WARRIOR MET COAL, INC.
For the period ended Mar 31, 2025. Filed Apr 30, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed Apr 30, 2025
HCC$84.15+4.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-10-30.
0001691303-24-000037
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-04-30.
0001691303-25-000022
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 159 previous paragraphs and 112 current paragraphs.
60 unchanged; 43 reworded; 9 added; 49 removed; 7 previous and 0 current paragraphs rearranged.
Tables are not compared: 8 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (9)
Current report
On February 21, 2025, we provided an update on the Blue Creek project. Due to the implementation of innovative technologies and best practices we increased nameplate capacity of the Blue Creek mine 25% to 5.4 million metric tons from the original production plan of 4.4 million metric tons. The additional capacity increases our overall nameplate capacity by 75%, from 7.3 million metric tons per year to 12.7 million metric tons per year. We also have the ability to increase the nameplate capacity 83% or 0.6 million metric tons to 6.0 million metric tons per year by adding an additional continuous miner unit. If current weak market conditions continue into next year, we will plan to initially operate Blue Creek at 4.4 million metric tons until the additional tons are warranted, as determined by supply and demand dynamics in the market. We expect the addition of Blue Creek to enhance our already advantageous position on the global cost curve, improve our profitability and cash flow generation, and cement our position as a leading pure play steelmaking coal producer.
Current report
In the first quarter of 2025, we continued to make excellent progress towards completing the Blue Creek project. We have invested approximately $771.8 million in the Blue Creek project to date, including $55.3 million in the first quarter of 2025. We expect to spend $225 to $250 million in 2025 on the continued development of Blue Creek. The baseline total project cost ranges from $995 million to $1.075 billion.
Current report
On April 2, 2025, the United States government announced a broad range of tariffs on foreign goods imported into the U.S., with certain nations and regions responding with retaliatory tariffs on U.S. goods. On April 9, 2025, the U.S. government announced, among other things, that it was modifying the previously announced tariffs and implemented a three-month pause on all "reciprocal" tariffs, with the exception of China. While the impact of these tariffs on steelmaking coal prices are not currently known, any new tariffs as well as other trade measures that may be implemented by the U.S. or retaliatory trade measures or tariffs implemented by other countries could result in reduced economic activity, increased costs in operating our business, reduced demand and/or changes in purchasing behaviors for steelmaking coal, disruptions in our supply chain, material changes in the pricing of steelmaking coal, limits on trade with the U.S. or other potentially adverse economic outcomes. It is too early to quantify the impact of the tariffs on the Company's financial statements. We continue to analyze the impact of tariffs on our business and actions we can take to minimize their impact.
Current report
On April 8, 2025, President Trump issued three Presidential Actions (the "Orders") with the aim to boost the U.S. coal industry. Included in one of these Orders was the request that the Secretary of Energy review whether coal used in the production of steel meets the definition of a "critical mineral" under The Energy Act of 2020, and, if so, take steps to place it on the Department of Energy Critical Materials list. This designation could benefit domestic steelmaking coal producers. One potential benefit, among others, is that 10% of production costs could become available as a Section 45X tax credit under the Inflation Reduction Act administered by the Treasury Department.
Current report
We produced 2.0 million metric tons of steelmaking coal for the three months ended March 31, 2025 compared to 1.9 million metric tons for the three months ended March 31, 2024, representing a 9.9% increase. The increased production was driven by 228 thousand metric tons produced by three continuous miner units at the Blue Creek mine developing the initial longwall panel.
Current report
Cost of other revenues was $7.9 million or 2.6% of total revenues, for the three months ended March 31, 2025, compared to $10.0 million, or 2.0% of total revenues for three months ended March 31, 2024. The decrease is primarily driven by the reduction of compression costs in operations and a 4% decrease in sales volumes.
Current report
Interest expense was $2.1 million, or 0.7% of total revenues, for the three months ended March 31, 2025, compared to interest expense of $1.1 million, or 0.2% of total revenues, for the three months ended March 31, 2024. The $1.0 million increase is due an increase in leased equipment.
Current report
On February 11, 2025, our Board declared a regular quarterly cash dividend of $0.08 per share, which was paid March 3, 2025, to stockholders of record as of the close of business on February 24, 2025.
Current report
On April 23, 2025, our Board declared a regular quarterly cash dividend of $0.08 per share, which we plan to distribute on May 12, 2025, to stockholders of record as of the close of business on May 5, 2025.
Removed paragraphs (49)
Previous report
U.S. inflation is currently at approximately 2.4%, driven by increased energy and food costs, supply constraints and strong consumer demand. While inflation in the overall economy has eased in the last twelve months, we have not seen it easing significantly in the coal mining industry. We expect that inflation will continue to negatively impact our profitability, as we expect inflation to remain high for steel prices, freight rates, labor and other materials and supplies. Specifically, we have experienced inflationary cost increases ranging from 25% to 35%, primarily in relation to labor, construction materials, and certain equipment. In addition, we have experienced inflation in the costs of belt structure, roof bolts, cable, magnetite, rock dust and other supplies, plus labor and parts on equipment repair and rebuilds.
Previous report
While we expect steelmaking coal prices to improve slightly in the fourth quarter, we believe the pricing environment will remain under pressure due to the persistent weakness in the global steel markets and delayed infrastructure spending in India.
Previous report
(6)Represents a loss incurred in connection with the early extinguishment of debt (see Note 5 of the "Notes to Condensed Financial Statements" in this Form 10-Q).
Previous report
(7)Represents expenses incurred in connection with a ransomware attack.
Previous report
We produced 1.7 million metric tons of steelmaking coal for the three months ended September 30, 2024 compared to 1.8 million metric tons for the three months ended September 30, 2023, representing a 3.8% decrease. The decreased production is primarily due to us operating at lower capacity levels in the third quarter of 2024 compared to 2023 due to anticipated lower sales volumes discussed in further detail below.
Previous report
Business interruption expenses were $0.1 million and $0.3 million for the three months ended September 30, 2024 and 2023, respectively. These expenses represent ongoing legal expenses associated with labor negotiations.
Previous report
Interest expense was $1.4 million, or 0.4% of total revenues, for the three months ended September 30, 2024, compared to interest expense of $3.4 million, or 0.8% of total revenues, for the three months ended September 30, 2023. The $2.0 million decrease is due to the early retirement of $146.1 million of our $350.0 million in aggregate principal amount of 7.875% senior secured notes due 2028 (the "Notes") in September 2023, maturity of financing leases and the capitalization of interest associated with the development of Blue Creek.
Previous report
Loss on early extinguishment of debt for the three months ended September 30, 2023 of $11.7 million represents a premium paid to early retire $146.1 million of our Notes, accelerated amortization of debt discount and fees incurred in connection with the transaction.
Previous report
Other expenses for the three months ended September 30, 2023 of $1.1 million, or 0.3% of total revenues, primarily represents non-recurring expenses incurred in connection with a ransomware attack.
Previous report
Nine Months Ended September 30, 2024 and 2023
Previous report
We produced 5.6 million metric tons of steelmaking coal for the nine months ended September 30, 2024 compared to 5.1 million metric tons for the nine months ended September 30, 2023, representing an 8% increase. The increased production drove a slight increase in sales as both Mine No. 4 and Mine No. 7 operated at higher capacity levels in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.
Previous report
Sales for the nine months ended September 30, 2024 were $1,208.4 million compared to $1,288.4 million for the nine months ended September 30, 2023. The $80.0 million or 6.2% decrease in sales was primarily driven by a $102.3 million decrease in sales related to a 7.8% or $18.53 per metric ton decrease in the average net selling price per metric ton of steelmaking coal offset partially by a $22.3 million increase in sales due to a 1.7% or 0.1 million metric ton increase in steelmaking coal sales volume. The 1.7% increase in sales volumes was driven by increased production due to both Mine No. 4 and Mine No. 7 operating at higher capacity levels combined with improved performance by our rail transportation provider and the McDuffie Terminal.
Previous report
Cost of sales (exclusive of items shown separately below) was $778.5 million, or 63.4%, of total revenues, for the nine months ended September 30, 2024, compared to $723.5 million, or 55.1% of total revenues for the nine months ended September 30, 2023. The $55.0 million increase is primarily driven by a $41.9 million increase due to an increase in cost of production primarily driven by increased labor costs, increased supply costs and increased transportation costs due to multiple failures of lock and dam systems that have prevented us from barging coal for the majority of this year combined with a $12.4 million increase due to a 2% or 0.1 million metric ton increase in steelmaking coal sales volume. For the nine months ended September 30, 2024, cost of production represented 63% of cost of sales and transportation and royalties accounted for approximately 37% compared to cost of production of 60% and transportation and royalties of 40% for the nine months ended September 30, 2023.
Previous report
Selling, general and administrative expenses were $45.5 million, or 3.7% of total revenues, for the nine months ended September 30, 2024, compared to $38.8 million, or 3.0% of total revenues, for the nine months ended September 30, 2023. The $6.6 million increase in selling, general and administrative expenses for the period is due to an increase in employee related expenses.
Previous report
Business interruption expenses were $0.4 million and $8.1 million for the nine months ended September 30, 2024 and 2023, respectively. These expenses decreased compared to the prior period primarily due to the end of the labor strike on February 16, 2023 that the labor union initiated on April 1, 2021. The expenses for the nine months ended September 30, 2024 represent ongoing legal expenses associated with the labor negotiations and the expenses in the nine months ended September 30, 2023 represent non-recurring expenses that were directly attributable to the labor strike for incremental safety and security, legal and labor negotiations and other expenses.
Previous report
Interest expense was $3.5 million, or 0.3% of total revenues, for the nine months ended September 30, 2024, compared to $16.3 million, or 1.2% of total revenues, for the nine months ended September 30, 2023. The $12.9 million decrease was primarily driven by a decrease in interest expense due to the early retirement of our Notes in September 2023, an increase in capitalized interest associated with the Blue Creek project and maturity of financing leases.
Previous report
Interest income was $26.1 million, or 2.1% of total revenues for the nine months ended September 30, 2024, compared to $31.2 million, or 2.4%, of total revenues for the nine months ended September 30, 2023. The $5.2 million decrease was primarily driven by a decrease in invested cash balances and lower rates of return earned on our investments.
Previous report
Loss on early extinguishment of debt for the nine months ended September 30, 2023 of $11.7 million represents a premium paid to early retire $146.1 million of our Notes, accelerated amortization of debt discount and fees incurred in connection with the transaction.
Previous report
Other expense for the nine months ended September 30, 2023 of $0.9 million represents non-recurring expenses incurred in connection with a ransomware attack offset partially by proceeds received from the Chapter 11 Cases from Walter Energy, Inc.
Previous report
Our ability to generate positive cash flow from operations in the future will be, at least in part, dependent on continued stable global economic conditions.
Previous report
During the first quarter of 2023, we repurchased in the open market and extinguished approximately $8.8 million principal amount of our Notes at a discount to par value. In connection with the extinguishment of our Notes, we recognized a loss on early extinguishment of debt of $0.1 million, which is included in interest expense in the Condensed Statements of Operations. In addition, in the third quarter of 2023, we retired approximately $146.1 million of our Notes and recognized a loss on early extinguishment of debt of $11.7 million, which represents a premium paid to retire the debt, accelerated amortization of debt discount, net and fees incurred in connection with the transaction.
Previous report
On April 25, 2024, our Board declared a regular quarterly cash dividend of $0.08 per share, totaling approximately $4.2 million, which was paid May 13, 2024, to stockholders of record as of the close of business on May 6, 2024.
Previous report
On July 26, 2024, our Board declared a regular quarterly cash dividend of $0.08 per share, totaling approximately $4.2 million, which was paid August 13, 2024, to stockholders of record as of the close of business on August 6, 2024.
Previous report
On October 25, 2024, our Board declared a regular quarterly cash dividend of $0.08 per share, totaling approximately $4.2 million, which will be paid November 12, 2024, to stockholders of record as of the close of business on November 5, 2024.
Previous report
On February 13, 2023, our Board declared a special cash dividend of $0.88 per share, totaling approximately $46.4 million, which was paid on March 7, 2023 to stockholders of record as of the close of business on February 28, 2023.
Previous report
Offers to Purchase the Notes
Previous report
On August 9, 2023, we commenced an offer to purchase (the “Restricted Payment Offer”), in cash, up to $150,000,000 principal amount of our outstanding Notes, at a repurchase price of 103% of the aggregate principal amount of such Notes, plus accrued and unpaid interest with respect to such Notes to, but not including, the date of repurchase (the “Restricted Payment Repurchase Price”). Concurrently with, but separate from, the Restricted Payment Offer, we commenced a cash tender offer (the “Tender Offer” and, together with the Restricted Payment Offer, the “Offers”) to purchase up to $150,000,000 principal amount of the Notes at a repurchase price of 104.25% of the aggregate principal amount of such Notes, plus accrued and unpaid interest to, but not including, the date of repurchase (the “TO Repurchase Price”). The Offers expired on September 7, 2023 (the “Expiration Date”).
Previous report
Restricted Payment Offer
Previous report
As of the Expiration Date, $200,000 aggregate principal amount of the Notes were validly tendered and not validly withdrawn pursuant to the Restricted Payment Offer. Pursuant to the terms of the Restricted Payment Offer:
Previous report
(1) an automatic pro ration factor of 49.5674% was applied to the $200,000 aggregate principal amount of the Notes that were validly tendered and not validly withdrawn in the Restricted Payment Offer (rounded down to avoid the purchase of Notes in a principal amount other than in integrals of $1,000), which resulted in $99,000 aggregate principal amount of the Notes (the “RP Pro-Rated Tendered Notes”);
Previous report
(2) we accepted all $99,000 aggregate principal amount of the RP Pro-Rated Tendered Notes for payment of the Restricted Payment Repurchase Price in cash; and
Previous report
(3) the remaining balance of $101,000 aggregate principal amount of the Notes tendered that were not RP Pro-Rated Tendered Notes were not accepted for payment and were returned to the tendering holder of the Notes.
Previous report
We consummated the Restricted Payment Offer on September 8, 2023.
Previous report
Accordingly, pursuant to the terms of the Indenture, we will have the ability from time to time in the future to make one or more restricted payments (the "Proposed Restricted Payment") in the form of special dividends to holders of our common stock and/or repurchases of our common stock in the aggregate amount of up to $299,901,000 consistent with the terms of the Capital Allocation Policy adopted by our Board. Any future Proposed Restricted Payments will be at the discretion of the Board and subject to a number of factors and there can be no assurance that we will make any Proposed Restricted Payments in the future.
Previous report
Tender Offer
Previous report
As of the Expiration Date, $294,770,000 aggregate principal amount of the Notes were validly tendered and not validly withdrawn pursuant to the Tender Offer. Pursuant to the terms of the Tender Offer:
Previous report
(1) an automatic pro ration factor of 49.5674% was applied to the $294,770,000 aggregate principal amount of the Notes that were validly tendered and not validly withdrawn in the Tender Offer (rounded down to avoid the purchase of Notes in a principal amount other than in integrals of $1,000), which resulted in $146,002,000 aggregate principal amount of the Notes (the “TO Pro-Rated Tendered Notes”);
Previous report
(2) we accepted all $146,002,000 aggregate principal amount of the TO Pro-Rated Tendered Notes for payment of the TO Repurchase Price in cash; and
Previous report
(3) the remaining balance of $148,768,000 aggregate principal amount of the Notes tendered that were not TO Pro-Rated Tendered Notes were not accepted for payment and were returned to the tendering holder of the Notes.
Previous report
We consummated the Tender Offer on September 11, 2023.
Showing the first 40 of 49 passages. Open the source sections for the rest.
Reworded paragraphs (43)
Previous wording
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 September 30, 2023. You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and related notes appearing in this Form 10-Q and the audited financial statements for the year ended December 31, 2023 included in our Annual Report on Form 10-K for the year ended December 31, 2023 (the "2023 Annual Report"). Some of the information contained in this discussion and analysis or set forth elsewhere in this Form 10-Q, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, our actual results could differ materially from the results described in, or implied by, the forward-looking statements contained in the following discussion and analysis. Please see“Forward-Looking Statements.”
Current wording
The following discussion and analysis provides a narrative of our results of operations and financial condition for the three months ended March 31, 2025 and March 31, 2024. You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and related notes appearing in this Form 10-Q and the audited financial statements for the year ended December 31, 2024 included in our Annual Report on Form 10-K for the year ended December 31, 2024 (the "2024 Annual Report"). Some of the information contained in this discussion and analysis or set forth elsewhere in this Form 10-Q, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, our actual results could differ materially from the results described in, or implied by, the forward-looking statements contained in the following discussion and analysis. Please see“Forward-Looking Statements.”
Previous wording
We are a U.S.-based, environmentally and socially minded supplier to the global steel industry. We are dedicated entirely to mining non-thermal metallurgical ("met") steelmaking coal used as a critical component of steel production by metal manufacturers in Europe, South America and Asia. We are a large-scale, low-cost producer and exporter of premium quality met coal, also known as hard coking coal (“HCC”), operating highly-efficient longwall operations in our underground mines based in Alabama, Mine No. 4 and Mine No. 7.
Current wording
We are a U.S.-based, environmentally and socially minded supplier to the global steel industry. We are dedicated entirely to mining non-thermal steelmaking coal used as a critical component of steel production by metal manufacturers in Europe, South America and Asia. We are a large-scale, low-cost producer and exporter of premium quality steelmaking coal, also known as hard coking coal (“HCC”), operating highly-efficient longwall operations in our underground mines based in Alabama, Mine No. 4 and Mine No. 7. We also are developing our world-class Blue Creek mine based in Alabama.
Previous wording
As of December 31, 2023, based on a reserve report prepared by Marshall Miller & Associates, Inc. ("Marshall Miller"), Mine No. 4 and Mine No. 7, our two operating mines, had approximately 82.9 million metric tons of recoverable reserves and our undeveloped Blue Creek mine contained 67.6 million metric tons of recoverable reserves and 39.7 million metric tons of coal resources exclusive of reserves, which total 107.3 million metric tons. As a result of our high-quality coal, our Mine No. 7 steelmaking coal realized price has historically been in line with, or at a slight discount to, the Platts Premium Low Volatility ("LV") Free On Board ("FOB") Australia Index Price ("Platts Index"). Our Mine No. 4 steelmaking coal transitioned in the second half of 2023 from a Mid Volatility ("MV") to a High Volatility A ("HVA") quality that typically trades at a larger discount to the price of coal from Mine No. 7. We now primarily target the East Coast High Vol A indices price for our Mine No. 4 coal. Our steelmaking coal, mined from the Southern Appalachian portion of the Blue Creek coal seam, is characterized by low sulfur, low-to-medium ash, and Low Vol to High Vol. These qualities make our coal ideally suited as a coking coal for the manufacture of steel.
Current wording
As of December 31, 2024, based on a reserve report prepared by Marshall Miller & Associates, Inc. ("Marshall Miller"), Mine No. 4 and Mine No. 7, our two operating mines, had approximately 82.4 million metric tons of recoverable reserves and our undeveloped Blue Creek mine contained 69.0 million metric tons of recoverable reserves and 39.7 million metric tons of coal resources exclusive of reserves, which total 108.7 million metric tons. As a result of our high-quality coal, our Mine No. 7 steelmaking coal realized price has historically been in line with, or at a slight discount to, the Platts Premium Low Volatility ("LV") Free-On-Board Australia Index Price (the "S&P Platts Index"). Our Mine No. 4 steelmaking coal is a High Volatility A ("HVA") quality that typically trades at a larger discount to the price of coal from Mine No. 7. We now primarily target the East Coast High Vol A indices price for our Mine No. 4 coal. Our steelmaking coal, mined from the Southern Appalachian portion of the Blue Creek coal seam, is characterized by low sulfur, low-to-medium ash, and Low Vol to High Vol. These qualities make our coal ideally suited as a coking coal for the manufacture of steel.
Previous wording
The project remains on schedule with the longwall scheduled to start up in the second quarter of 2026. We expect to ramp up production through the development of the project. Specifically, we expect to produce approximately 200 thousand metric tons in 2024, approximately 900 thousand metric tons in 2025, approximately 2.7 million metric tons in 2026 and approximately 4.4 million metric tons in 2027. We do not expect the tons produced in 2024 and 2025 of approximately 1.1 million metric tons to be sold until the second half of 2025 when the preparation plant comes online.
Current wording
The project remains on schedule with the longwall scheduled to start up no later than second quarter of 2026. We expect to ramp up production through the development of the project. Specifically, we expect to produce approximately 900 thousand metric tons in 2025, approximately 2.7 million metric tons in 2026 and approximately 4.4 million metric tons in 2027. We do not expect the tons produced in 2024 and 2025 of approximately 1.1 million metric tons to be sold until the second half of 2025 when the preparation plant comes online.
Previous wording
During the third quarter of 2024, high-quality steelmaking coal prices reached a three-year low driven by a confluence of weaker demand, excess Chinese steel exports in our customers' markets, and ample availability of steelmaking coals. As of October 11, 2024, the Platts Index price for premium LV coal was $207.00 per metric ton. Per the Wood Mackenzie global metallurgical coal short-term outlook released in September 2024, premium LV coal is expected to remain rangebound between $170.00 and $200.00 per metric ton for the remainder of the year. This expectation is in large part driven by additional Chinese stimulus measures and the end of India's monsoon season, combined with the fact that the premium LV coal price now cuts into the cost curve and approximately 13% of hard coking coal supply is making a negative margin at $180 per metric ton.
Current wording
During the first quarter of 2025, high-quality steelmaking coal prices fell significantly driven by seasonal demand weakness and ample spot supply. As of April 11, 2024, the Platts Index price for premium LV coal was $182.00 per metric ton. Per the Wood Mackenzie global metallurgical coal short-term outlook released in March 2025, premium LV coal is expected to remain rangebound between $174.00 and $209.00 per metric ton for the remainder of the year. This expectation is in large part driven by increased steel demand in India, Europe and Southeast Asia, seasonal supply constraints, and anti-dumping measures on imports of Chinese steel, combined with the fact that the premium LV coal price cuts into the cost curve.
Previous wording
Our Collective Bargaining Agreement ("CBA") with the labor union representing certain of our hourly employees expired on April 1, 2021 and the labor union initiated a strike after an agreement on a new contract was not reached. As a result of the strike, we initially idled Mine No. 4 and scaled back operations at Mine No. 7. In the first quarter of 2022, we restarted operations at Mine No. 4. On February 16, 2023, the labor union representing certain of our hourly employees announced that they were ending the strike and made an unconditional offer to return to work. We incurred business interruption expenses of approximately $0.1 million and $0.4 million for the three and nine months ended September 30, 2024, which represent ongoing legal expenses associated with ongoing labor negotiations. We incurred $0.3 million and $8.1 million for the three and nine months ended September 30, 2023, which represent non-recurring expenses that were directly attributable to the labor strike for incremental safety and security, labor negotiations and other expenses. These expenses are presented separately in the Condensed Statements of Operations. The Company continues to engage in good faith efforts with the labor union to reach an agreement on a new contract.
Current wording
The Company's Collective Bargaining Agreement ("CBA") with the labor union representing certain of the Company's hourly employees expired on April 1, 2021. The Company continues to engage in good faith efforts with the labor union to reach an agreement on a new contract.
Previous wording
We define Segment Adjusted EBITDA as net income adjusted for other revenues; cost of other revenues; depreciation and depletion expense; selling, general and administrative expenses; business interruption expenses; interest income, net; income tax expense; loss on early extinguishment of debt; other expense and certain transactions or adjustments that the Chief Executive Officer, our Chief Operating Decision Maker, does not consider for the purposes of making decisions to allocate resources among segments or assessing segment performance. Segment Adjusted EBITDA is used as a supplemental financial measure by management and by external users of our financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess:
Current wording
We define Segment Adjusted EBITDA as net (loss) income adjusted for other revenues; cost of other revenues; depreciation and depletion expense; selling, general and administrative expenses; business interruption expenses; interest income, net; income tax (benefit) expense and certain transactions or adjustments that the Chief Executive Officer, our Chief Operating Decision Maker, does not consider for the purposes of making decisions to allocate resources among segments or assessing segment performance. Segment Adjusted EBITDA is used as a supplemental financial measure by management and by external users of our financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess:
Previous wording
We evaluate our operations based on the volume of coal we can safely produce and sell in compliance with regulatory standards, and the prices we receive for our steelmaking coal. Our sales volume and sales prices are largely dependent upon the terms of our annual steelmaking coal sales contracts, for which prices generally are set on daily index averages on a quarterly basis. The volume of steelmaking coal we sell is also a function of the pricing environment in the international met coal markets and the amounts of LV and HVA coal that we sell. We evaluate the price we receive for our steelmaking coal based on our average net selling price per metric ton.
Current wording
We evaluate our operations based on the volume of coal we can safely produce and sell in compliance with regulatory standards, and the prices we receive for our steelmaking coal. Our sales volume and sales prices are largely dependent upon the terms of our annual steelmaking coal sales contracts, for which prices generally are set on daily index averages on a quarterly basis. The volume of steelmaking coal we sell is also a function of the pricing environment in the international steelmaking coal markets and the amounts of LV and HVA coal that we sell. We evaluate the price we receive for our steelmaking coal based on our average net selling price per metric ton.
Previous wording
We define Adjusted EBITDA as net income before interest income, net, income tax expense, depreciation and depletion, non-cash asset retirement obligation accretion, non-cash stock compensation expense, other non-cash accretion, mark-to-market gain on gas hedges, business interruption, loss on early extinguishment of debt and other income. Adjusted EBITDA is used as a supplemental financial measure by management and by external users of our financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess:
Current wording
We define Adjusted EBITDA as net (loss) income before interest income, net, income tax (benefit) expense, depreciation and depletion, non-cash asset retirement obligation accretion, non-cash stock compensation expense, other non-cash accretion, mark-to-market loss on gas hedges and business interruption expenses. Adjusted EBITDA is used as a supplemental financial measure by management and by external users of our financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess:
Previous wording
We believe that the presentation of Adjusted EBITDA in this report provides information useful to investors in assessing our financial condition and results of operations. The GAAP measure most directly comparable to Adjusted EBITDA is net income. Adjusted EBITDA should not be considered an alternative to net income or any other measure of financial performance or liquidity presented in accordance with GAAP. Adjustments exclude some, but not all, items that affect net income and our presentation of Adjusted EBITDA may vary from that presented by other companies.
Current wording
We believe that the presentation of Adjusted EBITDA in this report provides information useful to investors in assessing our financial condition and results of operations. The GAAP measure most directly comparable to Adjusted EBITDA is net (loss) income. Adjusted EBITDA should not be considered an alternative to net (loss) income or any other measure of financial performance or liquidity presented in accordance with GAAP. Adjustments exclude some, but not all, items that affect net (loss) income and our presentation of Adjusted EBITDA may vary from that presented by other companies.
Previous wording
The following table presents a reconciliation of Adjusted EBITDA to net income, the most directly comparable GAAP financial measure, on a historical basis for each of the periods indicated.
Current wording
The following table presents a reconciliation of Adjusted EBITDA to net (loss) income, the most directly comparable GAAP financial measure, on a historical basis for each of the periods indicated.
Previous wording
(4)Represents mark-to-market gain recognized on gas hedges.
Current wording
(4)Represents mark-to-market loss recognized on gas hedges.
Previous wording
Sales for the three months ended September 30, 2024 were $319.9 million compared to $416.9 million for the three months ended September 30, 2023. The $96.9 million decrease in sales was primarily driven by a $73.3 million decrease in sales due to a 17.6% or 0.4 million metric ton decrease in steelmaking coal sales volume and a $23.7 million decrease in sales related to a $14.02 per metric ton decrease in the average net selling price per metric ton of steelmaking coal. The 17.6% decrease in sales volumes was driven by us being selective with spot sales and exercising patience while we wait for market conditions to improve. The average net selling price of our steelmaking coal decreased $14.02 from $203.56 per metric ton in the third quarter of 2023 to $189.54 per metric ton in the third quarter of 2024.
Current wording
Sales for the three months ended March 31, 2025 were $294.9 million compared to $498.0 million for the three months ended March 31, 2024. The $203.1 million decrease in sales was primarily driven by a $213.1 million decrease in sales related to a $108.19 per metric ton decrease in the average net selling price per metric ton of our steelmaking coal offset partially by a $10.1 million increase in sales due to a 2.0% increase in steelmaking coal sales volume. The average net selling price of our steelmaking coal decreased $108.19 from $257.90 per metric ton in the first quarter of 2024 to $149.71 per metric ton in the first quarter of 2025.
Previous wording
For the three months ended September 30, 2024, our geographic customer mix was 44% in Europe, 41% in Asia, 15% in South America and 1% in the United States. For the three months ended September 30, 2023, our geographic customer mix was 45% in Asia, 36% in Europe and 19% in South America. Our geographic customer mix typically varies each period based on the timing of customer orders and shipments.
Current wording
For the three months ended March 31, 2025, our geographic customer mix was 37% in Europe, 43% in Asia, and 20% in South America. For the three months ended March 31, 2024, our geographic customer mix was 47% in Asia, 37% in Europe and 16% in South America. Our geographic customer mix typically varies each period based on the timing of customer orders and shipments.
Previous wording
Other revenues for the three months ended September 30, 2024 were $7.8 million compared to $6.6 million for the three months ended September 30, 2023. Other revenues are comprised of revenue derived from our natural gas operations, gains on sales and disposals of property, plant and equipment and land and earned royalty revenue. The $1.2 million increase in other revenues is primarily due to an increase of royalty income offset partially by a decrease in the Southern Louisiana natural gas price average per Million British Thermal Unit ("MMBtu") of 15% for the three months ended September 30, 2024 as compared to the prior year comparable period.
Current wording
Other revenues for the three months ended March 31, 2025 were $5.0 million compared to $5.5 million for the three months ended March 31, 2024. Other revenues are comprised of revenue derived from our natural gas operations, gains on sales and disposals of property, plant and equipment and land and earned royalty revenue. The $0.5 million decrease in other revenues is primarily driven by losses on mark-to-market gas hedges of $2.2 million and a decrease in natural gas sales volumes of 4% offset partially by an increase in the Southern Louisiana natural gas price average per Million British Thermal Unit ("MMBtu") of 64% for the three months ended March 31, 2025 as compared to the prior year comparable period.
Previous wording
Cost of sales was $231.6 million, or 70.7% of total revenues, for the three months ended September 30, 2024, compared to $260.4 million, or 61.5% of total revenues for the three months ended September 30, 2023. The $28.8 million decrease is primarily driven by a $45.5 million decrease due to a 0.4 million metric ton decrease in steelmaking coal sales volume offset partially by a $16.4 million increase due to a $9.74 per metric ton increase in cash cost of sales per metric ton due to an increase in production costs driven by increased headcount and supply costs. For the three months ended September 30, 2024, cost of production represented 66% of cost of sales and transportation and royalties accounted for approximately 34% compared to cost of production of 62% and transportation and royalties of 38% for the three months ended September 30, 2023.
Current wording
Cost of sales was $245.7 million, or 81.9% of total revenues, for the three months ended March 31, 2025, compared to $285.6 million, or 56.7% of total revenues for the three months ended March 31, 2024. The $39.9 million decrease is primarily driven by a $45.9 million decrease due to a $23.29 per metric ton decrease in cash cost of sales per metric ton due to a lower average net selling prices of steelmaking coal and its impact on our labor, transportation and royalty costs. The decrease in costs of sales is offset partially by a 39.0 thousand metric ton increase in steelmaking coal sales volume. For the three months ended March 31, 2025, cost of production represented 64% of cost of sales and transportation and royalties accounted for approximately 36% compared to cost of production of 61% and transportation and royalties of 39% for the three months ended March 31, 2024.
Previous wording
Depreciation and depletion expenses were $36.6 million, or 11.2% of total revenues, for the three months ended September 30, 2024, compared to $34.0 million, or 8.0% of total revenues for the three months ended September 30, 2023. The $2.6 million increase in depreciation and depletion is primarily driven by an increase in additional assets placed into service partially offset by a decrease in met coal sales volume as depreciation and depletion is first capitalized into coal inventory and relieved when the tons are sold.
Current wording
Depreciation and depletion expenses were $45.3 million, or 15.1% of total revenues, for the three months ended March 31, 2025, compared to $40.0 million, or 7.9% of total revenues for the three months ended March 31, 2024. The $5.3 million increase in depreciation and depletion is primarily driven by an increase in additional assets placed into service combined with a 2.0% increase in steelmaking coal sales volume as depreciation and depletion is first capitalized into coal inventory and relieved when the tons are sold.
Previous wording
Selling, general and administrative expenses were $11.4 million, or 3.5% of total revenues, for the three months ended September 30, 2024, compared to $11.1 million, or 2.6% of total revenues, for the three months ended September 30, 2023. The $0.3 million increase in selling, general and administrative expenses for the period is due to an increase in employee related expenses.
Current wording
Selling, general and administrative expenses were $18.4 million, or 6.1% of total revenues, for the three months ended March 31, 2025, compared to $18.9 million, or 3.7% of total revenues, for the three months ended March 31, 2024. The $0.4 million decrease in selling, general and administrative expenses for the period is due to a decrease in stock compensation expense.
Previous wording
Interest income was $8.7 million, or 2.6% of total revenues for the three months ended September 30, 2024, compared to $10.7 million, or 2.5% of total revenues for the three months ended September 30, 2023. The $2.0 million decrease was primarily driven by a decrease in invested cash balances and lower rates of return earned on our investments.
Current wording
Interest income was $5.3 million, or 1.8% of total revenues for the three months ended March 31, 2025, compared to $8.2 million, or 1.6% of total revenues for the three months ended March 31, 2024. The $2.9 million decrease was primarily driven by a decrease in invested cash balances and lower rates of return earned on our investments.
Previous wording
For the three months ended September 30, 2024, we recognized income tax expense of $4.6 million comp ared to income tax expense of $16.8 million for the three months ended September 30, 2023. The $12.2 million decrease in income tax expense is primarily driven by a decrease in pre-tax income. We estimated our annual effective tax rate and applied this effective tax rate to our year-to-date pretax income at the end of the interim reporting period. The $4.6 million income tax expense for the three months ended September 30, 2024, includes a benefit related to depletion, Internal Revenue Code ("IRC") Section 250 Deduction: Foreign-Derived Intangible Income ("FDII") and Section 45l Deduction: Marginal Well Credit. The Tax Cuts and Jobs Act ("TCJA") was enacted on December 22, 2017 and enacted IRC Section 250 Deduction: FDII, which provides for, among other things, a deduction of 37.5% with respect to foreign-derived intangible income, which reduces the statutory tax rate from 21% to 13.125%. Beginning in 2026, the deduction is reduced from 37.5% to 21.875% of foreign- derived intangible income. The Marginal Well Credit is a production-based tax credit that provides a credit for qualified natural gas production and is phased out when natural gas prices exceed certain thresholds.
Current wording
For the three months ended March 31, 2025, we recognized income tax benefit of$6.0 million comp ared to income tax expense of $19.1 million for the three months ended March 31, 2024. The income tax benefit for the three months ended March 31, 2025 is driven by a pre-tax loss. We estimated our annual effective tax rate and applied this effective tax rate to our year-to-date pretax loss at the end of the interim reporting period. The $6.0 million income tax benefit for the three months ended March 31, 2025, includes a benefit related to depletion, Internal Revenue Code ("IRC") Section 250 Deduction: Foreign-Derived Intangible Income ("FDII") and Section 45l Deduction: Marginal Well Credit. The Tax Cuts and Jobs Act ("TCJA") was enacted on December 22, 2017 and enacted IRC Section 250 Deduction: FDII, which provides for, among other things, a deduction of 37.5% with respect to foreign-derived intangible income, which reduces the statutory tax rate from 21% to 13.125%. Beginning in 2026, the deduction is reduced from 37.5% to 21.875% of foreign-derived intangible income. The Marginal Well Credit is a production-based tax credit that provides a credit for qualified natural gas production and is phased out when natural gas prices exceed certain thresholds.
Previous wording
Our sources of cash have been steelmaking coal and natural gas sales to customers, proceeds received from the Notes and access to our ABL Facility. Historically, our primary uses of cash have been for funding the operations of our coal and natural gas production operations, working capital, our capital expenditures, our reclamation obligations, payment of principal and interest on our Notes, professional fees and other non-recurring transaction expenses. In addition, we used available cash on hand to repurchase shares of common stock and to pay our quarterly and special dividends, each of which reduces or reduced cash and cash equivalents.
Current wording
Our sources of cash have been steelmaking coal and natural gas sales to customers, proceeds received from the Notes and access to our ABL Facility. Historically, our primary uses of cash have been for funding the operations of our coal and natural gas production operations, working capital, our capital expenditures, including capital expenditures and mine development for the development of Blue Creek, our reclamation obligations, payment of principal and interest on our Notes, professional fees and other non-recurring transaction expenses. In addition, we used available cash on hand to repurchase shares of common stock and to pay our quarterly and special dividends, each of which reduces or reduced cash and cash equivalents.
Previous wording
Going forward, we plan to use cash to fund debt service payments on our Notes, the ABL Facility and our other indebtedness, to fund operating activities, working capital, capital expenditures, reclamation obligations, professional fees and other non-recurring transaction expenses and strategic investments, the development of Blue Creek, and, if declared, to pay our quarterly and/or special dividends. Our ability to fund our capital needs, including the development of Blue Creek, going forward will depend on our ongoing ability to generate cash from operations and borrowing availability under the ABL Facility, and, in the case of any future strategic investments, capital needs, the development of Blue Creek, or special dividends financed partially or wholly with debt financing and our ability to access the capital markets to raise additional capital.
Current wording
Going forward, we plan to use cash to fund debt service payments on our Notes, the ABL Facility and our other indebtedness, to fund operating activities, working capital, the development of Blue Creek, capital expenditures, our reclamation obligations, our black lung obligations, professional fees and other non-recurring transaction expenses and strategic investments, and, if declared, to pay our quarterly and/or special dividends. Our ability to fund our capital needs, including the development of Blue Creek, going forward will depend on our ongoing ability to generate cash from operations and borrowing availability under the ABL Facility, and, in the case of any future strategic investments, capital needs, the development of Blue Creek, or special dividends financed partially or wholly with debt financing and our ability to access the capital markets to raise additional capital.
Previous wording
Our total liquidity as of September 30, 2024 was $746.4 million, consisting of cash and cash equivalents of $583.2 million, long-term investments of $49.7 million and $113.5 million available under our ABL Facility. As of September 30, 2024, no loans were outstanding under the ABL Facility and there were $2.5 million of letters of credit issued and outstanding under the ABL Facility.
Current wording
Our total liquidity as of March 31, 2025 was $616.6 million, consisting of cash and cash equivalents of $454.9 million, short-term investments of $23.5 million, net of $9.6 million posted as collateral, long-term investments of $24.6 million and $113.5 million available under our ABL Facility. As of March 31, 2025, no loans were outstanding under the ABL Facility and there were $2.5 million of letters of credit issued and outstanding under the ABL Facility.
Previous wording
In the future, we may, at any time and from time to time, seek to retire or purchase additional Notes in open-market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will be upon such terms and at such prices as we may determine, and will depend on prevailing market conditions, our liquidity requirements, contractual restrictions, if any, and other factors.
Current wording
We may, at any time and from time to time, seek to retire or purchase Notes in open-market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will be upon such terms and at such prices as we may determine, and will depend on prevailing market conditions, our liquidity requirements, contractual restrictions, if any, and other factors.
Previous wording
We are responsible for medical and disability benefits for black lung disease under the Federal Coal Mine Health and Safety Act of 1969, as amended. Beginning on April 1, 2016 through May 31, 2018, we were insured under a guaranteed cost insurance policy, through a third-party insurance carrier, for black lung claims raised by any employee subsequent to the acquisition of certain assets of Walter Energy. Beginning on June 1, 2018 through May 31, 2020, we had a deductible policy under which we were responsible for the first $0.5 million for each black lung claim. From June 1, 2020 through May 31, 2024, we had a deductible policy under which we were responsible for the first $1.0 million for each black lung claim. Beginning June 1, 2024, we have a deductible policy where we are responsible for the first $2.0 million for each black lung claim.
Current wording
We are responsible for medical and disability benefits for black lung disease under the Federal Coal Mine Health and Safety Act of 1969, as amended. Beginning on April 1, 2016 through May 31, 2018, we were insured under a guaranteed cost insurance policy, through a third-party insurance carrier, for black lung claims raised by any employee subsequent to the acquisition of certain assets of Walter Energy. From June 1, 2018 through May 31, 2020 and June 1, 2020 to May 31, 2024, we had a deductible policy under which we were responsible for the first $0.5 million and $1.0 million, respectively, for each black lung claim from any of our employees. Beginning on June 1, 2024, we have a deductible policy where we are responsible for the first $2.0 million for each black lung related claim from any of our employees.
Previous wording
In addition, in connection with the acquisition of certain assets of Walter Energy, we assumed all black lung liabilities of Walter Energy and its U.S. subsidiaries incurred prior to March 31, 2016, for which we are self-insured. We have posted $18.6 million in surety bonds and $9.4 million of collateral recognized as short-term investments in addition to maintaining a black lung trust of $2.1 million that was acquired from Walter Energy. We received a letter from the U.S. Department of Labor ("DOL") on February 21, 2020 under its new process for self-insurance renewals that would require us to increase the amount of collateral posted to $39.8 million, but we have appealed such increase. We received another letter from the DOL on December 8, 2021 requesting additional information to support our appeal of the collateral requested by the DOL. On February 9, 2022, the DOL held a conference call with representatives from the Company related to our appeal. On July 12, 2022, we received a decision on our appeal from the DOL lowering the amount of collateral required to be posted from $39.8 million to $28 million. We appealed this decision. In addition, on January 19, 2023, the DOL proposed revisions to regulations under the Black Lung Benefits Act governing authorization of self-insurers. The proposed rules require, among other requirements, all self-insured operators to post security equal to 120 percent of their projected black lung liabilities.
Current wording
In addition, in connection with the acquisition of certain assets of Walter Energy, we assumed all black lung liabilities of Walter Energy and its U.S. subsidiaries incurred prior to March 31, 2016, for which we are self-insured. We have posted $18.6 million in surety bonds and $9.6 million of collateral recognized as short-term investments in addition to maintaining a black lung trust of $1.2 million that was acquired from Walter Energy. We received a letter from the U.S. Department of Labor ("DOL") on February 21, 2020 under its new process for self-insurance renewals that would require us to increase the amount of collateral posted to $39.8 million, but we appealed such increase. We received another letter from the DOL on December 8, 2021 requesting additional information to support our appeal of the collateral requested by the DOL. On February 9, 2022, the DOL held a conference call with representatives from the Company related to our appeal. On July 12, 2022, we received a decision on our appeal from the DOL lowering the amount of collateral required to be posted from $39.8 million to $28 million. We appealed this decision. In addition, on January 19, 2023, the DOL proposed revisions to regulations under the Black Lung Benefits Act governing authorization of self-insurers, which was then subsequently revised as part of the final rules published on December 12, 2024, which became effective on January 13, 2025. The final rules require, among other requirements, self-insured operators to apply for self-insurance authorization and all self-insured operators to post security of at least 100 percent of their projected black lung liabilities. On February 20, 2025, we received another letter from the DOL notifying us that we did not need to provide any of the information requested under the published final rule and the DOL will provide us with additional guidance in the future after consultation with the new DOL leadership.
Previous wording
In the ordinary course of our business, we are required to provide surety bonds and letters of credit to provide financial assurance for certain transactions and business activities. Federal and state laws require us to obtain surety bonds or other acceptable security to secure payment of certain long-term obligations including mine closure or reclamation costs and other miscellaneous obligations. As of September 30, 2024, we had outstanding surety bonds and letters of credit with parties for post-mining reclamation at all of our mining operations totaling $46.3 million, $18.6 million as collateral for self-insured black lung related claims and $5.2 million for miscellaneous purposes.
Current wording
In the ordinary course of our business, we are required to provide surety bonds and letters of credit to provide financial assurance for certain transactions and business activities. Federal and state laws require us to obtain surety bonds or other acceptable security to secure payment of certain long-term obligations including mine closure or reclamation costs and other miscellaneous obligations. As of March 31, 2025, we had outstanding surety bonds and letters of credit with parties for post-mining reclamation at all of our mining operations totaling $47.0 million, $18.6 million as collateral for self-insured black lung related claims and $4.7 million for miscellaneous purposes.
Previous wording
We believe that our future cash flows from operations, together with cash on our balance sheet and proceeds from the borrowings under our ABL Facility, will provide adequate resources to fund our debt service payments and planned operating and capital expenditure needs, including the development of Blue Creek, for at least the next twelve months and beyond.
Current wording
We believe that our future cash flows from operations, together with cash on our balance sheet and proceeds from the borrowings under our ABL Facility, will provide adequate resources to fund our debt service payments and planned operating and capital expenditure needs, including the development of Blue Creek, for at least the next twelve months and beyond. However, we will continue to assess our liquidity needs in light of the current weakness in steelmaking coal prices and the uncertain economic impacts of new and existing tariffs on our business.
Previous wording
Cash balances were $583.2 million and $738.2 million at September 30, 2024 and December 31, 2023, respectively.
Current wording
Cash balances were $454.9 million and $491.5 million at March 31, 2025 and December 31, 2024, respectively.
Previous wording
Net cash flows from operating activities consist of net income adjusted for noncash items, such as depreciation and depletion of property, plant and equipment and mineral interests, deferred income tax expense, stock-based compensation expense, amortization of debt issuance costs and debt discount, accretion of asset retirement obligations, loss on early extinguishment of debt and changes in net working capital.
Current wording
Net cash flows from operating activities consist of net (loss) income adjusted for noncash items, such as depreciation and depletion of property, plant and equipment and mineral interests, deferred income tax (benefit) expense, stock-based compensation expense, amortization of debt issuance costs and debt discount, accretion of asset retirement obligations, mark-to-market adjustments on gas hedges and changes in net working capital. The timing between the conversion of our billed and unbilled receivables into cash from our customers, production and sale of coal inventory and disbursements to our vendors is the primary driver of changes in our working capital.
Previous wording
Net cash provided by operating activities was $456.0 million for the nine months ended September 30, 2023, and was primarily attributed to net income of $349.8 million adjusted for depreciation and depletion expense of $101.8 million, deferred income tax expense of $52.4 million, stock based compensation expense of $14.5 million, loss on early extinguishment of debt of $11.7 million, accretion of asset retirement obligations of $2.9 million, amortization of debt issuance costs and debt discount of $1.7 million, and an increase in our net working capital of $84.6 million since December 31, 2022. The increase in our working capital was primarily driven by an increase in accounts receivable and a decrease in accrued expenses offset partially by a decrease in inventories. The increase in trade accounts receivable reflected higher sales volumes and the timing of sales and the decrease in inventories is due to greater sales volumes than production.
Current wording
Net cash provided by operating activities was $10.9 million for the three months ended March 31, 2025, and was primarily attributed to a net loss of $8.2 million adjusted for depreciation and depletion expense of $45.3 million, stock based compensation expense of $8.1 million, deferred income tax benefit of $6.5 million, mark-to-market loss on gas hedges of $1.7 million, accretion of asset retirement obligations of $1.3 million, amortization of debt issuance costs and debt discount of $0.4 million, and an increase in our net working capital of $31.8 million since December 31, 2024. The increase in our working capital was primarily driven by increases in accounts receivable due to higher sales volumes and the timing of sales, lower accrued expenses and higher accounts payable.
Previous wording
Net cash provided by operating activities was $313.2 million for the nine months ended September 30, 2024, and was primarily attributed to net income of $249.5 million adjusted for depreciation and depletion expense of $114.8 million, stock based compensation expense of $15.1 million, deferred income tax expense of $3.4 million, accretion of asset retirement obligations of $3.9 million, amortization of debt issuance costs and debt discount of $1.2 million, and an increase in our net working capital of $52.6 million since December 31, 2023. The increase in our working capital was primarily driven by increases in accounts receivable due to higher sales volumes.
Current wording
Net cash provided by operating activities was $104.1 million for the three months ended March 31, 2024, and was primarily attributed to net income of $137.0 million adjusted for depreciation and depletion expense of $40.0 million, deferred income tax expense of $2.9 million, stock based compensation expense of $9.2 million, accretion of asset retirement obligations of $1.3 million, amortization of debt issuance costs and debt discount of $0.4 million, and an increase in our net working capital of $85.8 million since December 31, 2023. The increase in our working capital was primarily driven by an increases in accounts receivable due to higher sales volumes and the timing of sales partially offset by the draw down of inventories.
Previous wording
Net cash used in investing activities was $395.8 million and $344.8 million for the nine months ended September 30, 2024 and 2023, respectively, primarily due to purchases of property, plant and equipment, purchases of long-term investments and mine development. Capital expenditures for the development of Blue Creek were $246.4 million and $191.3 million for nine months ended September 30, 2024 and 2023, respectively. The current year also includes the purchase of $49.7 million of long-term investments. The prior year period includes $2.4 million cash paid to acquire the remaining ownership interest in gas wells owned by an independent third party.
Current wording
Net cash used in investing activities was $77.8 million and $101.7 million for the three months ended March 31, 2025 and 2024, respectively, primarily due to purchases of property, plant and equipment and mine development offset partially by proceeds from the sale of short term investments of $1.6 million. Capital expenditures for the development of Blue Creek were $55.3 million and $68.5 million for three months ended March 31, 2025 and 2024, respectively.
Previous wording
Net cash used in financing activities was $65.0 million for the nine months ended September 30, 2024, primarily due to the payment of regular quarterly and special dividends of $40.5 million, principal repayments of finance lease obligations of $12.7 million and payments for taxes related to net share settlement of equity awards of $11.8 million. Net cash used in financing activities was $253.9 million for the nine months ended September 30, 2023, primarily due to retirements of debt related to our Notes of $162.4 million, payment of regular quarterly and special dividends of $57.4 million, principal repayments of finance lease obligations of $25.0 million and payment for taxes related to net share settlement of equity awards of $9.2 million.
Current wording
Net cash provided in financing activities was $30.3 million for the three months ended March 31, 2025, primarily due to the receipt of proceeds on equipment financing for leases yet to commence of $48.8 million offset partially by payments for taxes related to net share settlement of equity awards of $9.4 million, payment of regular quarterly dividends of $5.2 million and principal repayments of finance lease obligations of $3.9 million. Net cash used in financing activities was $46.7 million for the three months ended March 31, 2024, primarily due to the payment of regular quarterly and special dividends of $30.6 million, payments for taxes related to net share settlement of equity awards of $11.8 million and principal repayments of finance lease obligations of $4.3 million.
Previous wording
During the nine months ended September 30, 2024, we have paid $40.5 million of regular quarterly and special cash dividends under the Capital Allocation Policy.
Current wording
During the three months ended March 31, 2025, we have paid $5.2 million of regular quarterly dividends under the Capital Allocation Policy.
Previous wording
On February 9, 2024, our Board approved an increase in the regular quarterly cash dividend by 14% and declared a regular quarterly cash dividend of $0.08 per share, totaling approximately $4.2 million, which was paid February 26, 2024, to stockholders of record as of the close of business on February 20, 2024.
Current wording
On February 9, 2024, our Board approved an increase in the regular quarterly cash dividend by 14% and declared a regular quarterly cash dividend of $0.08 per share, which was paid February 26, 2024, to stockholders of record as of the close of business on February 20, 2024.
Previous wording
On February 9, 2024, our Board declared a special cash dividend of $0.50 per share, totaling approximately $26.3 million, which was paid on March 7, 2024 to stockholders of record as of the close of business on March 1, 2024.
Current wording
On February 9, 2024, our Board declared a special cash dividend of $0.50 per share, which was paid on March 7, 2024 to stockholders of record as of the close of business on March 1, 2024.
Previous wording
On December 6, 2021, we issued $350.0 million in aggregate principal amount of 7.875% senior secured notes due 2028 (the “Notes”) at an initial price of 99.343% of their face amount. The Notes were issued to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and to certain non-U.S. persons in transactions outside the United States in accordance with Regulation S under the Securities Act. We used the net proceeds of the offering of the Notes, together with cash on hand, to fund the redemption of all of our outstanding 8.00% senior secured notes due 2024 (the “Existing Notes”), including payment of the redemption premium in connection with such redemption.
Current wording
On December 6, 2021, we issued $350.0 million in aggregate principal amount of 7.875% senior secured notes due 2028 (the “Notes”) at an initial price of 99.3% of their face amount. The Notes were issued to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and to certain non-U.S. persons in transactions outside the United States in accordance with Regulation S under the Securities Act. We used the net proceeds of the offering of the Notes, together with cash on hand, to fund the redemption of all of our outstanding 8.00% senior secured notes due 2024 (the “Existing Notes”), including payment of the redemption premium in connection with such redemption. Since inception, the Company has paid down principal totaling $193.5 million on the Notes. Interest on the Notes will be payable on June 1 and December 1 of each year, commencing on June 1, 2022. The Notes will mature on December 1, 2028.
Previous wording
Our mining operations require investments to maintain, expand, upgrade or enhance our operations and to comply with environmental regulations. Maintaining and expanding mines and related infrastructure is capital intensive. Specifically, the exploration, permitting and development of met coal reserves, mining costs, the maintenance of machinery and equipment and compliance with applicable laws and regulations require ongoing capital expenditures. The cost of our capital expenditures are also impacted by inflation and any prolonged inflation could result in higher costs and decreased margins and earnings. While a significant amount of the capital expenditures required at our mines has been spent, we must continue to invest capital to maintain our production. In addition, any decisions to increase production at our mines and the development of the high-quality met coal recoverable reserves at Blue Creek could also affect our capital needs or cause future capital expenditures to be higher than in the past and/or higher than our estimates.
Current wording
Our mining operations require investments to maintain, expand, upgrade or enhance our operations and to comply with environmental regulations. Maintaining and expanding mines and related infrastructure is capital intensive. Specifically, the exploration, permitting and development of met coal reserves, mining costs, the maintenance of machinery and equipment and compliance with applicable laws and regulations require ongoing capital expenditures. The cost of our capital expenditures are also impacted by inflation and tariffs and any prolonged inflation and/or tariffs could result in higher costs and decreased margins and earnings. While a significant amount of the capital expenditures required at our mines has been spent, we must continue to invest capital to maintain our production. In addition, any decisions to increase production at our mines could also affect our capital needs or cause future capital expenditures to be higher than in the past and/or higher than our estimates.
Previous wording
To fund our capital expenditures, we may be required to use cash from our operations, incur debt or sell equity securities. Our ability to obtain bank financing or our ability to access the capital markets for future equity or debt offerings may be limited by our financial condition at the time of any such financing or offering and the covenants in our current or future debt agreements, as well as by general economic conditions and contingencies and uncertainties, that are beyond our control.
Current wording
To fund our capital expenditures, we may be required to use cash from our operations, incur debt or sell equity securities. Our ability to obtain bank financing or our ability to access the capital markets for future equity or debt offerings may be limited by our financial condition at the time of any such financing or offering and the covenants in our current or future debt agreements, as well as by general economic conditions and uncertainties, that are beyond our control.
Showing the first 40 of 43 pairs. Open the source sections for the rest.
Rearranged previous paragraphs (7)
Previous report — wording carried elsewhere
The following table summarizes certain unaudited financial information for these periods.
Previous report — wording carried elsewhere
Sales and cost of sales components on a per unit basis were as follows:
Previous report — wording carried elsewhere
For the nine months ended September 30, 2024, our geographic customer mix was 43% in Asia, 39% in Europe, 17% in South America and 1% in the United States. For the nine months ended September 30, 2023, our geographic customer mix was 46% in Europe, 34% in Asia, and 20% in South America. Our geographic customer mix typically varies each period based on the timing of customer orders and shipments.
Previous report — wording carried elsewhere
Other revenues for the nine months ended September 30, 2024 were $19.4 million compared to $24.4 million for the nine months ended September 30, 2023. Other revenues are comprised of revenue derived from our natural gas operations, gains on sales and disposals of property, plant and equipment and land, changes in the fair value of our natural gas swap contracts, as well as earned royalty revenue. The $5.0 million decrease in other revenues is due to the decrease in the Southern Louisiana natural gas price average of $0.52 per MMBtu or 19% and a decrease in sales volume for the nine months ended September 30, 2024 as compared to the prior year comparable period.
Previous report — wording carried elsewhere
Depreciation and depletion expenses were $114.8 million, or 9.4% of total revenues, for the nine months ended September 30, 2024, compared to $101.8 million, or 7.8%, for the nine months ended September 30, 2023. The $13.0 million increase in depreciation and depletion is primarily driven by additional assets placed into service and a 1.7% or 0.1 million metric ton increase in steelmaking coal sales volume as depreciation and depletion is first capitalized into coal inventory and relieved when the tons are sold.
Previous report — wording carried elsewhere
We recognized income tax expense of $32.2 million and $60.4 million for the nine months ended September 30, 2024 and September 30, 2023, respectively. The decrease in income tax expense is primarily driven by a decrease in pre-tax income. We estimated our annual effective tax rate and applied this effective tax rate to our year-to-date pretax income at the end of the interim reporting period. The $32.2 million income tax expense for the nine months ended September 30, 2024 includes a benefit related to depletion, IRC Section 250 Deduction: FDII and Section 45l Deduction: Marginal Well Credit. The TCJA was enacted on December 22, 2017 and enacted IRC Section 250 Deduction: FDII, which provides for, among other things, a deduction of 37.5% with respect to foreign-derived intangible income, which reduces the statutory tax rate from 21% to 13.125%. Beginning in 2026, the deduction is reduced from 37.5% to 21.875% of foreign-derived intangible income. The Marginal Well Credit is a production-based tax credit that provides a credit for qualified natural gas production and is phased out when natural gas prices exceed certain thresholds. We estimated our annual effective tax rate and applied this effective tax rate to our year-to-date pretax income at the end of the interim reporting period.
Previous report — wording carried elsewhere
The Notes will accrue interest at a rate of 7.875% per year from December 6, 2021. Interest on the Notes will be payable on June 1 and December 1 of each year, commencing on June 1, 2022. The Notes will mature on December 1, 2028.