~of diesel fuel, belt structure, roof bolts, cable, magnetite, rock dust and ~~also the impact of low met coal sales prices during the first half of 2021~~other supplies, plus labor and parts on ~~our variable cost structure.~~repair and rebuilds.

Depreciation and depletion expenses were ~~$102.0~~$30.8 million, or ~~15.8%~~7.9% of total revenues, for the ~~nine~~three months ended September 30, ~~2021,~~2022, compared to ~~$78.8~~$29.0 million, or ~~13.8%~~14.3% for the ~~nine~~three months ended September 30, ~~2020.~~2021. The ~~$23.2~~$1.8 million increase in depreciation and depletion is primarily driven by a 0.4 million metric ton increase in met coal sales volume as depreciation and depletion is first capitalized into coal inventory and relieved when the tons are sold offset partially by the immediate recognition in the prior year of ~~$12.9~~$7.8 million in depreciation expense that would have normally bebeen capitalized into coal inventory ~~when produced~~ but was not due to the idled status of Mine No. ~~4 with the remainder of the increase due to the recognition of depreciation expense on an increase in assets placed in service.~~4.

Selling, general and administrative expenses were ~~$26.2~~$10.6 million, or ~~4.1%~~2.7% of total revenues, for the ~~nine~~three months ended September 30, ~~2021,~~2022, compared to ~~$25.1~~$7.4 million, or ~~4.4%~~3.7% of total revenues, for the ~~nine~~three months ended September 30, ~~2020.~~2021. The ~~$1.1~~$3.1 million increase in selling, general and administrative expenses for the period is ~~primarily driven by~~due to an increase in employee related expenses, primarily due to increased stock compensation expense, ~~due to the accelerated vesting of awards for certain individuals who have reached retirement eligibility offset by a decrease~~and an increase in ~~other~~ professional ~~services.~~fees.

Business interruption expenses were ~~$13.9~~$7.1 million and $6.9 million for the ~~nine~~three months ended September 30, ~~2021.~~2022 and 2021, respectively. These expenses remained relatively consistent with the prior period and represent non-recurring expenses that are directly attributable to the ongoing UMWA strike for incremental safety and security, labor negotiations and other expenses.

Idle mine expenses were $5.4 million and $9.3 million for the three months ended September 30, 2022 and 2021, respectively. These expenses represent idle mine expenses incurred in connection with reduced operations at Mine No. 7 and Mine No. 4, such as electricity, insurance and maintenance labor. The $3.9 million decrease in idle mine expenses for the period is primarily due to an increase in production of 0.5 thousand metric tons due to the restart of operations at Mine No. 4 and increased production from Mine No. 7.

Interest expense, net was $5.7 million, or 1.5% of total revenues, for the three months ended September 30, 2022, compared to $8.8 million, or 4.3% of total revenues, for the three months ended September 30, 2021. The $3.1 million decrease is primarily driven by a decrease in interest on our outstanding senior secured notes combined with an increase in interest income.

Other income for the three months ended September 30, 2021 represents proceeds received of $1.4 million upon the settlement of a lawsuit.

For the three months ended September 30, 2022, we recognized income tax expense of $20.3 million, which was principally offset by the utilization of federal net operating loss carryforwards ("NOLs") for cash tax purposes. We estimated our annual effective tax rate and applied this effective tax rate to our year-to-date pretax income at the end of the interim reporting period. For the three months ended September 30, 2021, we utilized a discrete period method to calculate taxes, as we did not believe that the annual effective tax rate method represented a reliable estimate given the uncertainty surrounding the contract negotiations with the UMWA, the COVID-19 pandemic, the Chinese ban on Australian coal and other potentially disruptive factors and their impact on our guidance at the time. The income tax expense of $5.4 million was primarily due to a pre-tax operating income offset partially by depletion and the Internal Revenue Code ("IRC") Section 45I Marginal Well Credit ("Section 45I Credit"). The Section 45I Credit is a production-based tax credit that provides a credit for qualified natural gas production. The credit is phased out when natural gas prices exceed certain levels.

Nine Months Ended September 30, 2022 and 2021

The following table summarizes certain unaudited financial information for these periods.


	For the nine months ended September 30,
($ in thousands)	2022		% of Total Revenues		2021		% of Total Revenues
Revenues:
Sales	$	1,377,665	98.8	%	$	631,493	98.1	%
Other revenues	16,323		1.2	%	12,178		1.9	%
Total revenues	1,393,988		100.0	%	643,671		100.0	%
Costs and expenses:
Cost of sales (exclusive of items shown separately below)	529,869		38.0	%	399,088		62.0	%
Cost of other revenues (exclusive of items shown separately below)	26,120		1.9	%	22,792		3.5	%
Depreciation and depletion	86,973		6.2	%	102,021		15.8	%
Selling, general and administrative	36,985		2.7	%	26,182		4.1	%
Business interruption	20,084		1.4	%	13,892		2.2	%
Idle mine	10,141		0.7	%	20,203		3.1	%
Total costs and expenses	710,172		50.9	%	584,178		90.8	%
Operating income	683,816		49.1	%	59,493		9.2	%
Interest expense, net	(20,706)		(1.5)	%	(25,954)		(4.0)	%

Other income	675		—	%	1,291		0.2	%
Income before income tax expense	663,785		47.6	%	34,830		5.4	%
Income tax expense	122,141		8.8	%	22,439		3.5	%
Net income	$	541,644	38.9	%	$	12,391	1.9	%

Sales and cost of sales components on a per unit basis were as follows:


	For the nine months ended September 30,
	2022		2021
Met Coal (metric tons in thousands)
Metric tons sold	3,782		4,385
Metric tons produced	4,397		4,079
Average net selling price per metric ton	$	364.27	$	144.01
Cash cost of sales per metric ton	$	139.15	$	90.37

We produced 4.4 million metric tons of met coal for the nine months ended September 30, 2022 compared to 4.1 million metric tons for the nine months ended September 30, 2021.

Sales for the nine months ended September 30, 2022 were $1,377.7 million compared to $631.5 million for the nine months ended September 30, 2021. The $746.2 million increase in sales was primarily driven by a $833.0 million increase in sales related to a $220.26 increase in the average net selling price per metric ton of met coal offset partially by an $86.8 million decrease in sales due to a 0.6 million metric ton decrease in met coal sales volume. The decrease in met coal sales volumes is primarily due to continued shipment delays resulting from port maintenance, lack of railcar availability and port congestion in the nine months ended September 30, 2022.

For the nine months ended September 30, 2022, our geographic customer mix was 63% in Europe, 21% in Asia, and 16% in South America. For the nine months ended September 30, 2021, our geographic customer mix was 56% in Asia, 36% in Europe and 8% in South America. The higher mix of sales into Asia in the prior year period was the result of us taking advantage of opportunities with new Chinese customers during the COVID-19 pandemic and the impact of the Chinese ban on Australian coal. Our geographic customer mix typically varies each period based on the timing of customer orders and shipments.

Other revenues for the nine months ended September 30, 2022 were $16.3 million compared to $12.2 million for the nine months ended September 30, 2021. Other revenues are comprised of revenue derived from our natural gas operations, gains on sales and disposals of property, plant and equipment and land, changes in the fair value of our natural gas swap contracts, as well as earned royalty revenue. The $4.1 million increase in other revenues is primarily due to an increase in gas revenues due to an approximate $4.15, or 133%, increase in average natural gas selling prices offset partially by a $19.0 million increase in the loss recognized on the fair value adjustment related to our natural gas swap contracts due to an increase in natural gas futures.

Cost of sales (exclusive of items shown separately below) was $529.9 million, or 38.0% of total revenues, for the nine months ended September 30, 2022, compared to $399.1 million, or 62.0% of total revenues for the nine months ended September 30, 2021. The $130.8 million increase is primarily driven by a $184.6 million increase due to higher costs on price sensitive transportation and royalty costs, as well as the impact of inflation, offset partially by a $53.8 million decrease due to a 0.6 million metric ton decrease in met coal sales volumes. Inflation accounted for approximately $16.3 million, or $3.71 per metric ton, due to increases in the costs of diesel fuel, belt structure, roof bolts, cable, magnetite, rock dust and other supplies, plus labor and parts on repair and rebuilds.

Depreciation and depletion expenses were $87.0 million, or 6.2% of total revenues, for the nine months ended September 30, 2022, compared to $102.0 million, or 15.8% for the nine months ended September 30, 2021. The $15.0 million decrease in depreciation and depletion is primarily driven by a 0.6 million metric ton decrease in met coal sales volumes as depreciation and depletion is first capitalized into coal inventory and relieved when the tons are sold combined with the immediate recognition in the prior year of $12.9 million in depreciation expense that would have normally been capitalized into coal inventory but was not due to the idled status of Mine No. 4.

Selling, general and administrative expenses were $37.0 million, or 2.7% of total revenues, for the nine months ended September 30, 2022, compared to $26.2 million, or 4.1% of total revenues, for the nine months ended September 30, 2021. The $10.8 million increase in selling, general and administrative expenses for the period is due to an increase in employee related expenses, primarily due to increased stock compensation expense, and an increase in professional fees.

Business interruption expenses were $20.1 million and $13.9 million for the nine months ended September 30, 2022 and 2021, respectively. These expenses represent non-recurring expenses that are directly attributable to the ongoing UMWA strike for incremental safety and security, labor negotiations and other expenses. The $6.2 million increase in business interruption expenses is primarily due to the current period including six months of related expenses compared to the prior year period only including three months of related expenses due to the strike beginning on April 1, 2021.

Idle mine expenses were $10.1 million and $20.2 million for the nine months ended September 30, ~~2021.~~2022 and 2021, respectively. These expenses represent idle mine expenses incurred in connection with ~~the idling of Mine No. 4 and~~ reduced operations at Mine No. 7 and Mine No. 4, such as electricity, insurance and maintenance labor. The $10.1 million decrease in idle mine expenses is primarily due to Mine No. 4 being operational for the full nine months ended September 30, 2022 versus Mine No. 4 being idled upon expiration of the CBA on April 1, 2021 in the prior year.

Interest expense, net was $20.7 million, or 1.5% of total revenues, for the nine months ended September 30, 2022, compared to $26.0 million, or 4.0% of total revenues, for the nine months ended September 30, ~~2021, compared to $23.8~~2021. The $5.2 million ~~or 4.2%~~decrease is primarily driven by a decrease in interest on our outstanding senior secured notes combined with an increase in interest income.

Other income of ~~total revenues,~~$0.7 million for the nine months ended September 30, ~~2020. The $2.2 million increase is primarily driven by an increase of $1.7 million due to interest on new equipment financing leases and a decrease in interest income of $0.5 million.~~

2022 represents proceeds received from the Chapter 11 Cases from Walter Energy, Inc. ("Walter Energy"). Other income for the nine months ended September 30, 2021 ~~were~~of $1.3 million ~~or 0.2% of total revenues, compared to $1.8 million, 0.3% of total revenues, for the nine months ended September 30, 2020. Other income for the nine months ended September 30, 2021,~~ represents proceeds received in connection with the settlement of a lawsuit offset partially by COVID-19 pandemic related expenses.

~~In connection with~~For the ~~Company’s acquisition~~nine months ended September 30, 2022, we recognized income tax expense of certain core operating assets of Walter Energy, the Company acquired a receivable owed to Walter Energy by Walter Canada for certain shared services provided by Walter Energy to Walter Canada (the “Shared Services Claim”) and a receivable for unpaid interest owed to Walter Energy from Walter Canada

~~in respect of a promissory note (the “Hybrid Debt Claim”). Each of these claims were asserted~~$122.1 million, which was principally offset by the ~~Company in~~utilization of federal NOLs for cash tax purposes. We estimated our annual effective tax rate and applied this effective tax rate to our year-to-date pretax income at the Walter Canada CCAA proceedings. Walter Energy deemed these receivables to be impaired for the year ended December 31, 2015 and the Company did not assign any value to these receivables in acquisition accounting as collectability was deemed remote. In March 2020, the Company received approximately $1.8 million in settlement proceeds for the Shared Services Claim and Hybrid Debt Claim which is reflected as other income in the Condensed Statement of Operations. The collectability of additional amounts, if any, related to the Shared Services Claim and Hybrid Debt Claim depends on the outcome of, and the timing of any resolutionsend of the ~~Walter Canada CCAA proceedings and cannot be predicted with certainty.~~

interim reporting period. For the nine months ended September 30, 2021, we utilized a discrete period method to calculate taxes, as we dodid not believe that the annual effective tax rate method ~~represents~~represented a reliable estimate given the ~~current~~ uncertainty surrounding the ~~current~~ CBA contract negotiations with the UMWA, the COVID-19 pandemic, the Chinese ban on Australian coal and other potentially disruptive factors and their impact on our guidance at the ~~Company's annual guidance. We recognized~~time. The income tax expense of $22.4 million ~~for such period. For the nine months ended September 30, 2020, we recognized income tax benefit of $9.3 million. The $22.4 million income tax expense~~ for the nine months ended September 30, 2021 ~~is primarily~~was due to the establishment of a non-cash $47.8 million state deferred income tax asset valuation allowance, ~~discussed above,~~ offset partially by a non-cash net ~~non-cash~~ income tax benefit of $22.9 million due to the remeasurement of state deferred income tax assets and liabilities and $2.5 million of net income tax ~~expense due to a pre-tax operating income,~~benefit from the ~~IRC~~ Section 45I ~~Marginal Well~~ Credit, depletion and other adjustments.

Liquidity and Capital Resources

Overview

Our sources of cash have been met coal and natural gas sales to customers, proceeds received from the issuance of the Notes (as defined below) and access to our ABL Facility. Historically, our primary uses of cash have been for funding the operations of our met coal and natural gas production operations, our capital expenditures, our reclamation obligations, payment of principal and interest on our Notes, professional fees and other non-recurring transaction expenses. In addition, we have used available cash on hand to repurchase shares of our common stock, pay quarterly dividends, and pay special dividends, each of which reduces cash and cash equivalents.

Going forward, we will use cash to fund debt service payments on our Notes, the ABL Facility and our other indebtedness, to fund operating activities, working capital, capital expenditures, and strategic investments, and, if declared, to pay our quarterly and/or special dividends. In addition, and, subject to prevailing market conditions and other factors we deem relevant and as further discussed below, we may, from time to time, repurchase our Notes. 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 ABL Facility, and, in the case of any future strategic investments, capital expenditures, or special dividends financed partially or wholly with debt financing, our ability to access the capital markets to raise additional capital.

Our ability to generate positive cash flow from operations in the future will be, at least in part, dependent on continued stable global economic conditions and a resolution of negotiations regarding the ~~CBA contract negotiations with the UMWA.~~Company's CBA. There remains significant uncertainty as to the continued effects of ~~new~~the COVID-19 ~~variants~~pandemic, the weakening global macroeconomic environment, inflation and trade disruptions following the previously mentioned sanctions imposed on ~~the global economy,~~Russian coal, which in turn may, among other things, impact our ability to generate positive cash flows from operations, fund capital expenditure needs and successfully execute and fund key initiatives, such as the development of Blue Creek.

Our total liquidity as of September 30, ~~2021~~2022 was ~~$355.7~~$869.0 million, consisting of cash and cash equivalents of ~~$268.4~~$745.7 million and ~~$87.3~~$123.3 million available under our ABL Facility. As of September 30, ~~2021,~~2022, no loans were outstanding under the ABL Facility and there were ~~$9.4~~$8.7 million of letters of credit issued and outstanding under the ABL Facility. On March 24, 2020, we borrowed $70.0 million in a partial draw of the ABL Facility (the “ABL Draw”) as a precautionary measure in order to increase our cash position and preserve financial flexibility in light of the current uncertainty resulting from the COVID-19 outbreak. In June 2020, we reduced the outstanding principal amount of the ABL Draw by $30.0 million and during

During the three months ended September 30, ~~2021,~~2022, we ~~reduced~~repurchased in the ~~remaining $40.0~~open market and extinguished approximately $37.8 million ~~outstanding~~ principal amount of our Notes at a discount to par value. The discounts to par value and the ~~ABL Draw.~~interest expense savings from these open market purchases are estimated to be approximately $19.0 million through the maturity of our Notes. In connection with the extinguishment of our Notes, we recognized a loss on early extinguishment of debt of $0.5 million which is included in interest expense, net in the Condensed Statements of Operations. In the future, we may, at any time and from time to time, seek to retire or purchase additional Notes in open-market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will be upon such terms and at such prices as we may determine, and will depend on prevailing market conditions, our liquidity requirements, contractual restrictions, if any, and other factors.

We are responsible for medical and disability benefits for black lung disease under the Federal Coal Mine Health and Safety Act of 1969, as amended. Beginning on April 1, 2016 through May 31, 2018, we were insured under a guaranteed cost insurance policy, through a third-party insurance carrier, for black lung claims raised by any employee subsequent to the acquisition of certain assets of Walter Energy. Beginning on June 1, 2018 through May 31, 2020, we had a deductible policy where we are responsible for the first $0.5 million for each black lung claim. Since June 1, 2020, we have a deductible policy where we are responsible for the first $1.0 million for each black lung claim.

In addition, in connection with the acquisition of certain assets of Walter Energy, we assumed all black lung liabilities of Walter Energy and its U.S. subsidiaries incurred prior to March 31, 2016, for which we are self-insured. Due to a limited operating history as a stand-alone company and as a result of being self-insured for these historical black lung claims, the U.S. Department of Labor ("DOL") required us to post $17.0 million in the form of Treasury bills or surety bonds as collateral, in addition to maintaining a black lung trust acquired in the Walter Energy acquisition. We received a letter from the DOL on February 21, 2020 under its new process for self-insurance renewals that would require us to increase the amount of collateral posted to $39.8 million, but we appealed such increase. We received a letter from the DOL on December 8, 2021 requesting additional information to support our appeal of the collateral requested by the DOL. We received another letter from the DOL on July 12, 2022 that based on their review of our arguments and submissions, requested us to increase our collateral to $28.0 million in order to remain self-insured for the legacy Walter Energy black lung liabilities, but we have appealed such increase.

As of September 30, 2022 and December 31, 2021, we had $17.0 million of surety bonds, which is collateralized by $8.5 million of short-term investments. There were also $2.3 million and $2.6 million of assets held in a black lung trust, which is offset against the long-term portion of the black lung obligations within the Condensed Balance Sheets as of September 30,

2022 and December 31, 2021, respectively. The estimated total black lung liabilities (net of black lung trust assets) were $36.9 million as of September 30, 2022, of which $2.6 million is classified in other current liabilities and the remainder of $34.3 million is shown as a long-term liability in a separate line item in the Condensed Balance Sheets. The estimated total black lung liabilities (net of black lung trust assets) were $37.1 million as of December 31, 2021, of which $2.6 million was classified in other current liabilities and the remainder of $34.5 million was presented as a long-term liability in the Balance Sheets.

In the ordinary course of our business, we are required to provide surety bonds and letters of credit to provide financial assurance for certain transactions and business activities. Federal and state laws require us to obtain surety bonds or other acceptable security to secure payment of certain long-term obligations including mine closure or reclamation costs and other miscellaneous obligations. As of September 30, 2022, we had outstanding surety bonds and letters of credit with parties for post-mining reclamation at all of our mining operations totaling $41.8 million, $18.6 million as collateral for self-insured black lung related claims and $4.2 million for miscellaneous purposes.

We believe that our future cash flows from operations, together with cash on our balance sheet, ~~and proceeds from the ABL Draw,~~ will provide adequate resources to fund our debt service payments and planned operating and capital expenditure needs for at least the next twelve months. However, we will continue to assess our liquidity needs in light of the ongoing CBA contract negotiations with the UMWA, ~~and~~ the ongoing impact of ~~COVID-19.~~COVID-19, the weakening global macroeconomic environment, inflation and trade disruptions following the previously mentioned sanctions imposed on Russian coal imports.

Our principal contractual commitments include repayments of long-term debt and related interest, potential minimum throughput payments associated with our rail and port providers, asset retirement obligation payments, black lung obligation payments, payments on various coal and land leases, payments under financing lease obligations and payments associated with our natural gas swap contracts. Currently, there are no known trends or expected changes anticipated in future periods that would not be indicative of past results for our contractual commitments.

Refer to the respective notes in our audited financial statements for the year ended December 31, 2021 included in our 2021 Annual Report for further information about our credit facilities and long-term debt (Note 13), commitments and contingencies (Note 16), asset retirement obligations (Note 8), black lung obligations (Note 10), lease payment obligations (Note 14), share repurchase programs (Note 17) and derivative instruments (Note 18).

If our cash flows from operations are less than we require, we may need to incur additional debt or issue additional equity. From time to time we may need to access the long-term and short-term capital markets to obtain financing. 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 (as defined below), and any other existing or future debt agreements. Additionally, banks, other lenders and investors have become increasingly unwilling to provide financing to coal producers. Due to the nature of our business, we may be limited in accessing debt capital markets or obtaining additional bank financing, or the cost of assessing this financing could become more expensive. There can be no assurance that we will have or continue to have access to bank financing or the capital markets on terms acceptable to us or at all.

Statements of Cash Flows

Cash balances were ~~$268.4~~$745.7 million and ~~$211.9~~$395.8 million at September 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively.

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 nine months ended September 30,					For the nine months ended September 30,
		2021		2020			2022		2021
Net cash provided by operating activities	Net cash provided by operating activities	$	176,830	$	82,153	Net cash provided by operating activities	$	646,910	$	176,830
Net cash used in investing activities	Net cash used in investing activities	(47,419)		(79,083)		Net cash used in investing activities	(156,679)		(47,419)
Net cash (used in) provided by financing activities		(72,932)		19,960
Net cash used in financing activities						Net cash used in financing activities	(140,404)		(72,932)
Net increase in cash and cash equivalents	Net increase in cash and cash equivalents	$	56,479	$	23,030	Net increase in cash and cash equivalents	$	349,827	$	56,479

Operating Activities

Net cash flows from operating activities consist of net income ~~(loss)~~ 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/premium, accretion of asset retirement obligations, mark-to-market losses on gas hedges and changes in net working capital.

Net cash provided by operating activities was $646.9 million for the nine months ended September 30, 2022, and was primarily attributed to net income of $541.6 million adjusted for deferred income tax expense of $122.2 million, depreciation and depletion expense of $87.0 million, stock based compensation expense of $14.3 million, mark-to-market loss on gas hedges of $4.0 million, accretion of asset retirement obligations of $2.7 million, amortization of debt issuance costs and debt discount of $2.9 million and an increase in our net working capital of $130.7 million since December 31, 2021. The increase in our working capital was primarily driven by increases in accounts receivable and inventory offset partially by an increase in accrued expenses and other current liabilities. The increase in trade accounts receivable reflects higher sales prices and the timing of sales and the increase in inventories is due to greater production than sales volumes and continued shipment delays resulting from port maintenance, lack of railcar availability and port congestion. The increase in accrued expenses and other current liabilities is due to the restart of Mine No. 4 in the first quarter of 2022 combined with higher costs on price sensitive transportation and royalty costs, and the impact of inflation.

Net cash provided by operating activities was $176.8 million for the nine months ended September 30, 2021, and was primarily attributed to the net income of $12.4 million adjusted for depreciation and depletion expense of $102.0 million, deferred income tax expense of $22.4 million, stock based compensation expense of $8.8 million, accretion of asset retirement obligations of $2.4 million, amortization of debt issuance costs and debt discount/premium, net of $1.3 million, mark-to-market loss on gas hedges of $8.7 million and a decrease in our net working capital of $12.4 million since December 31, 2020. The decrease in our working capital was primarily driven by decreases in accounts receivable, inventory and prepaid expenses and other receivables offset partially by decreases to accounts payable and accrued expenses and other current liabilities. The decrease to inventory was due to greater sales than production volume for the ~~current~~ period. The decrease in trade accounts receivable and accounts payable is primarily driven by the timing of cash receipts and payments.

Net cash provided by operating activities was $82.2 million for the nine months ended September 30, 2020, and was primarily attributed to net loss of $2.0 million adjusted for depreciation and depletion expense of $78.8 million, deferred income tax benefit of $9.3 million, stock based compensation expense of $5.6 million, accretion of asset retirement obligations of $2.2 million and amortization of debt issuance costs and debt discount/premium, net of $1.1 million, coupled with a net increase in our working capital of $1.0 million since December 31, 2019. The increase in our working capital was primarily driven by an increase in inventory and prepaid expenses and other receivables offset partially by a decrease in income tax receivable and trade accounts receivable and an increase in accounts payable. The increase in inventory and decrease in trade accounts receivable was primarily due to a 1.0 million decrease in metric tons sold. The decrease in trade accounts receivable was also due to a decrease in the average selling price per metric ton sold. The decrease in income tax receivable was due to the alternative minimum tax ("AMT") credit refund of $24.3 million received during the third quarter of 2020. The increase in our accounts payable was primarily driven by the timing of payments.

Investing Activities

Net cash used in investing activities was ~~$47.4~~$156.7 million and ~~$79.1~~$47.4 million for the nine months ended September 30, ~~2021~~2022 and September 30, ~~2020,~~2021, respectively, primarily due to purchases of property, plant and equipment and mine development. The ~~prior year~~current period also includes ~~proceeds from a~~$3.5 million cash used in connection with the acquisition of leased mineral rights and $2.5 million net ~~sale~~cash acquired in connection with the acquisition of ~~short-term investments.~~

the remaining 50% interest in BWM and BWT.

Financing Activities

Net cash used byin financing activities was $140.4 million for the nine months ended September 30, 2022, primarily due to the payment of regular quarterly and special dividends of $76.5 million, retirements of debt related to our senior notes of $37.8 million and principal repayments of finance lease obligations of $22.4 million.

Net cash used in financing activities was $72.9 million for the nine months ended September 30, 2021, primarily due to the repayment of the ABL Draw of $40.0 million, principal repayments of ~~capital~~finance lease obligations of $22.3 million and the payment of dividends of $7.8 million.

Net cash provided by financing activities was $20.0 million for the nine months ended September 30, 2020, primarily due to the proceeds received from the ABL Draw of $70.0 million offset by the subsequent partial repayment of the ABL Draw in an amount equal to $30.0 million, principal repayments of capital lease obligations of $11.0 million and the payment of dividends of $7.8 million.

Stock Repurchase Program

On March 26, 2019, our ~~board~~Board of ~~directors~~Directors (the "Board") approved our second stock repurchase program (the “Stock Repurchase Program”) that authorizes repurchases of up to an aggregate of $70.0 million of our outstanding common stock. We fully exhausted our previous stock repurchase program of $40.0 million of our outstanding common stock. The Stock Repurchase Program does not require us to repurchase a specific number of shares or have an expiration date. The Stock Repurchase Program may be suspended or discontinued by the Board at any time without prior notice.

Under the Stock Repurchase Program, we may repurchase shares of our common stock from time to time, in amounts, at prices and at such times as we deem appropriate, subject to market and industry conditions, share price, regulatory requirements as determined from time to time by us and other considerations. Our 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.~~Indenture governing the Notes (the "Indenture"). We intend to fund repurchases under the Stock Repurchase Program from cash on hand and/or other sources of liquidity.

As of September 30, ~~2021,~~2022, we have repurchased 500,000 shares for approximately $10.6 million, leaving approximately ~~$58.8~~$59.4 million of share repurchases authorized under the Stock Repurchase Program.

In light of the uncertainties resulting from the COVID-19 pandemic and as a precautionary measure to preserve liquidity, the Company has temporarily suspended its Stock Repurchase Program. The Company will continue to monitor its liquidity in light of the pandemic, the Chinese ban on Australian coal and our CBA contract negotiations with the UMWA and will consider when to reinstate the program.

~~Dividend~~Capital Allocation Policy

On May 17, 2017, the Board adopted ~~a dividend policy (the "Dividend Policy")~~the Capital Allocation Policy of paying a quarterly cash dividend of $0.05 per share. The ~~Dividend~~Capital Allocation Policy ~~also~~ states the following: In addition to the regular quarterly dividend and to the extent that we generate excess cash that is beyond the ~~then current~~then-current requirements of the business, the Board may consider returning all or a portion of such excess cash to stockholders through a special dividend or ~~repurchase~~implementation of ~~common stock pursuant to~~ a stock repurchase program. Any future dividends or stock repurchases will be at the discretion of the Board and subject to consideration of a number of factors, including business and market conditions, future financial performance and other strategic investment opportunities. ~~We will also seek~~

In February 2022, we announced that the Board approved an increase in the regular quarterly cash dividend by 20%, from $0.05 per share to ~~optimize~~$0.06 per share. On May 3, 2022, we provided an update on our capital allocation strategy. Our strategy continues to be focused on optimizing our capital structure to improve returns to stockholders, through special cash dividends, while allowing flexibility for us to ~~pursue very selective strategic growth opportunities~~develop Blue Creek. We intend on returning cash to stockholders in stronger price markets where we are generating significant amounts of cash flow, and less cash to stockholders during weaker markets. We also intend on using stock buybacks when there is no short- or long-term use for additional cash that ~~can provide compelling stockholder returns.~~

~~The Company has~~will deliver meaningful value to stockholders. We have paid a regular quarterly cash dividend ~~of $0.05 per share~~ every quarter since the Board adopted the ~~Dividend~~Capital Allocation Policy. ~~As of~~

During the nine months ended September 30, ~~2021, the Company has~~2022, we have paid ~~$44.7~~$76.5 million of regular quarterly and special cash dividends under the ~~Dividend Policy.~~Capital Allocation Policy.

Regular Quarterly Dividend

On February 18, ~~2021,~~2022, the Board declared a regular quarterly cash dividend of ~~$0.05~~$0.06 per share, totaling ~~$2.6~~approximately $3.1 million, which was paid on March ~~8, 2021,~~10, 2022, to stockholders of record as of the close of business on March ~~1, 2021.~~

3, 2022.

On April ~~27, 2021,~~26, 2022, the Board declared a regular quarterly cash dividend of ~~$0.05~~$0.06 per share, totaling ~~$2.6~~approximately $3.1 million, which was paid on May ~~12, 2021~~13, 2022, to stockholders of record as of the close of business on May ~~7, 2021.~~

6, 2022.

On ~~July 30, 2021,~~August 1, 2022 the Board declared a regular quarterly cash dividend of ~~$0.05~~$0.06 per share, totaling approximately ~~$2.6~~$3.1 million, which was paid on August ~~16, 2021~~18, 2022 to stockholders of record as of the close of business on August ~~9, 2021.~~

11, 2022.

On October ~~25, 2021,~~24, 2022 the ~~board of directors~~Board declared a regular quarterly cash dividend of ~~$0.05~~$0.06 per share, totaling approximately ~~$2.6~~$3.1 million, which will be paid on November ~~12, 2021~~11, 2022 to stockholders of record as of the close of business on November ~~5, 2021.~~4, 2022.

Special Dividend

AsOn May 3, 2022, the ~~Company continues~~Board declared a special cash dividend of $0.50 per share, totaling approximately $25.8 million, which was paid on May 20, 2022, to ~~monitor its liquidity in light~~stockholders of record as of the ~~COVID-19 pandemic, the Chinese ban~~close of business on ~~Australian coal and our CBA contract negotiations with the UMWA, the Company may decide to suspend its Dividend Policy in the future if~~May 13, 2022.

On August 1, 2022, the Board ~~deems it~~declared a special cash dividend of $0.80 per share, totaling approximately $41.3 million, which was paid on August 29, 2022 to ~~be necessary or appropriate.~~stockholders of record as of the close of business on August 22, 2022.

ABL Facility

The ABL Facility will mature on ~~October 15, 2023.~~December 6, 2026. As of September 30, ~~2021,~~2022, no loans were outstanding under the ABL Facility and there were ~~$9.4~~$8.7 million of letters of credit issued and outstanding under the ABL Facility. At September 30, ~~2021,~~2022, we had ~~$87.3~~$123.3 million of availability under the ABL Facility.

~~The revolving~~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, ~~receivable,~~ certain eligible inventory, certain eligible supplies inventory and qualified cash, in each case, subject to specified advance rates. The borrowing base availability is subject to certain reserves, which may be established by the agent in its reasonable credit discretion. The reserves may include rent

reserves, lower of cost or market ~~reserve,~~reserves, port charges reserves and any other reserves that the ~~agent~~Agent determines in its reasonable credit ~~judgement~~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. On July 20, 2020, we entered into Amendment No. 3 to the Amended and Restated Asset-Based Revolving Credit Agreement (the "Amendment"). The purpose of the Amendment was to clarify certain definitions related to the borrowing base and to decrease the aggregate commitments available to be borrowed

Borrowings under the ABL Facility bear interest at a rate equal to ~~$120.0 million~~either (i) the Secured Overnight Financing Rate ("SOFR"), plus a credit adjustment spread, ranging currently from approximately 11 bps to 43 bps depending on ~~February 28, 2021.~~

the interest period selected by us, or (ii) an alternate base 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. 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 38 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.

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. 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 September 30, ~~2021,~~2022, 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 September 30, ~~2021.~~2022.

Senior Secured Notes

On ~~November 2, 2017,~~December 6, 2021, we issued $350.0 ~~million aggregate principal amount of our 8.00% Senior Secured Notes due 2024 (the "Original Notes"). We then issued an additional $125.0~~ million in aggregate principal amount of 7.875% senior secured notes due 2028 (the “Notes”) at an initial price of 99.343% of their face amount. The Notes were issued to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and to certain non-U.S. persons in transactions outside the United States in accordance with Regulation S under the Securities Act. We used the net proceeds of the offering of the Notes, together with cash on hand, to fund the redemption of all of our outstanding 8.00% ~~Senior Secured Notes~~senior secured notes due 2024 (the ~~“New~~“Existing Notes” ~~and, together with the Original Notes, the "Notes") on March 1, 2018. The New Notes were issued as "Additional Notes" under the indenture dated as of November 2, 2017 (the "Original Indenture"~~), ~~among us,~~including payment of the subsidiary guarantors party thereto and Wilmington Trust, National Association, as trustee and priority lien collateral trustee, as supplemented by the First Supplemental Indenture, dated as of March 1, 2018 (the "First Supplemental Indenture" and, the Original Indenture as supplemented thereby and by the Second Supplemental Indenture, dated as of March 2, 2018, the "Indenture"). redemption premium in connection with such redemption.

The Notes ~~mature~~will accrue interest at a rate of 7.875% per year from December 6, 2021. Interest on ~~November 1, 2024 and interest is~~the Notes will be payable on ~~May~~June 1 and ~~November~~December 1 of each ~~year.~~year, commencing on June 1, 2022. The Notes will mature on December 1, 2028.

During the three months ended September 30, 2022, we repurchased in the open market and extinguished approximately $37.8 million principal amount of our Notes. In connection with the extinguishment of our Notes, we recognized a loss on early extinguishment of debt of $0.5 million which is included in interest expense, net in the Condensed Statements of Operations.

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. Specifically, the exploration, permitting and development of met coal reserves, mining costs, the maintenance of machinery and equipment and compliance with applicable laws and regulations require ongoing capital expenditures. The cost of our capital expenditures are also impacted by inflation and any prolonged inflation could result in higher costs and decreased margins and earnings. While a significant amount of the capital expenditures required at our mines has been spent, we must continue to invest capital to maintain our production. In addition, any decisions to increase production at our mines ~~or regarding~~and the development of the high-quality met coal recoverable reserves at Blue Creek could also affect our capital needs or cause future capital expenditures to be higher than in the past and/or higher than our estimates.

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

Our capital expenditures were ~~$34.1~~$120.0 million and ~~$72.1~~$34.1 million for the nine months ended September 30, ~~2021~~2022 and September 30, ~~2020,~~2021, respectively. Capital expenditures for these periods primarily related to investments required to maintain our property, plant and equipment. Our capital expenditures in the current year include approximately $0.5 million of capitalized interest. Our deferred mine development costs were ~~$13.5~~$35.7 million and ~~$13.3~~$13.5 million for the nine months ended September 30, ~~2021~~2022 and September 30, ~~2020,~~2021, respectively, and relate to Mine No. 4.4 and the development of Blue Creek.

Our guidance for capital expenditures in 2022 consists of sustaining capital spending of approximately $75.0 - $80.0 million, including regulatory and gas requirements, and discretionary capital spending of $110.0 - $120.0 million for the 4 North portal construction, deposits on two new sets of longwall shields and the development of the Blue Creek project for which we have budgeted $45.0 million for 2022. The 4 North portal construction is a new development in the north section of Mine No. 4 that includes a new portal, bathhouse, hoist shaft, office building, and warehouse that will shorten the travel distance for our current Mine No. 4 employees. We will continue to evaluate our spending on an ongoing basis in connection with our mining plans and the prices of met coal taking into consideration the funding available to maintain our operations at optimal production levels.

Relaunch of Blue Creek

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

We believe that Blue Creek represents one of the few remaining untapped reserves of premium ~~high volatility ("~~High ~~Vol")~~Vol A met coal in the United States and that it has the potential to provide us with meaningful growth. We believe that the combination of a low production cost and the high quality of the High Vol A met coal mined from Blue Creek, assuming we achieve our expected price realizations, will generate some of the highest met coal margins in the U.S., generate strong investment returns for us and achieve a rapid payback of our investment across a range of met coal price environments.

According to our ~~third party~~third-party reserve report, 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, Blue Creek ~~contains approximately 103.0~~has 63.3 million metric tons of recoverable reserves and we44.9 million metric tons of coal resources exclusive of reserves, which total 108.2 million metric tons. We have the ability to acquire adjacent reserves that would increase total reserves to over 154 million metric tons. We expect that Blue Creek will have a mine life of approximately 50 years assuming a single longwall operation.

Our third-party reserve report also indicates that, once developed, Blue Creek will produce a premium High Vol A met coal that is characterized by low-sulfur and high ~~CSR.~~coke strength after reaction. High Vol A met coal has traditionally priced at a discount to the Australian Premium Low Vol and the U.S. Low Vol coals; however, ~~in recent history, the High Vol A index~~recently, it has ~~traded closer to the prices of~~been priced at or slightly above these ~~coals and for some extended periods of time, even traded at a premium to them.~~coals. Warrior expects High Vol A coals will continue to become increasingly scarce as a result of Central Appalachian producers mining thinner and deeper reserves, which we expect will continue to support prices. This trend creates an opportunity for us to take advantage of favorable pricing dynamics driven by the declining supply of premium High Vol A met coal.

Since the initial announcement, inflation in steel and other commodity prices, including labor costs have increased the total capital spending requirements of this project. However, during a refresh of the project, we have identified production increases of approximately 10% and we are able to accelerate the start of longwall production by approximately fifteen months based on design modifications and stronger available liquidity to fund the project.

If we are able to successfully develop Blue Creek, we expect that it will be a transformational investment for us. We expect that the new single longwall mine at Blue Creek will have the capacity to produce an average of ~~3.9~~4.4 million metric tons per annum of premium High Vol A met coal over the first ten years of production, thereby increasing our annual production capacity by ~~54%~~60%. This, in turn, would expand our product portfolio to our global customers by allowing us to offer three premium hard coking coals from a single port location. Given these factors, and assuming we achieve expected price realizations, we believe that we will achieve some of the highest premium met coal margins in the United States.

~~Due~~We expect to invest approximately $650.0 to $700.0 million over the ~~ongoing uncertainty related~~next five years to develop Blue Creek with expected spending in 2022 of approximately $45.0 million to begin the ~~COVID-19 pandemic,~~project. Based on the ~~Chinese ban on Australian coal and our~~ current ~~CBA contract negotiations~~schedule, we expect the first development tons from continuous miner units to occur in the third quarter of 2024 with the ~~UMWA,~~longwall scheduled to start up in the second quarter of 2026. Our strong cash flow generation and current available liquidity, as well as the ability to finance $120.0 to $130.0 million of capital expenditures through equipment leases, allows us to be opportunistic as we ~~incurred minimal spend on the development of~~evaluate funding options for Blue Creek ~~in 2021. We have delayed~~with the ~~majority~~goal of ~~the first year budgeted $25.0 million development of the Blue Creek project, while we focus on preserving cash~~maintaining an efficient and ~~liquidity.~~low-cost capital.

~~Outlook~~

Critical Accounting Policies

~~Due~~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. Management evaluates these estimates and assumptions on an ongoing basis, using historical experience, consultation with experts and other methods considered reasonable in the particular circumstances. Nevertheless, actual results may differ significantly from management’s estimates.

Our most critical accounting estimates are those that are most important to the ~~ongoing uncertainty related~~presentation of our financial condition and results of operations and require management’s most difficult, subjective and complex judgments, often as a result of the need to make estimates about the ~~COVID-19 pandemic,~~effect of matters that are inherently uncertain. These estimates are based upon management’s historical experience and on various other assumptions that we believe are reasonable under the ~~Chinese ban on Australian coal~~circumstances. Changes in estimates used in these and our current CBA contract negotiations with the UMWA, we will not provide full year 2021 guidance at this time. Although we are aggressively managing our response to the COVID-19 pandemic and remain committed to good faith negotiations to reachother items could have a ~~new agreement with the UMWA, their~~material impact on our ~~full-year fiscal~~financial statements.

As of September 30, 2022, there have been no material changes to our critical accounting estimates as described in the "Critical Accounting Policies" in Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations in the 2021 results and beyond is uncertain. The Company is taking a more conservative approach to managing its cash flow given this uncertainty, and is carefully managing operating expenses, working capital, and capital expenditures during this period. We have also delayed the development of the Blue Creek project and our Stock Repurchase Program also remains temporarily suspended.Annual Report.

Off-Balance Sheet Arrangements

acceptable security to secure payment of certain long-term obligations including mine closure or reclamation costs and other miscellaneous obligations. As of September 30, ~~2021,~~2022, we had outstanding surety bonds and letters of credit with parties for post-mining reclamation at all of our U.S. mining operations totaling ~~$40.9~~$41.8 million, ~~$17.0 million as~~for collateral for self-insured black lung related claims totaling $18.6 million and ~~$3.6 million~~ for miscellaneous ~~purposes.~~purposes totaling $4.2 million .

Recently Adopted Accounting Standards

A summary of recently adopted accounting pronouncements is included in Note 2 of the "Notes to Condensed Financial Statements" in this Form 10-Q.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Commodity Price Risk

We are exposed to commodity price risk on sales of met coal. We sell most of our met coal under fixed supply contracts primarily with indexed pricing terms and volume terms of up to one to three years. Sales commitments in the met coal market are typically not long-term in nature, and we are, therefore, subject to fluctuations in market pricing.

We occasionally enter into natural gas swap contracts to hedge the exposure to variability in expected future cash flows associated with the fluctuations in the price of natural gas related to our forecasted sales. 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 Condensed Statements of Operations. ~~All~~Historically, all of our derivative instruments were entered into for hedging purposes rather than speculative trading.

As of September 30, 2022, the Company had no natural gas swap 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. 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. 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. We monitor the

exposure to credit losses and maintain allowances for anticipated losses. As of September 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the estimated allowance for credit losses was immaterial and did not have a material impact on the Company's financial statements.

Interest Rate Risk

We are exposed to market risk from changes in interest rates. Our Notes have a fixed rate of interest of ~~8.00%~~7.875% per annum and are payable semi-annually in arrears on ~~May~~June 1 and ~~November~~December 1 of each year.

Our ABL Facility bears an interest rate equal to ~~LIBOR~~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 ~~basis points. On March 24, 2020, the Company borrowed $70.0 million in a partial draw of the ABL Facility as a precautionary measure and in order~~bps or 50 bps to increase the Company's cash position and preserve financial flexibility in light of the uncertainty resulting from the COVID-19 outbreak. In June 2020, the Company made a principal repayment of $30.0 million on the ABL Facility and in the three months ending September 20, 2021, we made a principal repayment of $40.0 million. The100 bps, respectively. Any debt that we incur under the ABL Facility ~~exposes~~will expose us to interest rate risk. If interest rates increase significantly in the future, our exposure to interest rate risk will increase. As of September 30, ~~2021,~~2022, assuming we had ~~$120.0~~$132.0 million outstanding under our ABL Facility, a ~~100 basis~~100-basis point increase or decrease in interest rates would increase or decrease our annual interest expense under the ABL Facility by approximately ~~$1.2~~$1.3 million. Furthermore, such interest rates under our ABL Facility are based upon benchmarks that are subject to potential change or elimination, including as a result of the announcement from the United Kingdom Financial Conduct Authority ("FCA"), which regulates LIBOR, that it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021.

Impact of Inflation

~~While~~We have exposure to inflation for supplies that are used directly or indirectly in the normal course of production, such as belt structure, roof bolts, cable, magnetite, rock dust and other supplies, plus labor and parts on repair and rebuild equipment. These inflationary pressures have contributed to rising costs for us and may ~~impact our revenues and cost~~continue to do so in the future. We are applying a number of ~~sales, we believe~~different strategies to mitigate the ~~effects~~impact of inflation ~~if any,~~ on our ~~results of~~ operations, including placing purchase orders earlier, utilizing short term contracts and ~~financial condition have not been significant. However, there can be no assurance that~~leveraging our ~~results of operations and financial condition will not be materially impacted by inflation in the future.~~

supplier relationships.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As required by Rule 13a-15(b) under the Exchange Act, our management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) under the Exchange Act) as of September 30, ~~2021.~~2022. Based on the evaluation of our disclosure controls and procedures as of September 30, ~~2021,~~2022, our Chief Executive Officer and Chief Financial Officer have concluded that, as of September 30, ~~2021,~~2022, our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is (1) recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and (2) accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosures.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during our most recently completed fiscal quarter that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on the Effectiveness of Disclosure Controls and Procedures

In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

PART ~~II -~~II. OTHER INFORMATION

Item 1. Legal Proceedings.

See Note 109 of the “Notes to Condensed Financial Statements” in this Form 10-Q for a description of current legal proceedings, which is incorporated by reference in this Part II, Item 1.

We and our subsidiaries are parties to a number of other lawsuits arising in the ordinary course of our business. We record costs relating to these matters when a loss is probable and the amount can be reasonably estimated. The effect of the outcome of these matters on our future results of operations cannot be predicted with certainty as any such effect depends on future results of operations and the amount and timing of the resolution of such matters. While the results of litigation cannot be predicted with certainty, we believe that the final outcome of such litigation will not have a material adverse effect on our financial statements.

Item 1A. Risk Factors.

Other than as set forth below, there have been no material changes to the risk factors disclosed in "Risk Factors" in "Part I, Item 1A. Risk Factors" in our ~~2020~~2021 Annual Report. Our business, financial condition, operating results and cash flows can be impacted by a number of factors, any one of which could cause actual results to vary materially from recent results or from anticipated future results. In addition to the other information set forth in this Form 10-Q, you should carefully consider the risks discussed in "Part I, Item 1A. Risk Factors" in our ~~2020~~2021 Annual Report, which could materially affect our business, financial condition or future results. However, the risks described in our ~~2020~~2021 Annual Report are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may ~~also materially~~become material and adversely affect our business, financial condition and/or operating results.

The Russia-Ukraine war, and sanctions brought against Russia, may adversely affect our business due to the impact on the global economy, including significant market disruptions that may lead to increased volatility in the price of certain commodities.

~~Work stoppages,~~We face risks related to the ongoing Russia-Ukraine war that began in February 2022. The extent and duration of the military conflict involving Russia and Ukraine, resulting sanctions and future market or supply disruptions in the region, are impossible to predict, but could be significant and may have a severe adverse effect on the region. Globally, various governments, such as the ~~strike initiated~~European Union, have banned imports from Russia including commodities such as natural gas and coal. These events significantly impacted coking coal markets by disrupting previously existing trading patterns. The resulting volatility, including market expectations of potential changes in coal prices and inflationary pressures on steel products, may significantly affect prices for our coal or the ~~UMWA earlier this year, labor shortages~~cost of supplies and ~~other labor relations matters may harm~~equipment.

The war, trade and monetary sanctions, as well as any escalation of the conflict and future developments, could significantly affect coking coal prices and the demand for our ~~business. Union-represented labor creates~~coal. This could have a material adverse effect on our business, financial condition and results of operations, along with our operating costs, making it difficult to execute our planned capital expenditure program or the development of Blue Creek. Additionally, the geopolitical and macroeconomic consequences of the war and associated sanctions cannot be predicted, but could severely impact the world economy. If any of these events occur, the resulting political instability and societal disruption could reduce overall demand for our coal, causing a reduction in our revenues or an ~~increased~~increase in our costs, which would materially adversely affect our results of operations, financial condition and cash flows.

Our business is subject to the risk of ~~work stoppages~~increases or fluctuations in the cost, and ~~higher labor costs.~~delay in the delivery, of raw materials, mining equipment and purchased components.

IfMet coal mining consumes large quantities of commodities including steel, copper, rubber products, diesel and other liquid fuels, and requires the use of capital equipment. Some commodities, such as steel, are needed to comply with roof control plans required by regulation. The cost of roof bolts we fail to maintain satisfactory labor relations, disputes with the unionized portion of our workforce could affect us adversely. Union-represented labor creates an increased risk of work stoppages and higher labor costs. As of March 31, 2021, 66.8% of our employees were represented by the UMWA. In connection with the acquisition of certain assets of Walter Energy, we negotiated the CBA with the UMWA, which was ratified by the UMWA’s members on February 16, 2016 and had a five-year term. The CBA contract with the UMWA expired on April 1, 2021, and the UMWA initiated a strike. While the Company has business continuity plansuse in place, the strike may still cause disruption to production and shipment activities and our operations and profitability could be adversely affected. In addition, future work stoppages, labor union issues or labor disruptions at our mining operations depends on the price of scrap steel. The prices we pay for commodities and capital equipment are strongly impacted by the global market. A rapid or significant increase in the costs of commodities or capital equipment we use in our operations could impact our mining operations costs because we may have a limited ability to negotiate lower prices and, in some cases, may not have a ready substitute.

Inflation rates in the U.S. have increased to levels not seen in several years, which may result in decreased demand for our products, increases in our operating costs, constrained credit and liquidity, reduced government spending and volatility in financial markets. Future increases in costs for supplies that are used directly or indirectly in the normal course of our business and increases in other operating costs, such as increases in steel prices, freight rates, labor and other materials and supplies may negatively impact our profitability.

We use equipment in our met coal mining and transportation operations such as continuous mining units, conveyors, shuttle cars, rail cars, locomotives, roof bolters, shearers and shields. Some equipment and materials are needed to comply with regulations, such as proximity detection devices on continuous mining machines. We procure some of this equipment from a

concentrated group of suppliers, and obtaining this equipment often involves long lead times.Occasionally, demand for such equipment by mining companies can be high and some types of equipment may be in short supply. Delays in receiving or shortages of this equipment, as well as at the ~~operations~~raw materials used in the manufacturing of ~~key customers~~supplies and mining equipment, which, in some cases, do not have ready substitutes, or ~~service providers,~~the cancellation of our supply contracts under which we obtain equipment and other consumables, could ~~impede~~limit our ability to ~~produce~~obtain these supplies or equipment. In addition, there continues to be consolidation in the supplier base providing mining materials and ~~deliver our products, to receive critical~~equipment, which has resulted in a limited number of suppliers for certain types of equipment and ~~supplies or to collect payment. This may increase our costs or impede our ability to operate one or more~~supplies.If any of our ~~operations.~~

suppliers experiences an adverse event (including as a result of the COVID-19 pandemic), decides to cease producing products used by the mining industry, or decides to no longer do business with us, we may be unable to obtain sufficient equipment and raw materials in a timely manner or at a reasonable price to allow us to meet our production goals and our revenues may be materially adversely impacted.

We use considerable quantities of steel in the mining process. If the price of steel or other materials increases substantially or if the value of the U.S. dollar declines relative to foreign currencies with respect to certain imported supplies or other products, our operating expenses could increase. Any of the foregoing events could materially and adversely impact our business, financial condition, results of operations and cash flows.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

The following table sets forth share repurchases of our common stock made during the ~~quarter~~three months ended September 30, ~~2021:~~2022:


Period	Period	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate dollar value of shares that may yet be purchased under the plans or programs(1)		Period	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under The Plans or Programs(1)
July 1, 2021 - July 31, 2021
July 1, 2022 - July 31, 2022								July 1, 2022 - July 31, 2022
Stock Repurchase Program(1)	Stock Repurchase Program(1)	—	$	—	—	$	59,000,000	Stock Repurchase Program(1)	—	$	—	—	$	59,000,000
Employee Transactions(2)	Employee Transactions(2)	—	$	—	—			Employee Transactions(2)	—	$	—	—
August 1, 2021 - August 31, 2021
August 1, 2022 - August 31, 2022								August 1, 2022 - August 31, 2022
Stock Repurchase Program(1)	Stock Repurchase Program(1)	—	$	—	—			Stock Repurchase Program(1)	—	$	—	—
Employee Transactions(2)	Employee Transactions(2)	—	$	—	—			Employee Transactions(2)	—	$	—	—
September 1, 2021 - September 30, 2021
September 1, 2022 - September 30, 2022								September 1, 2022 - September 30, 2022
Stock Repurchase Program(1)	Stock Repurchase Program(1)	—	$	—	—			Stock Repurchase Program(1)	—	$	—	—
Employee Transactions(2)	Employee Transactions(2)	17	$	22.99	—			Employee Transactions(2)	15	$	32.00	—
Total	Total	17			—			Total	15			—

__________

(1)On March 26, 2019, the Board approved the Stock Repurchase Program that authorizes repurchases of up to an aggregate of $70.0 million of our outstanding common stock. The Stock Repurchase Program does not require us to repurchase a specific number of shares or have an expiration date.

(2)These shares were acquired to satisfy certain employees' tax withholding obligations associated with the lapse of restrictions on certain restricted stock awards granted under the 2016 Equity Incentive Plan and 2017 Equity Incentive Plan. Upon acquisition, these shares were retired.

Item 3. Defaults on Senior Securities.

None.

Item 4. Mine Safety Disclosures.

The information concerning mine safety violations and other regulatory matters is filed as Exhibit 95 to this Form 10-Q 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).

Item 5. Other Information.

None.

Item 6. Exhibits


Exhibit Number						Description


3.1						Certificate of Incorporation of Warrior Met Coal, Inc. (incorporated by reference to Exhibit 3.1 to the Registrant’s Registration Statement on Form S-8 (File No. 333-217389) filed with the Commission on April 19, 2017).

3.2						Certificate of Amendment to the Certificate of Incorporation of Warrior Met Coal, Inc. (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 001-38061) filed with the Commission on March 20, 2020).

3.3						Second Certificate of Amendment of the Certificate of Incorporation of Warrior Met Coal, Inc. (incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K (File No. 001-38061) filed with the Commission on April 26, 2022).

3.4						Bylaws of Warrior Met Coal, Inc. (incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form S-8 (File No. 333-217389) filed with the Commission on April 19, 2017).

~~3.4~~3.5						Amendment to Bylaws of Warrior Met Coal, Inc. (incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K (File No. 001-38061) filed with the Commission on August 3, 2022 ).

3.6						Certificate of Designations of Series A Junior Participating Preferred Stock of Warrior Met Coal, Inc., as filed with the Secretary of State of the State of Delaware on February 14, 2020 (incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K (File No. 001-38061) filed with the Commission on February 14, 2020).

31.1*						Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended.

31.2*						Certification of Chief Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended.

32.1**						Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

95*						Mine Safety Disclosures Pursuant to Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 299.104).

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

101.SCH*						Inline XBRL Taxonomy Extension Schema Document

101.CAL*						Inline XBRL Taxonomy Extension Calculation LinkBase Document

101.DEF*						Inline XBRL Taxonomy Extension Definition LinkBase Document

101.LAB*						Inline XBRL Taxonomy Extension Label LinkBase Document

101.PRE*						Inline XBRL Taxonomy Extension Presentation LinkBase Document

104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Filed herewith.

** Furnished herewith.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

~~Warrior Met Coal, Inc.~~WARRIOR MET COAL, INC.

Date: November 2, 2022

By:

/s/ Dale W. Boyles

Dale W. Boyles

Chief Financial Officer (on behalf of the registrant and as Principal Financial and Accounting Officer)

~~Date: November 2, 2021~~


	September 30, 2021		December 31, 2020		Weighted Average Interest Rate at September 30, 2021	Final Maturity
Senior Secured Notes	$	343,435	$	343,435	8%	2024
ABL Borrowings	—		40,000		4%	2023
Debt discount/premium, net	(2,944)		(3,527)
Total debt	340,491		379,908
Less: current debt	—		—
Total long-term debt	$	340,491	$	379,908