Ramaco Resources Inc

Previous wording

Global metallurgical coal markets have softened in 2024 due to constrained economic growth in some regions of the world and continued conflict overseas. The global steel market has experienced slower growth, especially in China, despite modest strength in certain places such as India. The lack of demand in China’s traditional real estate and infrastructure sectors has led to lower use of steel in Chinese domestic markets and elevated levels of Chinese steel exports, which have negatively affected pricing in the Company’s traditional markets, including the U.S. and Europe, due to its impact on domestic steel producers. Longer term, the Company believes that limited global investment in new coking coal production capacity and an eventual return to economic growth will support coking coal markets overall.

Current wording

Global metallurgical coal markets have softened in 2024 due to constrained economic growth in some regions of the world and continued conflict overseas. The global steel market has experienced slower growth, especially in China, resulting in elevated levels of Chinese steel exports. These conditions have led steel companies to both cut back on their own production and to reduce the price they are willing to pay for their metallurgical coal feedstock. Longer term, the Company believes that limited global investment in new coking coal production capacity and an eventual return to economic growth will support coking coal markets overall.

Previous wording

During the first six months of 2024, we sold 1.8 million tons of coal and recognized $328.0 million of revenue. Of this amount, 33% of our revenue was from sales into North American markets, including Canada, and 67% of our revenue was from sales into export markets. During the same period of 2023, we sold 1.5 million tons of coal and recognized $303.8 million of revenue, of which 31% was from sales into North American markets, including Canada, and 69% was from sales into export markets. Sales into export markets, which often include index-based pricing, generally have greater exposure to variability in pricing. The Company’s exports have not been affected by the catastrophic bridge collapse in Baltimore that occurred earlier in 2024, nor does the Company anticipate at this time any future effects, since all of the Company’s export throughput and shipments occur at other U.S. East Coast ports.

Current wording

During the first nine months of 2024, we sold 2.9 million tons of coal and recognized $495.4 million of revenue. Of this amount, 33% of our revenue was from sales into North American markets, including Canada, and 67% of our revenue was from sales into export markets. During the same period of 2023, we sold 2.5 million tons of coal and recognized $490.8 million of revenue, of which 34% was from sales into North American markets, including Canada, and 66% was from sales into export markets. Sales into export markets, which often include index-based pricing, generally have greater exposure to variability in pricing from period to period. The Company’s exports have not been materially delayed or otherwise affected by recent severe weather events or by dockworker labor disputes taking place at U.S. East Coast ports.

Previous wording

As of June 30, 2024, the Company had outstanding performance obligations of approximately 1.0 million tons for contracts with fixed sales prices averaging $165 per ton, excluding freight, as well as 2.4 million tons for contracts with index-based pricing mechanisms. The Company expects to satisfy approximately 62% of these commitments in the second half of 2024. Refer to Note 8 of Part I, Item 1 for additional information.

Current wording

As of September 30, 2024, the Company had outstanding performance obligations of approximately 1.7 million tons for contracts with fixed sales prices averaging $151 per ton, excluding freight, as well as 1.6 million tons for contracts with index-based pricing mechanisms. The Company expects to satisfy approximately 36% of these commitments in the fourth quarter of 2024, 63% of these commitments in 2025, and the remaining 1% in 2026. Subsequent to the date of the financial statements, the Company obtained additional sales commitments of approximately 0.7 million tons.

Previous wording

The Company continues to assess its potential rare earth and critical minerals deposit in Wyoming and is making progress in terms of initial mine development and related chemical, metallurgical, and mineralogy testing. Analysis performed to date indicates elevated levels of rare earth elements along with significant concentrations of critical minerals Gallium and Germanium. The Company expects to complete its techno economic analysis of the overall commercial aspects of the opportunity later this year and anticipates constructing a demonstration processing facility in 2025. Our rare earth elements exploration target is currently in an exploration stage and does not represent, and should not be construed to be, a mineral resource or mineral reserve as such terms are used in subpart 1300 of Regulation S-K. The Company also continues its work to advance new carbon product technologies with the goal of commercializing products that use coal in both an improved economic and environmental manner.

Current wording

The Company continues to assess its potential rare earth and critical minerals deposit in Wyoming and is making progress in terms of initial mine development and related chemical, metallurgical, and mineralogy testing. Analysis performed to date indicates elevated levels of rare earth elements along with significant concentrations of critical minerals Gallium and Germanium. The Company expects to complete its techno-economic analysis of the overall commercial aspects of the opportunity later this year and anticipates beginning construction of a demonstration processing facility in mid to late 2025. Our rare earth elements exploration target is currently in an exploration stage and does not represent, and should not be construed to be, a mineral resource or mineral reserve as such terms are used in subpart 1300 of Regulation S-K. The Company also continues its work to advance new carbon product technologies with the goal of commercializing products that use coal in both an improved economic and environmental manner.

Previous wording

Net income and Adjusted EBITDA for the three months and six months ended June 30, 2024 were impacted by the softening of global metallurgical coal markets. Margins on coal sales declined compared to the same periods in 2023 driven by the decrease in metallurgical coal price indices, which was due to a variety of macroeconomic factors including the continued Chinese oversupply of steel into a muted and slowing global economic environment.

Current wording

Net income and Adjusted EBITDA for the three months and nine months ended September 30, 2024 were negatively impacted by the softening of global metallurgical coal markets and the decrease in metallurgical coal price indices. This occurred due to a variety of macroeconomic factors including the continued Chinese oversupply of steel into a muted global economic environment. Refer toNon-GAAP Financial Measures later in Item 2 for more information regarding Adjusted EBITDA.

Previous wording

Three Months EndedJune 30, 2024 Compared to Three Months Ended**June 30, 2023

Current wording

Three Months EndedSeptember 30, 2024 Compared to Three Months Ended**September 30, 2023

Previous wording

*Revenue.*Coal sales revenue for the three months ended June 30, 2024 was $155.3 million, approximately 13% higher than the same period in 2023 driven by the 28% increase in tons sold offset partially by the negative impact of pricing. The increase in tons sold occurred primarily in export markets, with export volumes increasing by 39% and North America volumes increasing by 10%, and was aided by the Company’s increased capacity for production achieved during late 2023. Revenue per ton sold decreased 11% from $192 per ton for the three months ended June 30, 2023 to $170 per ton for the three months ended June 30, 2024 and was driven by the variability in index-based pricing for export sales. Revenue per ton sold (FOB mine), a non-GAAP measure which excludes transportation revenues and demurrage, decreased 13% from $165 per ton for the three months ended June 30, 2023 to $143 per ton for the three months ended June 30, 2024. The decrease in the Company’s revenue per ton sold measures was due to the decrease in U.S. and worldwide metallurgical coal price indices as indices continued to fall in the second quarter of 2024 due to the macroeconomic conditions discussed above. We expect metallurgical coal prices to remain volatile in the near term.

Current wording

Revenue.Coal sales revenue for the three months ended September 30, 2024 was $167.4 million, approximately 10% lower than the same period in 2023 driven by the negative impact of pricing offset partially by the 3% increase in tons sold. The increase in tons sold occurred in export markets, which increased 13% but were offset partially by the decrease in North America volumes. Revenue per ton sold decreased 13% from $188 per ton for the three months ended September 30, 2023 to $164 per ton for the three months ended September 30, 2024 and was driven by the variability in index-based pricing for export sales. Revenue per ton sold (FOB mine), a non-GAAP measure which excludes transportation revenues and demurrage, also decreased 13% from $157 per ton for the three months ended September 30, 2023 to $136 per ton for the three months ended September 30, 2024. Refer toNon-GAAP Financial Measures later in Item 2 for more information regarding this measure. The decrease in the Company’s revenue per ton sold measures was due to the decrease in metallurgical coal prices as U.S. metallurgical coal indices continued to fall in the third quarter of 2024 by an average of 7% due to the macroeconomic conditions discussed earlier. We expect metallurgical coal prices to remain volatile in the near term.

Previous wording

Cost of sales.Our cost of coal sales for the three months ended June 30, 2024 was $122.8 million, approximately 24% higher than the same period in 2023 driven by the increase in tons sold discussed above. Cost of sales per ton sold decreased 4% from $139 per ton for the three months ended June 30, 2023 to $134 per ton for the three months ended June 30, 2024. Cash cost per ton sold(FOB mine), a non-GAAP measure which excludes transportation costs, alternative mineral development costs, and idle mine costs, decreased 2% from $110 per ton for the three months ended June 30, 2023 to $108 per ton for the three months ended June 30, 2024. Mine costs for the second quarter of 2024 benefited from efficiencies gained from increased production versus the same period in 2023.

Current wording

Cost of sales.Our cost of coal sales for the three months ended September 30, 2024 was $134.7 million, approximately 7% lower than the same period in 2023 despite the 3% increase in tons sold discussed above. Cost of sales per ton sold decreased 9% from $145 per ton for the three months ended September 30, 2023 to $132 per ton for the three months ended September 30, 2024. Cash cost per ton sold(FOB mine), a non-GAAP measure which excludes transportation costs, alternative mineral development costs, and idle mine costs, decreased 10% from $113 per ton for the three months ended September 30, 2023 to $102 per ton for the three months ended September 30, 2024. Refer toNon-GAAP Financial Measures later in Item 2 for more information regarding this measure. Mine costs for the third quarter of 2024 benefited from efficiencies gained from increased production versus the same period in 2023.

Previous wording

*Selling, general, and administrative.*Selling, general, and administrative (“SG&A”) expenses were $25.0 million and $26.1 million for the six months ended June 30, 2024 and June 30, 2023, respectively. The decrease in 2024 is due

Current wording

*Selling, general, and administrative.*Selling, general, and administrative (“SG&A”) expenses were $12.9 million and $11.5 million for the three months ended September 30, 2024 and September 30, 2023, respectively. The $1.5 million increase in 2024 was primarily due to the increase in stock-based compensation expense.

Previous wording

*Interest expense, net.*Interest expense, net was $1.5 million for the three months ended June 30, 2024 compared to $2.5 million for the same period in 2023. The decrease in 2024 was largely due to the repayment in full of related-party debt in 2023 associated with the financing of the acquisition of Ramaco Coal from Yorktown Partners. Interest expense related to this financing was $0.6 million in the second quarter of 2023.

Current wording

*Interest expense, net.*Interest expense, net was $1.7 million for the three months ended September 30, 2024 compared to $2.4 million for the same period in 2023. The decrease in 2024 was largely due to the repayment in full of related-party debt in the fourth quarter of 2023 associated with the financing of the acquisition of Ramaco Coal from Yorktown Partners. Interest expense related to this financing was $0.4 million in the third quarter of 2023.

Previous wording

*Income tax expense.*The effective tax rate for the three months ended June 30, 2024 and June 30, 2023 was 26.3% and 24.6%, respectively, excluding the $0.8 million favorable impact of discrete items. The primary differences from the federal statutory rate of 21% are related to state taxes, non-deductible expenses, the foreign-derived intangible income deduction, and depletion expense for income tax purposes.

Current wording

*Income tax expense (benefit).*The effective tax rate for the three months ended September 30, 2024 and September 30, 2023 was 9% and 22%, respectively, excluding the impact of discrete items. The primary differences from the federal statutory rate of 21% are related to state taxes, non-deductible expenses, the foreign-derived intangible income deduction, and depletion expense for income tax purposes.

Previous wording

*Earnings per share.*Refer to Note 10 of Part I, Item 1 for information regarding earnings per share calculations for Class A and Class B common stock.

Current wording

*Earnings (loss) per share.*Refer to Note 10 of Part I, Item 1 for information regarding earnings per share calculations for Class A and Class B common stock.

Previous wording

*Revenue.*Coal sales revenue for the six months ended June 30, 2024 was $328.0 million, approximately 8% higher than the same period in 2023 driven by the 25% increase in tons sold offset partially by the negative impact of pricing. The increase in tons sold occurred in both North America and export markets, with North America volumes increasing by 27% and export volumes increasing by 24%, and was aided by the Company’s increased capacity for production achieved during late 2023. Revenue per ton sold decreased 14% from $206 per ton for the six months ended June 30, 2023 to $178 per ton for the six months ended June 30, 2024 and was driven by the variability in index-based pricing for export sales. Revenue per ton sold (FOB mine), a non-GAAP measure which excludes transportation revenues and demurrage, decreased 15% from $176 per ton for the six months ended June 30, 2023 to $149 per ton for the six months ended June 30, 2024. U.S. coal price indices have fallen by roughly 25% on a year-to-date basis driven by the macroeconomic conditions discussed earlier. We expect metallurgical coal prices to remain volatile in the near term.

Current wording

Revenue.Coal sales revenue for the nine months ended September 30, 2024 was $495.4 million, approximately 1% higher than the same period in 2023 due to the increase in tons sold, which was mostly offset by the negative impact of pricing. The 16% increase in tons sold occurred in both North America and export markets, with export volumes increasing by 20% and North America volumes increasing by 10%, and was aided by the Company’s increased capacity for production achieved during late 2023. Revenue per ton sold decreased 13% from $199 per ton for the nine months ended September 30, 2023 to $173 per ton for the nine months ended September 30, 2024 and was driven by the variability in index-based pricing for export sales. Revenue per ton sold (FOB mine), a non-GAAP measure which excludes transportation revenues and demurrage, decreased 14% from $169 per ton for the nine months ended September 30, 2023 to $145 per ton for the nine months ended September 30, 2024. Refer toNon-GAAP Financial Measures later in Item 2 for more information regarding this measure. U.S. metallurgical coal price indices have fallen by roughly 32% on a year-to-date basis driven by the macroeconomic conditions discussed previously. We expect metallurgical coal prices to remain volatile in the near term.

Previous wording

Cost of sales.Our cost of coal sales totaled $262.5 million for the six months ended June 30, 2024 compared to $209.7 million for the same period in 2023. The 25% increase was driven by the increase in tons sold, as discussed directly above. Cost of sales per ton sold decreased 1% from $143 per ton for the six months ended June 30, 2023 to $142 per ton for the six months ended June 30, 2024. Cash cost per ton sold(FOB mine), a non-GAAP measure which excludes transportation costs, alternative mineral development costs, and idle mine costs, increased 3% from $110 per ton for the six months ended June 30, 2023 to $113 per ton for the six months ended June 30, 2024. Mine costs for 2024 were impacted negatively by challenging geology and labor constraints in the first quarter of 2024 but improved during the second quarter of 2024 as discussed previously.

Current wording

Cost of sales.Our cost of coal sales totaled $397.2 million for the nine months ended September 30, 2024 compared to $354.4 million for the same period in 2023. The 12% increase was driven by the increase in tons sold, as discussed directly above. Cost of sales per ton sold decreased 3% from $144 per ton for the nine months ended September 30, 2023 to $139 per ton for the nine months ended September 30, 2024. Cash cost per ton sold(FOB mine), a non-GAAP measure which excludes transportation costs, alternative mineral development costs, and idle mine costs, decreased 2% from $111 per ton for the nine months ended September 30, 2023 to $109 per ton for the nine months ended September 30, 2024. Refer toNon-GAAP Financial Measures later in Item 2 for more information regarding this measure. Mine costs for 2024 were impacted negatively by challenging geology and labor constraints in the first quarter of 2024 but improved during the second and third quarters of 2024 due to efficiencies gained from increased production compared to the same periods in 2023.

Previous wording

*Depreciation, depletion, and amortization.*Depreciation, depletion, and amortization expense totaled $15.9 million and $13.6 million for the three months ended June 30, 2024 and June 30, 2023, respectively. The increase year-to-year occurred across all asset types and was driven by the Company’s initiative to grow production.

Current wording

*Depreciation, depletion, and amortization.*Depreciation, depletion, and amortization expense totaled $48.9 million and $39.9 million for the nine months ended September 30, 2024 and September 30, 2023, respectively. The increase

Previous wording

in 2024 was primarily due to the $3.1 million benefit accrued for the probable recovery of attorney fees related to the silo failure litigation developments, as discussed in Note 7 of Part I, Item 1, which is not indicative of future SG&A expenses.

Current wording

*Selling, general, and administrative.*SG&A expenses were $37.9 million and $37.5 million for the nine months ended September 30, 2024 and September 30, 2023, respectively. SG&A expenses in 2024 include a $3.1 million benefit accrued for the probable recovery of attorney fees related to the silo failure litigation developments, which is not indicative of future SG&A expenses. This matter offset most of the 2024 increase in stock-based compensation.

Previous wording

*Other income (expense), net.*Other income, net was $2.6 million for the three months ended June 30, 2024, which was primarily related to $2.2 million recovery of previously incurred demurrage and other transportation-related matters. Other income, net was $2.5 million for the same period in 2023, which was primarily due to $1.9 million of insurance proceeds received in excess of the Berwind ignition recovery asset accrued in 2022. These activities are not indicative of future results.

Current wording

*Other income (expense), net.*Other income, net was $3.1 million for the nine months ended September 30, 2024, which was primarily related to the $2.2 million recovery of previously incurred demurrage and other transportation-related matters. Other income, net was $15.1 million for the nine months ended September 30, 2023, which was due primarily to recognition of the $7.8 million legal verdict for contract (compensatory) damages related to the 2018 Elk Creek silo failure as well as the $4.9 million gain from the Company’s insurance claim related to the methane ignition that occurred at our Berwind complex in 2022. The Company received $6.0 million of proceeds during the nine months ended September 30, 2023 related to the Berwind ignition and had previously accrued a $1.1 million loss recovery asset at year-end 2022. These activities are not indicative of future results.

Previous wording

*Interest expense, net.*Interest expense, net was $2.8 million for the six months ended June 30, 2024 compared to $4.8 million for the same period in 2023. The decrease in 2024 was largely due to the repayment in full of related-party debt in 2023 associated with the financing of the acquisition of Ramaco Coal from Yorktown Partners. Interest expense related to this financing totaled $1.3 million in the first half of 2023.

Current wording

*Interest expense, net.*Interest expense, net was $4.5 million for the nine months ended September 30, 2024 compared to $7.3 million for the same period in 2023. The decrease in 2024 was largely due to the repayment in full of related-party debt in 2023 associated with the financing of the acquisition of Ramaco Coal from Yorktown Partners. Interest expense related to this financing totaled $1.7 million for the nine months ended September 30, 2023.

Previous wording

*Income tax expense.*The effective tax rate for the six months ended June 30, 2024 and June 30, 2023 was 24.5% and 19.6%, respectively, excluding the $0.8 million favorable impact of discrete items. The primary differences from the federal statutory rate of 21% are related to state taxes, non-deductible expenses, the foreign-derived intangible income deduction, and depletion expense for income tax purposes.

Current wording

*Income tax expense.*The effective tax rate for the nine months ended September 30, 2024 and September 30, 2023 was 28% and 21%, respectively, excluding the $1.0 million favorable impact of discrete items in 2024. The primary differences from the federal statutory rate of 21% are related to state taxes, non-deductible expenses, the foreign-derived intangible income deduction, and depletion expense for income tax purposes.

Previous wording

At June 30, 2024, we had $27.6 million of cash and cash equivalents and $43.7 million available under our Revolving Credit Facility for future borrowings. Cash and cash equivalents include $7.5 million of compensating balances held in dedicated accounts to assure future credit availability under the revolver. The Company’s total current assets were $160.6 million and were in excess of total current liabilities by $39.9 million as of the balance sheet date.

Current wording

At September 30, 2024, we had $22.9 million of cash and cash equivalents and $57.9 million of remaining availability under our Revolving Credit Facility for future borrowings. Cash and cash equivalents include $7.5 million of compensating balances held in dedicated accounts to assure future credit availability under the revolver. The Company’s total current assets were $146.7 million and were in excess of total current liabilities by $37.9 million as of the balance sheet date.

Previous wording

Significant sources and uses of cash during the first six months of 2024

Current wording

Significant sources and uses of cash during the first nine months of 2024

Previous wording

On August 7, 2024, the Company announced that its Board of Directors declared cash dividends of $0.1375 per share of Class A common stock and $0.2246 per share of Class B common stock during the third quarter of 2024. The Class B dividend was calculated based on 20% of CORE royalty and infrastructure fees for the second quarter of 2024. Both dividends are payable on September 13, 2024 to shareholders of record on August 30, 2024. The Company anticipates declaring similar cash dividends on a quarterly basis in future periods; however, future declarations of dividends are subject to Board of Directors’ approval and may be adjusted as business needs or market conditions change.

Current wording

The Company anticipates declaring similar dividends on a quarterly basis in future periods; however, future declarations of dividends are subject to Board of Directors’ approval and may be adjusted as business needs or market conditions change.

Previous wording

Our primary use of cash includes capital expenditures for mine development, ongoing operating expenses, and deferred cash payments in connection with the Maben Coal acquisition. We expect to fund our capital and liquidity requirements for the next twelve months and the reasonably foreseeable future with cash on hand, borrowings under our revolving credit facility, and projected cash flows from operations. Factors that could adversely impact our future liquidity and ability to carry out our capital expenditure program include the following:

Current wording

Our primary use of cash includes capital expenditures for mine development and ongoing operating expenses. We expect to fund our capital and liquidity requirements for the next twelve months and the reasonably foreseeable future with cash on hand, borrowings under our revolving credit facility, projected cash flows from operations, and, if warranted, capital raised under the Company’s shelf registration discussed below. Factors that could adversely impact our future liquidity and ability to carry out our capital expenditure program include the following:

Previous wording

On September 1, 2023, the Company filed a shelf registration statement to sell any combination of Class A common stock, Class B common stock, preferred stock, depositary shares, debt securities, warrants, and rights at an aggregate initial offering price of up to $400.0 million. However, the Company has no specific plans to raise capital at this time and no securities may be sold until a prospectus supplement describing the method and terms of any future offering is delivered.

Current wording

On September 1, 2023, the Company filed a shelf registration statement to sell any combination of Class A common stock, Class B common stock, preferred stock, depositary shares, debt securities, warrants, and rights at an aggregate initial offering price of up to $400.0 million. No securities may be sold until a prospectus supplement describing the method and terms of any future offering is delivered.

Previous wording

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the amounts of revenue and expenses reported for the period then ended. A discussion of our critical accounting policies and estimates is included in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimates” of the Annual Report. There were no material changes to our critical accounting policies during the first six months of 2024.

Current wording

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the amounts of revenue and expenses reported for the period then ended. A discussion of our critical accounting policies and estimates is included in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimates” of the Annual Report. There were no material changes to our critical accounting policies during the first nine months of 2024.

Previous wording

Adiscussion of off-balance sheet arrangements is included under the heading “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Off-Balance Sheet Arrangements” in the Annual Report. There were no material changes during the first six months of 2024.

Current wording

Adiscussion of off-balance sheet arrangements is included under the heading “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Off-Balance Sheet Arrangements” in the Annual Report. There were no material changes during the first nine months of 2024.

Previous wording

We define Adjusted EBITDA as net income plus net interest expense; stock-based compensation expense; depreciation, depletion, and amortization expenses; income taxes; accretion of asset retirement obligations; and, when applicable, certain non-operating expenses (e.g., income tax penalties and charitable contributions). A reconciliation of net income to Adjusted EBITDA is included below. Adjusted EBITDA is not intended to serve as a substitute to U.S. GAAP measures of performance and may not be comparable to similarly-titled measures presented by other companies.

Current wording

We define Adjusted EBITDA as net income plus net interest expense; stock-based compensation expense; depreciation, depletion, and amortization expenses; income taxes; accretion of asset retirement obligations; and, when applicable, certain other non-operating items (income tax penalties and charitable contributions). A reconciliation of net

Previous wording

Non-GAAP cash cost per ton sold -Non-GAAP cash cost per ton sold (FOB mine) is calculated as cash cost of sales less transportation costs, alternative mineral development costs, and idle mine costs, divided by tons sold. We believe cash cost per ton sold provides useful information to investors as it enables investors to compare our cash cost per ton against similar measures made by other publicly-traded coal companies and more effectively monitor changes in coal cost from period to period excluding the impact of transportation costs which are beyond our control, and alternative mineral costs, which are more developmentally focused at the present time. The adjustments made to arrive at these measures are significant in understanding and assessing our financial performance. Cash cost per ton sold (FOB mine) is not a measure of financial performance in accordance with U.S. GAAP and, therefore, should not be considered as a substitute to cost of sales under U.S. GAAP.

Current wording

Non-GAAP cash cost per ton sold -Non-GAAP cash cost per ton sold (FOB mine) is calculated as cash cost of sales less transportation costs, alternative mineral development costs, and idle and other costs, divided by tons sold. We believe cash cost per ton sold provides useful information to investors as it enables investors to compare our cash cost per ton against similar measures made by other publicly-traded coal companies and more effectively monitor changes in coal cost from period to period excluding the impact of transportation costs which are beyond our control, and alternative mineral costs, which are more developmentally focused at the present time. The adjustments made to arrive at these measures are significant in understanding and assessing our financial performance. Cash cost per ton sold (FOB mine) is not a measure of financial performance in accordance with U.S. GAAP and, therefore, should not be considered as a substitute to cost of sales under U.S. GAAP.