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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, 2024

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 No.)
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)

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

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 filer☒Accelerated filer☐
Non-accelerated filer☐Smaller 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

Number of shares of the registrant’s Common Stock, $0.01 par value per share, outstanding as of October 31, 2024: 13,016,010





TABLE OF CONTENTS
3
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:

•depressed levels or declines in coal prices;
•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;
•worldwide market demand for coal and steel, including demand for U.S. coal exports, and competition in coal markets;
•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;
•steel and coke producers switching to alternative energy sources such as natural gas, renewables and coal from basins where we do not operate;
•our ability to obtain or renew surety bonds on acceptable terms or maintain our current bonding status;
•attracting and retaining key personnel and other employee workforce factors, such as labor relations;
•our ability to self-insure certain of our black lung obligations without a significant increase in required collateral;
•our ability to meet collateral requirements for, and fund, employee benefit obligations;
•our costs of complying with health and safety regulations, including but not limited to MSHA’s silica regulations;
•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;
•the imposition or continuation of barriers to trade, such as tariffs;
•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, the environmental impacts of coal combustion or other factors;
•our ability to execute our share repurchase program;
•failures in performance, or non-performance, of services by third-party contractors, including contract mining and reclamation contractors;
•cybersecurity attacks or failures, threats to physical security, extreme weather conditions or other natural disasters;
•increased volatility and uncertainty regarding worldwide markets, seaborne transportation and our customers as a result of developments in and around Ukraine and the Middle East;
•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;
•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 as we may incur it from time to time;
•reclamation and mine closure obligations;
•our assumptions concerning economically recoverable coal reserve estimates; and
4
•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 in our Annual Report on Form 10-K for the year ended December 31, 2023.

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.
5
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,
 2024202320242023
Revenues:   
Coal revenues$669,783 $738,998 $2,331,196 $2,499,503 
Other revenues2,114 2,822 8,742 11,923 
Total revenues671,897 741,820 2,339,938 2,511,426 
Costs and expenses:    
Cost of coal sales (exclusive of items shown separately below)598,725 564,608 1,910,847 1,687,259 
Depreciation, depletion and amortization42,414 32,582 126,495 94,231 
Accretion on asset retirement obligations6,326 6,376 18,726 19,129 
Amortization of acquired intangibles, net1,675 2,069 5,025 6,458 
Selling, general and administrative expenses (exclusive of depreciation, depletion and amortization shown separately above)15,987 18,053 57,169 56,251 
Other operating loss (income)1,461 973 3,813 (1,665)
Total costs and expenses666,588 624,661 2,122,075 1,861,663 
Income from operations5,309 117,159 217,863 649,763 
Other (expense) income:    
Interest expense(1,041)(1,746)(3,228)(5,322)
Interest income5,145 4,639 13,256 8,911 
Equity loss in affiliates(7,011)(6,660)(14,568)(11,582)
Miscellaneous expense, net(2,685)(614)(8,259)(857)
Total other expense, net(5,592)(4,381)(12,799)(8,850)
(Loss) income before income taxes(283)112,778 205,064 640,913 
Income tax benefit (expense)4,087 (18,964)(15,356)(94,973)
Net income$3,804 $93,814 $189,708 $545,940 
Basic income per common share$0.29 $6.88 $14.58 $37.87 
Diluted income per common share$0.29 $6.65 $14.43 $36.46 
Weighted average shares – basic
13,017,820 13,633,640 13,011,234 14,416,289 
Weighted average shares – diluted
13,092,019 14,110,488 13,146,566 14,973,168 

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,
2024202320242023
Net income$3,804 $93,814 $189,708 $545,940 
Other comprehensive income (loss), net of tax:
Employee benefit plans:
Amortization of and adjustments to employee benefit costs308 (581)(9,630)(5,373)
Income tax (expense) benefit(68)129 2,137 1,192 
Total other comprehensive income (loss), net of tax240 (452)(7,493)(4,181)
Total comprehensive income$4,044 $93,362 $182,215 $541,759 
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, 2024December 31, 2023
Assets  
Current assets:  
Cash and cash equivalents$484,560 $268,207 
Trade accounts receivable, net of allowance for credit losses of $1,287 and $234 as of September 30, 2024 and December 31, 2023, respectively
375,869 509,682 
Inventories, net200,108 231,344 
Prepaid expenses and other current assets32,427 39,064 
Total current assets1,092,964 1,048,297 
Property, plant, and equipment, net of accumulated depreciation and amortization of $647,259 and $558,905 as of September 30, 2024 and December 31, 2023, respectively
620,929 588,992 
Owned and leased mineral rights, net of accumulated depletion and amortization of $120,206 and $99,826 as of September 30, 2024 and December 31, 2023, respectively
441,708 451,160 
Other acquired intangibles, net of accumulated amortization of $43,568 and $38,543 as of September 30, 2024 and December 31, 2023, respectively
41,554 46,579 
Long-term restricted investments42,512 40,597 
Long-term restricted cash121,077 115,918 
Deferred income taxes8,857 8,028 
Other non-current assets109,818 106,486 
Total assets$2,479,419 $2,406,057 
Liabilities and Stockholders’ Equity  
Current liabilities:  
Current portion of long-term debt$3,101 $3,582 
Trade accounts payable111,448 128,836 
Accrued expenses and other current liabilities190,085 177,512 
Total current liabilities304,634 309,930 
Long-term debt3,582 6,792 
Workers’ compensation and black lung obligations182,062 189,226 
Pension obligations104,610 101,908 
Asset retirement obligations170,643 166,509 
Deferred income taxes41,088 39,142 
Other non-current liabilities22,173 18,622 
Total liabilities828,792 832,129 
Commitments and Contingencies (Note 14)
Stockholders’ Equity
Preferred stock - par value $0.01, 5,000,000 shares authorized, none issued
— — 
Common stock - par value $0.01, 50,000,000 shares authorized, 22,382,945 issued and 13,016,010 outstanding at September 30, 2024 and 22,058,135 issued and 12,938,679 outstanding at December 31, 2023
224 221 
Additional paid-in capital836,803 834,482 
Accumulated other comprehensive loss(48,080)(40,587)
Treasury stock, at cost: 9,366,935 shares at September 30, 2024 and 9,119,456 shares at December 31, 2023
(1,296,916)(1,189,715)
Retained earnings 2,158,596 1,969,527 
Total stockholders’ equity1,650,627 1,573,928 
Total liabilities and stockholders’ equity$2,479,419 $2,406,057 
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,
20242023
Operating activities:
Net income$189,708 $545,940 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization126,495 94,231 
Amortization of acquired intangibles, net5,025 6,458 
Amortization of debt issuance costs and accretion of debt discount839 1,585 
Loss (gain) on disposal of assets31 (6,089)
Accretion on asset retirement obligations18,726 19,129 
Employee benefit plans, net15,123 9,989 
Deferred income taxes3,254 27,898 
Stock-based compensation9,317 9,678 
Equity loss in affiliates14,568 11,582 
Other, net(97)(123)
Changes in operating assets and liabilities140,672 (68,472)
Net cash provided by operating activities523,661 651,806 
Investing activities:
Capital expenditures(156,167)(183,836)
Proceeds on disposal of assets763 7,855 
Cash paid for business acquired— (11,919)
Purchases of investment securities(37,015)(166,515)
Sales and maturities of investment securities36,529 249,598 
Capital contributions to equity affiliates(22,865)(21,844)
Other, net24 24 
Net cash used in investing activities(178,731)(126,637)
Financing activities:
Principal repayments of long-term debt(1,748)(1,686)
Dividend and dividend equivalents paid(3,077)(99,731)
Common stock repurchases and related expenses(117,648)(403,385)
Other, net(945)3,302 
Net cash used in financing activities(123,418)(501,500)
Net increase in cash and cash equivalents and restricted cash221,512 23,669 
Cash and cash equivalents and restricted cash at beginning of period384,125 355,394 
Cash and cash equivalents and restricted cash at end of period$605,637 $379,063 
Supplemental disclosure of noncash investing and financing activities:
Financing leases and capital financing - equipment$1 $2,059 
Accrued capital expenditures$6,845 $11,618 
Accrued common stock repurchases and stock repurchase excise tax$4,652 $6,275 
Accrued dividend payable$424 $9,418 
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.
9
As of September 30,
 20242023
Cash and cash equivalents$484,560 $296,059 
Long-term restricted cash121,077 83,004 
Total cash and cash equivalents and restricted cash shown in the Condensed Consolidated Statements of Cash Flows$605,637 $379,063 

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 (Loss) IncomeTreasury Stock at CostRetained EarningsTotal Stockholders’ Equity
Balances, December 31, 2022$217 $815,442 $(12,162)$(649,061)$1,275,319 $1,429,755 
Net income— — — — 270,771 270,771 
Other comprehensive loss, net— — (488)— — (488)
Stock-based compensation, issuance of common stock for share vesting, and common stock reissuances1 (3,444)— 6,477 — 3,034 
Common stock repurchases and related expenses— — — (148,973)— (148,973)
Warrants exercises— 1,301 — — — 1,301 
Cash dividend and dividend equivalents declared ($0.44 per share)
— — — — (6,825)(6,825)
Balances, March 31, 2023$218 $813,299 $(12,650)$(791,557)$1,539,265 $1,548,575 
Net income— — — — 181,355 181,355 
Other comprehensive loss, net— — (3,241)— — (3,241)
Stock-based compensation and issuance of common stock for share vesting1 3,644 — — — 3,645 
Common stock repurchases and related expenses— — — (157,645)— (157,645)
Warrants exercises— 1,278 — — — 1,278 
Cash dividend and dividend equivalents declared ($0.50 per share)
— — — — (7,233)(7,233)
Balances, June 30, 2023$219 $818,221 $(15,891)$(949,202)$1,713,387 $1,566,734 
Net income— — — — 93,814 93,814 
Other comprehensive loss, net— — (452)— — (452)
Stock-based compensation and common stock reissuances1 2,587 — 411 — 2,999 
Exercise of stock options— 225 — — — 225 
Common stock repurchases and related expenses— — — (102,394)— (102,394)
Warrants exercises— 4,110 — — — 4,110 
Cash dividend and dividend equivalents declared ($0.50 per share)
— — — — (6,963)(6,963)
Balances, September 30, 2023$220 $825,143 $(16,343)$(1,051,185)$1,800,238 $1,558,073 
Balances, December 31, 2023$221 $834,482 $(40,587)$(1,189,715)$1,969,527 $1,573,928 
Net income— — — — 126,995 126,995 
Other comprehensive income, net— — 750 — — 750 
Stock-based compensation, issuance of common stock for share vesting, and common stock reissuances3 (3,946)— 6,712 — 2,769 
Common stock repurchases and related expenses— — — (112,636)— (112,636)
Dividend equivalents— — — — (662)(662)
Balances, March 31, 2024$224 $830,536 $(39,837)$(1,295,639)$2,095,860 $1,591,144 
Net income— — — — 58,909 58,909 
Other comprehensive loss, net— — (8,483)— — (8,483)
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Stock-based compensation, issuance of common stock for share vesting, and common stock reissuances— 3,254 — 281 — 3,535 
Common stock repurchases and related expenses— — — (1,558)— (1,558)
Dividend equivalents— — — — 23 23 
Balances, June 30, 2024$224 $833,790 $(48,320)$(1,296,916)$2,154,792 $1,643,570 
Net income— — — — 3,804 3,804 
Other comprehensive income, net— — 240 — — 240 
Stock-based compensation— 3,013 — — — 3,013 
Balances, September 30, 2024$224 $836,803 $(48,080)$(1,296,916)$2,158,596 $1,650,627 
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 is a Tennessee-based mining company with operations in 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 Condensed Consolidated Financial Statements include all wholly-owned subsidiaries’ results of operations for the three and nine months ended September 30, 2024 and 2023. 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, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024 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, 2023.

Reclassifications

For comparability purposes, certain immaterial segment information for the three and nine months ended September 30, 2023 in the notes to the Condensed Consolidated Financials Statements has been recast to conform to the current year presentation. Refer to Note 15.

Recent Accounting Guidance

Refer to the Recent Accounting Guidance section of Note 2 contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

(2) Revenue

Disaggregation of Revenue from Contracts with Customers

The Company earns revenues primarily through the sale of coal produced by 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.

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-term contracts with pricing determined at the time of shipment or based on a market index, whereas domestic revenue is characterized by contracts that typically have a term of one year or longer and with fixed pricing terms. The following tables disaggregate the
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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)
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,
2024202320242023
Export met coal revenues$501,173 $485,955 $1,808,088 $1,714,215 
Export thermal coal revenues11,731 28,642 52,977 95,085 
Total export coal revenues$512,904 $514,597 $1,861,065 $1,809,300 
Domestic met coal revenues$149,653 $213,389 $448,763 $649,094 
Domestic thermal coal revenues7,226 11,012 21,368 41,109 
Total domestic coal revenues$156,879 $224,401 $470,131 $690,203 
Total met coal revenues$650,826 $699,344 $2,256,851 $2,363,309 
Total thermal coal revenues18,957 39,654 74,345 136,194 
Total coal revenues$669,783 $738,998 $2,331,196 $2,499,503 

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, 2024:
Remainder of 20242025202620272028Total
Estimated coal revenues (1)
$22,033 $4,590 $12,000 $— $— $38,623 
(1) Amounts only include estimated coal revenues associated with customer contracts with fixed pricing and original expected duration of more than one year. Refer to Note 3 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

(3) Accumulated Other Comprehensive Loss
The following tables summarize the changes to accumulated other comprehensive loss during the nine months ended September 30, 2024 and 2023:
Balance January 1, 2024
Other comprehensive loss before reclassifications
Amounts reclassified from accumulated other comprehensive loss
Balance September 30, 2024
Employee benefit costs$(40,587)$(10,079)$2,586 $(48,080)

Balance January 1, 2023
Other comprehensive loss before reclassifications
Amounts reclassified from accumulated other comprehensive loss
Balance September 30, 2023
Employee benefit costs$(12,162)$(2,825)$(1,356)$(16,343)

The following table summarizes the amounts reclassified from accumulated other comprehensive loss and the Condensed Consolidated Statements of Operations line items affected by reclassification during the three and nine months ended September 30, 2024 and 2023:
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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,
2024202320242023
Employee benefit costs:
Amortization of net actuarial loss (gain) (1)
$1,127 $(581)$3,323 $(1,743)Miscellaneous expense, net
Income tax (expense) benefit(250)129 (737)387 Income tax benefit (expense)
Total, net of income tax$877 $(452)$2,586 $(1,356)
(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 12.

(4) Net Income Per Share
The number of shares of common stock 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 of common stock 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 effect of potentially dilutive securities outstanding during the period, which is determined by the application of the treasury stock method. 

When applying the treasury stock method, anti-dilution generally occurs when the exercise prices or unrecognized compensation cost per share of common stock are higher than the Company’s average price per share of common stock during an applicable period. For the three and nine months ended September 30, 2024, 24,894 and 12,727 securities, 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, 2023, 0 and 1,240 securities, respectively, were excluded from the computation of dilutive net income per common share because they would have been anti-dilutive.

The following table presents the net income per common share for the three and nine months ended September 30, 2024 and 2023:

Three Months Ended September 30, Nine Months Ended September 30,
2024202320242023
Basic
Net income$3,804 $93,814 $189,708 $545,940 
Weighted average common shares outstanding - basic13,017,820 13,633,640 13,011,234 14,416,289 
Net income per common share - basic$0.29 $6.88 $14.58 $37.87 
Diluted
Weighted average common shares outstanding - basic13,017,820 13,633,640 13,011,234 14,416,289 
Dilutive effect of warrants— 31,667 — 108,469 
Dilutive effect of stock options— 1,666 — 1,866 
Dilutive effect of other stock-based instruments74,199 443,515 135,332 446,544 
Weighted average common shares outstanding - diluted13,092,019 14,110,488 13,146,566 14,973,168 
Net income per common share - diluted$0.29 $6.65 $14.43 $36.46 

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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)
(5) Inventories, net
Inventories, net consisted of the following: 
 September 30, 2024December 31, 2023
Raw coal$36,350 $52,508 
Saleable coal99,158 120,000 
Materials, supplies and other, net
64,600 58,836 
Total inventories, net$200,108 $231,344 

(6) Capital Stock

Share Repurchase Program

The total authorization to repurchase the Company’s stock under the existing common share repurchase program adopted by the Company’s Board of Directors on March 4, 2022 is $1,500,000. As of September 30, 2024, the Company had repurchased an aggregate of 6,630,535 shares under the plan for an aggregate purchase price of approximately $1,098,916 (comprised of $1,098,717 of share repurchases and $199 of related fees). The Company has also accrued a stock repurchase excise tax of $4,652 related to the share repurchase program as of September 30, 2024, which is recorded in treasury stock at cost.

(7) Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following: 
September 30, 2024December 31, 2023
Wages and benefits$68,257 $62,811 
Workers’ compensation10,467 10,482 
Black lung10,687 10,687 
Taxes other than income taxes29,188 31,236 
Asset retirement obligations43,817 38,915 
Dividend payable334 2,342 
Freight accrual12,151 8,461 
Other15,184 12,578 
Total accrued expenses and other current liabilities$190,085 $177,512 

(8) Long-Term Debt
Long-term debt consisted of the following: 
 September 30, 2024December 31, 2023
Notes payable and other$2,353 $5,097 
Financing leases4,330 5,277 
Total long-term debt6,683 10,374 
Less current portion(3,101)(3,582)
Long-term debt, net of current portion$3,582 $6,792 

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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)
ABL Agreement

On October 27, 2023, the Company, along with certain of its directly and indirectly owned subsidiaries (the “Borrowers”), entered into a credit agreement (the “ABL Agreement”) with Regions Bank, as lender, swingline lender, letter of credit (“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 ABL Agreement includes an asset-based revolving credit facility (the “ABL Facility”) which allows the Company to borrow cash or obtain LCs, on a revolving basis, in an aggregate amount of up to $155,000. Availability under the ABL Facility is calculated monthly and fluctuates based on qualifying amounts of coal inventory, trade accounts receivable, and in certain circumstances specified amounts of cash. The ABL Facility matures on October 27, 2027. As of September 30, 2024 and December 31, 2023, the Company had no amounts borrowed and $57,537 and $60,896 LCs outstanding under the ABL Facility, respectively.

The ABL Agreement contains negative and affirmative covenants and requires the Company to maintain minimum Liquidity, as defined in the ABL Agreement, of $75,000. The Company is in compliance with all covenants under the ABL Agreement as of September 30, 2024.

(9) Asset Retirement Obligations

The following table summarizes the changes in asset retirement obligations for the nine months ended September 30, 2024:
Total asset retirement obligations at December 31, 2023$205,424 
Accretion for the period18,726 
Sites added during the period5,381 
Revisions in estimated cash flows (1)
6,445 
Expenditures for the period(21,516)
Total asset retirement obligations at September 30, 2024214,460 
Less current portion (2)
(43,817)
Long-term portion$170,643 
(1) The revisions in estimated cash flows resulted primarily from changes in mine plans and reclamation timing.
(2) Included within Accrued expenses and other current liabilities on the Company’s Condensed Consolidated Balance Sheets. Refer to Note 7.

(10) 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, restricted cash, deposits, trade accounts payable, notes payable and other, financing leases, and accrued expenses and other current liabilities approximate fair value as of September 30, 2024 and December 31, 2023 due to the short maturity of these instruments.
The following tables set 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, 2024 and December 31, 2023. 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.

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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)
 September 30, 2024
Total Fair ValueQuoted Prices in Active Markets (Level 1)Significant Other Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)
Trading securities$42,512 $— $42,512 $— 

 December 31, 2023
Total Fair ValueQuoted Prices in Active Markets (Level 1)Significant Other Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)
Trading securities$40,597 $— $40,597 $— 

The following methods and assumptions were used to estimate the fair values of the assets and liabilities in the tables above:

Level 2 Fair Value Measurements

Trading Securities - Typically includes U.S. government securities. The fair values 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.

(11) Income Taxes

For the nine months ended September 30, 2024, the Company recorded income tax expense of $15,356 on income before income taxes of $205,064. The income tax expense differs from the expected statutory amount primarily due to the permanent impact of stock compensation and percentage depletion, partially offset by the impact of non-deductible compensation. 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.

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

The following table details the components of the net periodic benefit cost for pension obligations:
Three Months Ended September 30, Nine Months Ended September 30,
2024202320242023
Interest cost$5,939 $5,993 $17,754 $17,979 
Expected return on plan assets(5,230)(5,499)(15,685)(16,497)
Amortization of net actuarial loss 459 183 1,323 548 
Net periodic benefit cost$1,168 $677 $3,392 $2,030 

During the nine months ended September 30, 2024, an annual census data actuarial revaluation of pension obligations was performed, which resulted in an increase in the liability for pension obligations of approximately $12,953 with the offset to accumulated other comprehensive loss and an increase in net periodic benefit cost to be recognized subsequent to the
18
ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited, amounts in thousands except share and per share data)
revaluation date. An annual census data actuarial revaluation of pension obligations was also performed during the nine months ended September 30, 2023, which resulted in an increase in the liability for pension obligations of approximately $3,630 with the offset to accumulated other comprehensive loss and a slight increase in net periodic benefit cost to be recognized subsequent to the revaluation date.
The expected long-term rate of return on assets of the pension plan is utilized for the determination of the net periodic benefit cost. During the three months ended June 30, 2024, the Company updated the expected long-term rate of return on plan assets from 6.20% to 5.70% based on a weighted basis of the beginning and more recently assumed rate as the pension plan’s target allocation was updated to 50% equity securities and 50% fixed income funds in the interim period.

The Company paid $12,320 in minimum required contributions to the pension plan in 2024.

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,
2024202320242023
Service cost$601 $512 $1,803 $1,538 
Interest cost1,307 1,165 3,921 3,495 
Expected return on plan assets(13)(12)(39)(38)
Amortization of net actuarial loss (gain)721 (708)2,163 (2,124)
Net periodic benefit cost$2,616 $957 $7,848 $2,871 

Defined Contribution and Profit Sharing Plans

The Company sponsors defined contribution plans to assist its eligible employees in providing for retirement. The Company’s total contributions to these plans for the three months ended September 30, 2024 and 2023 were $136 and $3,489, respectively. The Company’s total contributions to the plan for the nine months ended September 30, 2024 and 2023 were $6,268 and $11,856, respectively.

During the three months ended June 30, 2024, the Company’s matching contributions under the Alpha Metallurgical Resources 401(k) Retirement Savings Plan were suspended due to weak market conditions.

Self-insured Medical Plan

The Company is self-insured for health benefit coverage for all of its active employees. During the three months ended September 30, 2024 and 2023 the Company incurred total expenses of $27,885 and $22,040, respectively. and during the nine months ended September 30, 2024 and 2023 the Company incurred total expenses of $73,438 and $61,866, respectively, which primarily include claims processed and an estimate for claims incurred but not paid.

(13) Related Party Transactions
There were no material related party transactions for the nine months ended September 30, 2024 or 2023.

(14) Commitments and Contingencies
(a) General
Estimated losses from loss contingencies are accrued by a charge to income when 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.
19
ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited, amounts in thousands except share and per share data)
(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.

Coal royalty expense was $31,087 and $39,284 for the three months ended September 30, 2024 and 2023, respectively. Coal royalty expense was $112,319 and $136,308 for the nine months ended September 30, 2024 and 2023, respectively.

Other Commitments

Under the terms of its partnership related agreements with respect to its investment in Dominion Terminal Associates (“DTA”), the Company is required to fund its proportionate share of DTA’s ongoing operating and capital costs. In November 2023, the Company, together with DTA management announced that DTA needs additional capital investment to maximize functionality and minimize downtime due to mechanical issues. Beyond the Company’s share of routine operating costs, it expects to invest an average of approximately $28,000 per year for infrastructure and equipment upgrades at DTA over the next 5 years. In addition, to mitigate the risk of shipment delays during the upgrade period, in April 2024, the Company entered into a 3-year agreement which allows for the loading of 1,200 to 2,000 tons of coal annually at a third party terminal in Newport News, VA. The uses of the Company’s 2024 funding of DTA include routine operating and capital costs and infrastructure and equipment upgrades.

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.
(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 LCs, 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 LCs to collateralize certain obligations and commitments.

As of September 30, 2024, the Company had $57,537 LCs outstanding under the ABL Facility.

As of September 30, 2024, the Company had outstanding surety bonds with a total face amount of $180,944 to secure various obligations and commitments. To secure the Company’s reclamation-related obligations, the Company has $34,793 of collateral in the form of restricted cash and restricted investments supporting these obligations as of September 30, 2024.

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 Company’s surety bond providers require additional collateral, the Company would seek to secure its obligations with LCs,
20
ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited, amounts in thousands except share and per share data)
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 bonds.

Amounts included in restricted cash provide collateral to secure the following obligations:
 September 30, 2024December 31, 2023
Workers’ compensation and black lung obligations$111,519 $104,998 
Reclamation-related obligations1,023 685 
Financial payments and other performance obligations8,535 10,235 
Total restricted cash$121,077 $115,918 

Amounts included in restricted investments provide collateral to secure the following obligations:
 September 30, 2024December 31, 2023
Workers’ compensation obligations$3,288 $2,514 
Reclamation-related obligations33,770 33,173 
Financial payments and other performance obligations5,454 4,910 
Total restricted investments (1)
$42,512 $40,597 
(1) Classified as long-term trading securities as of September 30, 2024 and December 31, 2023.

Amounts included in deposits provide collateral to secure the following obligations:
 September 30, 2024December 31, 2023
Workers’ compensation obligations$4,108 $4,500 
Financial payments and other performance obligations— 32 
Other operating agreements847 850 
Total deposits 4,955 5,382 
Less current portion — (32)
Total deposits, net of current portion (1)
$4,955 $5,350 
(1) Included within 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 was contingent, however, upon the Company’s providing collateral of $65,700 to secure certain of its black lung obligations. This proposed collateral requirement would have been 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 DOL 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 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 LCs to receive the self-insurance reauthorization from the DCMWC or alternatively insure these black lung obligations through a third-party provider that would likely also require the Company to provide additional collateral. In
21
ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited, amounts in thousands except share and per share data)
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 (the “2023 Proposed Regulations”). 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. In May 2024, the DOL submitted its final draft of the 2023 Proposed Regulations to the Office of Management and Budget for review. It is unclear when this regulation will become effective; however, the Company will continue to monitor developments. A significant increase in these collateral obligations could have a materially adverse effect on the Company’s liquidity.

Supreme Court’s Decision on the Chevron Deference Standard

The United States Supreme Court's decision in Loper Bright Enterprises v. Raimondo, issued on June 28, 2024, eliminated a 40-year old precedent of judicial deference to regulatory agencies' interpretation of federal laws. Federal agencies such as the DOL and EPA have relied on this now-overturned principle, known as “Chevron deference” in defense of various regulations. Although the Court's decision does not explicitly affect any prior agency decisions, regulations made final in the future, such as the DOL's 2023 Proposed Regulations, which have not yet been adopted, may be subject to more intense scrutiny by the courts if they are challenged by any affected party.

For example, on July 18, 2024, the Fifth Circuit Court of Appeals directed the lower District Court to reconsider its dismissal of a lawsuit challenging a DOL rule that permits retirement plan fiduciaries to consider environmental, social and governance factors when selecting investments. In the case of State of Utah v. Su, et al., the Court of Appeals stated that in order to determine whether the DOL exceeded its statutory authority, “given the upended legal landscape,” the District Court needed to reassess the merits of the plaintiffs' challenge to the DOL rule. In view of this new “upended legal landscape,” it is uncertain whether the 2023 Proposed Regulations will be challenged after it is finalized and enacted and if so, the extent, if any, the Supreme Court's decision in Loper may impact such a challenge.

(d) Legal Proceedings 

Certain of our subsidiaries are involved in litigation in which the plaintiffs assert violations of the Fair Labor Standards Act of 1938, as amended, due to alleged failure to compensate for time required for “donning” and “doffing” equipment and claim consequent effects upon the calculation of overtime rates and pay. The plaintiffs seek collective action certification. We continue to evaluate the potential effects of this litigation upon the Company. Although we cannot reasonably estimate a range of potential exposure at this time, it is possible that the effects of this litigation upon our liquidity and results of operations could be materially adverse.

In addition, the Company is party to other 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.

(15) Segment Information

As a result of the closure of Slabcamp, the Company’s last remaining thermal mine, in August 2023, the Company changed its method of allocating certain corporate level income and expense items among its operating segments starting in 2024. Certain expenses not previously allocated to operating segments (e.g. selling, general and administrative expenses) began to be allocated. Certain other income or expense items previously allocated to operating segments began to be fully allocated to the Company’s primary Met reportable segment. For comparability purposes, prior period segment information has been recast to conform to the current year presentation.
22
ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited, amounts in thousands except share and per share data)

The Company’s mining operations are located within the Central Appalachian coal basin in Virginia and West Virginia. The Company’s strategic focus is on the production of metallurgical quality coal for sale to the steel industry. The Company’s reportable segment, Met, is comprised of the Company’s mining complexes which produce, as a primary product, metallurgical quality coal and thermal coal as a byproduct. The All Other category included the Company’s former CAPP – Thermal operating segment which was comprised of the Company’s mining complexes which produced, as a primary product, thermal quality coal. Segment operating results are regularly reviewed by the Chief Operating Decision Maker (“CODM”), who is the Chief Executive Officer of the Company.

Segment information and reconciliations to consolidated amounts for the three and nine months ended September 30, 2024 and 2023 are as follows:

 
Three Months Ended September 30, Nine Months Ended September 30,
2024202320242023
Coal revenues - Met$669,783 $731,481 $2,331,196 $2,452,462 
Other revenues - Met2,114 2,822 8,742 11,923 
Total revenues - Met$671,897 $734,303 $2,339,938 $2,464,385 
Coal revenues - All Other— 7,517 — 47,041 
Total revenues$671,897 $741,820 $2,339,938 $2,511,426 

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

A reconciliation of net income to Adjusted EBITDA for the three and nine months ended September 30, 2024 and 2023 is as follows:

Three Months Ended September 30, Nine Months Ended September 30,
2024202320242023
Net income$3,804 $93,814 $189,708 $545,940 
Interest expense1,041 1,746 3,228 5,322 
Interest income(5,145)(4,639)(13,256)(8,911)
Income tax (benefit) expense(4,087)18,964 15,356 94,973 
Depreciation, depletion, and amortization42,414 32,582 126,495 94,231 
Non-cash stock compensation expense3,013 2,999 9,317 9,678 
Accretion on asset retirement obligations6,326 6,376 18,726 19,129 
Amortization of acquired intangibles, net1,675 2,069 5,025 6,458 
Adjusted EBITDA$49,041 $153,911 $354,599 $766,820 
Adjusted EBITDA - Met$49,041 $157,585 $354,599 $765,518 
Adjusted EBITDA - All Other— (3,674)— 1,302 
Total Adjusted EBITDA$49,041 $153,911 $354,599 $766,820 

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:
23
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,
2024202320242023
Total coal revenues$669,783 $738,998 $2,331,196 $2,499,503 
Total revenues$671,897 $741,820 $2,339,938 $2,511,426 
Export coal revenues$512,904 $514,597 $1,861,065 $1,809,300 
Export coal revenues as % of total coal revenues77 %70 %80 %72 %
Countries with export coal revenue exceeding 10% of total revenuesIndia, BrazilIndiaIndia, BrazilIndia
Top customer as % of total revenues16 %13 %16 %12 %
Top 10 customers as % of total revenues74 %83 %75 %74 %
Number of customers exceeding 10% of total revenues1433
As of September 30,
 20242023
Number of customers exceeding 10% of total trade accounts receivable, net24

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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.

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.

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.

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.

MSHA. The United States Mine Safety and 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.

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.

25
Roof. The stratum of rock or other mineral above a coal seam; the overhead surface of a coal working place.

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” 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.



26
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis provides a narrative of our results of operations and financial condition for the three and nine months ended September 30, 2024 and 2023. The following discussion and analysis 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 included elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2023.

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 Statement Regarding Forward-Looking Statements” and “Item 1A. Risk Factors.”

Market Overview

Lower coal prices continued throughout the third quarter of 2024 as a result of sustained weakness in global steel demand. The World Steel Association’s (“WSA”) most recent Short-Range Outlook, published in mid-October, included significant downward revisions for steel demand in 2024, especially in China and other developed economies facing manufacturing weakness, economic headwinds, and geopolitical uncertainties. As evidenced by the Manufacturing Purchasing Managers’ Index (“PMI”) data from the last year, India is a notable exception, with robust steel demand expected to continue throughout 2024 and 2025; the WSA noted India as the strongest driver of steel demand growth since 2021. For the rest of the world, the WSA projected a moderate rebound in steel demand in 2025 and the potential for broad-based moderate growth in 2025 and 2026. Important factors that could fuel such growth were identified as the stabilization of China’s real estate sector, monetary policy such as interest rate adjustments to spur economic activity, and the trajectory of infrastructure spending in major global economies.

While overall manufacturing data in recent months reflect depressed business conditions and lackluster demand, longer-range business confidence ratings are more positive in anticipation of interest rate adjustments and the conclusion of political elections that have created geopolitical uncertainty across the globe. Unrest and political violence continue to pose geopolitical threats which may influence steel demand moving forward, as well as the health and resiliency of national and regional economies.

Metallurgical coal prices have continued to decline during the third quarter of 2024. All four indices that Alpha closely monitors fell 10% or more throughout the quarter, with the Australian Premium Low Volatile index representing the most significant drop of 16.5%. The Australian Premium Low Volatile index decreased from $245.20 per metric ton on July 1, 2024, to $204.75 per metric ton on September 30, 2024. The U.S. East Coast Low Volatile index fell from $218.00 per metric ton at the beginning of the quarter to $189.00 per metric ton at quarter close. The U.S. East Coast High Volatile A index decreased from $212.00 per metric ton in July to $184.00 per metric ton at the end of September, and the U.S. East Coast High Volatile B index moved from $190.00 per metric ton to $171.00 per metric ton at quarter end. Following the quarter close, all four indices have remained relatively stable, with modest upward movements. As of October 21, 2024, the U.S. East Coast Low Volatile, High Volatile A, and High Volatile B indices measured $190.00, $185.00, and $172.00 per ton, respectively. The Australian Premium Low Volatile decreased slightly from quarter-close levels to $202.00 per metric ton as of the same date.

PMI data for September 2024 showed deteriorating conditions across much of the world, including several regional economies where Alpha customer companies reside. The world manufacturing PMI declined for the third month in a row, with September’s PMI of 48.8 marking a drop from August’s level of 49.6. The United States’ September PMI also decreased further into contractionary territory to 47.3 from 47.9 in August. Europe’s manufacturing sector continues to face weak conditions, with its overall September PMI of 45.0 marking a nine-month low, down from August’s PMI of 45.8. China’s PMI of 49.3 in September moved down into contraction from its August level of 50.4. Data for two of Alpha’s key markets signal healthier manufacturing activity, with Brazil’s manufacturing sector PMI of 53.2 in September marking a solid move upward from 50.4 in August and India’s September PMI of 56.5 in September representing a drop from 57.5 in August but still firmly in expansionary territory.

The September 2024 global crude steel production of 143.6 million metric tons from 71 countries, as reported by the World Steel Association, represented a decrease of 4.7% compared to September 2023. China, the largest steel-producing country, produced 77.1 million metric tons in September, a 6.1% drop from its year-ago production level. India’s September 2024 steel
27
production was 11.7 million metric tons, a decrease of 0.2%, or roughly flat year-over-year. Japan’s 6.6 million metric tons of steel produced in September 2024 was down 5.8% compared to September 2023, and the United States produced 6.7 million metric tons of crude steel in September, up 1.2% from the year-ago period. Among the top ten steel-producing countries, Brazil recorded the largest year-over-year percentage increase in September production, with its 2.8 million metric tons being 9.9% higher than its September 2023 output levels, while Iran posted the most significant percentage drop of the group, as its 1.5 million metric tons of September production represented a 41.2% decrease from its year-ago figure. Regionally, the Asia and Oceania region, which contains both India and China, produced 105.3 million metric tons of crude steel in September 2024, a decrease of 5.0% compared to its September 2023 mark. The European Union’s September 2024 crude steel production of 10.5 million metric tons represented a slight increase of 0.3% from its year-ago period. North America produced 8.6 million metric tons in September, 3.4% less than its September 2023 level.

The American Iron and Steel Institute’s capacity utilization rate for U.S. steel mills was 73.4% for the week ending October 19, 2024. This is up from the year-ago period when the capacity utilization rate was 72.4%.

In the seaborne thermal market, the API2 index was $105.85 per metric ton on July 1, 2024, and increased to $119.40 per metric ton on September 30, 2024.

Business Overview

We are a Tennessee-based mining company with operations in Virginia and West Virginia. With customers across the globe, high-quality reserves and significant port capacity, we are 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, 2024, our operations consisted of twenty-one active mines and nine coal preparation and load-out facilities, with approximately 4,110 employees. We produce, process, and sell met coal and thermal coal as a byproduct. 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, 2023, we had 316.0 million tons of reserves, which included 303.0 million tons of proven and probable metallurgical reserves and 12.9 million tons of proven and probable thermal reserves.

For the three months ended September 30, 2024 and 2023, sales of met coal were 3.9 million tons and 3.8 million tons, respectively, and accounted for approximately 94% and 89%, respectively, of our coal sales volume in each period. Sales of thermal coal were 0.2 million tons and 0.4 million tons, respectively, and accounted for approximately 6% and 11%, respectively, of our coal sales volume. For the nine months ended September 30, 2024 and 2023, sales of met coal were 12.1 million tons and 11.2 million tons, respectively, and accounted for approximately 93% and 90%, respectively, of our coal sales volume. Sales of thermal coal were 0.9 million tons and 1.2 million tons, respectively, and accounted for approximately 7% and 10%, respectively, of our coal sales volume.

Our sales of met coal were made primarily in several countries in Asia, Europe, and the Americas and to steel companies in the northeastern and midwestern regions of the United States. Our sales of thermal coal were made primarily to large utilities and industrial customers both in the United States and across the world. For the three months ended September 30, 2024 and 2023 approximately 77% and 70%, respectively, of our coal revenues were derived from coal sales made to customers outside the United States. For the nine months ended September 30, 2024 and 2023 approximately 80% and 72%, respectively, of our 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, 2024, 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 small amounts of thermal coal being produced as a byproduct of mining. The All Other category included our former CAPP – Thermal operating segment which was comprised of our mining complexes which produced, as a primary product, thermal quality coal. Refer to Note 15 to our Condensed Consolidated Financial Statements for additional disclosures on reportable segments, geographic areas, and export coal revenue information.

As discussed in the “Market Overview” presented above, metallurgical coal prices remain at lower levels than in recent years due to weak global steel demand which has been influenced by a slowdown in manufacturing activity, economic pressures, and geopolitical uncertainty. Our results of operations for the three and nine months ended September 30, 2024 were impacted by these factors. On October 7, 2024, our subsidiary Elk Run Coal Company, LLC issued a 60-day notice to
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employees, under the Worker Adjustment and Retraining Notification (“WARN”) Act, of plans to idle the Checkmate Powellton mine as of December 6, 2024, or within the 14-day period starting on that date. This decision was driven by the recent decreases in coal prices, discussed above, and the current economic characteristics of the mine. From its idled state the mine could promptly be returned to production if circumstances warrant. We will continue to evaluate market conditions and expect to adjust our operations accordingly.

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 23, 2024, we had sales commitments for 2024 as follows:
Tons% PricedAverage Realized Price per Ton
Met - Domestic$160.73 
Met - Export$149.28 
Met Total16.0 million86 %$152.42 
Thermal1.1 million100 %$75.97 
Met Segment17.1 million88 %$145.90 

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, costs of purchased coal, royalties, wages and benefits, freight and handling costs and taxes incurred in selling our coal. The 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, 2024 and 2023 are discussed below. For comparability purposes, certain immaterial segment information for the three and nine months ended September 30, 2023 has been recast to conform to the current year presentation. Refer to Note 15.

Three Months Ended September 30, 2024 Compared to the Three Months Ended September 30, 2023

Revenues

The following table summarizes information about our revenues during the three months ended September 30, 2024 and 2023:
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Three Months Ended September 30, Increase (Decrease)
(In tho