UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 20222023

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

Commission File Number 001-38735
Alpha_Full-Logo_RGB.jpg
ALPHA METALLURGICAL RESOURCES, INC.
(Exact name of registrant as specified in its charter)
Delaware81-3015061
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification Number)
340 Martin Luther King Jr. Blvd.
Bristol, Tennessee 37620
(Address of principal executive offices, zip code)
(423) 573-0300
(Registrant’s telephone number, including area code)

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. x Yes   ¨ No

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 (Sec.232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). x Yes   ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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 filerAccelerated filer
Non-accelerated filerSmaller reporting 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.  ¨

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

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



Title of each classTrading Symbol(s)Name of each exchange on which registered
Common StockAMRNew York Stock Exchange

Number of shares of the registrant’s Common Stock, $0.01 par value, outstanding as of October 31, 2022: 15,943,64927, 2023: 13,283,594






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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report includes statements of our expectations, intentions, plans and beliefs that constitute “forward-looking statements.” 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. We have used the words “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “should” and similar terms and phrases, including references to assumptions, in this report to identify forward-looking statements, but these terms and phrases are not the exclusive means of identifying such 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 expressed in or implied by these forward-looking statements.

The following factors are among those that may cause actual results to differ materially from our forward-looking statements:

the financial performance of the company;
our liquidity, results of operations and financial condition;
our ability to generate sufficient cash or obtain financing to fund our business operations;
depressed levels or declines in coal prices;
railroad, barge, truck, port and other transportation availability, performance and costs;
changes in domestic or international environmental laws and regulations, and court decisions, including those directly affecting our coal mining and production and those affecting our customers’ coal usage, including potential climate change initiatives;
our ability to obtain or renew surety bonds on acceptable terms or maintain our current bonding status;
worldwide market demand for coal and steel, including demand for U.S. coal exports, and competition in coal markets;
attracting and retaining key personnel and other employee workforce factors, such as labor relations;
our ability to pay dividends on our common stock and execute our share repurchase program;
our ability to obtain or renew surety bonds on acceptable terms or maintainself-insure certain of our current bonding status;black lung obligations without a significant increase in required collateral;
our ability to meet collateral requirements and fund employee benefit obligations;
inflationary pressures on supplies and labor and significant or rapid increases in commodity prices;
disruptions in delivery or changes in pricing from third-party vendors of key equipment and materials that are necessary for our operations, such as diesel fuel, steel products, explosives, tires and purchased coal;
our ability to meet collateral requirements;
the imposition or continuation of barriers to trade, such as tariffs;
increased market volatility and uncertainty on worldwide markets and our customers as a result of developments in and around Ukraine and the consequent export controls and financial and economic sanctions;
railroad, barge, truck and other transportation availability, performance and costs;
reductions or increases in customer coal inventories and the timing of those changes;
our production capabilities and costs;
attracting and retaining key personnel and other employee workforce factors, such as labor relations;
the effects of the COVID-19 pandemic on our operations and the world economy;
inherent risks of coal mining, including those that are beyond our control;
changes in the ownership of our equity, which may significantly further reduce the annual amount of the net operating loss and other carryforwards available to be utilized;
changes in, interpretations of, or implementations of domestic or international tax or other laws and regulations, including the Tax Cuts and Jobs Act and its related regulations;
our relationships with, and other conditions affecting, our customers, including the inability to collect payments from our customers if their creditworthiness declines;
changes in, renewal or acquisition of, terms of and performance of customers under coal supply arrangements and the refusal by our customers to receive coal under agreed-upon contract terms;
our ability to self-insure certain of our black lung obligations without a significant increase in required collateral;
our ability to obtain, maintain or renew any necessary permits or rights, and our ability to mine properties due to defects in title on leasehold interests;
our indebtedness and potential future indebtedness;
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our ability to consummate financing or refinancing transactions, and other services, and the form and degree of these services available to us, which may be significantly limited by the lending, investment and similar policies of financial institutions and insurance companies regarding carbon energy producers and the environmental impacts of coal combustion;
funding forfailures in performance, or non-performance, of services by third-party contractors, including contract mining and changesreclamation contractors;
disruption in employee benefit obligations;third-party coal supplies;
cybersecurity attacks or failures, threats to physical security, extreme weather conditions or other natural disasters;
the imposition or continuation of barriers to trade, such as tariffs;
increased volatility and uncertainty regarding worldwide markets, seaborne transportation and our customers as a result of developments in and around Ukraine and the consequent export controls and financial and economic sanctions;
changes in, renewal or acquisition of, terms of and performance of customers under coal supply arrangements and the refusal by our customers to receive coal under agreed-upon contract terms;
reductions or increases in customer coal inventories and the timing of those changes;
our production capabilities and costs;
our ability to obtain, maintain or renew any necessary permits or rights;
the effects of the COVID-19 pandemic on our operations and the world economy;
inherent risks of coal mining, including those that are beyond our control;
changes in, interpretations of, or implementations of domestic or international tax or other laws and regulations, including the Inflation Reduction Act of 2022 and its related regulations;
our relationships with, and other conditions affecting, our customers, including the inability to collect payments from our customers if their creditworthiness declines;
our indebtedness and potential future indebtedness;
reclamation and mine closure obligations;
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utilitiessteel and coke producers switching to alternative energy sources such as natural gas, renewables and coal from basins where we do not operate;
our assumptions concerning economically recoverable coal reserve estimates;
failuresour ability to mine properties due to defects in performance, or non-performance, of services by third-party contractors, including contract mining and reclamation contractors;
disruption in third-party coal supplies;title on leasehold interests; and
other factors, including the other factors discussed in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section included elsewhere in this Quarterly Report on Form 10-Q and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections included elsewhere in this Quarterly Report on Form 10-Q and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections contained in our Annual Report on Form 10-K for the year ended December 31, 2021.2022.

The list of factors identified above is not exhaustive. We caution readers not to place undue reliance on any forward-looking statements, which are based on information currently available to us and speak only as of the dates on which they are made. When considering these forward-looking statements, you should keep in mind the cautionary statements in this report. We do not undertake any responsibility to publicly revise these forward-looking statements to take into account events or circumstances that occur after the date of this report. Additionally, except as expressly required by federal securities laws, we do not undertake any responsibility to update you on the occurrence of any unanticipated events, which may cause actual results to differ from those expressed or implied by the forward-looking statements contained in this report.

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Part I - Financial Information

Item 1. Financial Statements

ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(Amounts in thousands, except share and per share data)
Three Months Ended September 30,Nine Months Ended September 30,
 2022202120222021
Revenues:   
Coal revenues$867,849 $647,129 $3,271,845 $1,426,039 
Other revenues1,919 1,712 6,299 4,330 
Total revenues869,768 648,841 3,278,144 1,430,369 
Costs and expenses:    
Cost of coal sales (exclusive of items shown separately below)555,502 488,169 1,736,711 1,182,360 
Depreciation, depletion and amortization27,925 24,519 83,690 80,261 
Accretion on asset retirement obligations5,921 6,674 17,822 19,970 
Amortization of acquired intangibles, net4,543 2,980 16,038 9,402 
Asset impairment and restructuring— — — (561)
Selling, general and administrative expenses (exclusive of depreciation, depletion and amortization shown separately above)15,095 15,264 48,339 44,891 
Total other operating loss (income):
Mark-to-market adjustment for acquisition-related obligations(2,954)11,676 10,615 18,009 
Other expense (income)2,713 (457)569 (5,290)
Total costs and expenses608,745 548,825 1,913,784 1,349,042 
Income from operations261,023 100,016 1,364,360 81,327 
Other (expense) income:    
Interest expense(1,695)(17,338)(19,996)(53,290)
Interest income1,064 54 1,412 322 
Equity loss in affiliates(4,821)(643)(8,318)(1,161)
Miscellaneous income, net1,702 1,812 4,884 5,425 
Total other expense, net(3,750)(16,115)(22,018)(48,704)
Income from continuing operations before income taxes257,273 83,901 1,342,342 32,623 
Income tax expense(5,437)(208)(114,073)(211)
Net income from continuing operations251,836 83,693 1,228,269 32,412 
Discontinued operations:
Income (loss) from discontinued operations before income taxes1,273 (429)(525)(1,067)
Income tax (expense) benefit from discontinued operations(292)— 121 — 
Income (loss) from discontinued operations981 (429)(404)(1,067)
Net income$252,817 $83,264 $1,227,865 $31,345 
Basic income per common share:
Income from continuing operations$14.71 $4.54 $68.16 $1.76 
Income (loss) from discontinued operations0.06 (0.03)(0.02)(0.06)
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Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Revenues:Revenues:   
Coal revenuesCoal revenues$738,998 $867,849 $2,499,503 $3,271,845 
Other revenuesOther revenues2,822 1,919 11,923 6,299 
Total revenuesTotal revenues741,820 869,768 2,511,426 3,278,144 
Costs and expenses:Costs and expenses:    
Cost of coal sales (exclusive of items shown separately below)Cost of coal sales (exclusive of items shown separately below)564,608 554,055 1,687,259 1,736,826 
Depreciation, depletion and amortizationDepreciation, depletion and amortization32,582 27,925 94,231 83,690 
Accretion on asset retirement obligationsAccretion on asset retirement obligations6,376 5,921 19,129 17,822 
Amortization of acquired intangibles, netAmortization of acquired intangibles, net2,069 4,543 6,458 16,038 
Selling, general and administrative expenses (exclusive of depreciation, depletion and amortization shown separately above)Selling, general and administrative expenses (exclusive of depreciation, depletion and amortization shown separately above)18,053 15,095 56,251 48,339 
Total other operating loss (income):Total other operating loss (income):
Mark-to-market adjustment for acquisition-related obligationsMark-to-market adjustment for acquisition-related obligations— (2,954)— 10,615 
Other expense (income)Other expense (income)973 2,713 (1,665)569 
Total costs and expensesTotal costs and expenses624,661 607,298 1,861,663 1,913,899 
Income from operationsIncome from operations117,159 262,470 649,763 1,364,245 
Other (expense) income:Other (expense) income:    
Interest expenseInterest expense(1,746)(1,754)(5,322)(20,055)
Interest incomeInterest income4,639 1,058 8,911 1,412 
Equity loss in affiliatesEquity loss in affiliates(6,660)(4,821)(11,582)(8,318)
Miscellaneous (expense) income, netMiscellaneous (expense) income, net(614)1,594 (857)4,534 
Total other expense, netTotal other expense, net(4,381)(3,923)(8,850)(22,427)
Income before income taxesIncome before income taxes112,778 258,547 640,913 1,341,818 
Income tax expenseIncome tax expense(18,964)(5,730)(94,973)(113,953)
Net incomeNet income$14.77 $4.51 $68.14 $1.70 Net income$93,814 $252,817 $545,940 $1,227,865 
Diluted income per common share:
Income from continuing operations$14.21 $4.43 $65.33 $1.73 
Income (loss) from discontinued operations0.06 (0.03)(0.02)(0.06)
Net income$14.27 $4.40 $65.31 $1.67 
Basic income per common shareBasic income per common share$6.88 $14.77 $37.87 $68.14 
Diluted income per common shareDiluted income per common share$6.65 $14.27 $36.46 $65.31 
Weighted average shares – basicWeighted average shares – basic17,119,328 18,445,709 18,019,161 18,426,639 Weighted average shares – basic13,633,640 17,119,328 14,416,289 18,019,161 
Weighted average shares – dilutedWeighted average shares – diluted17,718,517 18,913,352 18,800,674 18,783,643 Weighted average shares – diluted14,110,488 17,718,517 14,973,168 18,800,674 

Refer to accompanying Notes to Condensed Consolidated Financial Statements.
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ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
(Amounts in thousands)
Three Months Ended September 30,Nine Months Ended September 30,Three Months Ended September 30,Nine Months Ended September 30,
20222021202220212023202220232022
Net incomeNet income$252,817 $83,264 $1,227,865 $31,345 Net income$93,814 $252,817 $545,940 $1,227,865 
Other comprehensive income, net of tax:
Other comprehensive (loss) income, net of tax:Other comprehensive (loss) income, net of tax:
Employee benefit plans:Employee benefit plans:Employee benefit plans:
Amortization of and adjustments to employee benefit costsAmortization of and adjustments to employee benefit costs$818 $1,413 $(2,383)$13,077 Amortization of and adjustments to employee benefit costs(581)818 (5,373)(2,383)
Income tax expense— — — — 
Total other comprehensive income (loss), net of tax$818 $1,413 $(2,383)$13,077 
Income tax benefitIncome tax benefit129 — 1,192 — 
Total other comprehensive (loss) income, net of taxTotal other comprehensive (loss) income, net of tax(452)818 (4,181)(2,383)
Total comprehensive incomeTotal comprehensive income$253,635 $84,677 $1,225,482 $44,422 Total comprehensive income$93,362 $253,635 $541,759 $1,225,482 
Refer to accompanying Notes to Condensed Consolidated Financial Statements.

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ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(Amounts in thousands, except share and per share data)
September 30, 2022December 31, 2021September 30, 2023December 31, 2022
AssetsAssets  Assets  
Current assets:Current assets:  Current assets:  
Cash and cash equivalentsCash and cash equivalents$404,430 $81,211 Cash and cash equivalents$296,059 $301,906 
Trade accounts receivable, net of allowance for doubtful accounts of $375 and $393 as of September 30, 2022 and December 31, 2021, respectively487,352 489,241 
Short-term investmentsShort-term investments— 46,052 
Trade accounts receivable, net of allowance for credit losses of $250 and $239 as of September 30, 2023 and December 31, 2022, respectivelyTrade accounts receivable, net of allowance for credit losses of $250 and $239 as of September 30, 2023 and December 31, 2022, respectively432,401 407,210 
Inventories, netInventories, net178,559 129,382 Inventories, net271,805 200,574 
Short-term depositsShort-term deposits6,736 84,748 
Short-term restricted cashShort-term restricted cash— 24,547 
Prepaid expenses and other current assetsPrepaid expenses and other current assets76,999 47,690 Prepaid expenses and other current assets41,945 49,384 
Current assets - discontinued operations57 462 
Total current assetsTotal current assets1,147,397 747,986 Total current assets1,048,946 1,114,421 
Property, plant, and equipment, net of accumulated depreciation and amortization of $497,149 and $443,856 as of September 30, 2022 and December 31, 2021, respectively404,171 362,218 
Owned and leased mineral rights, net of accumulated depletion and amortization of $73,446 and $52,444 as of September 30, 2022 and December 31, 2021, respectively423,763 444,302 
Other acquired intangibles, net of accumulated amortization of $50,259 and $34,221 as of September 30, 2022 and December 31, 2021, respectively58,561 74,197 
Property, plant, and equipment, net of accumulated depreciation and amortization of $547,451 and $491,186 as of September 30, 2023 and December 31, 2022, respectivelyProperty, plant, and equipment, net of accumulated depreciation and amortization of $547,451 and $491,186 as of September 30, 2023 and December 31, 2022, respectively539,904 442,645 
Owned and leased mineral rights, net of accumulated depletion and amortization of $95,541 and $77,333 as of September 30, 2023 and December 31, 2022, respectivelyOwned and leased mineral rights, net of accumulated depletion and amortization of $95,541 and $77,333 as of September 30, 2023 and December 31, 2022, respectively446,364 451,062 
Other acquired intangibles, net of accumulated amortization of $47,498 and $53,719 as of September 30, 2023 and December 31, 2022, respectivelyOther acquired intangibles, net of accumulated amortization of $47,498 and $53,719 as of September 30, 2023 and December 31, 2022, respectively48,644 55,102 
Long-term restricted investmentsLong-term restricted investments92,384 28,443 Long-term restricted investments71,269 105,735 
Long-term restricted cashLong-term restricted cash31,724 89,426 Long-term restricted cash83,004 28,941 
Deferred income taxesDeferred income taxes9,080 11,378 
Other non-current assetsOther non-current assets93,332 102,614 Other non-current assets105,749 103,195 
Non-current assets - discontinued operations8,521 8,526 
Total assetsTotal assets$2,259,853 $1,857,712 Total assets$2,352,960 $2,312,479 
Liabilities and Stockholders’ EquityLiabilities and Stockholders’ Equity  Liabilities and Stockholders’ Equity  
Current liabilities:Current liabilities:  Current liabilities:  
Current portion of long-term debtCurrent portion of long-term debt$1,711 $2,989 Current portion of long-term debt$3,438 $3,078 
Trade accounts payableTrade accounts payable101,584 90,090 Trade accounts payable121,472 106,037 
Acquisition-related obligations – current
Acquisition-related obligations – current
30,131 22,405 
Acquisition-related obligations – current
181 28,254 
Accrued expenses and other current liabilitiesAccrued expenses and other current liabilities203,902 174,607 Accrued expenses and other current liabilities190,119 265,256 
Current liabilities - discontinued operations4,014 5,838 
Total current liabilitiesTotal current liabilities341,342 295,929 Total current liabilities315,210 402,625 
Long-term debtLong-term debt2,987 445,562 Long-term debt7,064 7,897 
Acquisition-related obligations - long-term— 19,000 
Workers’ compensation and black lung obligationsWorkers’ compensation and black lung obligations200,827 208,193 Workers’ compensation and black lung obligations180,072 188,247 
Pension obligationsPension obligations152,184 159,930 Pension obligations90,938 110,836 
Asset retirement obligationsAsset retirement obligations135,082 132,013 Asset retirement obligations148,100 142,048 
Deferred income taxesDeferred income taxes11,723 317 Deferred income taxes35,282 10,874 
Other non-current liabilitiesOther non-current liabilities20,794 26,176 Other non-current liabilities18,221 20,197 
Non-current liabilities - discontinued operations23,245 23,683 
Total liabilitiesTotal liabilities888,184 1,310,803 Total liabilities794,887 882,724 
Commitments and Contingencies (Note 16)
Commitments and Contingencies (Note 15)Commitments and Contingencies (Note 15)
Stockholders’ EquityStockholders’ EquityStockholders’ Equity
Preferred stock - par value $0.01, 5.0 million shares authorized, none issuedPreferred stock - par value $0.01, 5.0 million shares authorized, none issued— — Preferred stock - par value $0.01, 5.0 million shares authorized, none issued— — 
Common stock - par value $0.01, 50.0 million shares authorized, 21.6 million issued and 16.3 million outstanding at September 30, 2022 and 20.8 million issued and 18.4 million outstanding at December 31, 2021217 208 
Common stock - par value $0.01, 50.0 million shares authorized, 22.0 million issued and 13.4 million outstanding at September 30, 2023 and 21.7 million issued and 15.5 million outstanding at December 31, 2022Common stock - par value $0.01, 50.0 million shares authorized, 22.0 million issued and 13.4 million outstanding at September 30, 2023 and 21.7 million issued and 15.5 million outstanding at December 31, 2022220 217 
Additional paid-in capitalAdditional paid-in capital811,012 784,743 Additional paid-in capital825,143 815,442 
Accumulated other comprehensive lossAccumulated other comprehensive loss(60,886)(58,503)Accumulated other comprehensive loss(16,343)(12,162)
Treasury stock, at cost: 8.6 million shares at September 30, 2023 and 6.2 million shares at December 31, 2022Treasury stock, at cost: 8.6 million shares at September 30, 2023 and 6.2 million shares at December 31, 2022(1,051,185)(649,061)
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Treasury stock, at cost: 5.3 million shares at September 30, 2022 and 2.4 million shares at December 31, 2021(521,094)(107,800)
Retained earnings (accumulated deficit)1,142,420 (71,739)
Retained earningsRetained earnings1,800,238 1,275,319 
Total stockholders’ equityTotal stockholders’ equity1,371,669 546,909 Total stockholders’ equity1,558,073 1,429,755 
Total liabilities and stockholders’ equityTotal liabilities and stockholders’ equity$2,259,853 $1,857,712 Total liabilities and stockholders’ equity$2,352,960 $2,312,479 

Refer to accompanying Notes to Condensed Consolidated Financial Statements.
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ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(Amounts in thousands)
Nine Months Ended September 30,Nine Months Ended September 30,
2022202120232022
Operating activities:Operating activities:Operating activities:
Net incomeNet income$1,227,865 $31,345 Net income$545,940 $1,227,865 
Adjustments to reconcile net income to net cash provided by operating activities: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, depletion and amortizationDepreciation, depletion and amortization83,690 80,261 Depreciation, depletion and amortization94,231 83,690 
Amortization of acquired intangibles, netAmortization of acquired intangibles, net16,038 9,402 Amortization of acquired intangibles, net6,458 16,038 
Amortization of debt issuance costs and accretion of debt discountAmortization of debt issuance costs and accretion of debt discount7,757 9,351 Amortization of debt issuance costs and accretion of debt discount1,585 7,757 
Mark-to-market adjustment for acquisition-related obligationsMark-to-market adjustment for acquisition-related obligations10,615 18,009 Mark-to-market adjustment for acquisition-related obligations— 10,615 
Gain on disposal of assetsGain on disposal of assets(2,607)(5,342)Gain on disposal of assets(6,089)(2,607)
Accretion on asset retirement obligationsAccretion on asset retirement obligations17,822 19,970 Accretion on asset retirement obligations19,129 17,822 
Employee benefit plans, netEmployee benefit plans, net1,312 6,685 Employee benefit plans, net9,989 1,312 
Deferred income taxesDeferred income taxes11,406 (1)Deferred income taxes27,898 11,406 
Stock-based compensationStock-based compensation4,103 4,351 Stock-based compensation9,678 4,103 
Equity loss in affiliatesEquity loss in affiliates8,318 1,161 Equity loss in affiliates11,582 8,318 
Other, netOther, net432 (3,938)Other, net(123)432 
Changes in operating assets and liabilitiesChanges in operating assets and liabilities(87,714)(100,681)Changes in operating assets and liabilities(68,472)(87,714)
Net cash provided by operating activitiesNet cash provided by operating activities1,299,037 70,573 Net cash provided by operating activities651,806 1,299,037 
Investing activities:Investing activities:Investing activities:
Capital expendituresCapital expenditures(103,351)(60,386)Capital expenditures(183,836)(103,351)
Proceeds on disposal of assets3,010 7,471 
Proceeds from disposal of assetsProceeds from disposal of assets7,855 3,010 
Cash paid for business acquiredCash paid for business acquired(11,919)— 
Purchases of investment securitiesPurchases of investment securities(181,539)(15,474)Purchases of investment securities(166,515)(181,539)
Maturity of investment securities117,380 10,508 
Sales and maturities of investment securitiesSales and maturities of investment securities249,598 117,380 
Capital contributions to equity affiliatesCapital contributions to equity affiliates(13,832)(4,473)Capital contributions to equity affiliates(21,844)(13,832)
Other, netOther, net(4,232)52 Other, net24 (4,232)
Net cash used in investing activitiesNet cash used in investing activities(182,564)(62,302)Net cash used in investing activities(126,637)(182,564)
Financing activities:Financing activities:Financing activities:
Repurchases of long-term debt— (18,415)
Principal repayments of long-term debtPrincipal repayments of long-term debt(450,484)(61,869)Principal repayments of long-term debt(1,686)(450,484)
Dividend and dividend equivalents paidDividend and dividend equivalents paid(6,807)— Dividend and dividend equivalents paid(99,731)(6,807)
Common stock repurchases and related expensesCommon stock repurchases and related expenses(391,166)(786)Common stock repurchases and related expenses(403,385)(391,166)
Proceeds from exercise of warrantsProceeds from exercise of warrants4,771 — Proceeds from exercise of warrants4,322 4,771 
Other, netOther, net(447)(1,846)Other, net(1,020)(447)
Net cash used in financing activitiesNet cash used in financing activities(844,133)(82,916)Net cash used in financing activities(501,500)(844,133)
Net increase (decrease) in cash and cash equivalents and restricted cash272,340 (74,645)
Net increase in cash and cash equivalents and restricted cashNet increase in cash and cash equivalents and restricted cash23,669 272,340 
Cash and cash equivalents and restricted cash at beginning of periodCash and cash equivalents and restricted cash at beginning of period182,614 244,571 Cash and cash equivalents and restricted cash at beginning of period355,394 182,614 
Cash and cash equivalents and restricted cash at end of periodCash and cash equivalents and restricted cash at end of period$454,954 $169,926 Cash and cash equivalents and restricted cash at end of period$379,063 $454,954 
Supplemental disclosure of noncash investing and financing activities:Supplemental disclosure of noncash investing and financing activities:
Financing leases and capital financing - equipmentFinancing leases and capital financing - equipment$2,059 $2,083 
Accrued capital expendituresAccrued capital expenditures$11,618 $10,527 
Accrued common stock repurchasesAccrued common stock repurchases$6,275 $5,864 
Accrued dividend payableAccrued dividend payable$9,418 $6,898 
The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the Condensed Consolidated Balance Sheets that sum to the total of the same such amounts shown in the Condensed Consolidated Statements of Cash Flows.
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As of September 30,As of September 30,
20222021 20232022
Cash and cash equivalentsCash and cash equivalents$404,430 $78,283 Cash and cash equivalents$296,059 $404,430 
Short-term restricted cash (included in Prepaid expenses and other current assets)18,800 7,642 
Short-term restricted cashShort-term restricted cash— 18,800 
Long-term restricted cashLong-term restricted cash31,724 84,001 Long-term restricted cash83,004 31,724 
Total cash and cash equivalents and restricted cash shown in the Condensed Consolidated Statements of Cash FlowsTotal cash and cash equivalents and restricted cash shown in the Condensed Consolidated Statements of Cash Flows$454,954 $169,926 Total cash and cash equivalents and restricted cash shown in the Condensed Consolidated Statements of Cash Flows$379,063 $454,954 

Refer to accompanying Notes to Condensed Consolidated Financial Statements.

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ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited)
(Amounts in thousands)
Common StockAdditional Paid-in CapitalAccumulated Other Comprehensive LossTreasury Stock at Cost(Accumulated Deficit) Retained EarningsTotal Stockholders’ Equity
Balances, December 31, 2020$206 $779,424 $(111,985)$(107,014)$(360,529)$200,102 
Net loss— — — — (32,928)(32,928)
Other comprehensive income, net— — 1,484 — — 1,484 
Stock-based compensation and issuance of common stock for share vesting2,182 — — — 2,183 
Common stock repurchases and related expenses— — — (680)— (680)
Balances, March 31, 2021$207 $781,606 $(110,501)$(107,694)$(393,457)$170,161 
Net loss— — — — (18,991)(18,991)
Other comprehensive income, net— — 10,180 — — 10,180 
Stock-based compensation and issuance of common stock for share vesting980 — — — 981 
Balances, June 30, 2021$208 $782,586 $(100,321)$(107,694)$(412,448)$162,331 
Net income— — — — 83,264 83,264 
Other comprehensive income, net— — 1,413 — — 1,413 
Stock-based compensation and issuance of common stock for share vesting— 1,189 — — — 1,189 
Warrant exercises— — — — 
Common stock repurchases and related expenses— — — (106)— (106)
Balances, September 30, 2021$208 $783,781 $(98,908)$(107,800)$(329,184)$248,097 
Common StockAdditional Paid-in CapitalAccumulated Other Comprehensive (Loss) IncomeTreasury Stock at Cost(Accumulated Deficit) Retained EarningsTotal Stockholders’ Equity
Balances, December 31, 2021Balances, December 31, 2021$208 $784,743 $(58,503)$(107,800)$(71,739)$546,909 Balances, December 31, 2021$208 $784,743 $(58,503)$(107,800)$(71,739)$546,909 
Net incomeNet income— — — — 400,891 400,891 Net income— — — — 400,891 400,891 
Other comprehensive income, netOther comprehensive income, net— — 775 — — 775 Other comprehensive income, net— — 775 — — 775 
Stock-based compensation, issuance of common stock for share vesting, and common stock reissuancesStock-based compensation, issuance of common stock for share vesting, and common stock reissuances(391)— 1,572 — 1,182 Stock-based compensation, issuance of common stock for share vesting, and common stock reissuances(391)— 1,572 — 1,182 
Exercise of stock optionsExercise of stock options— 891 — — — 891 Exercise of stock options— 891 — — — 891 
Common stock repurchases and related expensesCommon stock repurchases and related expenses— — — (23,840)— (23,840)
Warrants exercisesWarrants exercises3,038 — — — 3,039 Warrants exercises3,038 — — — 3,039 
Common stock repurchases and related expenses— — — (23,840)— (23,840)
Balances, March 31, 2022Balances, March 31, 2022$210 $788,281 $(57,728)$(130,068)$329,152 $929,847 Balances, March 31, 2022$210 $788,281 $(57,728)$(130,068)$329,152 $929,847 
Net incomeNet income— — — — 574,157 574,157 Net income— — — — 574,157 574,157 
Other comprehensive loss, netOther comprehensive loss, net— — (3,976)— — (3,976)Other comprehensive loss, net— — (3,976)— — (3,976)
Stock-based compensation, issuance of common stock for share vesting, and common stock reissuancesStock-based compensation, issuance of common stock for share vesting, and common stock reissuances— 1,249 — 152 — 1,401 Stock-based compensation, issuance of common stock for share vesting, and common stock reissuances— 1,249 — 152 — 1,401 
Exercise of stock optionsExercise of stock options— 11 — — — 11 Exercise of stock options— 11 — — — 11 
Common stock repurchases and related expensesCommon stock repurchases and related expenses— — — (192,958)— (192,958)
Warrants exercisesWarrants exercises18,062 — — — 18,068 Warrants exercises18,062 — — — 18,068 
Common stock repurchases and related expenses— — — (192,958)— (192,958)
Cash dividend and dividend equivalents declared ($0.375 per share)Cash dividend and dividend equivalents declared ($0.375 per share)— — — — (6,977)(6,977)Cash dividend and dividend equivalents declared ($0.375 per share)— — — — (6,977)(6,977)
Balances, June 30, 2022Balances, June 30, 2022$216 $807,603 $(61,704)$(322,874)$896,332 $1,319,573 Balances, June 30, 2022$216 $807,603 $(61,704)$(322,874)$896,332 $1,319,573 
Net incomeNet income— — — — 252,817 252,817 
Other comprehensive income, netOther comprehensive income, net— — 818 — — 818 
Stock-based compensation, issuance of common stock for share vesting, and common stock reissuancesStock-based compensation, issuance of common stock for share vesting, and common stock reissuances— 1,176 — 344 — 1,520 
Exercise of stock optionsExercise of stock options— 270 — — — 270 
Common stock repurchases and related expensesCommon stock repurchases and related expenses— — — (198,564)— (198,564)
Warrants exercisesWarrants exercises1,963 — — — 1,964 
Cash dividend and dividend equivalents declared ($0.392 per share)Cash dividend and dividend equivalents declared ($0.392 per share)— — — — (6,729)(6,729)
Balances, September 30, 2022Balances, September 30, 2022$217 $811,012 $(60,886)$(521,094)$1,142,420 $1,371,669 
Balances, December 31, 2022Balances, December 31, 2022$217 $815,442 $(12,162)$(649,061)$1,275,319 $1,429,755 
Net incomeNet income— — — — 270,771 270,771 
Other comprehensive loss, netOther comprehensive loss, net— — (488)— — (488)
Stock-based compensation, issuance of common stock for share vesting, and common stock reissuancesStock-based compensation, issuance of common stock for share vesting, and common stock reissuances(3,444)— 6,477 — 3,034 
Common stock repurchases and related expensesCommon stock repurchases and related expenses— — — (148,973)— (148,973)
Warrants exercisesWarrants exercises— 1,301 — — — 1,301 
Cash dividend and dividend equivalents declared ($0.44 per share)Cash dividend and dividend equivalents declared ($0.44 per share)— — — — (6,825)(6,825)
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Balances, March 31, 2023Balances, March 31, 2023$218 $813,299 $(12,650)$(791,557)$1,539,265 $1,548,575 
Net incomeNet income— — — — 252,817 252,817 Net income— — — — 181,355 181,355 
Other comprehensive income, net— — 818 — — 818 
Stock-based compensation, issuance of common stock for share vesting, and common stock reissuances— 1,176 — 344 — 1,520 
Other comprehensive loss, netOther comprehensive loss, net— — (3,241)— — (3,241)
Stock-based compensation and issuance of common stock for share vestingStock-based compensation and issuance of common stock for share vesting3,644 — — — 3,645 
Common stock repurchases and related expensesCommon stock repurchases and related expenses— — — (157,645)— (157,645)
Warrants exercisesWarrants exercises— 1,278 — — — 1,278 
Cash dividend and dividend equivalents declared ($0.50 per share)Cash dividend and dividend equivalents declared ($0.50 per share)— — — — (7,233)(7,233)
Balances, June 30, 2023Balances, June 30, 2023$219 $818,221 $(15,891)$(949,202)$1,713,387 $1,566,734 
Net incomeNet income— — — — 93,814 93,814 
Other comprehensive loss, netOther comprehensive loss, net— — (452)— — (452)
Stock-based compensation and common stock reissuancesStock-based compensation and common stock reissuances2,587 — 411 — 2,999 
Exercise of stock optionsExercise of stock options— 270 — — — 270 Exercise of stock options— 225 — — — 225 
Common stock repurchases and related expensesCommon stock repurchases and related expenses— — — (102,394)— (102,394)
Warrants exercisesWarrants exercises1,963 — — — 1,964 Warrants exercises— 4,110 — — — 4,110 
Common stock repurchases and related expenses— — — (198,564)— (198,564)
Cash dividend and dividend equivalents declared ($0.392 per share)— — — — (6,729)(6,729)
Balances, September 30, 2022$217 $811,012 $(60,886)$(521,094)$1,142,420 $1,371,669 
Cash dividend and dividend equivalents declared ($0.50 per share)Cash dividend and dividend equivalents declared ($0.50 per share)— — — — (6,963)(6,963)
Balances, September 30, 2023Balances, September 30, 2023$220 $825,143 $(16,343)$(1,051,185)$1,800,238 $1,558,073 
Refer to accompanying Notes to Condensed Consolidated Financial Statements.
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ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited, amounts in thousands except share and per share data)

(1) Business and Basis of Presentation
Business

Alpha Metallurgical Resources, Inc. (“Alpha” or the “Company”) is a Tennessee-based mining company with operations across Virginia and West Virginia. With customers across the globe, high-quality reserves and significant port capacity, Alpha is a leading U.S. supplier of metallurgical coal products for the steel industry.

Basis of Presentation

Together, the condensed consolidated statements of operations, comprehensive income, balance sheets, cash flows and stockholders’ equity for the Company are referred to as the “Condensed Consolidated Financial Statements.” The Condensed Consolidated Financial Statements are also referenced across periods as “Condensed Consolidated Statements of Operations,” “Condensed Consolidated Statements of Comprehensive Income,” “Condensed Consolidated Balance Sheets,” “Condensed Consolidated Statements of Cash Flows,” and “Condensed Consolidated Statements of Stockholders’ Equity.” The Company’s former Northern Appalachia (“NAPP”) operations results of operations and financial position are reported as discontinued operations in the Condensed Consolidated Financial Statements. Refer to Note 2 for further information on discontinued operations.
The Condensed Consolidated Financial Statements include all wholly-owned subsidiaries’ results of operations for the three and nine months ended September 30, 20222023 and 2021.2022. All significant intercompany transactions have been eliminated in consolidation.

The accompanying interim Condensed Consolidated Financial Statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and in accordance with the rules and regulations of the United States Securities and Exchange Commission (“SEC”) for Form 10-Q. Such rules and regulations allow the omission of certain information and footnote disclosures normally included in the financial statements prepared in accordance with U.S. GAAP as long as the financial statements are not misleading. In the opinion of management, these interim Condensed Consolidated Financial Statements reflect all normal and recurring adjustments necessary for a fair presentation of the results for the periods presented. Results of operations for the three and nine months ended September 30, 20222023 are not necessarily indicative of the results to be expected for the year ending December 31, 20222023 or any other period. These interim Condensed Consolidated Financial Statements should be read in conjunction with the Company’s Consolidated Financial Statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.2022.
COVID-19 PandemicReclassifications
Certain immaterial amounts for the three and nine months ended September 30, 2022 in the Condensed Consolidated Financials Statements and notes to the Condensed Consolidated Financials Statements have been recast to reclassify discontinued operations and present the related amounts within continuing operations as part of the All Other category.

In the first quarter of 2020, the COVID-19 virus was declared a pandemic by the World Health Organization. The COVID-19 pandemic has had negative impacts on the Company’s business, results of operations, financial condition and cash flows. The Company experienced an increase in employee absences due to COVID-19. Indirectly, through some of the Company’s third-party vendors, the Company and the Company’s customers have experienced some supply chain disruptions due to the COVID-19 pandemic. The full extent of the impact of the COVID-19 pandemic on the Company’s operational and financial performance will depend on certain developments, including the duration of the virus, its impact on the Company’s customers and suppliers, and the range of governmental and community reactions to the pandemic, which cannot be fully predicted. Health and safety are core values of the Company and are the foundation for how the Company manages every aspect of its business. The Company continues to monitor developments closely and adjust as necessary, including with respect to the Company’s implemented policies, procedures, and prevention measures to protect the safety and health of its employees.

Recently AdoptedRecent Accounting Guidance

Liabilities: In September 2022, the Financial Accounting Standards Board (the “FASB”)There are no new pronouncements issued Accounting Standards Update (“ASU”) 2022-04, Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations (“ASU 2022-04”). This update enhances transparency about an entity’s use of supplier finance programs. The ASU requires entitiesbut not yet effective expected to disclose information about the key terms of the program, outstanding confirmed amounts as of the end of the period, a rollforward of such amounts during each annual period, and a description of where in the financial statements outstanding amounts are presented. The amendments are effective for fiscal years beginning after December 15, 2022, with
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ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited, amounts in thousands except share and per share data)
early application permitted. The Company adopted ASU 2022-04 during the third quarter of 2022. The adoption of this ASU did not have a material impact on the Company’s Condensed Consolidated Financial Statements and related disclosures.

Fair Value Measurement: In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurementfinancial position, results of Equity Securities Subject to Contractual Sale Restrictions (“ASU 2022-03”). This update clarifies how the fair value of equity securities subject to contractual sale restrictions is determined. Per the update, a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and is not considered in measuring fair value. Additionally, the update requires entities with investments in equity securities subject to contractual sale restrictions to disclose certain qualitative and quantitative information about such securities. The amendments are effective for fiscal years beginning after December 15, 2023, with early application permitted. The Company adopted ASU 2022-03 during the second quarter of 2022. The adoption of this ASU did not have a material impact on the Company’s Condensed Consolidated Financial Statements and related disclosures.

Financial Instruments: In March 2022, the FASB issued ASU 2022-02, Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures (“ASU 2022-02”). This update eliminates the troubled debt restructuring model for creditors that have adopted Topic 326. All loan modifications will now be accounted for under general loan modification guidance and, on a prospective basis, entities will be subject to new disclosure requirements covering modifications of receivables to borrowers experiencing financial difficulty. In addition, entities will be required to prospectively disclose current-period gross write-off information by year of origination. The amendments are effective for fiscal years beginning after December 15, 2022, with early application permitted. The Company adopted ASU 2022-02 during the first quarter of 2022. The adoption of this ASU did not have a material impact on the Company’s Condensed Consolidated Financial Statements and related disclosures.operations, or liquidity.

(2) Discontinued Operations

Discontinued operations consist of activity related to the Company’s former NAPP operations.

Major Financial Statement Components of Discontinued Operations

The income (loss) from discontinued operations before income taxes for the three months ended September 30, 2022 and 2021 was $1,273 and ($429), respectively. The loss from discontinued operations before income taxes for the nine months ended September 30, 2022 and 2021 was $525 and $1,067, respectively. Refer to the Condensed Consolidated Statements of Operations and Note 5 for income (loss) per share information related to discontinued operations.

The major components of assets and liabilities that are classified as discontinued operations in the Condensed Consolidated Balance Sheets are as follows:
September 30, 2022December 31, 2021
Assets:
Prepaid expenses and other current assets$57 $462 
Other non-current assets (1)
$8,521 $8,526 
Liabilities:
Trade accounts payable, accrued expenses and other current liabilities$4,014 $5,838 
Workers’ compensation and black lung obligations, non-current$23,245 $23,683 
(1) Comprised of workers’ compensation insurance receivable and long-term restricted investments collateralizing workers’ compensation obligations.

(3) Revenue

Disaggregation of Revenue from Contracts with Customers

The Company earns revenues primarily through the sale of coal produced atby Company operations and coal purchased from third parties. The Company extracts, processes and markets met and thermal coal from deep and surface mines for sale to steel and coke producers, industrial customers, and electric utilities.

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ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited, amounts in thousands except share and per share data)
The Company has disaggregated revenue between met coal and thermal coal and export and domestic revenues which depicts the pricing and contract differences between the two. Export revenue generally is derived by spot or short termshort-term contracts with pricing determined at the time of shipment or based on a market index;index, whereas domestic revenue is characterized by contracts that typically have a term of one year or longer and typically thewith fixed pricing is fixed.terms. The following tables disaggregate the Company’s coal revenues by product category and by market to depict how the nature, amount, timing, and uncertainty of the Company’s coal revenues and cash flows are affected by economic factors:
Three Months Ended September 30, 2022
Met CoalThermal CoalTotal
Export coal revenues$602,314 $39,031 $641,345 
Domestic coal revenues192,301 34,203 226,504 
Total coal revenues$794,615 $73,234 $867,849 

Three Months Ended September 30, 2021
Met CoalThermal CoalTotal
Export coal revenues$503,566 $13,311 $516,877 
Domestic coal revenues92,115 38,137 130,252 
Total coal revenues$595,681 $51,448 $647,129 

Nine Months Ended September 30, 2022
Met CoalThermal CoalTotal
Export coal revenues$2,626,077 $55,796 $2,681,873 
Domestic coal revenues514,771 75,201 589,972 
Total coal revenues$3,140,848 $130,997 $3,271,845 

Nine Months Ended September 30, 2021
Met CoalThermal CoalTotal
Export coal revenues$996,642 $20,035 $1,016,677 
Domestic coal revenues297,592 111,770 409,362 
Total coal revenues$1,294,234 $131,805 $1,426,039 

Performance Obligations

The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied as of September 30, 2022:
Remainder of 20222023202420252026Total
Estimated coal revenues$11,388 $32,919 $37,250 $— $— $81,557 

(4) Accumulated Other Comprehensive Loss
The following tables summarize the changes to accumulated other comprehensive loss during the nine months ended September 30, 2022 and 2021:
Balance January 1, 2022Other comprehensive income (loss) before reclassificationsAmounts reclassified from accumulated other comprehensive lossBalance September 30, 2022
Employee benefit costs$(58,503)$(4,837)$2,454 $(60,886)
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Notes to Condensed Consolidated Financial Statements
(Unaudited, amounts in thousands except share and per share data)
Company’s coal revenues by product category and by market to depict how the nature, amount, timing, and uncertainty of the Company’s coal revenues and cash flows are affected by economic factors:
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Export met coal revenues$485,955 $602,314 $1,714,215 $2,626,077 
Export thermal coal revenues28,642 39,031 95,085 55,796 
Total export coal revenues$514,597 $641,345 $1,809,300 $2,681,873 
Domestic met coal revenues$213,389 $192,301 $649,094 $514,771 
Domestic thermal coal revenues11,012 34,203 41,109 75,201 
Total domestic coal revenues$224,401 $226,504 $690,203 $589,972 
Total met coal revenues$699,344 $794,615 $2,363,309 $3,140,848 
Total thermal coal revenues39,654 73,234 136,194 130,997 
Total coal revenues$738,998 $867,849 $2,499,503 $3,271,845 

Balance January 1, 2021Other comprehensive income (loss) before reclassificationsAmounts reclassified from accumulated other comprehensive lossBalance September 30, 2021
Employee benefit costs$(111,985)$8,838 $4,239 $(98,908)
Performance Obligations

The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied as of September 30, 2023:
Remainder of 20232024202520262027Total
Estimated coal revenues$71,365 $85,187 $— $— $— $156,552 

(3) Accumulated Other Comprehensive Loss
The following tables summarize the changes to accumulated other comprehensive loss during the nine months ended September 30, 2023 and 2022:
Balance January 1, 2023Other comprehensive loss before reclassificationsAmounts reclassified from accumulated other comprehensive lossBalance September 30, 2023
Employee benefit costs$(12,162)$(2,825)$(1,356)$(16,343)

Balance January 1, 2022Other comprehensive loss before reclassificationsAmounts reclassified from accumulated other comprehensive lossBalance September 30, 2022
Employee benefit costs$(58,503)$(4,837)$2,454 $(60,886)

The following table summarizes the amounts reclassified from accumulated other comprehensive loss and the Condensed Consolidated Statements of Operations line items affected by the reclassification during the three and nine months ended September 30, 20222023 and 2021:2022:
Details about accumulated other comprehensive loss componentsAmounts reclassified from accumulated other comprehensive lossAffected line item in the Condensed Consolidated Statements of Operations
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Employee benefit costs:
Amortization of net actuarial loss (1)
$828 $1,413 $2,483 $4,239 Miscellaneous income, net
Settlement (1)
(10)— (29)— Miscellaneous income, net
Total before income tax$818 $1,413 $2,454 $4,239 
Income tax— — — — Income tax expense
Total, net of income tax$818 $1,413 $2,454 $4,239 
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ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited, amounts in thousands except share and per share data)
Details about accumulated other comprehensive loss componentsAmounts reclassified from accumulated other comprehensive lossAffected line item in the Condensed Consolidated Statements of Operations
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Employee benefit costs:
Amortization of net actuarial (gain) loss (1)
$(581)$828 $(1,743)$2,483 Miscellaneous (expense) income, net
Settlement (1)
— (10)— (29)Miscellaneous (expense) income, net
Total before income tax$(581)$818 $(1,743)$2,454 
Income tax129 — 387 — Income tax expense
Total, net of income tax$(452)$818 $(1,356)$2,454 
(1) These accumulated other comprehensive loss components are included in the computation of net periodic benefit costs for certain employee benefit plans. Refer to Note 14.13.

(5)(4) Net Income Per Share
The number of shares used to calculate basic net income per common share is based on the weighted average number of the Company’s outstanding common shares during the respective period. The number of shares used to calculate diluted net income per common share is based on the number of common shares used to calculate basic net income per common share plus the dilutive effect of stock options and other stock-based instruments held by the Company’s employees and directors during the period, and the Company’s outstanding warrants. The dilutive effect of outstanding stock-based instruments is determined by application of the treasury stock method. The stock options and warrants become dilutive for diluted net income per common share calculations when the market price of the Company’s common stock exceeds the exercise price. Anti-dilution also occurs in periods of a net loss, and the dilutive impact of all warrants and share-based compensation awards are excluded.

For the three and nine months ended September 30, 2022 and 2021,2023, 0 and 942,408 warrants and stock options1,240 stock-based instruments, respectively, were excluded from the computation of dilutive net income per common share because they would have been anti-dilutive. For the three and nine months ended September 30, 2022, and 2021, 0 and 948,351no warrants, stock options, andor other stock-based instruments respectively, were excluded from the computation of dilutive net income per common share because they would have been anti-dilutive. When applying the treasury stock method, anti-dilution generally occurs when the exercise prices or unrecognized compensation cost per share are higher than the Company’s average stock price during an applicable period.

The following table presents the net income per common share for the three and nine months ended September 30, 20222023 and 2021:2022:

Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Basic
Net income$93,814 $252,817 $545,940 $1,227,865 
Weighted average common shares outstanding - basic13,633,640 17,119,328 14,416,289 18,019,161 
Net income per common share - basic$6.88 $14.77 $37.87 $68.14 
Diluted
Weighted average common shares outstanding - basic13,633,640 17,119,328 14,416,289 18,019,161 
Dilutive effect of warrants31,667 170,827 108,469 312,395 
Dilutive effect of stock options1,666 2,043 1,866 4,902 
Dilutive effect of other stock-based instruments443,515 426,319 446,544 464,216 
Weighted average common shares outstanding - diluted14,110,488 17,718,517 14,973,168 18,800,674 
Net income per common share - diluted$6.65 $14.27 $36.46 $65.31 

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Notes to Condensed Consolidated Financial Statements
(Unaudited, amounts in thousands except share and per share data)
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Net income
Income from continuing operations$251,836 $83,693 $1,228,269 $32,412 
Income (loss) from discontinued operations981 (429)(404)(1,067)
Net income$252,817 $83,264 $1,227,865 $31,345 
Basic
Weighted average common shares outstanding - basic17,119,328 18,445,709 18,019,161 18,426,639 
Basic income per common share:
Income from continuing operations$14.71 $4.54 $68.16 $1.76 
Income (loss) from discontinued operations0.06 (0.03)(0.02)(0.06)
Net income$14.77 $4.51 $68.14 $1.70 
Diluted
Weighted average common shares outstanding - basic17,119,328 18,445,709 18,019,161 18,426,639 
Diluted effect of warrants170,827 — 312,395 — 
Diluted effect of stock options2,043 1,938 4,902 1,654 
Diluted effect of other stock-based instruments426,319 465,705 464,216 355,350 
Weighted average common shares outstanding - diluted17,718,517 18,913,352 18,800,674 18,783,643 
Diluted income per common share:
Income from continuing operations$14.21 $4.43 $65.33 $1.73 
Income (loss) from discontinued operations0.06 (0.03)(0.02)(0.06)
Net income$14.27 $4.40 $65.31 $1.67 

(6)(5) Inventories, net
Inventories, net consisted of the following: 
September 30, 2022December 31, 2021 September 30, 2023December 31, 2022
Raw coalRaw coal$38,145 $20,347 Raw coal$53,762 $57,382 
Saleable coalSaleable coal100,655 81,240 Saleable coal156,715 91,474 
Materials, supplies and other, net
Materials, supplies and other, net
39,759 27,795 
Materials, supplies and other, net
61,328 51,718 
Total inventories, netTotal inventories, net$178,559 $129,382 Total inventories, net$271,805 $200,574 

(7)(6) Capital Stock

Share Repurchase Program

On March 4, 2022,February 21, 2023, the Company’s Board of Directors (the “Board”) adoptedapproved a $200,000 increase to the existing common share repurchase program that permitted the CompanyBoard adopted on March 4, 2022, bringing the total authorization to repurchase up to an aggregate amount of $150,000 of the Company's common stock. On May 3, 2022, the Company’s Board amended the share repurchase programstock to increase the aggregate amount the Company is permitted to repurchase to $600,000 of the Company's common stock. Share repurchases may be made from time to time through open market transactions, block trades, tender offers, or otherwise, and the program has no expiration date. The share repurchase
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Notes to Condensed Consolidated Financial Statements
(Unaudited, amounts in thousands except share and per share data)
program does not obligate the Company to acquire any particular amount of common stock or to acquire shares on any particular timetable, and the program may be suspended at any time at the Company’s discretion. Repurchases under the program are subject to market and business conditions, available liquidity, the Company’s cash needs, restrictions under agreements or obligations, legal or regulatory requirements or restrictions and other relevant factors.$1,200,000. As of September 30, 2022,2023, the Company had repurchased an aggregate of 2,731,4895,976,397 shares under the plan for an aggregate purchase price of approximately $389,163$910,281 (comprised of $389,081$910,101 of share repurchases and $82$180 of related fees). Refer to Note 18 for subsequent event disclosuresThe Company has also accrued a stock repurchase excise tax of $3,482 related to an increase in the aggregate amount permitted to be repurchased under the share repurchase program.program as of September 30, 2023, which is recorded in treasury stock at cost.

On October 31, 2023, the Board approved an additional $300,000 increase to the share repurchase program, bringing the total authorization to repurchase the Company’s stock to $1,500,000.

Dividend Program

OnPursuant to the dividend policy adopted by the Board on May 3, 2022, the Company‘s Board adopted a dividend policy. Pursuant to this policy, the Board initially intended to pay aggregate cash dividends of $1.50 per share of common stock per year, with $0.375 per share paid each quarter. On August 4, 2022 the Company’s Board increased the quarterly dividend amount to $0.392 per share. In addition, pursuant to the terms of certain stock-based compensation awards under the Company’s Management Incentive Plan and Long-Term Incentive Plan, dividend equivalent amounts for each quarterly dividend will become payable at various vesting dates with respect to each underlying outstanding award.

The Company’s Board declared the following quarterly cash dividends on the Company’s common stock during the nine months ended September 30, 2022:2023:
Dividend per shareDividend per share
Dividends Paid (1)
Declaration DateHolders of Record DatePayable DateDividend per share
Dividend Paid (1)
Declaration DateHolders of Record DatePayable Date
$0.375 $6,773 May 3, 2022June 15, 2022July 1, 20220.44 $6,602 February 21, 2023March 15, 2023April 3, 2023
$0.392 $6,522 August 4, 2022September 15, 2022October 3, 20220.50 $7,001 May 3, 2023June 15, 2023July 5, 2023
$0.50 $6,736 August 2, 2023September 15, 2023October 3, 2023
(1) Excludes dividend equivalents paid or accrued of $411$682 as of September 30, 2022.2023. As of September 30, 2022,2023, a related $6,522$6,736 balance was held on deposit to facilitate the dividend payment on October 3, 2022 which was included within Prepaid expenses and other current assets on the Company’s Condensed Consolidated Balance Sheets.2023.

The Company expects any futureOn August 2, 2023, the Board determined to end the Company’s fixed dividend payments will be targetedprogram following the quarterly dividend declared and to be paid in the first monthfourth quarter of each calendar quarter. Any decisions as2023 and to whether and when to pay future cash dividends will, however, be made by the Board and dependfocus instead on the Company’s future earnings and financial condition and other relevant factors. Refer to Note 18 for subsequent event disclosures related toshare repurchase program.

On October 31, 2023, the Company’s dividend program which includes the declaration of theBoard declared a quarterly cash dividend and a one-time, special dividend.of $0.50 per share which will be payable on December 15, 2023 for stockholders of record as of December 1, 2023.

Warrants

On July 26, 2016, the Company issued 810,811 warrants, which are classified as equity instruments. Pursuant to the underlying warrants agreement, the warrants arewere exercisable for cash or on a cashless basis at any time until July 26, 2023,their expiration, and no fractional shares shallwere to be issued upon warrant exercises. Pursuant to the underlying warrants agreement, the exercise price was adjusted from $46.911$45.086 per share to $46.804$44.972 per share as of the March 15, 2023 dividend record date and to $44.820 per share as of the June 15, 20222023 dividend record date, as a result ofwhile the occurrence of the dividend declaration on May 3, 2022. The warrant share number remained unchanged at 1.15. The exercise price was subsequently adjusted1.20. At 5:00 pm Eastern Time on July 26, 2023 the Company’s Series A Warrants expired pursuant to their terms.

As of September 30, 2023, no warrants remained outstanding as the warrants expired during the current quarter. For the three and nine months ended September 30, 2023, the Company issued 96,556 and 169,028 shares of common stock, respectively, resulting from $46.804exercises of its warrants and, pursuant to the terms of the underlying warrants agreement, withheld
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Notes to Condensed Consolidated Financial Statements
(Unaudited, amounts in thousands except share and per share to $46.679 per sharedata)
4,978 and the warrant share number was adjusted from 1.15 to 1.16 as20,139 of the September 15, 2022 dividend record date as a resultissued shares, respectively, in satisfaction of the occurrence of the dividend declaration on August 4, 2022. Refer to Note 18 for subsequent event disclosures related to the Company’s dividend program which could result in an additional adjustment to the warrantswarrant exercise price and warrants share number.in lieu of fractional shares, which were subsequently reclassified as treasury stock in the amount of $577 and $2,368, respectively.

As of September 30, 2022, 211,477 warrants remainedwere outstanding, with a total of 245,313 shares underlying the un-exercised warrants. For the three and nine months ended September 30, 2022, the Company issued 60,084 and 678,241 shares of common stock, respectively, resulting from exercises of its warrants and, pursuant to the terms of the underlying warrants agreement, withheld 18,151 and 186,397 of the issued shares, respectively, in satisfaction of the warrant exercise price and in lieu of fractional shares, which were subsequently reclassified as treasury stock in the amounts of $1,680 and $18,331, respectively.

(7) Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following: 
September 30, 2023December 31, 2022
Wages and benefits$66,048 $69,458 
Workers’ compensation11,651 11,651 
Black lung9,664 9,664 
Taxes other than income taxes25,731 24,959 
Asset retirement obligations35,745 36,963 
Dividend payable8,701 86,118 
Income taxes payable8,589 — 
Freight accrual12,378 7,181 
Other11,612 19,262 
Total accrued expenses and other current liabilities$190,119 $265,256 

(8) Long-Term Debt
Long-term debt consisted of the following: 
 September 30, 2023December 31, 2022
Notes payable and other$5,726 $6,179 
Financing leases4,776 4,796 
Total long-term debt$10,502 $10,975 
Less current portion(3,438)(3,078)
Long-term debt, net of current portion$7,064 $7,897 

Credit Agreement

At September 30, 2023, the Company’s Second Amended and Restated Asset-Based Revolving Credit Agreement (the “ABL Agreement”) included a senior secured asset-based revolving credit facility (the “ABL Facility”). Under the ABL Facility, the Company could borrow cash or obtain letters of credit, on a revolving basis, in an aggregate amount of up to $155,000, of which no more than $150,000 could represent outstanding letters of credit ($125,000 on a committed basis and another $25,000 on an uncommitted cash collateralized basis). The facility’s maturity date was December 6, 2024. As of September 30, 2021, 801,248 warrants2023 and December 31, 2022, there were no outstanding with a totalborrowings under the ABL Facility. As of 921,435 shares underlying the un-exercised warrants. For the three and nine months ended September 30, 2021,2023 and December 31, 2022, the Company issued 140 shareshad $60,927 and $61,877 letters of common stock resultingcredit outstanding under the ABL Facility, respectively. The ABL Agreement, as amended, and related documents contained negative and affirmative covenants including certain financial covenants. The Company was in compliance with all covenants under these agreements as of September 30, 2023.

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Notes to Condensed Consolidated Financial Statements
(Unaudited, amounts in thousands except share and per share data)
from exercisesOn October 27, 2023, the Company terminated its existing ABL Agreement and along with certain of its warrantsdirectly and pursuant to the terms of the underlying warrants agreement, withheld 16 of the issued shares in satisfaction of the warrant exercise price and in lieu of fractional shares.

(8) Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following: 
September 30, 2022December 31, 2021
Wages and benefits$88,130 $52,310 
Workers’ compensation10,582 10,582 
Black lung7,235 7,235 
Taxes other than income taxes28,006 30,734 
Asset retirement obligations33,533 32,159 
Accrued interest and fees1,035 14,489 
Freight accrual12,007 15,085 
Dividend payable6,649 — 
Other16,725 12,013 
Total accrued expenses and other current liabilities$203,902 $174,607 

(9) Long-Term Debt
Long-term debt consisted of the following: 
 September 30, 2022December 31, 2021
Term Loan Credit Facility - due June 2024$— $449,435 
Other (1)
4,698 5,311 
Debt discount and issuance costs— (6,195)
Total long-term debt$4,698 $448,551 
Less current portion(1,711)(2,989)
Long-term debt, net of current portion$2,987 $445,562 
(1) Includes financing leases.

Term Loan Credit Facility - due June 2024
On June 14, 2019, the Companyindirectly owned subsidiaries (the “Borrowers”) entered into a new Credit Agreement that provided for a senior secured term loan facility with a maturity date of June 14, 2024 (the “Term Loan Credit Facility”). As of September 30, 2022, there were no outstanding borrowings under the Term Loan Credit Facility as a result of the Company’s voluntary prepayments of $449,435 of outstanding principal borrowings during the first and second quarters of 2022. Effective with the final voluntary prepayment on June 3, 2022, the Credit Agreement was terminated, and the Company was released of all underlying obligations including the Credit Agreement covenants. As December 31, 2021, the carrying value of the Term Loan Credit Facility was $443,241, all of which was classified as long-term within the Condensed Consolidated Balance Sheets.

Second Amended and Restated Asset-Based Revolving Credit Agreement

The Second Amended and Restated Asset-Based Revolving Credit Agreement (““New ABL Agreement”) includes a senior securedwith Regions Bank, as lender, swingline lender, LC issuer, administrative agent, collateral agent, and lead arranger, along with ServisFirst Bank and Texas Capital Bank, as joint lead arrangers and the other lenders party thereto. The New ABL Agreement continues to include an asset-based revolving credit facility (the “ABL“New ABL Facility”). Under the ABL Facility, which allows the Company mayto borrow cash or obtain letters of credit (“LCs”), on a revolving basis, in an aggregate amount of up to $155,000,$155,000. The Company may request an increase to the capacity of which no more than $150,000the facility of up to $75,000 provided that $25,000 may represent outstanding lettersbe solely for the purpose of credit ($125,000 on a committed basis and another $25,000 on an uncommittedproviding additional availability to obtain cash collateralized basis) with any borrowings having a maturity date of December 6, 2024. As of September 30, 2022 and December 31, 2021, there were no outstanding borrowingsLCs. Availability under the ABL Facility. As of September 30, 2022 and December 31, 2021, the Company had $63,898 and $121,037 letters of credit outstanding under the ABL Facility, respectively.

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Notes to Condensed Consolidated Financial Statements
(Unaudited, amounts in thousands except share and per share data)
The ABL Agreement provides that a specified percentage of billed and unbilled receivables and raw and clean inventory meeting certain criteria are eligible to be counted for purposes of collateralizing the amount of financing available, subject to certain terms and conditions. Availability under theNew ABL Facility is calculated on a monthly basis and fluctuates based on qualifying amounts of coal inventory, and trade accounts receivable (the “Borrowing Base”) and in certain circumstances specified amounts of cash. The Company must maintain minimum liquidity, as defined in the facility's covenant limitations relatedNew ABL Agreement, of $75,000. The New ABL Facility matures on October 27, 2027. As part of the transition from the previous ABL Facility to the Fixed Charge Coverage Ratio (as defined in therein). In accordance with terms of theNew ABL Facility, the Company temporarily collateralized outstanding LCs with approximately $62,754 in cash. The Company expects to replace the cash collateral with new LCs under the New ABL Facility prior to year-end 2023.

Under the terms of the New ABL Facility, letter of credit fees will be calculated at 3.25% (including a fronting fee of 0.25%) while future borrowings will bear interest based on the character of the loan (defined as either a “Term Secured Overnight Financing Rate Loan” (or “Term SOFR Loan”) or a “Base Rate Loan”) plus an applicable rate of 3.10% for a Term SOFR Loan and 2.00% for a Base Rate Loan. The Company may elect the character and interest period for each loan. All amounts borrowed may be requiredrepaid prior to collateralize the ABL Facility to the extent outstanding borrowings and lettersmaturity without penalty. A commitment fee of credit under the ABL Facility exceed the Borrowing Base after considering covenant limitations.0.375% will be charged on any unused capacity.

The New ABL Facility is guaranteed by substantially all of Alpha’s directdirectly and indirectindirectly owned subsidiaries (together with Alpha, the “Loan Parties”that are not Borrowers (the “Guarantors”) and is secured by all or substantially all assets of the Loan Parties, including equity in Alpha’s direct domestic subsidiaries, as collateral for the obligations under the ABL Facility. The ABL Facility has a first lien on ABL priority collateralBorrowers and a second lien on Term Loan Priority Collateral. As noted above, the Term Loan Credit Facility was voluntarily prepaid in full on June 3, 2022, and in connection therewith, the Term Loan Priority Collateral has been released in connection therewith, and the ABL Facility’s lien on the Term Loan Priority Collateral is no longer second. The ABL Agreement, as amended, and related documents contain negative and affirmative covenants including certain financial covenants. The Company is in compliance with all covenants under these agreements as of September 30, 2022.Guarantors.

(10)(9) Acquisition-Related Obligations
Acquisition-related obligations consisted of the following:
September 30, 2022December 31, 2021
Contingent Revenue Obligation$29,454 $35,005 
Environmental Settlement Obligations677 6,633 
Discount— (233)
Total acquisition-related obligations$30,131 $41,405 
Less current portion(30,131)(22,405)
Acquisition-related obligations, net of current portion$— $19,000 
September 30, 2023December 31, 2022
Contingent Revenue Obligation$— $27,719 
Environmental Settlement Obligation181 535 
Total acquisition-related obligations - current$181 $28,254 

Contingent Revenue Obligation

AsDuring the first quarter of September 30, 2022 and December 31, 2021,2023, the carrying valueCompany paid the final calculated payment pursuant to terms of the Contingent Revenue Obligation was $29,454 and $35,005, with $29,454 and $16,005 classified as current, respectively, classified as an acquisition-related obligation in the Condensed Consolidated Balance Sheets.Obligation. Refer to Note 1211 for further disclosures related to the fair value assignment and methods used.

(11)(10) Asset Retirement Obligations

The following table summarizes the changes in asset retirement obligations for the nine months ended September 30, 2022:2023:
Total asset retirement obligations at December 31, 20212022$164,172179,011 
Accretion for the period17,82219,129 
Sites added during the period634 
Revisions in estimated cash flows(897)(43)
Expenditures for the period(13,116)(14,252)
Total asset retirement obligations at September 30, 20222023168,615183,845 
Less current portion (1)
(33,533)(35,745)
Long-term portion$135,082148,100 
(1) Included within Accrued expenses and other current liabilities on the Company’s Condensed Consolidated Balance Sheets. Refer to Note 8.7.

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Notes to Condensed Consolidated Financial Statements
(Unaudited, amounts in thousands except share and per share data)
(12)(11) Fair Value of Financial Instruments and Fair Value Measurements
The estimated fair values of financial instruments are determined based on relevant market information. These estimates involve uncertainty and cannot be determined with precision.
The carrying amounts for cash and cash equivalents, trade accounts receivable, net, prepaid expenses and other current assets, short-term and long-term restricted cash, short-term and long-term deposits, trade accounts payable, short-term and long-term dividend payable, and accrued expenses and other current liabilities, and environmental settlement obligations approximate fair value as of September 30, 20222023 and December 31, 20212022 due to the short maturity of these instruments.
The following tables set forth by level, within the fair value hierarchy, the Company’s long-term debt and acquisition-related obligations at fair value as of September 30, 2022 and December 31, 2021:
September 30, 2022
Carrying
     Amount (1)
Total Fair ValueQuoted Prices in Active Markets
(Level 1)
Significant Other Observable Inputs
(Level 2)
Significant Unobservable Inputs
(Level 3)
Environmental Settlement Obligations$677 $677 $— $— $677 

December 31, 2021
Carrying
     Amount (1)
Total Fair ValueQuoted Prices in Active Markets
(Level 1)
Significant Other Observable Inputs
(Level 2)
Significant Unobservable Inputs
(Level 3)
Term Loan Credit Facility - due June 2024$443,241 $447,561 $— $447,561 $— 
Environmental Settlement Obligations$6,400 $6,270 $— $— $6,270 
(1) Net of debt discounts and debt issuance costs.

The following table sets forth by level, within the fair value hierarchy, the Company’s financial and non-financial assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 20222023 and December 31, 2021.2022. Financial and non-financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the determination of fair value for assets and liabilities and their placement within the fair value hierarchy levels.

 September 30, 2022
Total Fair ValueQuoted Prices in Active Markets (Level 1)Significant Other Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)
Contingent Revenue Obligation$29,454 $— $— $29,454 
Trading securities$92,384 $— $92,384 $— 
 September 30, 2023
Total Fair ValueQuoted Prices in Active Markets (Level 1)Significant Other Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)
Trading securities (1)
$71,269 $— $71,269 $— 
(1) Classified as Long-term restricted investments on the Company’s Condensed Consolidated Balance Sheets.

December 31, 2021 December 31, 2022
Total Fair ValueQuoted Prices in Active Markets (Level 1)Significant Other Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)Total Fair ValueQuoted Prices in Active Markets (Level 1)Significant Other Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)
Contingent Revenue ObligationContingent Revenue Obligation$35,005 $— $— $35,005 Contingent Revenue Obligation$27,719 $— $— $27,719 
Trading securities(1)Trading securities(1)$28,443 $27,075 $1,368 $— Trading securities(1)$151,787 $— $151,787 $— 
(1) Includes $46,052 classified as Short-term investments and $105,735 classified as Long-term restricted investments on the Company’s Condensed Consolidated Balance Sheets.

The following tables present a reconciliationare reconciliations of the financial and non-financial assets and liabilities that were accounted for at fair value on a recurring basis and that were categorized within Level 3 of the fair value hierarchy:
December 31, 2022PaymentsLoss (Gain) Recognized in EarningsTransfer In (Out) of Level 3 Fair Value HierarchySeptember 30, 2023
Contingent Revenue Obligation$27,719 $(27,719)$— $— $— 

December 31, 2021
Payments
Loss (Gain) Recognized in Earnings (1)
Transfer In (Out) of Level 3 Fair Value HierarchySeptember 30, 2022
Contingent Revenue Obligation$35,005 $(16,166)$10,615 $— $29,454 
(1) The loss recognized in earnings resulted primarily from an increase in forecasted future revenue as of September 30, 2022.

The following methods and assumptions were used to estimate the fair values of the assets and liabilities in the tables above:
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Notes to Condensed Consolidated Financial Statements
(Unaudited, amounts in thousands except share and per share data)
December 31, 2021Payments
Loss (Gain) Recognized in Earnings (1)
Transfer In (Out) of Level 3 Fair Value HierarchySeptember 30, 2022
Contingent Revenue Obligation$35,005 $(16,166)$10,615 $— $29,454 
(1) The loss recognized in earnings resulted primarily from an increase in forecasted future revenue as of September 30, 2022.

December 31, 2020
Payments
Loss (Gain) Recognized in Earnings (1)
Transfer In (Out) of Level 3 Fair Value HierarchySeptember 30, 2021
Contingent Revenue Obligation$28,967 $(11,396)$18,009 $— $35,580 
(1) The loss recognized in earnings resulted primarily from an increase in forecasted future revenue as of September 30, 2021.

The following methods and assumptions were used to estimate the fair values of the assets and liabilities in the tables above:
Level 1 Fair Value Measurements
Trading Securities - Typically includes money market funds. The fair value is based on observable market data.

Level 2 Fair Value Measurements
Term Loan Credit Facility - due June 2024 - The fair value was based on the average between bid and ask prices provided by a third-party. As the fair value was based on observable market inputs and due to limited trading volume in the Term Loan Credit Facility, the Company had classified the fair value within Level 2 of the fair value hierarchy. Effective June 3, 2022, the Term Loan Credit Facility was terminated. Refer to Note 9 for additional information.

Trading Securities - Typically includes certificates of deposit, corporate fixed income, and U.S. government securities. The fair values of the Company’s trading securities are obtained from a third-party pricing service provider. The fair values provided by the pricing service provider are based on observable market inputs including credit spreads and broker-dealer quotes, among other inputs. The Company classifies the prices obtained from the pricing services within Level 2 of the fair value hierarchy because the underlying inputs are directly observable from active markets. However, the pricing models used entail a certain amount of subjectivity and therefore differing judgments in how the underlying inputs are modeled could result in different estimates of fair value.

Level 3 Fair Value Measurements

Environmental Settlement Obligations - Observable transactions are not available to aid in determining the fair value of these items. Therefore, the fair value was derived by using the expected present value approach in which estimated cash flows are discounted using a risk-free interest rate adjusted for credit risk (discount rate of approximately 0% as of September 30, 2022, based on the expected upcoming settlement date, and 13% as of December 31, 2021).

Contingent Revenue Obligation - The fair value of the contingent revenue obligationContingent Revenue Obligation was estimated using a Black-Scholes pricing model and is marked to market at each reporting period with changes in value reflected in earnings.model. The inputs included in the Black-Scholes pricing model are the Company'sCompany’s forecasted future revenue, the stated royalty rate, the remaining periods in the obligation, annual risk-free interest rate based on the U.S. Constant Maturity Treasury Curve and annualized volatility. The annualized volatility was calculated by observing volatilities for comparable companies with adjustments for the Company's size and leverage. The rangeAs the royalty period ended on December 31, 2022, the fair value of significant unobservable inputs used to value the Contingent Revenue Obligationremaining obligation as of September 30, 2022 and December 31, 2021, are set forth inthat date represents the following table:
September 30, 2022December 31, 2021
Forecasted future revenue$3.0 billion$1.5 - $2.0 billion
Stated royalty rate1.0% - 1.5%1.0% - 1.5%
Annualized volatility20.5% - 31.8% (28.9%)18.4% - 39.3% (29.9%)
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ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES
Notes2023. Refer to Condensed Consolidated Financial Statements
(Unaudited, amounts in thousands except share and per share data)
Note 9 for additional information.

(13)(12) Income Taxes

For the nine months ended September 30, 2023, the Company recorded income tax expense of $94,973 on income before income taxes of $640,913. The income tax expense differs from the expected statutory amount primarily due to the permanent impact of percentage depletion and foreign-derived intangible income deductions, partially offset by the impact of state income taxes, net of federal impact. For the nine months ended September 30, 2022, the Company recorded income tax expense of $114,073$113,953 on income from continuing operations before income taxes of $1,342,342.$1,341,818. The income tax expense differs from the expected statutory amount primarily due to the decrease in the valuation allowance and the permanent impact of percentage depletion and foreign-derived intangible income deductions, partially offset by the impact of state income taxes, net of federal impact. For the nine months ended September 30, 2021, the Company recorded income tax expense of $211 on income from continuing operations before income taxes of $32,623. The income tax expense differs from the expected statutory amount primarily due to the decrease in the valuation allowance and the permanent impact of percentage depletion deductions, partially offset by the impact of state income taxes, net of federal impact.

As a result of generating income before income taxes during the nine months ended September 30, 2022, the Company recorded a decrease of $73,673 to its deferred tax asset valuation allowance recorded as of December 31, 2021. The decrease in the valuation allowance results in part from a decrease in deferred tax assets since the prior reporting date of December 31, 2021. The Company currently is relying primarily on the reversal of taxable temporary differences, along with consideration of taxable income via carryback to prior years and tax planning strategies, to support the realization of deferred tax assets. For each reporting period, the Company updates its assessment regarding the realizability of its deferred tax assets, including scheduling the reversal of its deferred tax assets and liabilities, to determine the amount of valuation allowance needed. Scheduling the reversal of deferred tax asset and liability balances requires judgment and estimation. The Company believes the deferred tax liabilities relied upon as future taxable income in its assessment will reverse in the same period and jurisdiction and are of the same character as the temporary differences giving rise to the deferred tax assets that will be realized. The valuation allowance recorded represents the portion of deferred tax assets for which the Company is unable to support realization through the methods described above.

During the nine months ended September 30, 2022, the Company paid estimated federal and state income taxes of $120,165. As of September 30, 2022, the Company has recorded a current federal income taxes receivable of $16,271, classified as Prepaid expenses and other current assets in the Condensed Consolidated Balance Sheets.

On August 16, 2022, the Inflation Reduction Act of 2022 (“IRA”) was signed into law. Among other provisions, the IRA enacts a 15% corporate alternative minimum tax and a 1% excise tax on repurchases of corporate stock for tax years beginning after December 31, 2022. The Company is currently assessing the impact of the IRA.

(14)(13) Employee Benefit Plans
The components of net periodic benefit cost (credit) cost other than the service cost component for black lung are included in the line item miscellaneous (expense) income, net in the Condensed Consolidated Statements of Operations.
Pension

The following table details the components of the net periodic benefit creditcost (credit) for pension obligations:
Three Months Ended September 30,Nine Months Ended September 30,Three Months Ended September 30,Nine Months Ended September 30,
20222021202220212023202220232022
Interest costInterest cost$3,995 $3,392 $11,985 $10,176 Interest cost$5,993 $3,995 $17,979 $11,985 
Expected return on plan assetsExpected return on plan assets(7,183)(7,183)(21,549)(21,549)Expected return on plan assets(5,499)(7,183)(16,497)(21,549)
Amortization of net actuarial lossAmortization of net actuarial loss528 804 1,583 2,413 Amortization of net actuarial loss183 528 548 1,583 
Net periodic benefit credit$(2,660)$(2,987)$(7,981)$(8,960)
Net periodic benefit cost (credit)Net periodic benefit cost (credit)$677 $(2,660)$2,030 $(7,981)
During the three months ended June 30, 2022,2023, an annual census data actuarial revaluation of pension obligations was performed, which resulted in an increase in the liability for pension obligations of approximately $4,837$3,630 with the offset to accumulated other comprehensive gainloss and a slight decreaseincrease in net periodic benefit cost to be recognized subsequent to the revaluation date. An annual census data actuarial revaluation of pension obligations was also performed during the three months ended June 30, 2021,2022, which resulted in a decreasean increase in the liability for pension obligations of approximately $8,838$4,837 with the offset to accumulated other comprehensive gainloss and a slight increasedecrease in net periodic benefit credit to be recognized subsequent to the revaluation date.
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Notes to Condensed Consolidated Financial Statements
(Unaudited, amounts in thousands except share and per share data)

Black Lung

The following table details the components of the net periodic benefit cost for black lung obligations:
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Service cost$654 $739 $1,962 $2,217 
Interest cost665 607 1,995 1,821 
Expected return on plan assets(13)(14)(39)(42)
Amortization of net actuarial loss209 522 627 1,566 
Net periodic benefit cost$1,515 $1,854 $4,545 $5,562 
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ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited, amounts in thousands except share and per share data)
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Service cost$512 $661 $1,538 $1,982 
Interest cost1,165 681 3,495 2,041 
Expected return on plan assets(12)(13)(38)(39)
Amortization of net actuarial (gain) loss(708)314 (2,124)943 
Net periodic benefit cost$957 $1,643 $2,871 $4,927 

Defined Contribution and Profit Sharing Plans

During the third quarter of 2022, the Company announced a year-end discretionary employer contribution under the Alpha Metallurgical Resources 401(k) Retirement SavingsSelf-insured Medical Plan (the “Plan”) equal to the 2% of the Plan participants’ annual salaries. Effective in June 2021, the Company’s matching contributions under the Plan were reinstated after being suspended due to weak market conditions during the second quarter of 2020.

The Company is self-insured for health benefit coverage for all of its active employees. Estimated liabilities for health and medical claims are recorded based on the Company’s total contributions to these planshistorical experience and include a component for the three months ended September 30, 2022 and 2021 were $6,396 and $4,636, respectively. The Company’s total contributions to these plans for the nine months ended September 30, 2022 and 2021 were $12,599 and $4,830, respectively.

(15) Related Party Transactions
incurred but not paid claims. During the three months ended September 30, 2021,2023 and 2022 the Company repurchased at a discount certain outstanding principal borrowings made underincurred total expenses of $22,040 and $18,324, respectively, and during the Term Loan Credit Facility from existing shareholders through privately negotiated transactions. As the participating lenders were existing shareholders (related parties) ofnine months ended September 30, 2023 and 2022, the Company asincurred total expenses of the repurchase date, the Company analyzed various factors regarding each of the transactions$61,866 and concluded such repurchases were at a reasonable market rate$49,334, respectively, which primarily include claims processed and reflected the terms of an arm’s length transaction per the requirements of the Term Loan Credit Facility. Refer to Note 9estimate for additional disclosures on long-term debt.claims incurred but not paid.

(14) Related Party Transactions
There were no other material related party transactions for the nine months ended September 30, 20222023 or 2021.2022.

(16)(15) Commitments and Contingencies
(a) General
Estimated losses from loss contingencies are accrued by a charge to income when available information available indicates that it is probable that an asset has been impaired or a liability has been incurred and the amount of the loss can be reasonably estimated.
If a loss contingency is not probable or reasonably estimable, disclosure of the loss contingency is made in the Condensed Consolidated Financial Statements when it is at least reasonably possible that a loss may be incurred and that the loss could be material.
(b) Commitments and Contingencies
Commitments
The Company leases coal mining and other equipment under long-term financing and operating leases with varying terms. In addition, the Company leases mineral interests and surface rights from landowners under various terms and royalty rates.

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Notes to Condensed Consolidated Financial Statements
(Unaudited, amounts in thousands except share and per share data)
Coal royalty expense was $44,340$39,284 and $30,077$44,340 for the three months ended September 30, 20222023 and 2021,2022, respectively. Coal royalty expense was $174,310$136,308 and $70,116$174,310 for the nine months ended September 30, 2022 and 2021, respectively.

Other Commitments

As of September 30, 2022, the Company has obligations under certain coal purchase agreements that contain minimum quantities to be purchased in the remainder of 2022 and 2023 totaling an estimated $65,149 and $10,943, respectively. The Company also has obligations under certain unconditional purchase obligations totaling $47,776, $28,674, and $67,125 in the remainder of 2022, 2023 and 2024,2022, respectively.

Contingencies

Extensive regulation of the impacts of mining on the environment and of maintaining workplace safety has had, and is expected to continue to have, a significant effect on the Company’s costs of production and results of operations. Further regulations, legislation or litigation in these areas may also cause the Company’s sales or profitability to decline by increasing costs or by hindering the Company’s ability to continue mining at existing operations or to permit new operations.
During the normal course of business, contract-related matters arise between the Company and its customers. When a loss related to such matters is considered probable and can reasonably be estimated, the Company records a liability.
AsDuring the first half of September 30, 2022, per terms of the Cumberland Back-to-Back Coal Supply Agreements, the Company is required to purchase and sell 900 tons of coal in the remainder of 2022 totaling $34,733. For the three months ended September 30, 2022 and 2021,2023, the Company purchased and sold 443 and 514399 tons, respectively, totaling $16,979 and $19,948, respectively,$15,170, under the Cumberland Back-to-Back Coal Supply Agreements. For the three and nine months ended September 30, 2022, and 2021, the Company purchased and sold 1,120443
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Notes to Condensed Consolidated Financial Statements
(Unaudited, amounts in thousands except share and 1,974per share data)
and 1,120 tons, respectively, totaling $43,100$16,979 and $76,501,$43,100, respectively, under the Cumberland Back-to-Back Coal Supply Agreements. DuringAs of June 30, 2023, the fourth quarter of 2022, one Cumberland Back-to-Back Coal Supply Agreement initially scheduled to beAgreements had been fully performed by December 31, 2022 was extended into 2023 and is expected to be fully performed by the end of the second quarter of 2023.performed.
(c) Guarantees and Financial Instruments with Off-Balance Sheet Risk
In the normal course of business, the Company is a party to certain guarantees and financial instruments with off-balance sheet risk, such as bank letters of credit, performance or surety bonds, and other guarantees and indemnities related to the obligations of affiliated entities which are not reflected in the Company’s Condensed Consolidated Balance Sheets. However, the underlying liabilities that they secure, such as asset retirement obligations, workers’ compensation liabilities, and royalty obligations, are reflected in the Company’s Condensed Consolidated Balance Sheets.
The Company is required to provide financial assurance in order to perform the post-mining reclamation required by its mining permits, pay workers’ compensation claims under workers’ compensation laws in various states, pay federal black lung benefits, and perform certain other obligations. In order to provide the required financial assurance, the Company generally uses surety bonds for post-mining reclamation and workers’ compensation obligations. The Company can also use bank letters of credit to collateralize certain obligations.

As of September 30, 2022,2023, the Company had $63,898$60,927 letters of credit outstanding under the Second Amended and Restated Asset-Based Revolving CreditABL Agreement. Additionally, as of September 30, 2022, the Company had $50 in letters of credit outstanding under the Credit and Security Agreement dated June 30, 2017, and related amendments, between ANR, Inc. and First Tennessee Bank National Association.

As of September 30, 2022,2023, the Company had outstanding surety bonds with a total face amount of $162,105$175,339 to secure various obligations and commitments. To secure the Company’s reclamation-related obligations, the Company has $34,750$33,372 of collateral in the form of restricted cash and restricted investments and deposits supporting these obligations as of September 30, 2022.2023.

The Company meets frequently with its surety providers and has discussions with certain providers regarding the extent of and the terms of their participation in the program. These discussions may cause the Company to shift surety bonds between providers or to alter the terms of their participation in our program. To the extent that surety bonds become unavailable or the
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Notes to Condensed Consolidated Financial Statements
(Unaudited, amounts in thousands except share and per share data)
Company’s surety bond providers require additional collateral, the Company would seek to secure its obligations with letters of credit, cash deposits or other suitable forms of collateral. The Company’s failure to maintain, or inability to acquire, surety bonds or to provide a suitable alternative would have a material adverse effect on its liquidity. These failures could result from a variety of factors, including the lack of availability, higher cost or unfavorable market terms of new surety bonds, and the exercise by third-party surety bond issuers of their right to refuse to renew the surety.

Amounts included in restricted cash provide collateral to secure the following obligations:
 September 30, 2022December 31, 2021
Workers’ compensation and black lung obligations$21,985 $70,637 
Reclamation-related obligations206 10,449 
Financial payments and other performance obligations9,533 8,340 
Contingent Revenue Obligation escrow18,800 11,977 
Total restricted cash50,524 101,403 
Less current portion (1)
(18,800)(11,977)
Restricted cash, net of current portion$31,724 $89,426 
(1) Included within Prepaid expenses and other current assets on the Company’s Condensed Consolidated Balance Sheets.
 September 30, 2023December 31, 2022
Workers’ compensation and black lung obligations$71,988 $15,334 
Reclamation-related obligations840 3,220 
Financial payments and other performance obligations10,176 10,387 
Contingent Revenue Obligation escrow— 24,547 
Total restricted cash83,004 53,488 
Less current portion— (24,547)
Restricted cash, net of current portion$83,004 $28,941 

Amounts included in restricted investments provide collateral to secure the following obligations:
September 30, 2022December 31, 2021 September 30, 2023December 31, 2022
Workers’ compensation and black lung obligationsWorkers’ compensation and black lung obligations$55,910 $210 Workers’ compensation and black lung obligations$33,866 $72,136 
Reclamation-related obligationsReclamation-related obligations34,442 26,225 Reclamation-related obligations32,532 31,718 
Financial payments and other performance obligationsFinancial payments and other performance obligations2,032 2,008 Financial payments and other performance obligations4,871 1,881 
Total restricted investments (1)
Total restricted investments (1)
$92,384 $28,443 
Total restricted investments (1)
$71,269 $105,735 
(1) Classified as long-term trading securities as of September 30, 20222023 and December 31, 2021.2022.

Amounts included in deposits provide collateral to secure the following obligations:
 September 30, 2022December 31, 2021
Reclamation-related obligations$102 $118 
Financial payments and other performance obligations391 403 
Other operating agreements (1)
7,407 873 
Total deposits (2)
$7,900 $1,394 
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Notes to Condensed Consolidated Financial Statements
(Unaudited, amounts in thousands except share and per share data)
 September 30, 2023December 31, 2022
Reclamation-related obligations$— $102 
Financial payments and other performance obligations— 391 
Other operating agreements (1)
7,605 85,618 
Total deposits7,605 86,111 
Less current portion(6,736)(84,748)
Total deposits, net of current portion (2)
$869 $1,363 
(1) Includes $6,522Included $6,736 and $84,748 related to the Company’s dividend payable.payable as of September 30, 2023 and December 31, 2022, respectively. Refer to Note 76 for additional information.
(2) Included within Prepaid expenses and other current assets and Other non-current assets on the Company’s Condensed Consolidated Balance Sheets.

DCMWC Reauthorization Process

In July 2019, the U.S. Department of Labor (Division of Coal Mine Workers’ Compensation or “DCMWC”) began implementing a new authorization process for all self-insured coal mine operators. As requested by the DCMWC, the Company filed an application and supporting documentation for reauthorization to self-insure certain of its black lung obligations in October 2019. As a result of this application, the DCMWC notified the Company in a letter dated February 21, 2020 that the Company was reauthorized to self-insure certain of its black lung obligations for a period of one-year from February 21, 2020. The DCMWC reauthorization is contingent, however, upon the Company’s providing collateral of $65,700 to secure certain of its black lung obligations. This proposed collateral requirement is an increase from the approximate $2,600 in collateral that the Company currently provides to secure these self-insured black lung obligations. The reauthorization process provided the Company with the right to appeal the security determination in writing within 30 days of the date of the notification, which appeal period the DCMWC agreed to extend to May 22, 2020. The Company exercised this right of appeal in connection with the substantial increase in the amount of required collateral. In February 2021, the U.S. Department of Labor (“DOL”) withdrew its Federal Register notice seeking comments on its bulletin describing its new method of calculating collateral requirements. The DepartmentDOL removed the bulletin from its website in May 2021. On February 10, 2022, a telephone
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Notes to Condensed Consolidated Financial Statements
(Unaudited, amounts in thousands except share and per share data)
conference was held with DCMWC and DOL decision makers wherein the Company presented facts and arguments in support of its appeal. No ruling has been made on the appeal, but during the call the Company indicated that it would be willing to allocate an additional $10,000 in collateral. If the Company’s appeal is unsuccessful, the Company may be required to provide additional letters of credit to receive the self-insurance reauthorization from the DCMWC or alternatively insure these black lung obligations through a third partythird-party provider that would likely also require the Company to provide additional collateral. EitherIn January 2023, the DOL proposed for public comment new regulations which, if adopted, would substantially increase the collateral required to secure self-insured federal black lung obligations. Under the proposed 120% minimum collateral requirement, the Company estimates it could be required to provide approximately $80,000 to $100,000 of collateral to secure certain of its black lung obligations. The DOL has indicated that it expects that some form of these outcomesnew regulations could potentially reducego into effect in the fourth quarter of 2023. A significant increase in these collateral obligations could have a materially adverse effect on the Company’s liquidity.

(d) Legal Proceedings 

The Company is party to legal proceedings from time to time. These proceedings, as well as governmental examinations, could involve various business units and a variety of claims including, but not limited to, contract disputes, personal injury claims, property damage claims (including those resulting from blasting, trucking and flooding), environmental and safety issues, securities-related matters and employment matters. While some legal matters may specify the damages claimed by the plaintiffs, many seek an unquantified amount of damages. Even when the amount of damages claimed against the Company or its subsidiaries is stated, (i) the claimed amount may be exaggerated or unsupported; (ii) the claim may be based on a novel legal theory or involve a large number of parties; (iii) there may be uncertainty as to the likelihood of a class being certified or the ultimate size of the class; (iv) there may be uncertainty as to the outcome of pending appeals or motions; and/or (v) there may be significant factual issues to be resolved. As a result, if such legal matters arise in the future, the Company may be unable to estimate a range of possible loss for matters that have not yet progressed sufficiently through discovery and the development of important factual information and legal issues. The Company records accruals based on an estimate of the ultimate outcome of these matters, but these estimates can be difficult to determine and involve significant judgment.

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ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited, amounts in thousands except share and per share data)
(16) Segment Information
The Company extracts, processes and markets met and thermal coal from deep and surface mines for sale to steel and coke producers, industrial customers, and electric utilities. The Company conducts mining operations only in the United States with mines in Central Appalachia (“CAPP”). The Company has one reportable segment: Met, which consists of sixfive active mines and two preparation plants in Virginia, sixteen active mines and five preparation plants in West Virginia, as well as expenses associated with certain idled/closed mines.

In addition to the one reportable segment, the All Other category includes general corporate overhead and corporate assets and liabilities, the former CAPP - Thermal operations consisting of one active mine and one preparation plant in West Virginia, and the elimination of certain intercompany activity, as well as expenses associated with certain idled/closed mines. Certain immaterial amounts as of and for the three and nine months ended September 30, 2022 in the Condensed Consolidated Financials Statements and notes to the Condensed Consolidated Financials Statements have been recast to reclassify discontinued operations and present the related amounts within continuing operations as part of the All Other category.

Reportable segment operating results are regularly reviewed by the Chief Operating Decision Maker (“CODM”(the “CODM”), who is the Chief Executive Officer of the Company.

Segment operating results and capital expenditures for the three and nine months ended September 30, 20222023 and 20212022 were as follows: 
Three Months Ended September 30, 2022Three Months Ended September 30, 2023
MetAll OtherConsolidatedMetAll OtherConsolidated
Total revenuesTotal revenues$841,958 $27,810 $869,768 Total revenues$733,536 $8,284 $741,820 
Depreciation, depletion, and amortizationDepreciation, depletion, and amortization$26,747 $1,178 $27,925 Depreciation, depletion, and amortization$31,893 $689 $32,582 
Amortization of acquired intangibles, netAmortization of acquired intangibles, net$3,591 $952 $4,543 Amortization of acquired intangibles, net$2,069 $— $2,069 
Adjusted EBITDAAdjusted EBITDA$301,556 $(6,697)$294,859 Adjusted EBITDA$172,414 $(18,503)$153,911 
Capital expendituresCapital expenditures$32,623 $716 $33,339 Capital expenditures$54,237 $488 $54,725 
 

Three Months Ended September 30, 2022
MetAll OtherConsolidated
Total revenues$841,958 $27,810 $869,768 
Depreciation, depletion, and amortization$26,747 $1,178 $27,925 
Amortization of acquired intangibles, net$3,591 $952 $4,543 
Adjusted EBITDA$301,556 $(5,358)$296,198 
Capital expenditures$32,623 $716 $33,339 

Nine Months Ended September 30, 2023
MetAll OtherConsolidated
Total revenues$2,461,274 $50,152 $2,511,426 
Depreciation, depletion, and amortization$92,421 $1,810 $94,231 
Amortization of acquired intangibles, net$6,458 $— $6,458 
Adjusted EBITDA$803,517 $(36,697)$766,820 
Capital expenditures$177,813 $6,023 $183,836 

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Notes to Condensed Consolidated Financial Statements
(Unaudited, amounts in thousands except share and per share data)
Three Months Ended September 30, 2021
MetAll OtherConsolidated
Total revenues$626,103 $22,738 $648,841 
Depreciation, depletion, and amortization$23,181 $1,338 $24,519 
Amortization of acquired intangibles, net$3,063 $(83)$2,980 
Adjusted EBITDA$155,456 $(7,233)$148,223 
Capital expenditures$21,882 $465 $22,347 

Segment operating results and capital expenditures for the nine months ended September 30, 2022 and 2021 were as follows:
Nine Months Ended September 30, 2022
MetAll OtherConsolidated
Total revenues$3,217,588 $60,556 $3,278,144 
Depreciation, depletion, and amortization$81,010 $2,680 $83,690 
Amortization of acquired intangibles, net$13,182 $2,856 $16,038 
Adjusted EBITDA$1,521,089 $(27,895)$1,493,194 
Capital expenditures$99,979 $3,372 $103,351 
Nine Months Ended September 30, 2021Nine Months Ended September 30, 2022
MetAll OtherConsolidatedMetAll OtherConsolidated
Total revenuesTotal revenues$1,363,918 $66,451 $1,430,369 Total revenues$3,217,588 $60,556 $3,278,144 
Depreciation, depletion, and amortizationDepreciation, depletion, and amortization$75,403 $4,858 $80,261 Depreciation, depletion, and amortization$81,010 $2,680 $83,690 
Amortization of acquired intangibles, netAmortization of acquired intangibles, net$9,749 $(347)$9,402 Amortization of acquired intangibles, net$13,182 $2,856 $16,038 
Adjusted EBITDAAdjusted EBITDA$234,824 $(17,801)$217,023 Adjusted EBITDA$1,521,089 $(28,360)$1,492,729 
Capital expendituresCapital expenditures$59,408 $978 $60,386 Capital expenditures$99,979 $3,372 $103,351 

The following tables present a reconciliation of net income (loss) to Adjusted EBITDA for the three and nine months ended September 30, 20222023 and 2021:2022:
Three Months Ended September 30, 2022Three Months Ended September 30, 2023
MetAll OtherConsolidatedMetAll OtherConsolidated
Net income (loss) from continuing operations$268,157 $(16,321)$251,836 
Net income (loss)Net income (loss)$134,886 $(41,072)$93,814 
Interest expenseInterest expense40 1,655 1,695 Interest expense190 1,556 1,746 
Interest incomeInterest income(369)(695)(1,064)Interest income(369)(4,270)(4,639)
Income tax expenseIncome tax expense— 5,437 5,437 Income tax expense— 18,964 18,964 
Depreciation, depletion and amortizationDepreciation, depletion and amortization26,747 1,178 27,925 Depreciation, depletion and amortization31,893 689 32,582 
Non-cash stock compensation expenseNon-cash stock compensation expense— 1,520 1,520 Non-cash stock compensation expense23 2,976 2,999 
Mark-to-market adjustment - acquisition-related obligations— (2,954)(2,954)
Accretion on asset retirement obligationsAccretion on asset retirement obligations3,390 2,531 5,921 Accretion on asset retirement obligations3,722 2,654 6,376 
Amortization of acquired intangibles, netAmortization of acquired intangibles, net3,591 952 4,543 Amortization of acquired intangibles, net2,069 — 2,069 
Adjusted EBITDAAdjusted EBITDA$301,556 $(6,697)$294,859 Adjusted EBITDA$172,414 $(18,503)$153,911 

Three Months Ended September 30, 2022
MetAll OtherConsolidated
Net income (loss)$268,157 $(15,340)$252,817 
Interest expense40 1,714 1,754 
Interest income(369)(689)(1,058)
Income tax expense— 5,730 5,730 
Depreciation, depletion and amortization26,747 1,178 27,925 
Non-cash stock compensation expense— 1,520 1,520 
Mark-to-market adjustment - acquisition-related obligations— (2,954)(2,954)
Accretion on asset retirement obligations3,390 2,531 5,921 
Amortization of acquired intangibles, net3,591 952 4,543 
Adjusted EBITDA$301,556 $(5,358)$296,198 

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Notes to Condensed Consolidated Financial Statements
(Unaudited, amounts in thousands except share and per share data)
Three Months Ended September 30, 2021Nine Months Ended September 30, 2023
MetAll OtherConsolidatedMetAll OtherConsolidated
Net income (loss) from continuing operations$125,750 $(42,057)$83,693 
Net income (loss)Net income (loss)$693,494 $(147,554)$545,940 
Interest expenseInterest expense49 17,289 17,338 Interest expense553 4,769 5,322 
Interest incomeInterest income(1)(53)(54)Interest income(643)(8,268)(8,911)
Income tax expenseIncome tax expense— 208 208 Income tax expense— 94,973 94,973 
Depreciation, depletion and amortizationDepreciation, depletion and amortization23,181 1,338 24,519 Depreciation, depletion and amortization92,421 1,810 94,231 
Non-cash stock compensation expenseNon-cash stock compensation expense1,183 1,189 Non-cash stock compensation expense69 9,609 9,678 
Mark-to-market adjustment - acquisition-related obligations— 11,676 11,676 
Accretion on asset retirement obligationsAccretion on asset retirement obligations3,408 3,266 6,674 Accretion on asset retirement obligations11,165 7,964 19,129 
Amortization of acquired intangibles, netAmortization of acquired intangibles, net3,063 (83)2,980 Amortization of acquired intangibles, net6,458 — 6,458 
Adjusted EBITDAAdjusted EBITDA$155,456 $(7,233)$148,223 Adjusted EBITDA$803,517 $(36,697)$766,820 

The following tables present a reconciliation of net income (loss) to Adjusted EBITDA for the nine months ended September 30, 2022 and 2021:

Nine Months Ended September 30, 2022
MetAll OtherConsolidated
Net income (loss) from continuing operations$1,417,125 $(188,856)$1,228,269 
Interest expense132 19,864 19,996 
Interest income(541)(871)(1,412)
Income tax expense— 114,073 114,073 
Depreciation, depletion and amortization81,010 2,680 83,690 
Non-cash stock compensation expense4,100 4,103 
Mark-to-market adjustment - acquisition-related obligations— 10,615 10,615 
Accretion on asset retirement obligations10,178 7,644 17,822 
Amortization of acquired intangibles, net13,182 2,856 16,038 
Adjusted EBITDA$1,521,089 $(27,895)$1,493,194 

Nine Months Ended September 30, 2021Nine Months Ended September 30, 2022
MetAll OtherConsolidatedMetAll OtherConsolidated
Net income (loss) from continuing operations$139,354 $(106,942)$32,412 
Net income (loss)Net income (loss)$1,417,125 $(189,260)$1,227,865 
Interest expenseInterest expense132 53,158 53,290 Interest expense132 19,923 20,055 
Interest incomeInterest income(6)(316)(322)Interest income(541)(871)(1,412)
Income tax expenseIncome tax expense— 211 211 Income tax expense— 113,953 113,953 
Depreciation, depletion and amortizationDepreciation, depletion and amortization75,403 4,858 80,261 Depreciation, depletion and amortization81,010 2,680 83,690 
Non-cash stock compensation expenseNon-cash stock compensation expense22 4,329 4,351 Non-cash stock compensation expense4,100 4,103 
Mark-to-market adjustment - acquisition-related obligationsMark-to-market adjustment - acquisition-related obligations— 18,009 18,009 Mark-to-market adjustment - acquisition-related obligations— 10,615 10,615 
Accretion on asset retirement obligationsAccretion on asset retirement obligations10,170 9,800 19,970 Accretion on asset retirement obligations10,178 7,644 17,822 
Asset impairment and restructuring
— (561)(561)
Amortization of acquired intangibles, netAmortization of acquired intangibles, net9,749 (347)9,402 Amortization of acquired intangibles, net13,182 2,856 16,038 
Adjusted EBITDAAdjusted EBITDA$234,824 $(17,801)$217,023 Adjusted EBITDA$1,521,089 $(28,360)$1,492,729 

No asset information has been disclosed as the CODM does not regularly review asset information by reportable segment.

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Notes to Condensed Consolidated Financial Statements
(Unaudited, amounts in thousands except share and per share data)
The Company markets produced, processed and purchased coal to customers in the United States and in international markets. Revenue is tracked within the Company’s accounting records based on the product destination. The following tables present additional information on our revenues and top customers:
Three Months Ended September 30,Nine Months Ended September 30,
 2022202120222021
Total coal revenues$867,849 $647,129 $3,271,845 $1,426,039 
Export coal revenues$641,345 $516,877 $2,681,873 $1,016,677 
Export coal revenues as % of total coal revenues74 %80 %82 %71 %
Countries with export coal revenue exceeding 10% of total revenueIndiaChina, IndiaIndiaChina, India, Brazil
Top customer as % of total revenue18 %28 %28 %15 %
Top 10 customers as % of total revenue65 %72 %70 %68 %
Number of customers exceeding 10% of total revenue1212
Three Months Ended September 30,Nine Months Ended September 30,
 2023202220232022
Total coal revenues$738,998 $867,849 $2,499,503 $3,271,845 
Total revenues$741,820 $869,768 $2,511,426 $3,278,144 
Export coal revenues$514,597 $641,345 $1,809,300 $2,681,873 
Export coal revenues as % of total coal revenues70 %74 %72 %82 %
Countries with export coal revenue exceeding 10% of total revenuesIndiaIndiaIndiaIndia
Top customer as % of total revenues13 %18 %12 %28 %
Top 10 customers as % of total revenues83 %65 %74 %70 %
Number of customers exceeding 10% of total revenues4131
As of September 30,
 20222021
Number of customers exceeding 10% of total trade accounts receivable, net22
As of September 30,
 20232022
Number of customers exceeding 10% of total trade accounts receivable, net42

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ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited, amounts in thousands except share and per share data)
(17) Subsequent Events

On November 4, 2022, the Company’s Board declared a quarterly cash dividend of $0.418 per share which will be payable on January 3, 2023 for holders of record as of December 15, 2022. The quarterly cash dividend was increased to $0.418 from the previous quarterly cash dividend of $0.392 per share.

Additionally, on November 4, 2022, the Company’s Board declared a one-time, special dividend of $5.00 per share which will be payable on January 3, 2023 for holders of record as of December 15, 2022.

On November 4, 2022, the Company’s Board also approved a $400,000 increase to the existing common share repurchase program, bringing the total authorization to repurchase the Company’s stock to $1,000,000.

Refer to Note 76 for informationsubsequent event disclosures regarding the Company’s dividend program and share repurchase program.



Refer to Note 8 for subsequent event disclosures related to the refinancing of the ABL Facility.
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GLOSSARY
Alpha. Alpha Metallurgical Resources, Inc. (the “Company”) (previously named Contura Energy, Inc.).
Ash. Impurities consisting of iron, alumina and other incombustible matter that are contained in coal. Since ash increases the weight of coal, it adds to the cost of handling and can affect the burning characteristics of coal.

Bituminous coal. Coal used primarily to generate electricity and to make coke for the steel industry with a heat value ranging between 10,500 and 15,500 BTU’sBTUs per pound.

British Thermal Unit or BTU. A measure of the thermal energy required to raise the temperature of one pound of pure liquid water one degree Fahrenheit at the temperature at which water has its greatest density (39 degrees Fahrenheit).

Central Appalachia or CAPP. Coal producing area in eastern Kentucky, Virginia, southern West Virginia and a portion of eastern Tennessee.

Coal reserves. The economically mineable part of a measured or indicated coal resource, which includes diluting materials and allowances for losses that may occur when coal is mined or extracted.

Coal resources. Coal deposits in such form, quality, and quantity that there are reasonable prospects for economic extraction.

Coal seam. Coal deposits occur in layers. Each layer is called a “seam.”

Coke. A hard, dry carbon substance produced by heating coal to a very high temperature in the absence of air. Coke is used in the manufacture of iron and steel. Its production results in a number of useful byproducts.

Cumberland Back-to-Back Coal Supply Agreement. Certain agreements with Iron Senergy under which Iron Senergy willwould sell to the Company all of the coal that the Company iswas obligated to sell to customers under Cumberland coal supply agreements (“Cumberland CSAs”) which existed as of the transaction closing date but did not transfer to Iron Senergy at closing (each, a “Cumberland Back-to-Back Coal Supply Agreement”). Each Cumberland Back-to-Back Coal Supply Agreement hashad economic terms identical to, but offsetting, the related Cumberland CSA. If a Cumberland customer subsequently consentsconsented to assign a Cumberland CSA to Iron Senergy after closing, the related Cumberland CSA willwould immediately and automatically transfer to Iron Senergy and the related Cumberland Back-to-Back Coal Supply Agreements executed by the parties shallwould thereupon terminate as set forth therein.

ESG. Environmental, social and governance sustainability criteria.

Indicated coal resource. That part of a coal resource for which quantity and quality are estimated on the basis of adequate geological evidence and sampling sufficient to establish geological and quality continuity with reasonable certainty.

In situ coal resources. Coal resources stated on an in-seam dry basis (excluding surface and inherent moisture) with no consideration for dilution or losses that may occur when coal is mined or extracted.

Measured coal resource. That part of a coal resource for which quantity and quality are estimated on the basis of conclusive geological evidence and sampling sufficient to test and confirm geological and quality continuity.

Merger. Merger with ANR, Inc. and Alpha Natural Resources Holdings, Inc. completed on November 9, 2018.

Metallurgical coal. The various grades of coal suitable for carbonization to make coke for steel manufacture. Also known as “met” coal, its quality is primarily differentiated based on volatility or its percent of volatile matter. Met coal typically has a particularly high BTU but low ash and sulfur content.

Northern Appalachia or NAPP.MSHA. Coal producing area in Maryland, Ohio, PennsylvaniaThe United States Mine Safety and northern West Virginia.Health Administration, which has responsibility for developing and enforcing safety and health rules for U.S. mines.

Operating Margin. Coal revenues less cost of coal sales.

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Preparation plant. A preparation plant is a facility for crushing, sizing and washing coal to remove impurities and prepare it for use by a particular customer. The washing process has the added benefit of removing some of the coal’s sulfur content. A preparation plant is usually located on a mine site, although one plant may serve several mines.

Probable mineral reserve. The economically mineable part of an indicated and, in some cases, a measured coal resource.

Productivity. As used in this report, refers to clean metric tons of coal produced per underground man hour worked, as published by the MSHA.

Proven mineral reserve. The economically mineable part of a measured coal resource.

Reclamation. The process of restoring land and the environment to their original state following mining activities. The process commonly includes “recontouring” or reshaping the land to its approximate original appearance, restoring topsoil and planting native grass and ground covers. Reclamation operations are usually underway before the mining of a particular site is completed. Reclamation is closely regulated by both state and federal law.

Roof. The stratum of rock or other mineral above a coal seam; the overhead surface of a coal working place.

Sulfur. One of the elements present in varying quantities in coal that contributes to environmental degradation when coal is burned. Sulfur dioxide is produced as a gaseous by-product of coal combustion.

Surface mine. A mine in which the coal lies near the surface and can be extracted by removing the covering layer of soil.

Thermal coal. Coal used by power plants and industrial steam boilers to produce electricity, steam or both. It generally is lower in BTU heat content and higher in volatile matter than metallurgical coal.

Tons. A “short” or net ton is equal to 2,000 pounds. A “long” or British ton is equal to 2,240 pounds; a “metric” ton (or “tonne”) is approximately 2,205 pounds. Tonnage amounts in this report are stated in short tons, unless otherwise indicated.

Underground mine. Also known as a “deep��“deep” mine. Usually located several hundred feet below the earth’s surface, an underground mine’s coal is removed mechanically and transferred by shuttle car and conveyor to the surface.



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Item 2. Managements 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, 20222023 and 2021.2022. The following discussion and analysis contains forward-looking statements and should be read in conjunction with our Condensed Consolidated Financial Statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and our Consolidated Financial Statements and related notes and risk factors containedincluded elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2021.2022.

The following discussion includes forward-looking statements about our business, financial condition and results of operations, including discussions about management’s expectations for our business. These statements represent projections, beliefs and expectations based on current circumstances and conditions and in light of recent events and trends, and you should not construe these statements either as assurances of performance or as promises of a given course of action. Instead, various known and unknown factors are likely to cause our actual performance and management’s actions to vary, and the results of these variances may be both material and adverse. See “Cautionary NoteStatement Regarding Forward-Looking Statements” included elsewhere herein.and “Item 1A. Risk Factors.”

Market Overview

AcrossRecent months have brought about continued economic pressures in many areas of the globe, continued recessionary pressure and weakening economic conditions alongside the ongoing war between Russia and Ukraine and the intensifying European energy crisis have influencedworld as well as intensified geopolitical conflicts, all of which influence metallurgical coal markets. CoalThe lingering effects of the Russian war, recessionary pressures, and high-interest environments have resulted in muted world manufacturing output, new orders, and employment data and, in the case of Europe specifically, worsening conditions for regions already stalled in a significant downturn. The uncertainty around the depth of China’s economic challenges and the escalating conflict and violence between Israel and Palestine are additional challenges affecting the stability of the global economic landscape. Despite these factors, metallurgical coal indices continued retreating duringhave strengthened in recent months amid tight supply conditions globally and the expectation of slow, but increasing, steel demand. According to the World Steel Association’s latest short-range outlook, 2024 steel demand is expected to rise by roughly 2% over 2023 levels, with developing economies projected to increase growth at a faster pace than advanced economies, especially developed nations hindered by high-interest rates and geopolitical impacts.

After a slight softening of metallurgical coal indices in the early part of the third quarter butof 2023, each of the four indices Alpha closely monitors began moving upward in mid-August and have leveled off incontinued to show strength through the weeks followingrest of the quarter close. Additionally, in October 2022, the imbalances in typical pricing hierarchies for coal qualities have shifted to be more consistent with historical norms, with the API2 thermal index dropping below pricing levels for metallurgical coal qualities.

and into October. The Australian Premium Low Volatile index droppedmoved up from $302.00$233.00 per metric ton onat the beginning of July 1, 2022 to $270.50$333.00 per metric ton at the end of the third quarter. The U.S. East Coast Low Volatile index declinedincreased from $315.00$227.00 per metric ton at the start of the quarter to $270.00$258.00 per metric ton on September 30, 2022. Theat the end of September. During the third quarter, the U.S. East Coast High Volatile A index started the quarter at $325.00moved from $216.00 per metric ton and droppedon July 1, 2023 to $287.00$288.00 per metric ton at quarter close.close, and the U.S. East Coast High Volatile B fellindex increased from $317.50$206.00 per metric ton to $284.00$238.00 per metric ton over the course of the third quarter. The pricing movements have largely leveled off in recent weeks forFollowing the twoquarter close, the U.S. East Coast indices of Low Volatile, High Volatile indices, which are hovering at or near their quarter-close levelsA and High Volatile B measured $258.00, $277.00, and $236.00 per ton, respectively, as of the end of October.October 24, 2023. The two Low Volatile indices have increased from their quarter-end levels to $311.50 per metric ton for Australian Premium Low Volatile and $293jumped from its quarter-close level to $344.50 per metric ton for U.S. East Coast Low Volatile as of October 31, 2022.on the same date.

The negative economic impacts of the Russian war and intensifying recessionary fears are evident in the most recent global economic indicators showing a continued softening of the global economy. The world manufacturing Purchasing Managers’ Index (“PMI”) contracted to 49.8of 49.1 for September 2023 was roughly flat against the August figure of 49.0, remaining in September, down from 50.3below-50.0 levels which signifies contraction. Considerable and continued weakness was evident in August, falling below the neutral 50.0 level for the first time since June 2020. Europe’s PMI decreased from 49.6 in August to 48.4 in September due to high uncertainty, accelerating inflationary pressures, and decreasing production volumes. Similarly, China’s PMI dropped from 49.5 in August to 48.1 in September due to falling demand and production levels as a result of the country’s extensive COVID-19 containment efforts. Conversely, indicators show that certain areas of the world—such as India, a key market for Alpha—are experiencing growth. India’s September PMI of 55.1 is down43.4, virtually unchanged from 56.243.5 in August but still represents solid growth. Brazil postedAugust. September clocked the fifteenth successive month in contractionary territory for Europe’s key indicator, with growth expectations in the region dropping to a ten-month low and new orders shrinking rapidly. Brazil’s September PMI of 51.1,49.0 was down slightly from 51.950.1 in August. TheAugust, and China’s figure slid to 50.6 in September from August’s 51.0. Monthly changes in the United States PMI index increased to 52.0showed an increase in September 2022to 49.8 from 51.547.9 in August. Among Alpha’s key markets, India continues to show strength with its September index registering at 57.5, down from the August level of 58.6 but still firmly signaling expansion.

In addition to the uneven growth trajectories across the globe, currency valuations have also played a role in the shifting international trade landscape. The U.S. dollar has shown increasing strength against other world currencies, which can influence the relative pricing of Alpha’s products for customers in certain markets. Our coal is sold internationally in U.S. dollars and, as a result, general economic conditions in foreign markets and changes in foreign currency exchange rates may provide our foreign competitors with a competitive advantage. Refer to “Quantitative and Qualitative Disclosures about Market Risk—Foreign Currency Risk” for additional information.

In its periodic review of macroeconomic factors affecting the steel industry,As compiled by the World Steel Association (“WSA”) issued revisions in October to its Short Range Outlook for 2022 and 2023. The WSA forecasts a contraction in steel demand of 2.3% in 2022. The WSA now projects a recovery of 1.0% for steel demand in, September 2023 which represents a downward revision from its prior estimates. The WSA attributed the altered outlook to deteriorating economic conditions over the course of 2022, including persisting inflation and rising interest rates globally, alongside Russia’s invasion of Ukraine and China’s economic deceleration. The WSA cited infrastructure demand as the expected catalyst for slight increases in 2023 steel demand, contingent on the impact of tightening monetary policies, falling consumer confidence, and potential further inflation risk.

The most recent global crude steel production data showed production of 151.7149.3 million metric tons infrom 63 countries represented a decrease of 1.5% from September 2022,2022. China, the largest steel-producing country, produced 82.1 million metric tons, 5.6% less than its year-ago September production amount. India, the second largest producer behind China, increased their year-over-year steel production by 18.2% to a level of 11.6 million metric tons. The United States had an increase of 3.7% over2.6% to 6.7 million metric tons produced compared to September 2022. South Korea produced 5.5 million metrics tons of steel in September 2023, an 18.2% increase from the country’s September 2022 production. Among the top ten steel producing countries, South Korea and India posted the largest percentage increases against their year-ago period. This increase is largely attributable to production inlevels (both countries at 18.2%). In terms of regional production, the Asia and Oceania region, which represented a 10.6% increase over that region’s September 2021 period.contains both India and China, produced 87.0110.7 million metric tons in September 2022, an increase of 17.6%crude steel for the month, a 2.1% decrease from September 2021. India’s production of 9.9 million metric tons was a slight 1.8% increase over the year-ago period. Several other regions posted significant declines for the comparison timeframe. The European Union’s September 2022 crude steel production of 10.7 million metric tons was a 16.7% drop as compared to its September 2021 level. Steel production of 3.5 million metric tons in South America was a decrease of 9.6% against September 2021, while North American production of 9.1 million metric tons for September 2022 represented a 7.6% drop as compared to the year-ago period.

2022. Only two
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regions saw increases against their year-ago production levels for the month of September: Europe at 2.7% and Russia at 10.7%. All other regions reported decreases when compared to year-ago September levels.

The American Iron and Steel Institute’s capacity utilization rate for U.S. steel mills was 79.3%74.1% for the week ending October 15, 2022.21, 2023. This is downup in comparison to the year-ago period, of October 15, 2021 when the capacity utilization rate was 81.2%73.7%.

The volatility inIn the seaborne thermal coal market, largely a result of Russia’s invasion of Ukraine, continued through the third quarter, with the API2 index at $328.95increased from $119.05 per metric ton onat the beginning of July 1, 2022 and declining2023 to $312.00$128.05 per metric ton as of September 30, 2022. In the weeks following the quarter close, the API2 fell back below pricing for metallurgical coal qualities, which has historically been the norm.

COVID-19 Pandemic

The COVID-19 pandemic has had negative impacts on our business, results of operations, financial condition and cash flows. Our Company experienced an increase in employee absences due to COVID-19. Indirectly, through some of our third-party vendors, we and our customers have experienced some supply chain disruptions due to the COVID-19 pandemic. The full extentend of the impact of the COVID-19 pandemic on our operational and financial performance will depend on certain developments, including the duration of the virus, its impact on our customers and suppliers, and the range of governmental and community reactions to the pandemic, which cannot be fully predicted. Health and safety are core values of our Company and are the foundation for how we manage every aspect of our business. We continue to monitor developments closely and adjust as necessary, including with respect to our implemented policies, procedures, and prevention measures to protect the safety and health of our employees.third quarter.

Business Overview

We are a Tennessee-based mining company with operations across Virginia and West Virginia. With customers across the globe, high-quality reserves and significant port capacity, we reliably supplyare a leading supplier of metallurgical coal products to the steel industry. We operate high-quality, cost-competitive coal mines across the CAPP coal basin. As of September 30, 2022,2023, our operations consisted of twenty-threetwenty-one active mines and eight coal preparation and load-out facilities, with approximately 3,6204,030 employees. We produce, process, and sell met coal and thermal coal. We also sell coal produced by others, some of which is processed and/or blended with coal produced from our mines prior to resale, with the remainder purchased for resale. As of December 31, 2021,2022, we had 351.1336.7 million tons of reserves, including 335.8which included 322.7 million tons of proven and probable metallurgical reserves and 15.314.0 million tons of proven and probable thermal reserves. Additionally, we had approximately 381.7527.3 million tons of in situ bituminous coal resources.

For the three months ended September 30, 20222023 and 2021,2022, sales of met coal were 3.53.8 million tons and 3.93.5 million tons, respectively, and accounted for approximately 85%89% and 82%85%, respectively, of our coal sales volume. Sales of thermal coal were 0.60.4 million tons and 0.80.6 million tons, respectively, and accounted for approximately 15%11% and 18%15%, respectively, of our coal sales volume. For the nine months ended September 30, 20222023 and 2021,2022, sales of met coal were 10.811.2 million tons and 10.610.8 million tons, respectively, and accounted for approximately 87%90% and 83%87%, respectively, of our coal sales volume. Sales of thermal coal were 1.61.2 million tons and 2.21.6 million tons, respectively, and accounted for approximately 13%10% and 17%13%, respectively, of our coal sales volume.

Our sales of met coal were made primarily to steel companies in the northeastern and midwestern regions of the United States and in several countries in Asia, Europe, and the Americas. Our sales of thermal coal were made primarily to large utilities and industrial customers throughoutboth in the United States.States and across the world. For the three months ended September 30, 2023 and 2022 approximately 70% and 2021 approximately 74% and 80%, respectively, of our coal revenues were derived from coal sales made to customers outside the United States. For the nine months ended September 30, 2023 and 2022 approximately 72% and 2021 approximately 82% and 71%, respectively, of our total coal revenues were derived from coal sales made to customers outside the United States.

In addition, we generate other revenues from equipment sales, rentals, terminal and processing fees, coal and environmental analysis fees, royalties and the sale of natural gas. We also record freight and handling fulfillment revenue within coal revenues for freight and handling services provided in delivering coal to certain customers, which are a component of the contractual selling price.

As of September 30, 2022,2023, we have one reportable segment: Met. Our Met segment operations consist of high-quality met coal mines, including Deep Mine 41, Road Fork 52, Black Eagle, and Lynn Branch. The coal produced by our Met segment operations is predominantly met coal with some amounts of thermal coal being produced as a byproduct of mining. In addition to the one reportable segment, our All Other category includes general corporate overhead and corporate assets and liabilities, our former CAPP - Thermal operations consisting of one active mine and one preparation plant in West Virginia, and the elimination of certain intercompany activity, as well as expenses associated with certain idled/closed mines. Refer to Note 1716 to
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our Condensed Consolidated Financial Statements for additional disclosures on reportable segments, geographic areas, and export coal revenue information.

The disposition of our former NAPP operations during the fourth quarter of 2020 accelerated our strategic exit from thermal coal production to shift our focus toward met coal production. The former NAPP operations results of operations and financial position are reported as discontinued operations in the Condensed Consolidated Financial Statements. Refer to Note 2 for further information on discontinued operations.

As discussed in the “Market Overview” presented above, continued recessionary pressuremonetary tightening in the United States and weakeningEurope, a muted recovery in China, weak economic conditions alongsideacross the globe, and the ongoing war between Russia and Ukraine and the intensifying European energy crisis have influenced metallurgical coal markets.markets so far in 2023. As a result, our threenine months ended September 30, 20222023 results of operations were impacted by the coal indices’ drop from their early-2022 historic highs. However, as further discussed in the “Results of Operations” presented below, our three and nine months ended September 30, 2022 results of operations still remain strong from a historical average perspective compared to the three and nine months ended September 30, 2021 due to higher coal sales realization as a result of an improved pricing environment during the current period. Increasing coal demand, resulting from improved economic activity, coupled with a limited supply response contributed to a risecontinued volatility in coal prices in the current periods compared to the prior year periods.indices.

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Other Business Developments

In August 2023, we completed our transition to a pure-play metallurgical producer with the cessation of mining of our Mammoth mining complex's sole remaining thermal coal mine, Slabcamp.

In January 2023, our subsidiary Maxxim Rebuild Co., LLC (“Maxxim”) completed a series of transactions to acquire a number of coal trucks and related equipment and facilities to secure trucking services for our operations.

Factors Affecting Our Results of Operations

Sales Agreements. We manage our commodity price risk for coal sales through the use of coal supply agreements. As of October 28, 2022,25, 2023, we had sales commitments for 20222023 as follows:
Tons% PricedAverage Realized Price per TonTons% PricedAverage Realized Price per Ton
Met - DomesticMet - Domestic$192.03 Met - Domestic$192.92 
Met - ExportMet - Export$265.02 Met - Export$176.67 
Met TotalMet Total14.5 million87 %$243.30 Met Total15.0 million88 %$182.08 
ThermalThermal1.2 million100 %$97.43 Thermal1.2 million100 %$102.45 
Met SegmentMet Segment15.7 million89 %$228.76 Met Segment16.2 million90 %$174.19 
All OtherAll Other0.7 million100 %$77.69 All Other0.6 million95 %$92.23 

Realized Pricing. Our realized price per ton of coal is influenced by many factors that vary by region, including (i) coal quality, which includes energy (heat content), sulfur, ash, volatile matter and moisture content; (ii) differences in market conventions concerning transportation costs and volume measurement; and (iii) regional supply and demand.
Costs. Our results of operations are dependent upon our ability to maximize productivity and control costs. Our primary expenses are for operating supply costs, repair and maintenance expenditures, costcosts of purchased coal, royalties, wages and benefits, freight and handling costs and taxes incurred in selling our coal. PrincipalThe principal goods and services we use in our operations include maintenance and repair parts and services, electricity, fuel, roof control and support items, explosives, tires, conveyance structures, ventilation supplies and lubricants. Our management strives to aggressively control costs and improve operating performance to mitigate external cost pressures. We experience volatility in operating costs related to fuel, explosives, steel, tires, contract services and healthcare, among others, and take measures to mitigate the increases in these costs at all operations. We have a centralized sourcing group for major supplier contract negotiation and administration, for the negotiation and purchase of major capital goods, and to support the business units. We promote competition between suppliers and seek to develop relationships with suppliers that focus on lowering our costs. We seek suppliers who identify and concentrate on implementing continuous improvement opportunities within their area of expertise. To the extent upward pressure on costs exceeds our ability to realize sales increases, or if we experience unanticipated operating or transportation difficulties, our operating margins would be negatively impacted. We may also experience difficult geologic conditions, delays in obtaining permits, labor shortages, unforeseen equipment problems, and unexpected shortages of critical materials such as tires, fuel and explosives that may result in adverse cost increases and limit our ability to produce at forecasted levels.

Results of Operations

Our results of operations for the three and nine months ended September 30, 20222023 and 20212022 are discussed in these “Results of Operations” presented below. Certain immaterial amounts for the three and nine months ended September 30, 2022 have been recast to reclassify discontinued operations and present the related amounts within continuing operations as part of the All Other category.

Three Months Ended September 30, 20222023 Compared to the Three Months Ended September 30, 2021
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Revenues

The following table summarizes information about our revenues during the three months ended September 30, 20222023 and 2021:2022:
Three Months Ended September 30,Increase (Decrease)
(In thousands, except for per ton data)20222021$ or Tons%
Coal revenues$867,849 $647,129 $220,720 34.1 %
Other revenues1,919 1,712 207 12.1 %
Total revenues$869,768 $648,841 $220,927 34.0 %
Tons sold4,145 4,728 (583)(12.3)%
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Three Months Ended September 30,Increase (Decrease)
(In thousands, except for per ton data)20232022$ or Tons%
Coal revenues$738,998 $867,849 $(128,851)(14.8)%
Other revenues2,822 1,919 903 47.1 %
Total revenues$741,820 $869,768 $(127,948)(14.7)%
Tons sold4,225 4,145 80 1.9 %

Coal revenues. Coal revenues increased $220.7decreased $128.9 million, or 34.1%14.8%, for the three months ended September 30, 20222023 compared to the prior year period. The increasedecrease was primarily due to highera 17.6% reduction in average coal sales realization within our Met segment as pricing moderated from the higher levels experienced during the prior year, partially offset by a result of an improved5.6% increase in coal sales volumes. The elevated coal sales pricing environment duringin the current period. Increasingprior year period was driven by increased coal demand, resulting from improved economic activity, coupled with a limited supply response contributedresponse. Coal revenues within our All Other category also declined due to a risethe cessation of mining of our Mammoth mining complex's sole remaining thermal coal mine in coal prices.August of 2023. Refer to the “Non-GAAP Coal revenues” section below for further detail on coal revenues for the three months ended September 30, 20222023 compared to the prior year period.

Cost and Expenses

The following table summarizes information about our costs and expenses during the three months ended September 30, 20222023 and 2021:2022:
Three Months Ended September 30,Increase (Decrease)Three Months Ended September 30,Increase (Decrease)
(In thousands)(In thousands)20222021$%(In thousands)20232022$%
Cost of coal sales (exclusive of items shown separately below)Cost of coal sales (exclusive of items shown separately below)$555,502 $488,169 $67,333 13.8 %Cost of coal sales (exclusive of items shown separately below)$564,608 $554,055 $10,553 1.9 %
Depreciation, depletion and amortizationDepreciation, depletion and amortization27,925 24,519 3,406 13.9 %Depreciation, depletion and amortization32,582 27,925 4,657 16.7 %
Accretion on asset retirement obligationsAccretion on asset retirement obligations5,921 6,674 (753)(11.3)%Accretion on asset retirement obligations6,376 5,921 455 7.7 %
Amortization of acquired intangibles, netAmortization of acquired intangibles, net4,543 2,980 1,563 52.4 %Amortization of acquired intangibles, net2,069 4,543 (2,474)(54.5)%
Selling, general and administrative expenses (exclusive of depreciation, depletion and amortization shown separately above)Selling, general and administrative expenses (exclusive of depreciation, depletion and amortization shown separately above)15,095 15,264 (169)(1.1)%Selling, general and administrative expenses (exclusive of depreciation, depletion and amortization shown separately above)18,053 15,095 2,958 19.6 %
Total other operating loss (income):Total other operating loss (income):Total other operating loss (income):
Mark-to-market adjustment for acquisition-related obligationsMark-to-market adjustment for acquisition-related obligations(2,954)11,676 (14,630)(125.3)%Mark-to-market adjustment for acquisition-related obligations— (2,954)2,954 100.0 %
Other expense (income)2,713 (457)3,170 693.7 %
Other expenseOther expense973 2,713 (1,740)(64.1)%
Total costs and expensesTotal costs and expenses$608,745 $548,825 $59,920 10.9 %Total costs and expenses$624,661 $607,298 $17,363 2.9 %

Cost of coal sales. Cost of coal sales increased $67.3$10.6 million, or 13.8%1.9%, for the three months ended September 30, 20222023 compared to the prior year period, primarily due to a 1.9% increase in coal sales volumes. On a per ton basis, cost of coal sales was consistent with the prior period as increases in cost due to inflationary pressure and increased levels of coal purchases were offset by lower royalties, taxes, and freight and handling costs due to the lower coal pricing environment.
Depreciation, depletion and amortization. Depreciation, depletion and amortization increased $4.7 million, or 16.7%, for the three months ended September 30, 2023 compared to the prior year period. The increase was primarily driven by increased supplies and maintenance expense, salaries and wages expense, rail freight costs, and royalties and taxes.
Depreciation, depletion and amortization. Depreciation, depletion and amortization increased $3.4 million, or 13.9%, for the three months ended September 30, 2022 compared to the prior year period. The increase in depreciation, depletion and amortization was primarily a result of annual changes in depletion rates due to the Company’s updated estimated coal reserves.capital expenditures.

Amortization of acquired intangibles, net. Amortization of acquired intangibles, net increased $1.6decreased $2.5 million, or 52.4%54.5%, for the three months ended September 30, 20222023 compared to the prior year period. The increasedecrease was primarily driven by accelerated currentprior period amortization of certain acquired mine permits as a result of an update to the estimated life of the associated mines.

Selling, general and administrative. Selling, general and administrative expenses increased $3.0 million, or 19.6%, for the three months ended September 30, 2023 compared to the prior year period. This increase was primarily related to increases of $1.4 million in stock compensation expense and $1.2 million in incentive pay.

Mark-to-market adjustment for acquisition-related obligations. The mark-to-market adjustment for acquisition-related obligations resulted in an increase to income of $14.6 million for the three months ended September 30, 2022 compared to the
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prior year period. This increaseobligations was related to$3.0 million for the ($3.0) million Contingent Revenue Obligationthree months ended September 30, 2022. As the royalty period ended on December 31, 2022, there was no mark-to-market adjustment recorded during the three months ended September 30, 2022 due to changes in underlying fair value assumptions during the current period.2023. Refer to Note 12Notes 9 and 11 for additional information on the Contingent Revenue Obligation fair value input assumptions.Obligation.
Total Other expense (income). Other income decreased $3.2 million, or 693.7%, for the three months ended September 30, 2022 compared to the prior year period, primarily due to a decrease in income on sale of assets in the current period.

Other (Expense) IncomeExpense, Net

The following table summarizes information about our total other (expense) incomeexpense, net during the three months ended September 30, 20222023 and 2021:2022:
Three Months Ended September 30,Increase (Decrease)
(In thousands)20222021$%
Other (expense) income: 
Interest expense$(1,695)$(17,338)$15,643 90.2 %
Interest income1,064 54 1,010 1,870.4 %
Equity loss in affiliates(4,821)(643)(4,178)(649.8)%
Miscellaneous income, net1,702 1,812 (110)(6.1)%
Total other expense, net$(3,750)$(16,115)$12,365 76.7 %

Interest expense. Interest expense decreased $15.6 million, or 90.2%, for the three months ended September 30, 2022 compared to the prior year period, primarily due to a decrease in debt outstanding. Refer to Note 9 for additional information.

Equity loss in affiliates. Equity loss in affiliates increased $4.2 million, or 649.8%, for the three months ended September 30, 2022 compared to the prior year period, primarily driven by a net decrease in net income of our equity affiliates.
Three Months Ended September 30,Increase (Decrease)
(In thousands)20232022$%
Total other expense, net$4,381 $3,923 $458 11.7 %

Income Tax Expense

The following table summarizes information about our income tax expense during the three months ended September 30, 20222023 and 2021:2022:
Three Months Ended September 30,Increase (Decrease)Three Months Ended September 30,Increase (Decrease)
(In thousands)(In thousands)20222021$%(In thousands)20232022$%
Income tax expenseIncome tax expense$(5,437)$(208)$(5,229)(2,513.9)%Income tax expense18,964 5,730 $13,234 231.0 %

Income taxes.Income tax expense of $5.4$19.0 million was recorded for the three months ended September 30, 2023 on income before income taxes of $112.8 million. The effective tax rate differs from the federal statutory rate of 21% primarily due to the permanent impact of percentage depletion and foreign-derived intangible income deductions.

Income tax expense of $5.7 million was recorded for the three months ended September 30, 2022 on income from continuing operations before income taxes of $257.3$258.5 million. The effective tax rate differs from the federal statutory rate of 21% primarily due to the decrease in the valuation allowance and the permanent impact of percentage depletion and foreign-derived intangible income deductions.

Income tax expense of $0.2 million was recorded for the three months ended September 30, 2021 on income from continuing operations before income taxes of $83.9 million. The effective tax rate differs from the federal statutory rate of 21% primarily due to the decrease in the valuation allowance. Refer to Note 1312 for additional information.

Non-GAAP Financial Measures

The discussion below contains “non-GAAP financial measures.” These are financial measures whichthat either exclude or include amounts that are not excluded or included in the most directly comparable measures calculated and presented in accordance with generally accepted accounting principles in the United States (“U.S. GAAP” or “GAAP”). Specifically, we make use of the non-GAAP financial measures “Adjusted EBITDA,” “non-GAAP coal revenues,” “non-GAAP cost of coal sales,” and “non-GAAP coal margin,” and “Adjusted cost of produced coal sold.margin.” We use Adjusted EBITDA to measure the operating performance of our segments and allocate resources to the segments. Adjusted EBITDA does not purport to be an alternative to net income (loss) as a measure of operating performance or any other measure of operating results, financial performance, or liquidity presented in accordance with GAAP. Moreover, this measure is not calculated identically by all companies and therefore may not be comparable to similarly titled measures used by other companies. Adjusted EBITDA is presented because management believes it is a useful indicator of the financial performance of our coal operations. We use non-GAAP coal revenues to present coal revenues generated, excluding freight and handling fulfillment revenues. Non-GAAP coal sales realization per ton for our operations is calculated as non-GAAP coal revenues divided by tons sold. We use non-GAAP cost of coal sales to adjust cost of coal sales to remove freight and handling costs, depreciation, depletion and amortization - production (excluding the depreciation, depletion and amortization related to
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selling, general and administrative functions), accretion on asset retirement obligations, amortization of acquired intangibles, net, and idled and closed mine costs. Non-GAAP cost of coal sales per ton for our operations is calculated as non-GAAP cost of coal sales divided by tons sold. Non-GAAP coal margin per ton for our coal operations is calculated as non-GAAP coal sales realization per ton for our coal operations less non-GAAP cost of coal sales per ton for our coal operations. We also use Adjusted cost of produced coal sold to distinguish the cost of captive produced coal from the effects of purchased coal. The presentation of these measures should not be considered in isolation, or as a substitute for analysis of our results as reported under GAAP.

Management uses non-GAAP financial measures to supplement GAAP results to provide a more complete understanding of the factors and trends affecting the business than GAAP results alone. The definition of these non-GAAP measures may be changed periodically by management to adjust for significant items important to an understanding of operating trends and to adjust for items that may not reflect the trend of future results by excluding transactions that are not indicative of our core operating performance. Furthermore, analogous measures are used by industry analysts to evaluate the Company’s operating performance. Because not all companies use identical calculations, the presentations of these measures may not be comparable
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to other similarly titled measures of other companies and can differ significantly from company to company depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which companies operate, and capital investments.

Included below are reconciliations of non-GAAP financial measures to GAAP financial measures.

The following tables summarize certain financial information relating to our coal operations for the three months ended September 30, 20222023 and 2021:2022:
Three Months Ended September 30, 2022Three Months Ended September 30, 2023
(In thousands, except for per ton data)(In thousands, except for per ton data)MetAll OtherConsolidated(In thousands, except for per ton data)MetAll OtherConsolidated
Coal revenuesCoal revenues$840,638 $27,211 $867,849 Coal revenues$731,481 $7,517 $738,998 
Less: Freight and handling fulfillment revenuesLess: Freight and handling fulfillment revenues(122,585)(3)(122,588)Less: Freight and handling fulfillment revenues(94,770)(2)(94,772)
Non-GAAP Coal revenuesNon-GAAP Coal revenues$718,053 $27,208 $745,261 Non-GAAP Coal revenues$636,711 $7,515 $644,226 
Tons soldTons sold3,896 249 4,145 Tons sold4,115 110 4,225 
Non-GAAP Coal sales realization per tonNon-GAAP Coal sales realization per ton$184.31 $109.27 $179.80 Non-GAAP Coal sales realization per ton$154.73 $68.32 $152.48 
Cost of coal sales (exclusive of items shown separately below)Cost of coal sales (exclusive of items shown separately below)$534,718 $20,784 $555,502 Cost of coal sales (exclusive of items shown separately below)$552,737 $11,871 $564,608 
Depreciation, depletion and amortization - production (1)
Depreciation, depletion and amortization - production (1)
26,747 906 27,653 
Depreciation, depletion and amortization - production (1)
31,893 377 32,270 
Accretion on asset retirement obligationsAccretion on asset retirement obligations3,390 2,531 5,921 Accretion on asset retirement obligations3,722 2,654 6,376 
Amortization of acquired intangibles, netAmortization of acquired intangibles, net3,591 952 4,543 Amortization of acquired intangibles, net2,069 — 2,069 
Total Cost of coal salesTotal Cost of coal sales$568,446 $25,173 $593,619 Total Cost of coal sales$590,421 $14,902 $605,323 
Less: Freight and handling costsLess: Freight and handling costs(122,585)(3)(122,588)Less: Freight and handling costs(94,770)(2)(94,772)
Less: Depreciation, depletion and amortization - production (1)
Less: Depreciation, depletion and amortization - production (1)
(26,747)(906)(27,653)
Less: Depreciation, depletion and amortization - production (1)
(31,893)(377)(32,270)
Less: Accretion on asset retirement obligationsLess: Accretion on asset retirement obligations(3,390)(2,531)(5,921)Less: Accretion on asset retirement obligations(3,722)(2,654)(6,376)
Less: Amortization of acquired intangibles, netLess: Amortization of acquired intangibles, net(3,591)(952)(4,543)Less: Amortization of acquired intangibles, net(2,069)— (2,069)
Less: Idled and closed mine costsLess: Idled and closed mine costs(3,580)(3,978)(7,558)Less: Idled and closed mine costs(5,507)(2,549)(8,056)
Non-GAAP Cost of coal salesNon-GAAP Cost of coal sales$408,553 $16,803 $425,356 Non-GAAP Cost of coal sales$452,460 $9,320 $461,780 
Tons soldTons sold3,896 249 4,145 Tons sold4,115 110 4,225 
Non-GAAP Cost of coal sales per tonNon-GAAP Cost of coal sales per ton$104.86 $67.48 $102.62 Non-GAAP Cost of coal sales per ton$109.95 $84.73 $109.30 
(1) Depreciation, depletion and amortization - production excludes the depreciation, depletion and amortization related to selling, general and administrative functions.

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Three Months Ended September 30, 2022Three Months Ended September 30, 2023
(In thousands, except for per ton data)(In thousands, except for per ton data)MetAll OtherConsolidated(In thousands, except for per ton data)MetAll OtherConsolidated
Coal revenuesCoal revenues$840,638 $27,211 $867,849 Coal revenues$731,481 $7,517 $738,998 
Less: Total Cost of coal sales (per table above)Less: Total Cost of coal sales (per table above)(568,446)(25,173)(593,619)Less: Total Cost of coal sales (per table above)(590,421)(14,902)(605,323)
GAAP Coal marginGAAP Coal margin$272,192 $2,038 $274,230 GAAP Coal margin$141,060 $(7,385)$133,675 
Tons soldTons sold3,896 249 4,145 Tons sold4,115 110 4,225 
GAAP Coal margin per tonGAAP Coal margin per ton$69.86 $8.18 $66.16 GAAP Coal margin per ton$34.28 $(67.14)$31.64 
GAAP Coal marginGAAP Coal margin$272,192 $2,038 $274,230 GAAP Coal margin$141,060 $(7,385)$133,675 
Add: Depreciation, depletion and amortization - production (1)
Add: Depreciation, depletion and amortization - production (1)
26,747 906 27,653 
Add: Depreciation, depletion and amortization - production (1)
31,893 377 32,270 
Add: Accretion on asset retirement obligationsAdd: Accretion on asset retirement obligations3,390 2,531 5,921 Add: Accretion on asset retirement obligations3,722 2,654 6,376 
Add: Amortization of acquired intangibles, netAdd: Amortization of acquired intangibles, net3,591 952 4,543 Add: Amortization of acquired intangibles, net2,069 — 2,069 
Add: Idled and closed mine costsAdd: Idled and closed mine costs3,580 3,978 7,558 Add: Idled and closed mine costs5,507 2,549 8,056 
Non-GAAP Coal marginNon-GAAP Coal margin$309,500 $10,405 $319,905 Non-GAAP Coal margin$184,251 $(1,805)$182,446 
Tons soldTons sold3,896 249 4,145 Tons sold4,115 110 4,225 
Non-GAAP Coal margin per tonNon-GAAP Coal margin per ton$79.44 $41.79 $77.18 Non-GAAP Coal margin per ton$44.78 $(16.41)$43.18 
(1) Depreciation, depletion and amortization - production excludes the depreciation, depletion and amortization related to selling, general and administrative functions.
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Three Months Ended September 30, 2021Three Months Ended September 30, 2022
(In thousands, except for per ton data)(In thousands, except for per ton data)MetAll OtherConsolidated(In thousands, except for per ton data)MetAll OtherConsolidated
Coal revenuesCoal revenues$625,387 $21,742 $647,129 Coal revenues$840,638 $27,211 $867,849 
Less: Freight and handling fulfillment revenuesLess: Freight and handling fulfillment revenues(128,192)(18)(128,210)Less: Freight and handling fulfillment revenues(122,585)(3)(122,588)
Non-GAAP Coal revenuesNon-GAAP Coal revenues$497,195 $21,724 $518,919 Non-GAAP Coal revenues$718,053 $27,208 $745,261 
Tons soldTons sold4,380 348 4,728 Tons sold3,896 249 4,145 
Non-GAAP Coal sales realization per tonNon-GAAP Coal sales realization per ton$113.51 $62.43 $109.75 Non-GAAP Coal sales realization per ton$184.31 $109.27 $179.80 
Cost of coal sales (exclusive of items shown separately below)Cost of coal sales (exclusive of items shown separately below)$468,706 $19,463 $488,169 Cost of coal sales (exclusive of items shown separately below)$534,718 $19,337 $554,055 
Depreciation, depletion and amortization - production (1)
Depreciation, depletion and amortization - production (1)
23,181 1,160 24,341 
Depreciation, depletion and amortization - production (1)
26,747 906 27,653 
Accretion on asset retirement obligationsAccretion on asset retirement obligations3,408 3,266 6,674 Accretion on asset retirement obligations3,390 2,531 5,921 
Amortization of acquired intangibles, netAmortization of acquired intangibles, net3,063 (83)2,980 Amortization of acquired intangibles, net3,591 952 4,543 
Total Cost of coal salesTotal Cost of coal sales$498,358 $23,806 $522,164 Total Cost of coal sales$568,446 $23,726 $592,172 
Less: Freight and handling costsLess: Freight and handling costs(128,192)(18)(128,210)Less: Freight and handling costs(122,585)(3)(122,588)
Less: Depreciation, depletion and amortization - production (1)
Less: Depreciation, depletion and amortization - production (1)
(23,181)(1,160)(24,341)
Less: Depreciation, depletion and amortization - production (1)
(26,747)(906)(27,653)
Less: Accretion on asset retirement obligationsLess: Accretion on asset retirement obligations(3,408)(3,266)(6,674)Less: Accretion on asset retirement obligations(3,390)(2,531)(5,921)
Less: Amortization of acquired intangibles, netLess: Amortization of acquired intangibles, net(3,063)83 (2,980)Less: Amortization of acquired intangibles, net(3,591)(952)(4,543)
Less: Idled and closed mine costsLess: Idled and closed mine costs(4,932)(2,927)(7,859)Less: Idled and closed mine costs(3,580)(2,530)(6,110)
Non-GAAP Cost of coal salesNon-GAAP Cost of coal sales$335,582 $16,518 $352,100 Non-GAAP Cost of coal sales$408,553 $16,804 $425,357 
Tons soldTons sold4,380 348 4,728 Tons sold3,896 249 4,145 
Non-GAAP Cost of coal sales per tonNon-GAAP Cost of coal sales per ton$76.62 $47.47 $74.47 Non-GAAP Cost of coal sales per ton$104.86 $67.49 $102.62 
(1) Depreciation, depletion and amortization - production excludes the depreciation, depletion and amortization related to selling, general and administrative functions.


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Three Months Ended September 30, 2021Three Months Ended September 30, 2022
(In thousands, except for per ton data)(In thousands, except for per ton data)MetAll OtherConsolidated(In thousands, except for per ton data)MetAll OtherConsolidated
Coal revenuesCoal revenues$625,387 $21,742 $647,129 Coal revenues$840,638 $27,211 $867,849 
Less: Total Cost of coal sales (per table above)Less: Total Cost of coal sales (per table above)(498,358)(23,806)(522,164)Less: Total Cost of coal sales (per table above)(568,446)(23,726)(592,172)
GAAP Coal marginGAAP Coal margin$127,029 $(2,064)$124,965 GAAP Coal margin$272,192 $3,485 $275,677 
Tons soldTons sold4,380 348 4,728 Tons sold3,896 249 4,145 
GAAP Coal margin per tonGAAP Coal margin per ton$29.00 $(5.93)$26.43 GAAP Coal margin per ton$69.86 $14.00 $66.51 
GAAP Coal marginGAAP Coal margin$127,029 $(2,064)$124,965 GAAP Coal margin$272,192 $3,485 $275,677 
Add: Depreciation, depletion and amortization - production (1)
Add: Depreciation, depletion and amortization - production (1)
23,181 1,160 24,341 
Add: Depreciation, depletion and amortization - production (1)
26,747 906 27,653 
Add: Accretion on asset retirement obligationsAdd: Accretion on asset retirement obligations3,408 3,266 6,674 Add: Accretion on asset retirement obligations3,390 2,531 5,921 
Add: Amortization of acquired intangibles, netAdd: Amortization of acquired intangibles, net3,063 (83)2,980 Add: Amortization of acquired intangibles, net3,591 952 4,543 
Add: Idled and closed mine costsAdd: Idled and closed mine costs4,932 2,927 7,859 Add: Idled and closed mine costs3,580 2,530 6,110 
Non-GAAP Coal marginNon-GAAP Coal margin$161,613 $5,206 $166,819 Non-GAAP Coal margin$309,500 $10,404 $319,904 
Tons soldTons sold4,380 348 4,728 Tons sold3,896 249 4,145 
Non-GAAP Coal margin per tonNon-GAAP Coal margin per ton$36.90 $14.96 $35.28 Non-GAAP Coal margin per ton$79.44 $41.78 $77.18 
(1) Depreciation, depletion and amortization - production excludes the depreciation, depletion and amortization related to selling, general and administrative functions.

Three Months Ended September 30,Increase (Decrease)
(In thousands, except for per ton data)20222021$ or Tons%
Met segment operations:
Tons sold3,896 4,380 (484)(11.1)%
Non-GAAP Coal revenues$718,053 $497,195 $220,858 44.4 %
Non-GAAP Coal sales realization per ton$184.31 $113.51 $70.80 62.4 %
All Other category:
Tons sold249 348 (99)(28.4)%
Non-GAAP Coal revenues$27,208 $21,724 $5,484 25.2 %
Non-GAAP Coal sales realization per ton$109.27 $62.43 $46.84 75.0 %
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Three Months Ended September 30,Increase (Decrease)
(In thousands, except for per ton data)20232022$ or Tons%
Met segment operations:
Tons sold4,115 3,896 219 5.6 %
Non-GAAP Coal revenues$636,711 $718,053 $(81,342)(11.3)%
Non-GAAP Coal sales realization per ton$154.73 $184.31 $(29.58)(16.0)%
All Other category:
Tons sold110 249 (139)(55.8)%
Non-GAAP Coal revenues$7,515 $27,208 $(19,693)(72.4)%
Non-GAAP Coal sales realization per ton$68.32 $109.27 $(40.95)(37.5)%

Non-GAAP Coal revenues. Met segment operations non-GAAP coal revenues increased $220.9decreased $81.3 million, or 44.4%11.3%, for the three months ended September 30, 20222023 compared to the prior year period. The increasedecrease was primarily due to highera $29.58 per ton, or 16.0%, reduction in average non-GAAP coal sales realization as prices moderated from the higher levels experienced during the third quarter of 62.4% per ton resulting from an improved2022, partially offset by a 5.6% increase in Met coal sales volumes. The elevated coal sales pricing environment compared toin the prior year period.period was driven by increased coal demand, resulting from improved economic activity, coupled with limited supply response.

All Other category non-GAAP coal revenues increased $5.5decreased $19.7 million, or 25.2%72.4%, for the three months ended September 30, 20222023 compared to the prior year period primarily due to higher average non-GAAPa weaker thermal coal pricing environment combined with a decline in coal sales realizationvolumes as our Mammoth mining complex’s sole remaining thermal coal mine ceased operation in August of 75.0% per ton resulting from an improved pricing environment compared to the prior year period.2023.

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Three Months Ended September 30,Increase (Decrease)Three Months Ended September 30,Increase (Decrease)
(In thousands, except for per ton data)(In thousands, except for per ton data)20222021$%(In thousands, except for per ton data)20232022$%
Met segment operations:Met segment operations:Met segment operations:
Non-GAAP Cost of coal salesNon-GAAP Cost of coal sales$408,553 $335,582 $72,971 21.7 %Non-GAAP Cost of coal sales$452,460 $408,553 $43,907 10.7 %
Non-GAAP Cost of coal sales per tonNon-GAAP Cost of coal sales per ton$104.86 $76.62 $28.24 36.9 %Non-GAAP Cost of coal sales per ton$109.95 $104.86 $5.09 4.9 %
Non-GAAP Coal margin per tonNon-GAAP Coal margin per ton$79.44 $36.90 $42.54 115.3 %Non-GAAP Coal margin per ton$44.78 $79.44 $(34.66)(43.6)%
All Other category:All Other category:All Other category:
Non-GAAP Cost of coal salesNon-GAAP Cost of coal sales$16,803 $16,518 $285 1.7 %Non-GAAP Cost of coal sales$9,320 $16,804 $(7,484)(44.5)%
Non-GAAP Cost of coal sales per tonNon-GAAP Cost of coal sales per ton$67.48 $47.47 $20.01 42.2 %Non-GAAP Cost of coal sales per ton$84.73 $67.49 $17.24 25.5 %
Non-GAAP Coal margin per tonNon-GAAP Coal margin per ton$41.79 $14.96 $26.83 179.3 %Non-GAAP Coal margin per ton$(16.41)$41.78 $(58.19)(139.3)%

Non-GAAP Cost of coal sales. Met segment operations non-GAAP cost of coal sales increased $73.0$43.9 million, or 21.7%10.7%, for the three months ended September 30, 20222023 compared to the prior year period. The increase was primarily driven by a 5.6% increase in Met coal sales volumes combined with a 4.9% increase in average non-GAAP cost of coal sales per ton. The increase in average non-GAAP cost of coal sales per ton was primarily driven by inflationary pressures and increased supplies and maintenance expense, salaries and wages expense, rail freight costs, andlevels of coal purchases, partially offset by lower royalties and taxes.taxes as a result of a lower coal pricing environment.

All Other category non-GAAP cost of coal sales increased $0.3decreased $7.5 million, or 1.7%44.5%, for the three months ended September 30, 20222023 compared to the prior year period. The increase wasperiod primarily driven by increasesdue to the cessation of mining of our Mammoth mining complex’s sole remaining thermal coal mine in supplies and maintenance expense, royalties and taxes, and salaries and wages expense.

Our non-GAAP costAugust of coal sales includes purchased coal costs. In the following tables, we calculate Adjusted cost of produced coal sold as non-GAAP cost of coal sales less purchased coal costs.
Three Months Ended September 30, 2022
(In thousands, except for per ton data)MetAll OtherConsolidated
Non-GAAP Cost of coal sales$408,553 $16,803 $425,356 
Less: cost of purchased coal sold(21,222)— (21,222)
Adjusted cost of produced coal sold$387,331 $16,803 $404,134 
Produced tons sold3,795 249 4,044 
Adjusted cost of produced coal sold per ton (1)
$102.06 $67.48 $99.93 
(1) Cost of produced coal sold per ton for our operations is calculated as non-GAAP cost of produced coal sold divided by produced tons sold.
Three Months Ended September 30, 2021
(In thousands, except for per ton data)MetAll OtherConsolidated
Non-GAAP Cost of coal sales$335,582 $16,518 $352,100 
Less: cost of purchased coal sold(32,168)— (32,168)
Adjusted cost of produced coal sold$303,414 $16,518 $319,932 
Produced tons sold4,107 348 4,455 
Adjusted cost of produced coal sold per ton (1)
$73.88 $47.47 $71.81 
(1) Cost of produced coal sold per ton for our operations is calculated as non-GAAP cost of produced coal sold divided by produced tons sold.2023.

Adjusted EBITDA

Adjusted EBITDA is a non-GAAP financial measure that is presented as a supplemental measure and is not intended to replace financial performance or liquidity measures determined in accordance with GAAP. Moreover, this measure is not calculated identically by all companies and therefore may not be comparable to similarly titled measures used by other companies. Adjusted EBITDA is presented because management believes it is a useful indicator of the financial performance of our coal operations. The following tables present a reconciliation of net income (loss) to Adjusted EBITDA for the three months ended September 30, 20222023 and 2021:2022:
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Three Months Ended September 30, 2022Three Months Ended September 30, 2023
(In thousands)(In thousands)MetAll OtherConsolidated(In thousands)MetAll OtherConsolidated
Net income (loss) from continuing operations$268,157 $(16,321)$251,836 
Net income (loss)Net income (loss)$134,886 $(41,072)$93,814 
Interest expenseInterest expense40 1,655 1,695 Interest expense190 1,556 1,746 
Interest incomeInterest income(369)(695)(1,064)Interest income(369)(4,270)(4,639)
Income tax expenseIncome tax expense— 5,437 5,437 Income tax expense— 18,964 18,964 
Depreciation, depletion and amortizationDepreciation, depletion and amortization26,747 1,178 27,925 Depreciation, depletion and amortization31,893 689 32,582 
Non-cash stock compensation expenseNon-cash stock compensation expense— 1,520 1,520 Non-cash stock compensation expense23 2,976 2,999 
Mark-to-market adjustment - acquisition-related obligations— (2,954)(2,954)
Accretion on asset retirement obligationsAccretion on asset retirement obligations3,390 2,531 5,921 Accretion on asset retirement obligations3,722 2,654 6,376 
Amortization of acquired intangibles, netAmortization of acquired intangibles, net3,591 952 4,543 Amortization of acquired intangibles, net2,069 — 2,069 
Adjusted EBITDAAdjusted EBITDA$301,556 $(6,697)$294,859 Adjusted EBITDA$172,414 $(18,503)$153,911 

Three Months Ended September 30, 2021Three Months Ended September 30, 2022
(In thousands)(In thousands)MetAll OtherConsolidated(In thousands)MetAll OtherConsolidated
Net income (loss) from continuing operations$125,750 $(42,057)$83,693 
Net income (loss)Net income (loss)$268,157 $(15,340)$252,817 
Interest expenseInterest expense49 17,289 17,338 Interest expense40 1,714 1,754 
Interest incomeInterest income(1)(53)(54)Interest income(369)(689)(1,058)
Income tax expenseIncome tax expense— 208 208 Income tax expense— 5,730 5,730 
Depreciation, depletion and amortizationDepreciation, depletion and amortization23,181 1,338 24,519 Depreciation, depletion and amortization26,747 1,178 27,925 
Non-cash stock compensation expenseNon-cash stock compensation expense1,183 1,189 Non-cash stock compensation expense— 1,520 1,520 
Mark-to-market adjustment - acquisition-related obligationsMark-to-market adjustment - acquisition-related obligations— 11,676 11,676 Mark-to-market adjustment - acquisition-related obligations— (2,954)(2,954)
Accretion on asset retirement obligationsAccretion on asset retirement obligations3,408 3,266 6,674 Accretion on asset retirement obligations3,390 2,531 5,921 
Amortization of acquired intangibles, netAmortization of acquired intangibles, net3,063 (83)2,980 Amortization of acquired intangibles, net3,591 952 4,543 
Adjusted EBITDAAdjusted EBITDA$155,456 $(7,233)$148,223 Adjusted EBITDA$301,556 $(5,358)$296,198 

The following table summarizes Adjusted EBITDA for our Met segment operations and All Other category:
Three Months Ended September 30,Increase (Decrease)Three Months Ended September 30,Increase (Decrease)
(In thousands)(In thousands)20222021$%(In thousands)20232022$%
Adjusted EBITDAAdjusted EBITDAAdjusted EBITDA
Met segment operationsMet segment operations$301,556 $155,456 $146,100 94.0 %Met segment operations$172,414 $301,556 $(129,142)(42.8)%
All Other categoryAll Other category(6,697)(7,233)536 7.4 %All Other category(18,503)(5,358)(13,145)(245.3)%
TotalTotal$294,859 $148,223 $146,636 98.9 %Total$153,911 $296,198 $(142,287)(48.0)%

Met segment operations. Adjusted EBITDA increased $146.1decreased $129.1 million, or 94.0%42.8%, for the three months ended September 30, 20222023 compared to the prior year period. The increasedecrease in Adjusted EBITDA was primarily driven by increaseddecreased coal margin.margin and lower non-GAAP coal sales realization per ton in the current period.

All Other category. Adjusted EBITDA increased $0.5decreased $13.1 million, or 7.4%245.3%, for the three months ended September 30, 20222023 compared to the prior year period. The increasedecrease in Adjusted EBITDA was primarily driven by increaseda decrease in tons sold, decreased coal margin.margin, and lower non-GAAP coal sales realization per ton in the current period.

Discontinued Operations
The former NAPP operations results of operations and financial position are reported as discontinued operations in the Condensed Consolidated Financial Statements. Refer to Note 2 for further information on discontinued operations. Refer to Note 16 for disclosures on the Cumberland Back-to-Back Coal Supply Agreements.

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Nine Months Ended September 30, 20222023 Compared to the Nine Months Ended September 30, 20212022

Revenues

The following table summarizes information about our revenues during the nine months ended September 30, 20222023 and 2021:2022:
Nine Months Ended September 30,Increase (Decrease)
(In thousands, except for per ton data)20222021$ or Tons%
Coal revenues$3,271,845 $1,426,039 $1,845,806 129.4 %
Other revenues6,299 4,330 1,969 45.5 %
Total revenues$3,278,144 $1,430,369 $1,847,775 129.2 %
Tons sold12,497 12,815 (318)(2.5)%

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Nine Months Ended September 30,Increase (Decrease)
(In thousands, except for per ton data)20232022$ or Tons%
Coal revenues$2,499,503 $3,271,845 $(772,342)(23.6)%
Other revenues11,923 6,299 5,624 89.3 %
Total revenues$2,511,426 $3,278,144 $(766,718)(23.4)%
Tons sold12,488 12,497 (9)(0.1)%

Coal revenuesrevenues. . Coal revenues increased $1,845.8decreased $772.3 million, or 129.4%23.6%, for the nine months ended September 30, 20222023 compared to the prior year period. The increasedecrease was primarily due to highera 25.4% reduction in average coal sales realization within our Met segment as pricing moderated from the higher levels experienced during the prior year, partially offset by a result of an improved2.3% increase in coal sales volumes. The elevated coal sales pricing environment duringin the current period. Increasingprior year period was driven by increased coal demand, resulting from improved economic activity, coupled with a limited supply response contributedresponse. Coal revenues within our All Other category also declined due to a risethe cessation of mining of our Mammoth mining complex’s sole remaining thermal coal mine in coal prices.August of 2023. Refer to the “Non-GAAP Coal revenues” section below for further detail on coal revenues for the nine months ended September 30, 20222023 compared to the prior year period.

Cost and Expenses

The following table summarizes information about our costs and expenses during the nine months ended September 30, 20222023 and 2021:2022:
Nine Months Ended September 30,Increase (Decrease)
(In thousands)20222021$%
Cost of coal sales (exclusive of items shown separately below)$1,736,711 $1,182,360 $554,351 46.9 %
Depreciation, depletion and amortization83,690 80,261 3,429 4.3 %
Accretion on asset retirement obligations17,822 19,970 (2,148)(10.8)%
Amortization of acquired intangibles, net16,038 9,402 6,636 70.6 %
Asset impairment and restructuring— (561)561 100.0 %
Selling, general and administrative expenses (exclusive of depreciation, depletion and amortization shown separately above)48,339 44,891 3,448 7.7 %
Total other operating loss (income):
Mark-to-market adjustment for acquisition-related obligations10,615 18,009 (7,394)(41.1)%
Other expense (income)569 (5,290)5,859 110.8 %
Total costs and expenses$1,913,784 $1,349,042 $564,742 41.9 %

Nine Months Ended September 30,Increase (Decrease)
(In thousands)20232022$%
Cost of coal sales (exclusive of items shown separately below)$1,687,259 $1,736,826 $(49,567)(2.9)%
Depreciation, depletion and amortization94,231 83,690 10,541 12.6 %
Accretion on asset retirement obligations19,129 17,822 1,307 7.3 %
Amortization of acquired intangibles, net6,458 16,038 (9,580)(59.7)%
Selling, general and administrative expenses (exclusive of depreciation, depletion and amortization shown separately above)56,251 48,339 7,912 16.4 %
Total other operating loss (income):
Mark-to-market adjustment for acquisition-related obligations— 10,615 (10,615)(100.0)%
Other (income) expense(1,665)569 (2,234)(392.6)%
Total costs and expenses$1,861,663 $1,913,899 $(52,236)(2.7)%

Cost of coal sales. sales. Cost of coal sales increased $554.4decreased $49.6 million, or 46.9%2.9%, for the nine months ended September 30, 20222023 compared to the prior year period as increased costs due to inflationary pressure and increased levels of coal purchases were more than offset by lower royalties, taxes, and freight and handling costs due to the lower coal pricing environment.

Depreciation, depletion and amortization. Depreciation, depletion and amortization increased $10.5 million, or 12.6%, for the nine months ended September 30, 2023 compared to the prior year period. The increase was primarily driven by increased rail freight costs, royalties and taxes, salaries and wages expense, and supplies and maintenance expense, partially offset by inventory change during the current period.due to capital expenditures.
Depreciation, depletion and amortization.
Amortization of acquired intangibles, net. Depreciation, depletion and amortization increased $3.4Amortization of acquired intangibles, net decreased $9.6 million, or 4.3%59.7%, for the nine months ended September 30, 20222023 compared to the prior year period. The increase in depreciation, depletion and amortization was primarily a result of annual changes in depletion rates due to the Company’s updated estimated coal reserves.
Amortization of acquired intangibles, net. Amortization of acquired intangibles, net increased $6.6 million, or 70.6%, for the nine months ended September 30, 2022 compared to the prior year period. The increasedecrease was primarily driven by accelerated currentprior period amortization of certain acquired mine permits as a result of an update to the estimated life of the associated mines.

Selling, general and administrative. Selling, general and administrative expenses increased $7.9 million, or 16.4%, for the nine months ended September 30, 2023 compared to the prior year period. This increase was primarily related to increases of $5.1 million in stock compensation expense, $1.8 million in wages and benefits expense, and $0.3 million in incentive pay.

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Selling, general and administrative. Selling, general and administrative expenses increased $3.4 million, or 7.7%, for the nine months ended September 30, 2022 compared to the prior year period. This increase in expense was primarily related to increases of $2.8 million in wages and benefits expense.

Mark-to-market adjustment for acquisition-related obligations.The mark-to-market adjustment for acquisition-related obligations resulted in an increase to income of $7.4was $10.6 million for the nine months ended September 30, 2022. As the royalty period ended on December 31, 2022, compared to the prior year period. This increasethere was related to the $10.6 million Contingent Revenue Obligationno mark-to-market adjustment recorded during the nine months ended September 30, 2022 due to changes in underlying fair value assumptions during the current period.2023. Refer to Note 12Notes 9 and 11 for additional information on the Contingent Revenue Obligation fair value input assumptions.Obligation.

Other expense (income). expense. Other income decreased $5.9increased $2.2 million, or 110.8%392.6%, for the nine months ended September 30, 20222023 compared to the prior year period, primarily due to a decreasean increase in income on sale of assets in the current period.

Total Other (Expense) IncomeExpense, Net

The following table summarizes information about our total other (expense) incomeexpense, net during the nine months ended September 30, 20222023 and 2021:
Nine Months Ended September 30,Increase (Decrease)
(In thousands)20222021$%
Other (expense) income: 
Interest expense$(19,996)$(53,290)$33,294 62.5 %
Interest income1,412 322 1,090 338.5 %
Equity loss in affiliates(8,318)(1,161)(7,157)(616.5)%
Miscellaneous income, net4,884 5,425 (541)(10.0)%
Total other expense, net$(22,018)$(48,704)$26,686 54.8 %
2022:

Nine Months Ended September 30,Increase (Decrease)
(In thousands)20232022$%
Total other expense, net$8,850 $22,427 $(13,577)(60.5)%
Interest expense.
Interest
Total other expense, net decreased $33.3$13.6 million, or 62.5%60.5%, for the nine months ended September 30, 20222023 compared to the prior year period, primarily related to decreased interest expense due to a decreasereduction in debt outstanding. Refer to Note 9 for additional information.

Equity loss in affiliates. Equity loss in affiliates increased $7.2 million, or 616.5%, for the nine months ended September 30, 2022 compared to the prior year period, primarily driven by a net decrease in net income of our equity affiliates.outstanding debt.

Income Tax Expense

The following table summarizes information about our income tax expense during the nine months ended September 30, 20222023 and 2021:2022:
Nine Months Ended September 30,Increase (Decrease)Nine Months Ended September 30,Increase (Decrease)
(In thousands)(In thousands)20222021$%(In thousands)20232022$%
Income tax expenseIncome tax expense$(114,073)$(211)$(113,862)(53,963.0)%Income tax expense$94,973 $113,953 $(18,980)(16.7)%

Income taxes.Income tax expense of $114.1$95.0 million was recorded for the nine months ended September 30, 2023 on income before income taxes of $640.9 million. The effective tax rate differs from the federal statutory rate of 21% primarily due to the permanent impact of percentage depletion and foreign-derived intangible income deductions.
Income tax expense of $114.0 million was recorded for the nine months ended September 30, 2022 on income from continuing operations before income taxes of $1,342.3$1,341.8 million. The effective tax rate differs from the federal statutory rate of 21% primarily due to the decrease in the valuation allowance and the permanent impact of percentage depletion and foreign-derived intangible income deductions.

Income tax expense of $0.2 million was recorded for the nine months ended September 30, 2021 on income from continuing operations before income taxes of $32.6 million. The effective tax rate differs from the federal statutory rate of 21% primarily due to the decrease in the valuation allowance. Refer to Note 1312 for additional information.

Non-GAAP Financial Measures

Included below are reconciliations of non-GAAP financial measures to GAAP financial measures.

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Refer to the “Three Months Ended September 30, 2023 Compared to the Three Months Ended September 30, 2022” section above for discussion on “non-GAAP financial measures.”
The following tables summarize certain financial information relating to our coal operations for the nine months ended September 30, 20222023 and 2021:2022:

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Nine Months Ended September 30, 2022Nine Months Ended September 30, 2023
(In thousands, except for per ton data)(In thousands, except for per ton data)MetAll OtherConsolidated(In thousands, except for per ton data)MetAll OtherConsolidated
Coal revenuesCoal revenues$3,213,639 $58,206 $3,271,845 Coal revenues$2,452,462 $47,041 $2,499,503 
Less: Freight and handling fulfillment revenuesLess: Freight and handling fulfillment revenues(423,132)(21)(423,153)Less: Freight and handling fulfillment revenues(319,244)(227)(319,471)
Non-GAAP Coal revenuesNon-GAAP Coal revenues$2,790,507 $58,185 $2,848,692 Non-GAAP Coal revenues$2,133,218 $46,814 $2,180,032 
Tons soldTons sold11,726 771 12,497 Tons sold12,001 487 12,488 
Non-GAAP Coal sales realization per tonNon-GAAP Coal sales realization per ton$237.98 $75.47 $227.95 Non-GAAP Coal sales realization per ton$177.75 $96.13 $174.57 
Cost of coal sales (exclusive of items shown separately below)Cost of coal sales (exclusive of items shown separately below)$1,684,224 $52,487 $1,736,711 Cost of coal sales (exclusive of items shown separately below)$1,639,230 $48,029 $1,687,259 
Depreciation, depletion and amortization - production (1)
Depreciation, depletion and amortization - production (1)
81,009 1,953 82,962 
Depreciation, depletion and amortization - production (1)
92,421 922 93,343 
Accretion on asset retirement obligationsAccretion on asset retirement obligations10,178 7,644 17,822 Accretion on asset retirement obligations11,165 7,964 19,129 
Amortization of acquired intangibles, netAmortization of acquired intangibles, net13,182 2,856 16,038 Amortization of acquired intangibles, net6,458 — 6,458 
Total Cost of coal salesTotal Cost of coal sales$1,788,593 $64,940 $1,853,533 Total Cost of coal sales$1,749,274 $56,915 $1,806,189 
Less: Freight and handling costsLess: Freight and handling costs(423,132)(21)(423,153)Less: Freight and handling costs(319,244)(227)(319,471)
Less: Depreciation, depletion and amortization - production (1)
Less: Depreciation, depletion and amortization - production (1)
(81,009)(1,953)(82,962)
Less: Depreciation, depletion and amortization - production (1)
(92,421)(922)(93,343)
Less: Accretion on asset retirement obligationsLess: Accretion on asset retirement obligations(10,178)(7,644)(17,822)Less: Accretion on asset retirement obligations(11,165)(7,964)(19,129)
Less: Amortization of acquired intangibles, netLess: Amortization of acquired intangibles, net(13,182)(2,856)(16,038)Less: Amortization of acquired intangibles, net(6,458)— (6,458)
Less: Idled and closed mine costsLess: Idled and closed mine costs(9,892)(9,617)(19,509)Less: Idled and closed mine costs(13,107)(7,558)(20,665)
Non-GAAP Cost of coal salesNon-GAAP Cost of coal sales$1,251,200 $42,849 $1,294,049 Non-GAAP Cost of coal sales$1,306,879 $40,244 $1,347,123 
Tons soldTons sold11,726 771 12,497 Tons sold12,001 487 12,488 
Non-GAAP Cost of coal sales per tonNon-GAAP Cost of coal sales per ton$106.70 $55.58 $103.55 Non-GAAP Cost of coal sales per ton$108.90 $82.64 $107.87 
(1) Depreciation, depletion and amortization - production excludes the depreciation, depletion and amortization related to selling, general and administrative functions.

Nine Months Ended September 30, 2022Nine Months Ended September 30, 2023
(In thousands, except for per ton data)(In thousands, except for per ton data)MetAll OtherConsolidated(In thousands, except for per ton data)MetAll OtherConsolidated
Coal revenuesCoal revenues$3,213,639 $58,206 $3,271,845 Coal revenues$2,452,462 $47,041 $2,499,503 
Less: Total Cost of coal sales (per table above)Less: Total Cost of coal sales (per table above)(1,788,593)(64,940)(1,853,533)Less: Total Cost of coal sales (per table above)(1,749,274)(56,915)(1,806,189)
GAAP Coal marginGAAP Coal margin$1,425,046 $(6,734)$1,418,312 GAAP Coal margin$703,188 $(9,874)$693,314 
Tons soldTons sold11,726 771 12,497 Tons sold12,001 487 12,488 
GAAP Coal margin per tonGAAP Coal margin per ton$121.53 $(8.73)$113.49 GAAP Coal margin per ton$58.59 $(20.28)$55.52 
GAAP Coal marginGAAP Coal margin$1,425,046 $(6,734)$1,418,312 GAAP Coal margin$703,188 $(9,874)$693,314 
Add: Depreciation, depletion and amortization - production (1)
Add: Depreciation, depletion and amortization - production (1)
81,009 1,953 82,962 
Add: Depreciation, depletion and amortization - production (1)
92,421 922 93,343 
Add: Accretion on asset retirement obligationsAdd: Accretion on asset retirement obligations10,178 7,644 17,822 Add: Accretion on asset retirement obligations11,165 7,964 19,129 
Add: Amortization of acquired intangibles, netAdd: Amortization of acquired intangibles, net13,182 2,856 16,038 Add: Amortization of acquired intangibles, net6,458 — 6,458 
Add: Idled and closed mine costsAdd: Idled and closed mine costs9,892 9,617 19,509 Add: Idled and closed mine costs13,107 7,558 20,665 
Non-GAAP Coal marginNon-GAAP Coal margin$1,539,307 $15,336 $1,554,643 Non-GAAP Coal margin$826,339 $6,570 $832,909 
Tons soldTons sold11,726 771 12,497 Tons sold12,001 487 12,488 
Non-GAAP Coal margin per tonNon-GAAP Coal margin per ton$131.27 $19.89 $124.40 Non-GAAP Coal margin per ton$68.86 $13.49 $66.70 
(1) Depreciation, depletion and amortization - production excludes the depreciation, depletion and amortization related to selling, general and administrative functions.


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Nine Months Ended September 30, 2021
(In thousands, except for per ton data)MetAll OtherConsolidated
Coal revenues$1,362,119 $63,920 $1,426,039 
Less: Freight and handling fulfillment revenues(252,532)(504)(253,036)
Non-GAAP Coal revenues$1,109,587 $63,416 $1,173,003 
Tons sold11,785 1,030 12,815 
Non-GAAP Coal sales realization per ton$94.15 $61.57 $91.53 
Cost of coal sales (exclusive of items shown separately below)$1,125,840 $56,520 $1,182,360 
Depreciation, depletion and amortization - production (1)
75,403 4,321 79,724 
Accretion on asset retirement obligations10,170 9,800 19,970 
Amortization of acquired intangibles, net9,749 (347)9,402 
Total Cost of coal sales$1,221,162 $70,294 $1,291,456 
Less: Freight and handling costs(252,532)(504)(253,036)
Less: Depreciation, depletion and amortization - production (1)
(75,403)(4,321)(79,724)
Less: Accretion on asset retirement obligations(10,170)(9,800)(19,970)
Less: Amortization of acquired intangibles, net(9,749)347 (9,402)
Less: Idled and closed mine costs(13,325)(10,215)(23,540)
Non-GAAP Cost of coal sales$859,983 $45,801 $905,784 
Tons sold11,785 1,030 12,815 
Non-GAAP Cost of coal sales per ton$72.97 $44.47 $70.68 
(1) Depreciation, depletion and amortization - production excludes the depreciation, depletion and amortization related to selling, general and administrative functions.
Nine Months Ended September 30, 2022
(In thousands, except for per ton data)MetAll OtherConsolidated
Coal revenues$3,213,639 $58,206 $3,271,845 
Less: Freight and handling fulfillment revenues(423,132)(21)(423,153)
Non-GAAP Coal revenues$2,790,507 $58,185 $2,848,692 
Tons sold11,726 771 12,497 
Non-GAAP Coal sales realization per ton$237.98 $75.47 $227.95 
Cost of coal sales (exclusive of items shown separately below)$1,684,224 $52,602 $1,736,826 
Depreciation, depletion and amortization - production (1)
81,009 1,953 82,962 
Accretion on asset retirement obligations10,178 7,644 17,822 
Amortization of acquired intangibles, net13,182 2,856 16,038 
Total Cost of coal sales$1,788,593 $65,055 $1,853,648 
Less: Freight and handling costs(423,132)(21)(423,153)
Less: Depreciation, depletion and amortization - production (1)
(81,009)(1,953)(82,962)
Less: Accretion on asset retirement obligations(10,178)(7,644)(17,822)
Less: Amortization of acquired intangibles, net(13,182)(2,856)(16,038)
Less: Idled and closed mine costs(9,892)(9,732)(19,624)
Non-GAAP Cost of coal sales$1,251,200 $42,849 $1,294,049 
Tons sold11,726 771 12,497 
Non-GAAP Cost of coal sales per ton$106.70 $55.58 $103.55 

Nine Months Ended September 30, 2021
(In thousands, except for per ton data)MetAll OtherConsolidated
Coal revenues$1,362,119 $63,920 $1,426,039 
Less: Total Cost of coal sales (per table above)(1,221,162)(70,294)(1,291,456)
GAAP Coal margin$140,957 $(6,374)$134,583 
Tons sold11,785 1,030 12,815 
GAAP Coal margin per ton$11.96 $(6.19)$10.50 
GAAP Coal margin$140,957 $(6,374)$134,583 
Add: Depreciation, depletion and amortization - production (1)
75,403 4,321 79,724 
Add: Accretion on asset retirement obligations10,170 9,800 19,970 
Add: Amortization of acquired intangibles, net9,749 (347)9,402 
Add: Idled and closed mine costs13,325 10,215 23,540 
Non-GAAP Coal margin$249,604 $17,615 $267,219 
Tons sold11,785 1,030 12,815 
Non-GAAP Coal margin per ton$21.18 $17.10 $20.85 
(1) Depreciation, depletion and amortization - production excludes the depreciation, depletion and amortization related to selling, general and administrative functions.
Nine Months Ended September 30, 2022
(In thousands, except for per ton data)MetAll OtherConsolidated
Coal revenues$3,213,639 $58,206 $3,271,845 
Less: Total Cost of coal sales (per table above)(1,788,593)(65,055)(1,853,648)
GAAP Coal margin$1,425,046 $(6,849)$1,418,197 
Tons sold11,726 771 12,497 
GAAP Coal margin per ton$121.53 $(8.88)$113.48 
GAAP Coal margin$1,425,046 $(6,849)$1,418,197 
Add: Depreciation, depletion and amortization - production (1)
81,009 1,953 82,962 
Add: Accretion on asset retirement obligations10,178 7,644 17,822 
Add: Amortization of acquired intangibles, net13,182 2,856 16,038 
Add: Idled and closed mine costs9,892 9,732 19,624 
Non-GAAP Coal margin$1,539,307 $15,336 $1,554,643 
Tons sold11,726 771 12,497 
Non-GAAP Coal margin per ton$131.27 $19.89 $124.40 

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Nine Months Ended September 30,Increase (Decrease)Nine Months Ended September 30,Increase (Decrease)
(In thousands, except for per ton data)(In thousands, except for per ton data)20222021$%(In thousands, except for per ton data)20232022$%
Met segment operations:Met segment operations:Met segment operations:
Tons soldTons sold11,726 11,785 (59)(0.5)%Tons sold12,001 11,726 275 2.3 %
Non-GAAP Coal revenuesNon-GAAP Coal revenues$2,790,507 $1,109,587 $1,680,920 151.5 %Non-GAAP Coal revenues$2,133,218 $2,790,507 $(657,289)(23.6)%
Non-GAAP Coal sales realization per tonNon-GAAP Coal sales realization per ton$237.98 $94.15 $143.83 152.8 %Non-GAAP Coal sales realization per ton$177.75 $237.98 $(60.23)(25.3)%
All Other category:All Other category:All Other category:
Tons soldTons sold771 1,030 (259)(25.1)%Tons sold487 771 (284)(36.8)%
Non-GAAP Coal revenuesNon-GAAP Coal revenues$58,185 $63,416 $(5,231)(8.2)%Non-GAAP Coal revenues$46,814 $58,185 $(11,371)(19.5)%
Non-GAAP Coal sales realization per tonNon-GAAP Coal sales realization per ton$75.47 $61.57 $13.90 22.6 %Non-GAAP Coal sales realization per ton$96.13 $75.47 $20.66 27.4 %

Non-GAAP Coal revenues. Met segment operations non-GAAP coal revenues increased $1,680.9decreased $657.3 million, or 151.5%23.6%, for the nine months ended September 30, 20222023 compared to the prior year period. The increasedecrease was primarily due to highera $60.23 per ton, or 25.3%, reduction in average non-GAAP coal sales realization of 152.8% per ton resultingas prices moderated from an improved pricing environment compared tothe higher levels experienced during the prior year period.period, partially offset by a 2.3% increase in Met coal sales volumes. The elevated coal sales pricing environment in the prior year period was driven by increased coal demand, resulting from improved economic activity, coupled with limited supply response.

All Other category non-GAAP coal revenues decreased $5.2$11.4 million, or 8.2%19.5%, for the nine months ended September 30, 20222023 compared to the prior year period primarily due to a decreasedecline in tons sold, partially offset by higher non-GAAP coal sales realization per tonvolumes as our Mammoth mining complex’s sole remaining thermal coal mine ceased operation in the current period.August of 2023.

Nine Months Ended September 30,Increase (Decrease)Nine Months Ended September 30,Increase (Decrease)
(In thousands, except for per ton data)(In thousands, except for per ton data)20222021$%(In thousands, except for per ton data)20232022$%
Met segment operations:Met segment operations:Met segment operations:
Non-GAAP Cost of coal salesNon-GAAP Cost of coal sales$1,251,200 $859,983 $391,217 45.5 %Non-GAAP Cost of coal sales$1,306,879 $1,251,200 $55,679 4.5 %
Non-GAAP Cost of coal sales per tonNon-GAAP Cost of coal sales per ton$106.70 $72.97 $33.73 46.2 %Non-GAAP Cost of coal sales per ton$108.90 $106.70 $2.20 2.1 %
Non-GAAP Coal margin per tonNon-GAAP Coal margin per ton$131.27 $21.18 $110.09 519.8 %Non-GAAP Coal margin per ton$68.86 $131.27 $(62.41)(47.5)%
All Other category:All Other category:All Other category:
Non-GAAP Cost of coal salesNon-GAAP Cost of coal sales$42,849 $45,801 $(2,952)(6.4)%Non-GAAP Cost of coal sales$40,244 $42,849 $(2,605)(6.1)%
Non-GAAP Cost of coal sales per tonNon-GAAP Cost of coal sales per ton$55.58 $44.47 $11.11 25.0 %Non-GAAP Cost of coal sales per ton$82.64 $55.58 $27.06 48.7 %
Non-GAAP Coal margin per tonNon-GAAP Coal margin per ton$19.89 $17.10 $2.79 16.3 %Non-GAAP Coal margin per ton$13.49 $19.89 $(6.40)(32.2)%

Non-GAAP Cost of coal sales. Met segment operations non-GAAP cost of coal sales increased $391.2$55.7 million, or 45.5%4.5%, for the nine months ended September 30, 20222023 compared to the prior year period. The increase was primarily driven by a 2.3% increase in Met coal sales volumes combined with a 2.1% increase in average non-GAAP cost of coal sales per ton. The increase in average non-GAAP cost of coal sales per ton was primarily driven by inflationary pressures and increased rail freight costs,levels of coal purchases, partially offset by lower royalties and taxes supplies and maintenance expense, and salaries and wages expense, partially offset by inventory change during the current period.as a result of a lower coal pricing environment.

All Other category non-GAAP cost of coal sales decreased $3.0$2.6 million, or 6.4%6.1%, for the nine months ended September 30, 20222023 compared to the prior year period. The decrease wasperiod primarily driven by a decreasedue to the cessation of mining of our Mammoth mining complex’s sole remaining thermal coal mine in tons sold, inventory change during the current period, and decreased royalties and taxes, partially offset by increased salaries and wages expense and supplies and maintenance expense.

Our non-GAAP costAugust of coal sales includes purchased coal costs. In the following tables, we calculate Adjusted cost of produced coal sold as non-GAAP cost of coal sales less purchased coal costs.
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Nine Months Ended September 30, 2022
(In thousands, except for per ton data)MetAll OtherConsolidated
Non-GAAP Cost of coal sales$1,251,200 $42,849 $1,294,049 
Less: cost of purchased coal sold(82,235)(37)(82,272)
Adjusted cost of produced coal sold$1,168,965 $42,812 $1,211,777 
Produced tons sold11,377 770 12,147 
Adjusted cost of produced coal sold per ton (1)
$102.75 $55.60 $99.76 
(1) Cost of produced coal sold per ton for our operations is calculated as non-GAAP cost of produced coal sold divided by produced tons sold.
Nine Months Ended September 30, 2021
(In thousands, except for per ton data)MetAll OtherConsolidated
Non-GAAP Cost of coal sales$859,983 $45,801 $905,784 
Less: cost of purchased coal sold(75,074)— (75,074)
Adjusted cost of produced coal sold$784,909 $45,801 $830,710 
Produced tons sold11,028 1,030 12,058 
Adjusted cost of produced coal sold per ton (1)
$71.17 $44.47 $68.89 
(1) Cost of produced coal sold per ton for our operations is calculated as non-GAAP cost of produced coal sold divided by produced tons sold.2023.

Adjusted EBITDA

Adjusted EBITDA is a non-GAAP financial measure that is presented as a supplemental measure and is not intended to replace financial performance or liquidity measures determined in accordance with GAAP. Moreover, this measure is not calculated identically by all companies and therefore may not be comparable to similarly titled measures used by other companies. Adjusted EBITDA is presented because management believes it is a useful indicator of the financial performance of our coal operations. The following tables present a reconciliation of net income (loss) to Adjusted EBITDA for the nine months ended September 30, 20222023 and 2021:
Nine Months Ended September 30, 2022
MetAll OtherConsolidated
Net income (loss) from continuing operations$1,417,125 $(188,856)$1,228,269 
Interest expense132 19,864 19,996 
Interest income(541)(871)(1,412)
Income tax expense— 114,073 114,073 
Depreciation, depletion and amortization81,010 2,680 83,690 
Non-cash stock compensation expense4,100 4,103 
Mark-to-market adjustment - acquisition-related obligations— 10,615 10,615 
Accretion on asset retirement obligations10,178 7,644 17,822 
Amortization of acquired intangibles, net13,182 2,856 16,038 
Adjusted EBITDA$1,521,089 $(27,895)$1,493,194 

2022:
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Nine Months Ended September 30, 2021Nine Months Ended September 30, 2023
MetAll OtherConsolidatedMetAll OtherConsolidated
Net income (loss) from continuing operations$139,354 $(106,942)$32,412 
Net income (loss)Net income (loss)$693,494 $(147,554)$545,940 
Interest expenseInterest expense132 53,158 53,290 Interest expense553 4,769 5,322 
Interest incomeInterest income(6)(316)(322)Interest income(643)(8,268)(8,911)
Income tax expenseIncome tax expense— 211 211 Income tax expense— 94,973 94,973 
Depreciation, depletion and amortizationDepreciation, depletion and amortization75,403 4,858 80,261 Depreciation, depletion and amortization92,421 1,810 94,231 
Non-cash stock compensation expenseNon-cash stock compensation expense22 4,329 4,351 Non-cash stock compensation expense69 9,609 9,678 
Mark-to-market adjustment - acquisition-related obligations— 18,009 18,009 
Accretion on asset retirement obligationsAccretion on asset retirement obligations10,170 9,800 19,970 Accretion on asset retirement obligations11,165 7,964 19,129 
Asset impairment and restructuring
— (561)(561)
Amortization of acquired intangibles, netAmortization of acquired intangibles, net9,749 (347)9,402 Amortization of acquired intangibles, net6,458 — 6,458 
Adjusted EBITDAAdjusted EBITDA$234,824 $(17,801)$217,023 Adjusted EBITDA$803,517 $(36,697)$766,820 

Nine Months Ended September 30, 2022
MetAll OtherConsolidated
Net income (loss)$1,417,125 $(189,260)$1,227,865 
Interest expense132 19,923 20,055 
Interest income(541)(871)(1,412)
Income tax expense— 113,953 113,953 
Depreciation, depletion and amortization81,010 2,680 83,690 
Non-cash stock compensation expense4,100 4,103 
Mark-to-market adjustment - acquisition-related obligations— 10,615 10,615 
Accretion on asset retirement obligations10,178 7,644 17,822 
Amortization of acquired intangibles, net13,182 2,856 16,038 
Adjusted EBITDA$1,521,089 $(28,360)$1,492,729 

The following table summarizes Adjusted EBITDA for our Met segment operations and All Other category:

Nine Months Ended September 30,Increase (Decrease)Nine Months Ended September 30,Increase (Decrease)
(In thousands)(In thousands)20222021$%(In thousands)20232022$%
Adjusted EBITDAAdjusted EBITDAAdjusted EBITDA
Met segment operationsMet segment operations$1,521,089 $234,824 $1,286,265 547.8 %Met segment operations$803,517 $1,521,089 $(717,572)(47.2)%
All Other categoryAll Other category(27,895)(17,801)(10,094)(56.7)%All Other category(36,697)(28,360)(8,337)(29.4)%
TotalTotal$1,493,194 $217,023 $1,276,171 588.0 %Total$766,820 $1,492,729 $(725,909)(48.6)%

Met segment operations. operations. Adjusted EBITDA increased $1,286.3decreased $717.6 million, or 547.8%47.2%, for the nine months ended September 30, 20222023 compared to the prior year period. The increasedecrease in Adjusted EBITDA was primarily driven by increaseddecreased coal margin.margin and lower non-GAAP coal sales realization per ton in the current period.

All Other category.Adjusted EBITDA decreased $10.1$8.3 million, or 56.7%29.4%, for the nine months ended September 30, 20222023 compared to the prior year period. The decrease in Adjusted EBITDA was primarily driven by a decrease in tons sold and decreased coal margin, partially offset by higher non-GAAP coal sales realization per ton in the current period.

Discontinued Operations
The former NAPP operations results of operations and financial position are reported as discontinued operations in the Condensed Consolidated Financial Statements. Refer to Note 2 for further information on discontinued operations. Refer to Note 16 for disclosures on the Cumberland Back-to-Back Coal Supply Agreements.

Liquidity and Capital Resources
Overview
Our primary liquidity and capital resource requirements stem from the cost of our coal production and purchases, our capital expenditures, our debt service, our reclamation obligations, taxes, our regulatory costs and settlements and associated costs. Our primary sources of liquidity are derived from sales of coal, our debt financing, and miscellaneous revenues.
We believe that cash on hand and cash generated from our operations will be sufficient to meet our working capital requirements, anticipated capital expenditures, income taxes, debt service requirements, acquisition-related obligations, and
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reclamation obligations for the next 12 months and the reasonably foreseeable future. The CompanyWe may also use cash in accordance with itsour share repurchase program and dividend program. We rely on a number of assumptions in budgeting for our future activities. These include the costs for mine development to sustain capacity of our operating mines, our cash flows from operations, effects of regulation and taxes by governmental agencies, mining technology improvements and reclamation costs. These assumptions are inherently subject to significant business, political, economic, regulatory, environmental and competitive uncertainties, pending and existing climate-related initiatives, contingencies and risks, all of which are difficult to predict and many of which are beyond our control. For example, if the new authorization process for all self-insured coal mine operators is adopted, it would substantially increase the collateral required to secure our self-insured federal black lung obligations. Refer to the DCMWC Reauthorization Process section below for more information. Increased scrutiny of ESG matters specific to the coal sector could negatively influence our ability to raise capital in the future and result in a reduced number of surety and insurance providers. We may need to raise
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additional funds if market conditions deteriorate, and we may not be able to do so in a timely fashion, on terms acceptable to us, or at all; or one or more of our assumptions prove to be incorrect or if we choose to expand our acquisition, exploration, appraisal, or development efforts or any other activity more rapidly than we presently anticipate. Additionally, we may elect to raise additional funds before we need them if the conditions for raising capital are favorable. We may seek to sell equity or debt securities or obtain additional bank credit facilities. The sale of equity securities could result in dilution to our stockholders. The incurrence of additional indebtedness could result in increased fixed obligations and additional covenants that could restrict our operations.

Liquidity

The following table summarizes our total liquidity as of September 30, 2022:2023:

(in thousands)September 30, 20222023
Cash and cash equivalents$404,430296,059 
Credit facility availability (1)
91,10294,073 
Total liquidity$495,532390,132 
(1) Comprised of our unused commitments available under the Second Amended and Restated Asset-Based Revolving Credit
Agreement (“ABL(the “ABL Agreement”), subject to limitations described therein.

Cash Collateral

We are required to provide cash collateral to secure our obligations under certain worker’sworkers’ compensation, black lung, reclamation-related obligations, financial payments and other performance obligations, and other operating agreements. Additionally, we have short-term restricted cash held in escrow related to our Contingent Revenue Obligation (refer to Note 10). Future regulatory changes relating to these obligations could result in increased obligations, additional costs, or additional collateral requirements which could require greater use of alternative sources of funding for this purpose, which would reduce our liquidity. Refer to the DCMWC Reauthorization Process section below for information related to the new authorization process for self-insured coal mine operators being implemented by the U.S. Department of Labor (Division of Coal Mine Workers’ Compensation). As of September 30, 2022,2023, we had the following cash collateral on our Condensed Consolidated Balance Sheets:

(in thousands)September 30, 20222023
Short-term and long-termLong-term restricted cash$50,52483,004 
Long-term restricted investments92,38471,269 
Short-term and long-term deposits (1)
7,9007,605 
Total cash collateral$150,808161,878 
(1) Includes $6,522$6,736 related to our dividend payable. Refer to Note 76 for additional information.

Off-Balance Sheet Arrangements

We are required to provide financial assurance in order to perform the post-mining reclamation required by our mining permits, pay workers’ compensation claims under workers’ compensation laws in various states, pay federal black lung benefits, and perform certain other obligations. In order to provide the required financial assurance, we generally use surety bonds for post-mining reclamation and workers’ compensation obligations. We also use bank letters of credit to collateralize certain obligations. As of September 30, 2022,2023, we had the following outstanding surety bonds and letters of credit:

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(in thousands)September 30, 20222023
Surety bonds$162,105175,339 
Letters of credit (1)
$63,94860,927 
(1) The letters of credit outstanding are under the Second Amended and Restated Asset-Based Revolving CreditABL Agreement dated December 6, 2021 and the Credit and Security Agreement dated June 30, 2017, and related amendments, between ANR, Inc. and First Tennessee Bank National Association.2021.

Refer to Note 16,15, part (c) for further disclosures on off-balance sheet arrangements.

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Debt Financing and Related Transactions

As ofAt September 30, 2022, we had $4.7 million of indebtedness outstanding before debt discount and issuance costs. Our indebtedness is comprised of financing leases and other financing obligations. Our Credit Agreement entered into on June 14, 2019 provided for a senior secured term loan facility with a maturity date of June 14, 2024 (the “Term Loan Credit Facility”). As of September 30, 2022, we had no outstanding borrowings under2023, the Term Loan Credit Facility as a result of voluntary prepayments of $449.4 million of outstanding principal borrowings during the first and second quarters of 2022 in our continued strategic effort to reduce our outstanding debt and strengthen our balance sheet. Effective with the final voluntary prepayment on June 3, 2022, the Credit Agreement was terminated, and we were released of all underlying obligations including the Credit Agreement covenants.

The ABL Agreement includesincluded a senior secured asset-based revolving credit facility (the “ABL Facility”). Under the ABL Facility, the Company maywe could borrow cash or obtain letters of credit, on a revolving basis, in an aggregate amount of up to $155.0 million, of which no more than $150.0 million maycould represent outstanding letters of credit ($125.0 million on a committed basis and another $25.0 million on an uncommitted cash collateralized basis) with any borrowings having a. The facility’s maturity date ofwas December 6, 2024. Availability under the ABL Facility iswas calculated on a monthly basis and fluctuatesfluctuated based on qualifying amounts of coal inventory and trade accounts receivable (the “Borrowing Base”) and the facility'sfacility’s covenant limitations related to our Fixed Charge Coverage Ratio (refer to “Analysis of Material Debt Covenants” below). In accordance with terms of the ABL Facility, we may becould have been required to cash collateralize the ABL Facility to the extent outstanding borrowings and letters of credit under the ABL Facility exceedexceeded the Borrowing Base after considering covenant limitations.

During the second quarter of 2022, in connection with our improved financial position, we received a reduction of $40.1 million in collateral requirements under the ABL Facility related to our self-insured workers compensation at certain locations in West Virginia. Additionally, during the second quarter of 2022 and as part of routine surety program review and negotiation, we received a $16.5 million reduction in surety collateral requirements under the ABL Facility, while securing multi-year visibility on surety program terms and conditions. These collateral releases increased our availability under the ABL Facility and thus our financial liquidity.

Refer to Note 98 for additional disclosures on long-term debt.debt and for subsequent event disclosures related to the refinancing of the ABL Facility.

Acquisition-Related Obligations

During the first quarter of 2023, we paid the final calculated payment pursuant to terms of the Contingent Revenue Obligation. At September 30, 2022,2023, we had $30.1$0.2 million of acquisition-related obligations outstanding. Our acquisition-related obligations are primarily comprised of the Contingent Revenue Obligation which has an offsetting short-term restricted cash amount held in escrow (referRefer to Note 10 and Note 16). During the second quarter of 2022, we paid $16.2 million pursuant to the terms of the Contingent Revenue Obligation.9 for additional disclosures on acquisition-related obligations.

Capital Requirements

Our capital expenditures for the nine months ended September 30, 20222023 were $103.4$183.8 million. We expect to spend between $160.0$250.0 million and $190.0$280.0 million on capital expenditures during 2022.2023.

Contractual Obligations

Our contractual obligations are discussed in the “Liquidity and Capital Resources—Contractual Obligations” section contained in our Annual Report on Form 10-K for the year ended December 31, 2021.

Our2022. There have been no material changes to our contractual obligations relating to the Term Loan Credit Facility were eliminated during the nine months ended September 30, 2022 due to the final voluntary prepayments we made during the period terminating our Credit Agreement. Our contractual obligations relating to the Contingent Revenue Obligation decreased during the nine months ended September 30, 2022 primarily as a result of payments made during the period, partially offset by an increase in forecasted future revenue. Our contractual obligations relating to coal purchase commitments increased during the nine months ended September 30, 2022 primarily as a result of new agreements during the period. Additionally, our contractual obligations relating to unconditional purchase obligations decreased during the nine months ended September 30, 2022 primarily as a result of expected fulfillment of commitments during the current period, partially offset by new agreements. The table below reflects these obligations as of September 30, 2022:
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(in thousands)Remainder of 20222023202420252026After 2026Total
Term Loan Credit Facility (1)
$— $— $— $— $— $— $— 
Contingent Revenue Obligation$— $30,369 $— $— $— $— $30,369 
Coal purchase commitments$65,149 $10,943 $— $— $— $— $76,092 
Unconditional purchase obligations (2)
$47,776 $28,674 $67,125 $— $— $— $143,575 
(1) On June 3, 2022, the remaining outstanding principal and interest on the Term Loan Credit Facility were eliminated and the underlying Credit Agreement was terminated.
(2) Includes transportation commitments, minimum equipment purchase commitments, and diesel fuel purchase commitments.2023.

Refer to Note 9,8, Note 10,9, and Note 1615 for additional disclosures on long-term debt, acquisition-related obligations, and other commitments, respectively.

Business Updates

On JuneAugust 3, 2022, in a significant step in further strengthening our balance sheet, we voluntarily prepaid in full the remaining outstanding principal borrowings of the Term Loan Credit Facility two years ahead of maturity.

On July 28, 2022,2023, S&P Global Ratings upgraded its issuer credit rating on the Company to B+ from B from B- followingbased on the strength of our full repayment of the Term Loan Credit Facility and amid improving credit metrics.balance sheet. The rating outlook was noted as stable. On July 21, 2022,18, 2023, Moody’s Investors Service upgraded our Corporate Family Rating to B2B1 from B3,B2, upgraded our Probability of Default Rating to B1-PD from B2-PD, from B3-PD, assigned aand affirmed our B1 rating to ouron the ABL Facility, and withdrew the B3 rating on our Term Loan Credit Facility following our full repayment.Facility. Our Speculative Grade Liquidity Rating remained unchanged at SGL-2. The rating outlook was revised to positivestable from stable. On March 30, 2022, S&P Global Ratings upgraded its issuer-level rating on our senior secured debt to B from B- amid favorable market indicators and credit metrics. The rating outlook was revised to positive from stable.positive. Should we receive any negative outlook ratings in the future, such negative outlook ratings would result in potential liquidity risks for us, including the risks of declines in our stock value, declines in our cash and cash equivalents, less availability and higher costs of additional credit, and requests for additional collateral by surety providers.

ReferWe own a 65.0% interest in Dominion Terminal Associates (“DTA”), a coal export terminal in Newport News, Virginia. DTA provides us with the ability to “Management’s Discussionfulfill a broad range of customer coal quality requirements through coal blending, while also providing storage capacity and Analysistransportation flexibility. DTA is in need of Financial Conditioncapital investment to maximize functionality and Resultsminimize downtime due to mechanical issues. Together with DTA leadership and ownership partners, we are evaluating a needs assessment and rough timeline for the recommended work. In connection with expected capital investments at DTA, we expect to spend between $40.0 million and $50.0 million on capital contributions for equity affiliates in 2024. The cash contribution range for 2024 includes both the cash needed for normal operating costs which are expected to be approximately
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$20.0 million along with the amounts expected to be spent related to the facility upgrades. Beyond our share of routine operating costs, we expect we will invest up to an incremental $25.0 million per year for information oninfrastructure and equipment upgrades at DTA over the impact of the COVID-19 pandemic on our business.next 6 years.

We continually strive to enhance our capital structure and financial flexibility and reduce cash outflows from operations. As opportunities arise, we will continue to consider the possibility of the refinancing, repayment or repurchase of any outstanding debt and amendment of our credit facility, and may consider the sale of other assets or businesses, and such other measures as we believe circumstances warrant. We may decide to pursue or not pursue these opportunities at any time. Access to additional funds from liquidity-generating transactions or other sources of external financing is subject to market conditions and certain limitations, including our credit rating and covenant restrictions in our credit facilities.

As a regular part of our business, we review opportunities for, and engage in discussions and negotiations concerning, the acquisition or disposition of coal mining and related infrastructure assets and interests in coal mining companies, and acquisitions or dispositions of, or combinations or other strategic transactions involving, companies with coal mining or other energy assets. When we believe that these opportunities are consistent with our strategic plans and our acquisition or disposition criteria, we will make bids or proposals and/or enter into letters of intent and other similar agreements. These bids or proposals, which may be binding or non-binding, are customarily subject to a variety of conditions and usually permit us to terminate the discussions and any related agreement if, among other things, we are not satisfied with the results of due diligence. Any acquisition opportunities we pursue could materially affect our liquidity and capital resources and may require us to incur indebtedness, seek equity capital or both. There can be no assurance that additional financing will be available on terms acceptable to us, or at all.

Income Taxes

During the nine months endedAs of September 30, 2022, we paid estimated2023, the Company has recorded federal and state income taxes payable of $120.2$8.6 million. Refer to Note 1312 for further disclosures related to income taxes.

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Pension Plans

We do not expect our minimum requiredto have any additional contributions to the pension plans to be $0.4 million infor the remainder of 2022.2023. Refer to Note 1413 for further disclosures related to this obligation.

Discontinued Operations

Refer to Note 2 for disclosure information on discontinued operations.

DCMWC Reauthorization Process

In July 2019, the U.S. Department of Labor (Division of Coal Mine Workers’ Compensation or “DCMWC”) began implementing a new authorization process for all self-insured coal mine operators. As requested by DCMWC, we filed an application and supporting documentation for reauthorization to self-insure certain of our black lung obligations in October 2019. As a result of this application, the DCMWC notified us in a letter dated February 21, 2020 that we were reauthorized to self-insure certain of our black lung obligations for a period of one-year from February 21, 2020. The DCMWC reauthorization is contingent, however, upon us providing collateral of $65.7 million to secure certain of our black lung obligations. This collateral requirement, which the DCMWC advises represents 70% of our estimated future liability according to the DCMWC’s estimation methodology, is an increase of approximately 2,400% from the approximately $2.6 million in collateral which we (previously by Alpha Natural Resources Inc. prior to the Merger) have provided since 2016 to secure these self-insured black lung obligations. Future liability has not previously been estimated by the DCMWC in connection with the reauthorization process but is now being considered as part of its new collateral-setting methodology.

The reauthorization process provided us with the right to appeal the security determination in writing within 30 days of the date of the notification, which appeal period the DCMWC agreed to extend to May 22, 2020, and we exercised this right of appeal. We strongly disagree with the DCMWC’s substantially higher collateral determination and the methodology through which the calculation was derived. In February 2021, the U.S. Department of Labor (“DOL”) withdrew its Federal Register notice seeking comments on its bulletin describing its new method of calculating collateral requirements. The DepartmentDOL removed the bulletin from its website in May 2021. On February 10, 2022, a telephone conference was held with DCMWC and DOL decision makers wherein we presented facts and arguments in support of our appeal. No ruling has been made on the appeal, but during the call we indicated that we would be willing to allocate an additional $10.0 million in collateral. If our appeal is unsuccessful, we may be required to provide additional letters of credit in order to receive self-insurance reauthorization from the DCMWC or insure these black lung obligations through a third partythird-party provider, which would likely also require us to provide additional collateral. EitherIn January 2023, the DOL proposed for public comment new regulations which, if adopted, would substantially increase the collateral required to secure self-insured federal black lung obligations. Under the proposed 120% minimum collateral requirement, we estimate we could be required to provide approximately $80.0 million to $100.0 million of
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collateral to secure certain of our black lung obligations. The DOL has indicated that it expects that some form of these outcomes would significantly reducenew regulations could go into effect in the fourth quarter of 2023. A significant increase in these collateral obligations could have a materially adverse effect on our liquidity.

Share Repurchase Program

Refer to Note 76 and “Unregistered Sales of Equity Securities and Use of Proceeds” for information on the share repurchase program, and the shares repurchased during the current period. Also refer to Note 18 for informationperiod, and subsequent event disclosures related to the Board’s approval by our Board of Directors (the “Board”) to increase the aggregate amount permitted to be repurchased under the share repurchase program.

Dividend Program

Refer to Note 7 and Note 186 for information related to our dividend program, including the quarterly cash dividendsdividend declared during the current period and the related subsequent event disclosures which includeson the declaration of thea quarterly cash dividend and a one-time, special dividend.during the fourth quarter.

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Cash Flows

Cash, cash equivalents, and restricted cash increased by $272.3$23.7 million and decreased by $74.6$272.3 million over the nine months ended September 30, 20222023 and 2021,2022, respectively. The net change in cash, cash equivalents, and restricted cash was attributable to the following:
Nine Months Ended September 30,Nine Months Ended September 30,
2022202120232022
Cash flows (in thousands):Cash flows (in thousands):Cash flows (in thousands):
Net cash provided by operating activitiesNet cash provided by operating activities$1,299,037 $70,573 Net cash provided by operating activities$651,806 $1,299,037 
Net cash used in investing activitiesNet cash used in investing activities(182,564)(62,302)Net cash used in investing activities(126,637)(182,564)
Net cash used in financing activitiesNet cash used in financing activities(844,133)(82,916)Net cash used in financing activities(501,500)(844,133)
Net increase (decrease) in cash and cash equivalents and restricted cash$272,340 $(74,645)
Net increase in cash and cash equivalents and restricted cashNet increase in cash and cash equivalents and restricted cash$23,669 $272,340 

Operating Activities. The increasedecrease in net cash provided by operating activities for the nine months ended September 30, 20222023 compared to the prior year period was primarily attributable to the improvement in our results from operationslower coal sale realizations as discussed above in “Results of Operations,” partially offset by changesreductions in operating assetsroyalties and liabilities, primarily attributable to an increase in our working capital. Our working capital increase was primarily driven by increases in our cash and cash equivalents and trade accounts receivable, net.taxes as a result of a lower coal pricing environment.

Investing Activities. The increasedecrease in net cash used in investing activities for the nine months ended September 30, 20222023 compared to the prior year period was primarily driven by increasesa net increase in our purchases ofcash from investment securities and capital expenditures,security activity, partially offset by an increaseincreases in the maturity of investment securities.capital expenditures and cash paid for business acquired.

Financing Activities. The increasedecrease in net cash used in financing activities for the nine months ended September 30, 20222023 compared to the prior year period was primarily driven by decreases in principal repayments of long-term debt as a result of the voluntary prepaymentspayoff of our remaining outstanding principal borrowings under the Term Loan Credit Facility in the prior year period, partially offset by increases in dividends paid and the common stock repurchases under our share repurchase program during the current period (refer to Note 7 and Note 9 for further information).related expenses.

Analysis of Material Debt Covenants

We arewere in compliance with all covenants under the ABL Agreement as of September 30, 2022.2023. A breach of the covenants in the ABL Agreement could resulthave resulted in a default under the terms of such agreement, and the respective lenders could then electhave elected to declare all amounts borrowed due and payable.

Pursuant to the ABL Agreement, during any Liquidity Period (capitalized terms as defined in the ABL Agreement), our Fixed Charge Coverage Ratio cannot becould not have been less than 1.0 as of the last day of any Test Period, commencing with the Test Period ended immediately preceding the commencement of such Liquidity Period. The Fixed Charge Coverage Ratio iswas calculated as (a) Consolidated EBITDA of the Company and its Restricted Subsidiaries for such period, minus non-financed Capital Expenditures (including Capital Expenditures financed with the proceeds of any Loans) paid or payable currently in cash by the Company or any of its Subsidiaries for such period to (b) the Fixed Charges of the Company and its Restricted Subsidiaries during such period. As of September 30, 2022,2023, we were not in a Liquidity Period.

Refer to Note 8 for subsequent event disclosures related to the refinancing of the ABL Facility.
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Critical Accounting Policies and Estimates
The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We base our estimates on historical experience and on various other factors and assumptions, including the current economic environment, that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis and adjust such estimates and assumptions as facts and circumstances require. Foreign currency and energy markets, and fluctuations in demand for steel products, have combined to increase the uncertainty inherent in such estimates and assumptions. As future events and their effects cannot be determined with precision, actual results may differ significantly from these estimates. Changes in these estimates resulting from continuing changes in the economic environment will be reflected in the financial statements in future periods.
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Our critical accounting policies are discussed in the “Critical Accounting Policies and Estimates” section contained in our Annual Report on Form 10-K for the year ended December 31, 2021.2022. Our critical accounting policies remain unchanged at September 30, 2022.2023. Refer to the Recent Accounting Guidance section in Note 1 for disclosures related to new accounting policies adopted.further information.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Commodity Price Risk

We manage our commodity price risk for coal sales through the use of coal supply agreements. Refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Factors Affecting Our Results of Operations” for information on our sales commitments for 2022.2023.
We have exposure to commodity price risk for supplies that are used directly or indirectly in the normal course of production such as diesel fuel, steel and other items such as explosives. We manage our risk for these items through strategic sourcing contracts in normal quantities with our suppliers.

The market price of diesel fuel fluctuates due to changes in production, seasonality, and other market factors generally outside of our control. Increased fuel costs may have a negative impact on our results of operations and financial condition. Based upon our 2021 diesel fuel consumption (approximately 23.0 million gallons), a 10% increase in the average annual price per gallon of diesel fuel would have increased our annual diesel fuel expense by approximately $5.4 million. As of September 30, 2022, we had2023, our forecasted diesel fuel usage and fixed price diesel fuel purchase commitments for 20222023 and 2024 are as follows:

Budgeted Usage in Gallons (1)
% PricedAverage Realized Price per Gallon
Diesel fuel24.3 million85.2 %$3.07 
(1) Includes fixed price purchase agreements covering approximately 13.1 million gallons (53.8% of expected 2022 usage).
Budgeted Diesel Fuel Usage in Gallons% PricedAverage Realized Price per Gallon
202323.9 million94.6 %$3.49 
202423.3 million42.4 %$3.46 

Interest Rate Risk

As of September 30, 2023, we maintain a senior secured asset-based revolving credit facility under which we may borrow up to $155.0 million (less amounts outstanding for letters of credit). Any cash borrowings under the facility would bear a floating rate of interest. No cash borrowings were outstanding under the facility as of September 30, 2023 or December 31, 2022. As of September 30, 2023 and December 31, 2022, we do not have anyhad $60.9 million and $61.9 million letters of credit outstanding variable rate borrowings with market risk exposure with respect to interest rates.under the facility, respectively. Refer to Note 98 for additional information. Also refer to the“Financialthe “Financial Statements and Supplementary Data—Note 14” section contained in our Annual Report on Form 10-K for the year ended December 31, 20212022 for discussion on the terms of our long-term debt.

As of September 30, 2023 and December 31, 2022, we had investments in trading securities of $71.3 million and $151.8 million respectively. While the fair value of these investments is exposed to risk with respect to changes in market rates of interest, we do not believe exposure to changes in interest rates is material to our consolidated financial statements. We manage risk by investing in shorter term highly rated debt obligations (primarily U.S. government securities). As of September 30, 2023 and December 31, 2022, the remaining maturities of our acquired debt securities was less than 12 months.

Foreign Currency Risk

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Our transactions are denominated in U.S. dollars, and, as a result, we do not have material exposure to currency exchange-rate risks. However, our coal is sold internationally in U.S. dollars and, as a result, general economic conditions in foreign markets and changes in foreign currency exchange rates may provide our foreign competitors with a competitive advantage. If our competitors’ currencies decline against the U.S. dollar or against our foreign customers’ local currencies, those competitors may be able to offer lower prices for coal to customers. Furthermore, if the currencies of our overseas customers were to significantly decline in value in comparison to the U.S. dollar, those customers may seek decreased prices for the coal we sell to them. Consequently, currency fluctuations could adversely affect the competitiveness of our coal in international markets, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer (“CEO”) and our Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosures. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In accordance with Rule 13a-15(b) of the Exchange Act, we have evaluated, under the supervision of our CEO and our CFO, the effectiveness of
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disclosure controls and procedures as of September 30, 2022.2023. Based on this evaluation, our CEO and our CFO concluded that our disclosure controls and procedures were effective as of September 30, 2022.2023.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or isare reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Disclosure Controls and Procedures

Our CEO, our CFO and other members of management do not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Part II - Other Information

Item 1. Legal Proceedings

For a description of the Company’s legal proceedings, refer to Note 16,15, part (d), to the unaudited Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, which is incorporated herein by reference.

Item 1A. Risk Factors

In addition to the other information set forth in this report, you should carefully consider the risk factor below and the factors discussed in the “Risk Factors” section contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021,2022, together with the cautionary statement under the caption “Cautionary Note Regarding Forward-Looking Statements” included elsewhere in this Quarterly Report on Form 10-Q. These described risks are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

Dividends onDisruptions in transportation services or port facilities, and increased transportation costs, could impair our common stock are only payable if declared by the Company’s Board of Directors (the “Board”)ability to supply coal to our customers, reduce demand and permitted by Delaware law.adversely affect our business.

Dividends on our common stock will be paid only if declared by the Board. The Board is not legally obligated or required to declare dividends on our common stock even if we have funds available for that purpose. In addition, even if the Board wishes to declare a dividend, we cannot make payments of cash in respect of dividends to the extent such payments are not permitted under Delaware law. If we do not declare and pay dividends on our common stock as expected, the market price of our common stock is likely to be adversely affected.

If our earnings and cash flow decline materially, we may be unable to continue to pay dividends on our common stock and/or execute our share repurchase program as intended.

Our ability to pay dividends on our common stock and repurchase shares of common stock depends upon on our earnings and cash flows. If our earnings and cash flows were to decline materially, we may be unable to continue to pay dividends in the amounts previously paid, or at all. In addition, in such a circumstance, we may be unable to execute our share repurchase program in part or as a whole.

Decreased availability or increased costs of key equipment and materials, including certain items mandated by regulations, increased commodities costs, sustained inflation or increased costs of coal that we purchase from third parties, could increase our cost of production and decrease our profitability.

We depend on reliable supplies of mining equipment, replacement parts and materials such as explosives, diesel fuel, tires, steel, magnetite and other raw materials and consumables which, in some cases, do not have ready substitutes. Some equipment and materials are needed to comply with regulations, such as proximity detection devices on continuous mining machines and
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steel. The supplier base providing mining materialsFor the nine months ended September 30, 2023 and equipment has been relatively consistentthe year ended December 31, 2022, 89% and 84% of our coal volume, respectively, was transported from our shipping points to a vessel loading point or customer location by rail. Deterioration in recent years, although there continuesthe reliability of the service provided by rail carriers because of, for example, insufficient allocation of resources to us by rail companies or a strike by railroad workers, would result in increased internal coal handling costs and decreased shipping volumes. If we were unable to find alternatives, our business would be consolidation, which has resulted in a limited numberadversely affected, possibly materially. Most of suppliers for certain types of equipment and supplies.
Any significant reduction in availability or increase in cost of any mining equipment or key supplies could adversely affect our operations and increase our costs,are serviced by a single rail carrier. Due to the difficulty in arranging alternative transportation, these operations are particularly at risk of disruptions, capacity issues or other difficulties with that carrier’s transportation services, which could adversely and materially affect our operating resultsrevenues and cash flows. Diesel fuel supply, in particular, is unusually limited at present due to the current global economy, and a sustained or worsened shortage of diesel fuel could negatively and materially impact our results of operations.

In addition,Further, we depend significantly upon the pricesreliable operation of the Dominion Terminal Associates (“DTA”) coal export terminal in Newport News, Virginia. DTA, in which we pay for materials are strongly influenced byhold a 65.0% ownership interest, provides us with the global commodities markets. Coal mines consume large quantitiesability to fulfill a broad range of these commodities, such as steel, copper, rubber products, explosivescustomer coal quality requirements through coal blending, while also providing storage capacity and dieseltransportation flexibility. Any significant disruption in DTA’s functions and other liquid fuels. A rapid or significant increase in the cost of these commodities would increaseoperations could adversely and materially affect our mining costs. Diesel fuel, for example, is one of our largest variable costs,revenues and any increase in the price we pay for diesel fuel has a negative impact on our results of operations. Further, 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 will increase, which could materially adversely impact our profitability.

The U.S. and global economies have recently experienced high levels of inflation. If inflation were to remain at high levels for an extended period, or increase further, a related increase in our input costs could materially adversely affect our profitability.

We purchasealso depend upon trucks, barges and ocean vessels to deliver coal to our customers. In addition, much of our coal is transported from our mines to our loading facilities by trucks owned and operated by third parties,parties. Disruption of any of these transportation services due to weather-related problems, mechanical difficulties, fuel and supply costs, strikes, lockouts, bottlenecks, terrorist attacks or other events could impair our ability to supply coal to our customers, resulting in decreased shipments and revenue. Disruption in shipment levels over long periods of time could cause our customers to look to other sources for use intheir coal blendingneeds, negatively affecting our revenues and for other purposes, for which ready substitutes may not be immediately available. A significant reduction in availability orresults of operations.

An increase in cost of these supplies,transportation costs could have an adverse effect on our ability to increase or the failure of third party coal producers to provide them inmaintain production on a timely fashion,profit-making basis and could therefore adversely affect our operationsrevenues and increaseearnings. Because transportation costs represent a significant portion of the total cost of coal for our customers, increases in transportation costs which could adversely affectalso reduce overall demand for coal or make our operating results and cash flows.coal production less competitive than coal produced from other sources or other regions.

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

Dividend Policy

OnPursuant to the dividend policy adopted by the Board on May 3, 2022, the Company’s Board adopted a dividend policy. Pursuant to this policy, the Board initially intended to pay aggregatedeclared quarterly cash dividends of $1.50$0.44, $0.50, and $0.50 per share ofon the Company’s common stock per year, with $0.375 per share paid each quarter. On August 4, 2022during the Company’s Board increased the quarterly dividend amount to $0.392 per share. Refer to Note 18 for subsequent event disclosures related to the Company’s dividend program.three months ended March 31, 2023, June 30, 2023, and September 30, 2023, respectively. The holders of the Company’s common stock are entitled to receive such dividends, if any, when they are declared by the Board. On August 2, 2023, the Board determined to end the Company’s Board. Futurefixed dividend program following the quarterly dividend declared and to be paid in the fourth quarter of 2023. The decision to declare and pay cash dividends are subject to declarationwill be made by the Company’s Board and will depend on Alpha’s futurethe Company’s earnings, and financial condition and other relevant factors. Refer to Note 76 for further information related to the Company’s dividend program.

Repurchase of Common Stock

The following table summarizes information about shares of common stock that were repurchased during the third quarter of 2022.2023. 
Total Number of Shares Purchased (1)
Average Price Paid per Share
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (In thousands) (2),(3),(4)
July 1, 2022 through July 31, 2022433,470 $127.27 429,180 $420,147 
August 1, 2022 through August 31, 2022534,848 $147.22 534,848 $341,407 
September 1, 2022 through September 30, 2022458,099 $137.39 458,099 $278,471 
1,426,417 1,422,127 
Total Number of Shares PurchasedAverage Price Paid per Share
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (In thousands) (1)(2)(3)
July 1, 2023 through July 31, 2023257,614 $162.93 257,614 $416,422 
August 1, 2023 through August 31, 2023173,015 $184.93 173,015 $384,427 
September 1, 2023 through September 30, 2023114,412 $235.78 114,412 $357,451 
545,041 545,041 
(1) Includes 4,290On February 21, 2023, the Board approved an increase to the existing common shares repurchased from employees to satisfyshare repurchase program that the employees’ statutory tax withholdings upon the vesting of stock grants. Shares that are repurchased to satisfy the employees’ statutory tax withholdings are recorded in treasury stock at cost.
(2) OnBoard adopted on March 4, 2022, bringing the total authorization to repurchase the Company’s Board adopted a share repurchase program with no expiration date that permitted the Companystock to repurchase up to an aggregate amount of $150 million of the Company's common stock. On May 3, 2022, the Company’s Board amended the share repurchase program to increase the aggregate amount the Company is permitted to repurchase to $600 million of the Company's common stock.$1.2 billion. Refer to Notes 7 and 18Note 6 for additional information and subsequent event disclosures.information.
(3)(2) The Company adopted a capital return program in 2019, including a stock repurchase plan with no expiration date that permitted the Company to repurchase up to an aggregate amount of $100 million of the Company's common stock. The Company suspended this stock repurchase plan on October 1, 2019 and does not currently intend to make further repurchases under it.
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(4)(3) We cannot estimate the number of shares that will be repurchased because decisions to purchase are subject to market and business conditions, levels of available liquidity, our cash needs, restrictions under agreements or obligations, legal or regulatory requirements or restrictions, and other relevant factors. This amount does not include $97 thousand of stock repurchase related fees.fees and excise taxes.

Refer to Note 76 for information about repurchases related to warrants during the current quarter.

Item 4. Mine Safety Disclosures

Information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in Exhibit 95 to this Quarterly Report on Form 10-Q.

Item 5. Other Information

(a) On October 27, 2023, the Company entered into a Credit Agreement by and among the Company and certain of its subsidiaries, as borrowers, guarantors party thereto, Regions Capital Markets, a division of Regions Bank, as book runner and lead arranger, ServisFirst Bank and Texas Capital Bank, as joint book runners and joint lead arrangers, other lenders from time to time party thereto, and Regions Bank, as administrative agent, collateral agent, swingline lender and letter of credit issuer (the “New ABL Facility”).

The New ABL Facility provides for a $155 million senior secured asset-based revolving loan facility that matures on October 27, 2027 (subject to any intervening maturity date, as described in the New ABL Facility). The New ABL Facility also (i) contains a letter of credit sub-facility with $155 million committed availability for letters of credit and another $25 million uncommitted on a cash collateralized basis and (ii) provides the Borrowers with the right to seek additional credit under the agreement in an aggregate amount of up to $75 million, subject to certain specified conditions.

Borrowings under the New ABL Facility will bear interest at a rate per annum, at the option of the Company, at either (i) Term SOFR (as defined in the New ABL Facility) plus 3.0% and an additional 0.10% adjustment and (ii) the Base Rate (as defined in the New ABL Facility) plus 2.0%. The New ABL Facility also provides for the payment of additional fees, including an upfront fee, a 0.375% commitment fee, and a 0.25% per annum fronting fee on the face amount of each letter of credit, and other fees set forth therein. The New ABL Facility replaces the Company’s Second Amended and Restated Asset-Based Revolving Credit Agreement dated as December 6, 2021 (as amended, modified or supplemented), among the Company, the Borrowers and Guarantors party thereto, the lenders and letter of credit issuers from time to time party thereto and Citibank, N.A., as administrative agent and collateral agent.

The terms of the New ABL Facility include customary representations and warranties, affirmative and negative covenants and events of default. The New ABL Facility is guaranteed by substantially all of the Company’s direct and indirect subsidiaries (together with the Company, the “Loan Parties”) and secured by all or substantially all of the assets of the Loan Parties, including equity in the Loan Parties’ domestic subsidiaries, as collateral for the obligations under the New ABL Facility

The above summary of the New ABL Facility is not a complete description thereof and is qualified in its entirety by the full text of the agreements filed as Exhibits 10.1 and 10.2 and incorporated herein by reference.

On October 31, 2023, the compensation committee of the Board increased the base salary of Mr. Munsey, the Company's chief financial officer, to $500,000 per year, effective as of November 6, 2023.

(b) None.

(c) Trading Plans

During the quarter ended September 30, 2023, no director or officer adopted or terminated:

(i)    Any contract, instruction or written plan for the purchase or sale of securities of the Company intended to satisfy the affirmative defense conditions of Rule 10b5-1(c); or

(ii)    Any “non-Rule 10b5-1 trading arrangement” as defined in paragraph (c) of item 408(a) of Regulation S-K.


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Item 6. Exhibits

Refer to the Exhibit Index following the signature page to this Quarterly Report on Form 10-Q.
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SIGNATURES
 
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 ALPHA METALLURGICAL RESOURCES, INC.
Date: November 7, 20222, 2023By:/s/ J. Todd Munsey
 Name:J. Todd Munsey
 Title:Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)

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Exhibit Index
Exhibit No.Description of Exhibit
3.1
3.2
10.1
10.2
31*
32**
95*
101*
The following financial information from Alpha Metallurgical Resources, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 20222023 formatted in Inline XBRL (Extensible Business Reporting Language) includes: (i) Condensed Consolidated Statements of Operations, (ii) Condensed Consolidated Statements of Comprehensive Income, (iii) Condensed Consolidated Balance Sheets, (iv) Condensed Consolidated Statements of Cash Flows, (v) Condensed Consolidated Statements of Stockholders’ Equity, and (vi) Notes to the Condensed Consolidated Financial Statements.
104*Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Filed herewith
** Furnished herewith
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