PR Newswire | Mar 15, 2021 07:31AM EDT

03/15 06:30 CDT

Alpha Announces Fourth Quarter 2020 Results- Reports net loss from continuing operations of $55 million for the fourth quarter 2020- Posts Adjusted EBITDA(1) of $7 million for the fourth quarter 2020- Continues strong cost management across all operating segments- Closes transaction divesting Cumberland Mine, furthering strategic repositioning towards a pure metallurgical coal producer- Completes name change to Alpha Metallurgical Resources, Inc.- Appoints new board members to diversify and enhance corporate governance- Reiterates 2021 operating guidance BRISTOL, Tenn., March 15, 2021

BRISTOL, Tenn., March 15, 2021 /PRNewswire/ -- Alpha Metallurgical Resources, Inc. (NYSE: AMR), a leading U.S. supplier of metallurgical products for the steel industry, today reported results for the fourth quarter ending December 31, 2020.

(millions, except per share)

Three months ended

Dec. 31, 2020Sept. 30, 2020Dec. 31, 2019

Net loss^(2) $(55.1) $(68.5) $(210.2)

Net loss^(2) per diluted share$(3.00) $(3.74) $(11.55)

Adjusted EBITDA^(1) $7.4 $12.4 $22.1

Operating cash flow^(3) $56.2 $(5.9) $(5.7)

Capital expenditures^(3) $35.1 $27.8 $48.2

Tons of coal sold^(2) 3.7 4.0 4.2

^1. These are non-GAAP financial measures. A reconciliation of Net Income toAdjusted EBITDA is included in tables accompanying the financial schedules.

^2. From continuing operations.

^3. Includes discontinued operations.

"Despite the numerous challenges of the last year, we are proud of our accomplishments including significant operating cost reductions, refreshed board composition, and our rebranding to Alpha Metallurgical Resources, which reflects our strategic shift and focus on metallurgical coal," said chairman and chief executive officer, David Stetson. "We remain confident that in 2021 we can take advantage of improved market conditions and met coal prices as expected global infrastructure spending and stimulus actions come to fruition."

Financial Performance

Alpha reported a net loss from continuing operations of $55.1 million, or $3.00 per diluted share, for the fourth quarter 2020. In the third quarter 2020, the company had a net loss from continuing operations of $68.5 million or $3.74 diluted share.

Total Adjusted EBITDA was $7.4 million for the fourth quarter, compared with $12.4 million in the third quarter, primarily due to lower coal revenues and higher Met costs per ton.

Coal Revenues

(millions)

Three months ended

Dec. 31, 2020Sept. 30, 2020

Met $289.8 $295.4

CAPP - Thermal $33.6 $39.8

Met (excl. f&h)^(1) $241.5 $245.6

CAPP - Thermal (excl. f&h)^(1)$32.1 $36.8



Tons Sold (millions)

Three months ended

Dec. 31, 2020Sept. 30, 2020

Met 3.2 3.3

CAPP - Thermal 0.5 0.6

^1. Represents Non-GAAP coal revenues which is defined and reconciled under"Non-GAAP Financial Measures" and "Results of Operations."

The slight Met revenue decline in the fourth quarter was driven by reduced volume relative to the third quarter. The CAPP - Thermal revenues also decreased due to lower volumes.

Coal Sales Realization(1)

(per ton)

Three months ended

Dec. 31, 2020Sept. 30, 2020

Met $75.24 $73.79

CAPP - Thermal$59.81 $57.86

^1. Represents Non-GAAP coal sales realization which is defined and reconciledunder "Non-GAAP Financial Measures" and "Results of Operations."

Global metallurgical coal prices were mixed, with Australian prices declining while Atlantic prices showed modest improvement, resulting in our average Met coal sales realization increase of two percent against the prior quarter to $75.24 per ton. The CAPP - Thermal segment also saw slightly higher realization in the fourth quarter.

Cost of Coal Sales

(in millions, except per ton data)

Three months ended

Dec. 31, 2020 Sept. 30, 2020

Cost of Coal Sales $301.8 $309.7

Cost of Coal Sales (excl. f&h/idle)^(1)$245.9 $250.7



(per ton)

Met^(1) $69.25 $66.51

CAPP - Thermal^(1) $44.15 $45.98

^1. Represents Non-GAAP cost of coal sales per ton which is defined andreconciled under "Non-GAAP Financial Measures" and "Results of Operations."

In the fourth quarter, the company reported another sub-$70 per ton cost performance in the Met segment, with costs averaging $69.25 per ton, down from $82.28 in the year-ago quarter. The third quarter 2020 cost of coal sales was a record low of $66.51 per ton. Fewer mines, combined with higher production per mine and reduced labor force, were instrumental in driving the cost of coal sales per ton lower in 2020.

The CAPP - Thermal segment also continued its impressive cost of coal sales performance, with fourth quarter cost of $44.15 per ton as compared to $45.98 for the prior quarter.

Selling, general and administrative (SG&A) and depreciation, depletion and amortization (DD&A) expenses

(millions)

Three months ended

Dec. 31, Sept. 30, 2020 2020

SG&A $15.3 $14.5

Less: non-cash stock compensation and one-time $(0.8) $(1.0) expenses

Non-GAAP SG&A^(1) $14.5 $13.5



DD&A $(4.0) $49.2

^1. Represents Non-GAAP SG&A which is defined under "Non-GAAP FinancialMeasures."

Alpha's fourth quarter 2020 SG&A expenses were $14.5 million, excluding non-cash stock compensation expense and one-time expenses of $0.8 million, compared with $13.5 million in the prior quarter.

Liquidity and Capital Resources

"In the fourth quarter, our teams continued their exceptional focus on cost performance with another quarter of sub-$70 met costs, and a full year average met cost of $70.19," said Andy Eidson, Alpha's president and chief financial officer. "While the year as a whole was challenging, both in terms of pricing and pandemic uncertainty, Alpha made progress on a number of our stated strategic goals. Divesting the Cumberland Mine has not only hastened our transition to a pure metallurgical producer, but has also meaningfully reduced our bonding and collateral requirements."

Cash provided by operating activities for the fourth quarter 2020 was $56.2 million, which includes the receipt of $66.1 million in accelerated alternative minimum tax (AMT) credit monetization refund, and capital expenditures for the fourth quarter were $35.1 million. In the prior period, the cash used in operating activities was $5.9 million and capital expenditures were $27.8 million.

As of December 31, 2020, Alpha had $139.2 million in unrestricted cash and $157.4 million in restricted cash, deposits and investments. Total long-term debt, including the current portion of long-term debt as of December 31, 2020, was $582.5 million, down approximately $15 million from the prior quarter. At the end of the fourth quarter, the company had total liquidity of $139.2 million, including cash and cash equivalents of $139.2 million and no remaining unused availability under the Asset-Based Revolving Credit Facility (ABL). The future available capacity under the ABL is subject to inventory and accounts receivable collateral requirements and the maintenance of certain financial ratios. As of December 31, 2020, the company had $3.4 million in borrowings and $123.1 million in letters of credit outstanding under the ABL. In January 2021, subsequent to the quarter close, the company posted $25.0 million in collateral to remain in compliance due to fluctuations in the borrowing base, a portion of which was then used to repay $3.4 million in borrowings under the ABL.

Operational and Strategic Update

As part of the ongoing strategic shift towards becoming a pure-play met company, Alpha closed a transaction to divest the Cumberland Mine and related assets on December 10, 2020. The previously announced transaction transferred the associated coal reserves, mining permits and operations, infrastructure and equipment to Iron Senergy LLC, releasing Alpha from all reclamation obligations, totaling $169 million in undiscounted future cash flows. After the Cumberland divestiture, the company operates only one remaining thermal mine, which is expected to cease operation by the end of 2022.

As a result of this renewed focus on supplying metallurgical products to the steel industry, the company also rebranded and changed its name to Alpha Metallurgical Resources, Inc., effective February 1, 2021. The company's common stock began trading on the New York Stock Exchange under a new symbol, AMR, shortly thereafter.

In addition, Alpha continued to enhance its board of directors by adding Michael Quillen, the founder of Alpha Natural Resources and an industry veteran, as lead independent director in November 2020. Subsequent to the quarter end, Alpha appointed three new directors to the board. Effective February 1, Kenneth Courtis, Elizabeth Fessenden and Daniel Smith joined the board as independent directors.

2021 Full-Year Guidance

In connection with the company's strategic shift toward a pure-play metallurgical business, the reporting segments in the following guidance table have been reconfigured. The CAPP - Thermal reporting segment has been eliminated and is now included in the All Other segment. The prior CAPP - Met segment is now called the Met segment.

The company reiterates its previously issued 2021 operating guidance with coal shipments guidance range of 14.8 million tons to 16.2 million tons, with Met segment volume expected to be between 13.5 million to 14.5 million tons with pure metallurgical coal shipments of 12.5 million to 13.0 million tons and incidental thermal shipments in this segment of 1.0 million to 1.5 million tons. Our All Other segment volume is anticipated to be between 1.3 million tons to 1.7 million tons.

For 2021, Alpha has committed and priced approximately 53% of its metallurgical coal within the Met segment at an average price of $85.47 per ton and 86% of thermal coal in the Met segment at an average expected price of $50.80 per ton. In the All Other segment the company is 100% committed and priced at an average price of $57.57 per ton.

The company expects our strong cost performance to continue in 2021 with Met segment cost of coal sales per ton anticipated at a range of $68.00 to $74.00 and our All Other segment is expected to be in the range of $45.00 to $49.00 per ton.

For 2021, the company expects its SG&A to be in the range of $44 million to $49 million, excluding non-recurring items and stock compensation. Our overall 2021 capital expenditures guidance is in a range of $75 million to $95 million, near the maintenance capital level. Depreciation, depletion and amortization is expected to be between $125 million and $145 million and cash interest expense in the range of $51 million and $55 million.

2021 Guidance

in millions of tons Low High

Metallurgical 12.5 13.0

Thermal 1.0 1.5

Met Segment 13.5 14.5

All Other 1.3 1.7

Total Shipments 14.8 16.2



Committed/Priced^1,2,3 CommittedAverage Price

Metallurgical 53 %$85.47

Thermal 86 %$50.80

Met Segment 56 %$80.68

All Other 100 %$57.57



Committed/Unpriced^1,3 Committed

Metallurgical 32 %

Thermal 8 %

Met Segment 30 %

All Other - %



Costs per ton^4 Low High

Met Segment $68.00 $74.00

All Other $45.00 $49.00



In millions (except taxes)Low High

SG&A^5 $44 $49

Idle Operations Expense $24 $30

Cash Interest Expense $51 $55

DD&A $125 $145

Capital Expenditures $75 $95

Tax Rate - %5 %

Notes:

1. Based on committed and priced coal shipments as of March 11, 2021. Committed percentage based on the midpoint of shipment guidance range.

Actual average per-ton realizations on committed and priced tons recognized2. in future periods may vary based on actual freight expense in future periods relative to assumed freight expense embedded in projected average per-ton realizations.

Includes estimates of future coal shipments based upon contract terms and3. anticipated delivery schedules. Actual coal shipments may vary from these estimates.

Note: The Company is unable to present a quantitative reconciliation of its forward-looking non-GAAP cost of coal sales per ton sold financial measures to the most directly comparable GAAP measures without unreasonable efforts due to the inherent difficulty in forecasting and quantifying with reasonable accuracy significant items required for the reconciliation. The most directly comparable GAAP measure, GAAP cost of sales, is not accessible4. without unreasonable efforts on a forward- looking basis. The reconciling items include freight and handling costs, which are a component of GAAP cost of sales. Management is unable to predict without unreasonable efforts freight and handling costs due to uncertainty as to the end market and FOB point for uncommitted sales volumes and the final shipping point for export shipments. These amounts have historically varied and may continue to vary significantly from quarter to quarter and material changes to these items could have a significant effect on our future GAAP results.

5. Excludes expenses related to non-cash stock compensation and non-recurring business development expenses.

Conference Call

The company plans to hold a conference call regarding its fourth quarter 2020 results on March 15, 2021, at 10:00 a.m. Eastern time. The conference call will be available live on the investor section of the company's website at https://investors.alphametresources.com/investors. Analysts who would like to participate in the conference call should dial 866-270-1533 (domestic toll-free) or 412-317-0797 (international) approximately 15 minutes prior to the start of the call.

About Alpha Metallurgical Resources

Alpha Metallurgical Resources (NYSE: AMR) is a Tennessee-based mining company with operations across Virginia and West Virginia. With customers across the globe, high-quality reserves and significant port capacity, Alpha reliably supplies metallurgical products to the steel industry. For more information, visit www.AlphaMetResources.com.

Forward-Looking Statements

This news release includes forward-looking statements. These forward-looking statements are based on Alpha's expectations and beliefs concerning future events and involve risks and uncertainties that may cause actual results to differ materially from current expectations. These factors are difficult to predict accurately and may be beyond Alpha's control. Forward-looking statements in this news release or elsewhere speak only as of the date made. New uncertainties and risks arise from time to time, and it is impossible for Alpha to predict these events or how they may affect Alpha. Except as required by law, Alpha has no duty to, and does not intend to, update or revise the forward-looking statements in this news release or elsewhere after the date this release is issued. In light of these risks and uncertainties, investors should keep in mind that results, events or developments discussed in any forward-looking statement made in this news release may not occur.

Investor ContactInvestorRelations@AlphaMetResources.com

Alex Rotonen, CFA 423.956.6882

Media ContactCorporateCommunications@AlphaMetResources.com

Emily O'Quinn423.573.0369

FINANCIAL TABLES FOLLOW

Non-GAAP Financial Measures

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

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

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

ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in thousands, except share and per share data)





Three Months Ended December 31,Year Ended December 31,

2020 2019 2020 2019

Revenues:

Coal revenues $ 323,360 $ 431,457 $1,413,124$1,995,934

Other revenues 491 1,381 3,063 5,346

Total revenues 323,851 432,838 1,416,187 2,001,280

Costs and expenses:

Cost of coal sales (exclusive of items 301,831 387,000 1,281,011 1,667,768 shown separately below)

Depreciation, depletion and amortization (4,036) 50,221 139,885 215,757

Accretion on asset retirement obligations 6,559 6,990 26,504 23,865

Amortization of acquired intangibles, net 4,748 3,137 9,214 (3,189)

Selling, general and administrative expenses (exclusive of depreciation, 15,346 25,832 57,356 78,953 depletion and amortization shown separately above)

Merger-related costs - 35 - 1,090

Asset impairment and restructuring 29,897 60,466 83,878 66,324

Goodwill impairment - 124,353 - 124,353

Total other operating income:

Mark-to-market adjustment for 4,676 (3,276) (8,750) (3,564) acquisition-related obligations

Other (income) expense (200) 7,518 (2,223) (974)

Total costs and expenses 358,821 662,276 1,586,875 2,170,383

Loss from operations (34,970) (229,438) (170,688) (169,103)

Other (expense) income:

Interest expense (18,290) (17,444) (74,528) (67,521)

Interest income 153 1,701 7,027 7,247

Loss on modification and extinguishment of - - - (26,459) debt

Equity loss in affiliates (388) (2,070) (3,473) (6,874)

Miscellaneous loss, net (1,519) (7,393) (1,972) (10,195)

Total other expense, net (20,044) (25,206) (72,946) (103,802)

Loss from continuing operations before (55,014) (254,644) (243,634) (272,905) income taxes

Income tax (expense) benefit (36) 44,407 2,164 53,287

Net loss from continuing operations (55,050) (210,237) (241,470) (219,618)

Discontinued operations:

(Loss) income from discontinued operations (45,103) 73,678 (205,429) (105,185) before income taxes

Income tax (expense) benefit from - (4,382) - 8,484 discontinued operations

(Loss) income from discontinued operations (45,103) 69,296 (205,429) (96,701)

Net loss $ (100,153)$ (140,941) $(446,899)$(316,319)



Basic loss per common share:

Loss from continuing operations $ (3.00) $ (11.55) $(13.20) $(11.68)

(Loss) income from discontinued operations (2.47) 3.80 (11.22) (5.14)

Net loss $ (5.47) $ (7.75) $(24.42) $(16.82)



Diluted loss per common share:

Loss from continuing operations $ (3.00) $ (11.55) $(13.20) $(11.68)

(Loss) income from discontinued operations (2.47) 3.80 (11.22) (5.14)

Net loss $ (5.47) $ (7.75) $(24.42) $(16.82)



Weighted average shares - basic 18,322,236 18,195,651 18,298,362 18,808,460

Weighted average shares - diluted 18,322,236 18,195,651 18,298,362 18,808,460

ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Amounts in thousands, except share and per share data)



December 31,December 31, 2020 2019

Assets

Current assets:

Cash and cash equivalents $139,227 $212,803

Trade accounts receivable, net of allowance for doubtful accounts of $293 and $0 as of December 145,670 224,173 31, 2020 and 2019

Inventories, net 108,051 150,888

Prepaid expenses and other current assets 106,252 77,723

Current assets - discontinued operations 10,935 45,892

Total current assets 510,135 711,479

Property, plant, and equipment, net of accumulated depreciation and amortization of $382,423 and 363,620 436,398 $256,378 as of December 31, 2020 and 2019

Owned and leased mineral rights, net of accumulated depletion and amortization of $35,143 463,250 523,012 and $27,548 as of December 31, 2020 and 2019

Other acquired intangibles, net of accumulated amortization of $25,700 and $26,806 as of December88,196 124,246 31, 2020 and 2019

Long-term restricted cash 96,033 122,524

Deferred income taxes - 33,065

Other non-current assets 149,382 189,475

Non-current assets - discontinued operations 9,473 162,624

Total assets $1,680,089$2,302,823

Liabilities and Stockholders' Equity

Current liabilities:

Current portion of long-term debt $28,830 $28,476

Trade accounts payable 58,413 82,725

Acquisition-related obligations - current 19,099 33,639

Accrued expenses and other current liabilities 140,406 139,479

Current liabilities - discontinued operations 12,306 30,833

Total current liabilities 259,054 315,152

Long-term debt 553,697 564,458

Acquisition-related obligations - long-term 20,768 46,259

Workers' compensation and black lung obligations 230,081 228,850

Pension obligations 218,671 204,086

Asset retirement obligations 140,074 164,406

Deferred income taxes 480 422

Other non-current liabilities 28,072 26,822

Non-current liabilities - discontinued operations 29,090 56,246

Total liabilities 1,479,987 1,606,701

Commitments and Contingencies

Stockholders' Equity

Preferred stock - par value $0.01, 5.0 million - - shares authorized, none issued

Common stock - par value $0.01, 50.0 million shares authorized, 20.6 million issued and 18.3 million outstanding at December 31, 2020 and 20.5 206 205 million issued and 18.2 million outstanding at December 31, 2019

Additional paid-in capital 779,424 775,707

Accumulated other comprehensive loss (111,985) (58,616)

Treasury stock, at cost: 2.3 million shares at (107,014) (107,984) December 31, 2020 and 2019

(Accumulated deficit) retained earnings (360,529) 86,810

Total stockholders' equity 200,102 696,122

Total liabilities and stockholders' equity $1,680,089$2,302,823

ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands)



Year Ended December 31,

2020 2019

Operating activities:

Net loss $(446,899)$(316,319)

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation, depletion and amortization 151,455 315,162

Amortization of acquired intangibles, net 10,075 (88)

Accretion of acquisition-related obligations 3,342 5,522 discount

Amortization of debt issuance costs and accretion 14,772 14,070 of debt discount

Mark-to-market adjustment for acquisition-related (8,750) (3,564) obligations

Loss on sale of business 36,113 -

(Gain) loss on disposal of assets (2,401) 8,142

Gain on assets acquired in an exchange transaction - (9,083)

Accretion on asset retirement obligations 30,658 33,759

Employee benefit plans, net 14,439 20,846

Deferred income taxes 33,123 (12,098)

Goodwill impairment - 124,353

Asset impairment and restructuring 256,518 83,485

Loss on modification and extinguishment of debt - 26,459

Stock-based compensation 4,896 12,397

Equity in loss of affiliates 3,473 6,874

Other, net (5,972) (5,204)

Changes in operating assets and liabilities

Trade accounts receivable, net 91,190 47,424

Inventories, net 48,689 (40,694)

Prepaid expenses and other current assets 28,152 56,671

Deposits (17,926) 15,170

Other non-current assets (6,753) (24,460)

Trade accounts payable (28,620) (28,148)

Accrued expenses and other current liabilities 15,428 (25,495)

Acquisition-related obligations (32,560) (28,128)

Asset retirement obligations (19,375) (111,616)

Other non-current liabilities (43,831) (33,557)

Net cash provided by operating activities 129,236 131,880

Investing activities:

Capital expenditures (153,990) (192,411)

Proceeds on disposal of assets 4,023 2,780

Cash paid on sale of business (52,192) -

Capital contributions to equity affiliates (3,443) (10,051)

Purchase of investment securities (21,129) (92,855)

Maturity of investment securities 16,685 100,250

Other, net 77 535

Net cash used in investing activities (209,969) (191,752)

Financing activities:

Proceeds from borrowings on debt 57,500 544,946

Principal repayments of debt (59,768) (552,809)

Principal repayments of financing lease obligations(3,176) (3,654)

Debt issuance costs - (6,689)

Common stock repurchases and related expenses (209) (37,622)

Principal repayments of notes payable (16,723) (14,818)

Other, net - 952

Net cash used in financing activities (22,376) (69,694)

Net decrease in cash and cash equivalents and (103,109) (129,566) restricted cash

Cash and cash equivalents and restricted cash at 347,680 477,246 beginning of period

Cash and cash equivalents and restricted cash at $244,571 $347,680 end of period



Supplemental cash flow information:

Cash paid for interest $49,294 $51,877

Cash paid for income taxes $5 $3,039

Cash received for income tax refunds $68,801 $72,236

Supplemental disclosure of noncash investing and financing activities:

Financing leases and capital financing - equipment $4,411 $5,324

Accrued capital expenditures $7,493 $4,110

The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the Consolidated Balance Sheets that sum to the total of the same such amounts shown in the Consolidated Statements of Cash Flows.

As of December 31,

2020 2019

Cash and cash equivalents $139,227$212,793

Short-term restricted cash (included in Prepaid 9,311 12,363 expenses and other current assets)

Long-term restricted cash 96,033 122,524

Total cash and cash equivalents and restricted cash $244,571$347,680shown in the Consolidated Statements of Cash Flows

ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES ADJUSTED EBITDA RECONCILIATION (Amounts in thousands)



Three Months Ended Year Ended December 31,

September 30, 2020December 31, 2020December 31, 20192020 2019

Net loss from continuing operations $ (68,487) $(55,050) $(210,237) $(241,470)$(219,618)

Interest expense 18,746 18,290 17,444 74,528 67,521

Interest income (376) (153) (1,701) (7,027) (7,247)

Income tax (benefit) expense (45) 36 (44,407) (2,164) (53,287)

Depreciation, depletion and amortization 49,236 (4,036) 50,221 139,885 215,757

Merger-related costs - - 35 - 1,090

Non-cash stock compensation expense 1,078 696 4,885 4,897 12,348

Mark-to-market adjustment - acquisition-related obligations3,624 4,676 (3,276) (8,750) (3,564)

Accretion on asset retirement obligations 6,736 6,559 6,990 26,504 23,865

Loss on modification and extinguishment of debt - - - - 26,459

Asset impairment and restructuring ^(1) (226) 29,897 60,466 83,878 66,324

Goodwill impairment ^(2) - - 124,353 - 124,353

Cost impact of coal inventory fair value adjustment ^(3) - - - - 8,209

Gain on assets acquired in an exchange transaction ^(4) - - - - (9,083)

Management restructuring costs ^(5) - - 7,720 941 7,720

Loss on partial settlement of benefit obligations - 1,735 6,446 2,966 6,446

Amortization of acquired intangibles, net 2,074 4,748 3,137 9,214 (3,189)

Adjusted EBITDA $ 12,360 $7,398 $22,076 $83,402 $264,104

^(1) Asset impairment and restructuring for the year ended December 31, 2020includes long-lived asset impairments of $80,954 related to asset groupsrecorded within the Met and CAPP - Thermal reporting segments and restructuringexpense of $2,924 recorded in CAPP - Thermal and All Other reporting segments.Asset impairment for the year ended December 31, 2019 includes a long-livedasset impairment of $60,169 related to asset groups recorded within the Met andCAPP - Thermal reporting segments and an asset impairment of $6,155 primarilyrelated to the write-off of prepaid purchased coal as a result of Blackjewel'sChapter 11 bankruptcy filing on July 1, 2019.

^(2) The goodwill impairment testing as of December 31, 2019 resulted in agoodwill impairment of $124,353 to write down the full carrying value ofgoodwill.

^(3) The cost impact of the coal inventory fair value adjustment as a result ofthe Merger was completed during the three months ended June 30, 2019.

^(4) During the year ended December 31, 2019, the Company entered into anexchange transaction which primarily included the release of the PRB overridingroyalty interest owed to the Company in exchange for met coal reserves whichresulted in a gain of $9,083.

^(5) Management restructuring costs are related to severance expense associatedwith senior management changes during the three months ended March 31, 2020 andthe year ended December 31, 2019.

ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES RESULTS OF OPERATIONS



Three Months Ended September 30, 2020

(In thousands, except for per ton data) Met CAPP - All Consolidated Thermal Other

Coal revenues $295,376$39,813 $- $335,189

Less: Freight and handling fulfillment revenues (49,742) (3,015) - (52,757)

Non-GAAP Coal revenues $245,634$36,798 $- $282,432

Tons sold 3,329 636 - 3,965

Non-GAAP Coal sales realization per ton $73.79 $57.86 $- $71.23



Cost of coal sales (exclusive of items shown separately $276,248$33,999 $(553)$309,694 below)

Depreciation, depletion and amortization - production^ (1)41,177 7,313 410 48,900

Accretion on asset retirement obligations 3,800 2,406 530 6,736

Amortization of acquired intangibles, net 2,535 (486) 25 2,074

Total Cost of coal sales $323,760$43,232 $412 $367,404

Less: Freight and handling costs (49,742) (3,015) - (52,757)

Less: Depreciation, depletion and amortization - (41,177) (7,313) (410) (48,900) production^ (1)

Less: Accretion on asset retirement obligations (3,800) (2,406) (530) (6,736)

Less: Amortization of acquired intangibles, net (2,535) 486 (25) (2,074)

Less: Idled and closed mine costs (5,091) (1,742) 546 (6,287)

Non-GAAP Cost of coal sales $221,415$29,242 $(7) $250,650

Tons sold 3,329 636 - 3,965

Non-GAAP Cost of coal sales per ton $66.51 $45.98 $- $63.22

^(1) Depreciation, depletion and amortization - production excludes thedepreciation, depletion and amortization related to selling, general andadministrative functions.

Three Months Ended September 30, 2020

(In thousands, except for per ton data) Met CAPP - ThermalAll OtherConsolidated

Coal revenues $295,376 $39,813 $- $335,189

Less: Total Cost of coal sales (per table above) (323,760) (43,232) (412) (367,404)

GAAP Coal margin $(28,384)$(3,419) $(412) $(32,215)

Tons sold 3,329 636 - 3,965

GAAP Coal margin per ton $(8.53) $(5.38) $- $(8.12)



GAAP Coal margin $(28,384)$(3,419) $(412) $(32,215)

Add: Depreciation, depletion and amortization - production^ (1)41,177 7,313 410 48,900

Add: Accretion on asset retirement obligations 3,800 2,406 530 6,736

Add: Amortization of acquired intangibles, net 2,535 (486) 25 2,074

Add: Idled and closed mine costs 5,091 1,742 (546) 6,287

Non-GAAP Coal margin $24,219 $7,556 $7 $31,782

Tons sold 3,329 636 - 3,965

Non-GAAP Coal margin per ton $7.28 $11.88 $- $8.02

^(1) Depreciation, depletion and amortization - production excludes thedepreciation, depletion and amortization related to selling, general andadministrative functions.

Three Months Ended December 31, 2020

(In thousands, except for per ton data) Met CAPP - All Other Consolidated Thermal

Coal revenues $289,756$33,604 $- $323,360

Less: Freight and handling fulfillment revenues (48,251) (1,548) - (49,799)

Non-GAAP Coal revenues $241,505$32,056 $- $273,561

Tons sold 3,210 536 - 3,746

Non-GAAP Coal sales realization per ton $75.24 $59.81 $- $73.03



Cost of coal sales (exclusive of items shown separately below)$273,984$28,754 $(907) $301,831

Depreciation, depletion and amortization - production^ (1) 2,381 1,031 (7,680) (4,268)

Accretion on asset retirement obligations 3,328 2,259 972 6,559

Amortization of acquired intangibles, net 5,014 (291) 25 4,748

Total Cost of coal sales $284,707$31,753 $(7,590)$308,870

Less: Freight and handling costs (48,251) (1,548) - (49,799)

Less: Depreciation, depletion and amortization - production^ (2,381) (1,031) 7,680 4,268 (1)

Less: Accretion on asset retirement obligations (3,328) (2,259) (972) (6,559)

Less: Amortization of acquired intangibles, net (5,014) 291 (25) (4,748)

Less: Idled and closed mine costs (3,445) (3,543) 845 (6,143)

Non-GAAP Cost of coal sales $222,288$23,663 $(62) $245,889

Tons sold 3,210 536 - 3,746

Non-GAAP Cost of coal sales per ton $69.25 $44.15 $- $65.64

^(1) Depreciation, depletion and amortization - production excludes thedepreciation, depletion and amortization related to selling, general andadministrative functions.

Three Months Ended December 31, 2020

(In thousands, except for per ton data) Met CAPP - All Consolidated Thermal Other

Coal revenues $289,756$33,604 $- $323,360

Less: Total Cost of coal sales (per table above) (284,707)(31,753) 7,590 (308,870)

GAAP Coal margin $5,049 $1,851 $7,590$14,490

Tons sold 3,210 536 - 3,746

GAAP Coal margin per ton $1.57 $3.45 $- $3.87



GAAP Coal margin $5,049 $1,851 $7,590$14,490

Add: Depreciation, depletion and amortization - production^ (1)2,381 1,031 (7,680)(4,268)

Add: Accretion on asset retirement obligations 3,328 2,259 972 6,559

Add: Amortization of acquired intangibles, net 5,014 (291) 25 4,748

Add: Idled and closed mine costs 3,445 3,543 (845) 6,143

Non-GAAP Coal margin $19,217 $8,393 $62 $27,672

Tons sold 3,210 536 - 3,746

Non-GAAP Coal margin per ton $5.99 $15.66 $- $7.39

^(1) Depreciation, depletion and amortization - production excludes thedepreciation, depletion and amortization related to selling, general andadministrative functions.

Three Months Ended December 31, 2019

(In thousands, except for per ton data) Met CAPP - All Other Consolidated Thermal

Coal revenues $370,200$60,576 $681 $431,457

Less: Freight and handling fulfillment revenues (59,320) (10,450) - (69,770)

Non-GAAP Coal revenues $310,880$50,126 $681 $361,687

Tons sold 3,273 893 8 4,174

Non-GAAP Coal sales realization per ton $94.98 $56.13 $85.13 $86.65



Cost of coal sales (exclusive of items shown separately below)$331,395$55,653 $(48) $387,000

Depreciation, depletion and amortization - production^ (1) 39,122 12,897 (2,165) 49,854

Accretion on asset retirement obligations 2,613 3,528 849 6,990

Amortization of acquired intangibles, net 4,574 (1,437) - 3,137

Total Cost of coal sales $377,704$70,641 $(1,364)$446,981

Less: Freight and handling costs (59,320) (10,450) - (69,770)

Less: Depreciation, depletion and amortization - production^ (39,122) (12,897) 2,165 (49,854) (1)

Less: Accretion on asset retirement obligations (2,613) (3,528) (849) (6,990)

Less: Amortization of acquired intangibles, net (4,574) 1,437 - (3,137)

Less: Idled and closed mine costs (2,757) (1,260) 713 (3,304)

Non-GAAP Cost of coal sales $269,318$43,943 $665 $313,926

Tons sold 3,273 893 8 4,174

Non-GAAP Cost of coal sales per ton $82.28 $49.21 $83.13 $75.21

^(1) Depreciation, depletion and amortization - production excludes thedepreciation, depletion and amortization related to selling, general andadministrative functions.

Three Months Ended December 31, 2019

(In thousands, except for per ton data) Met CAPP - All OtherConsolidated Thermal

Coal revenues $370,200$60,576 $681 $431,457

Less: Total Cost of coal sales (per table above) (377,704)(70,641) 1,364 (446,981)

GAAP Coal margin $(7,504)$(10,065) $2,045 $(15,524)

Tons sold 3,273 893 8 4,174

GAAP Coal margin per ton $(2.29) $(11.27) $255.63$(3.72)



GAAP Coal margin $(7,504)$(10,065) $2,045 $(15,524)

Add: Depreciation, depletion and amortization - production^ (1)39,122 12,897 (2,165) 49,854

Add: Accretion on asset retirement obligations 2,613 3,528 849 6,990

Add: Amortization of acquired intangibles, net 4,574 (1,437) - 3,137

Add: Idled and closed mine costs 2,757 1,260 (713) 3,304

Non-GAAP Coal margin $41,562 $6,183 $16 $47,761

Tons sold 3,273 893 8 4,174

Non-GAAP Coal margin per ton $12.70 $6.92 $2.00 $11.44

^(1) Depreciation, depletion and amortization - production excludes thedepreciation, depletion and amortization related to selling, general andadministrative functions.

Year Ended December 31, 2020

(In thousands, except for per ton data) Met CAPP - All Consolidated Thermal Other

Coal revenues $1,263,855$148,880 $389 $1,413,124

Less: Freight and handling fulfillment revenues (206,509) (12,940) - (219,449)

Non-GAAP Coal revenues $1,057,346$135,940 $389 $1,193,675

Tons sold 13,070 2,437 6 15,513

Non-GAAP Coal sales realization per ton $80.90 $55.78 $64.83$76.95



Cost of coal sales (exclusive of items shown separately below)$1,140,556$136,944 $3,511$1,281,011

Depreciation, depletion and amortization - production^ (1) 124,060 20,453 (5,885)138,628

Accretion on asset retirement obligations 14,214 9,285 3,005 26,504

Amortization of acquired intangibles, net 12,889 (3,775) 100 9,214

Total Cost of coal sales $1,291,719$162,907 $731 $1,455,357

Less: Freight and handling costs (206,509) (12,940) - (219,449)

Less: Depreciation, depletion and amortization - production^ (124,060) (20,453) 5,885 (138,628) (1)

Less: Accretion on asset retirement obligations (14,214) (9,285) (3,005)(26,504)

Less: Amortization of acquired intangibles, net (12,889) 3,775 (100) (9,214)

Less: Idled and closed mine costs (16,640) (8,973) (3,267)(28,880)

Non-GAAP Cost of coal sales $917,407 $115,031 $244 $1,032,682

Tons sold 13,070 2,437 6 15,513

Non-GAAP Cost of coal sales per ton $70.19 $47.20 $40.67$66.57

^(1) Depreciation, depletion and amortization - production excludes thedepreciation, depletion and amortization related to selling, general andadministrative functions.

Year Ended December 31, 2020

(In thousands, except for per ton data) Met CAPP - ThermalAll Other Consolidated

Coal revenues $1,263,855$148,880 $389 $1,413,124

Less: Total Cost of coal sales (per table above) (1,291,719)(162,907) (731) (1,455,357)

GAAP Coal margin $(27,864) $(14,027) $(342) $(42,233)

Tons sold 13,070 2,437 6 15,513

GAAP Coal margin per ton $(2.13) $(5.76) $(57.00)$(2.72)



GAAP Coal margin $(27,864) $(14,027) $(342) $(42,233)

Add: Depreciation, depletion and amortization - production^ (1)124,060 20,453 (5,885) 138,628

Add: Accretion on asset retirement obligations 14,214 9,285 3,005 26,504

Add: Amortization of acquired intangibles, net 12,889 (3,775) 100 9,214

Add: Idled and closed mine costs 16,640 8,973 3,267 28,880

Non-GAAP Coal margin $139,939 $20,909 $145 $160,993

Tons sold 13,070 2,437 6 15,513

Non-GAAP Coal margin per ton $10.71 $8.58 $24.17 $10.38

^(1) Depreciation, depletion and amortization - production excludes thedepreciation, depletion and amortization related to selling, general andadministrative functions.

Year Ended December 31, 2019

(In thousands, except for per ton data) Met CAPP - ThermalAll OtherConsolidated

Coal revenues $1,709,863$285,390 $681 $1,995,934

Less: Freight and handling fulfillment revenues (242,049) (34,133) - (276,182)

Non-GAAP Coal revenues $1,467,814$251,257 $681 $1,719,752

Tons sold 12,926 4,218 8 17,152

Non-GAAP Coal sales realization per ton $113.56 $59.57 $85.13 $100.27



Cost of coal sales (exclusive of items shown separately below) $1,389,619$274,320 $3,829 $1,667,768

Depreciation, depletion and amortization - production^ (1) 152,835 57,483 4,025 214,343

Accretion on asset retirement obligations 9,599 10,929 3,337 23,865

Amortization of acquired intangibles, net 10,389 (13,578) - (3,189)

Total Cost of coal sales $1,562,442$329,154 $11,191$1,902,787

Less: Freight and handling costs (242,049) (34,133) - (276,182)

Less: Depreciation, depletion and amortization - production^ (1)(152,835) (57,483) (4,025) (214,343)

Less: Accretion on asset retirement obligations (9,599) (10,929) (3,337) (23,865)

Less: Amortization of acquired intangibles, net (10,389) 13,578 - 3,189

Less: Idled and closed mine costs (8,699) (2,702) (3,164) (14,565)

Less: Cost impact of coal inventory fair value adjustment ^(2) (4,751) (3,458) - (8,209)

Non-GAAP Cost of coal sales $1,134,120$234,027 $665 $1,368,812

Tons sold 12,926 4,218 8 17,152

Non-GAAP Cost of coal sales per ton $87.74 $55.48 $83.13 $79.80

^(1) Depreciation, depletion and amortization - production excludes thedepreciation, depletion and amortization related to selling, general andadministrative functions.

^(2) The cost impact of the coal inventory fair value adjustment as a result ofthe Merger was completed during the three months ended June 30, 2019.

Year Ended December 31, 2019

(In thousands, except for per ton data) Met CAPP - ThermalAll Other Consolidated

Coal revenues $1,709,863$285,390 $681 $1,995,934

Less: Total Cost of coal sales (per table above) (1,562,442)(329,154) (11,191) (1,902,787)

GAAP Coal margin $147,421 $(43,764) $(10,510) $93,147

Tons sold 12,926 4,218 8 17,152

GAAP Coal margin per ton $11.40 $(10.38) $(1,313.75)$5.43



GAAP Coal margin $147,421 $(43,764) $(10,510) $93,147

Add: Depreciation, depletion and amortization - production^ (1)152,835 57,483 4,025 214,343

Add: Accretion on asset retirement obligations 9,599 10,929 3,337 23,865

Add: Amortization of acquired intangibles, net 10,389 (13,578) - (3,189)

Add: Idled and closed mine costs 8,699 2,702 3,164 14,565

Add: Cost impact of coal inventory fair value adjustment ^(2) 4,751 3,458 - 8,209

Non-GAAP Coal margin $333,694 $17,230 $16 $350,940

Tons sold 12,926 4,218 8 17,152

Non-GAAP Coal margin per ton $25.82 $4.08 $2.00 $20.46

^(1) Depreciation, depletion and amortization - production excludes thedepreciation, depletion and amortization related to selling, general andadministrative functions.

^(2) The cost impact of the coal inventory fair value adjustment as a result ofthe Merger was completed during the three months ended June 30, 2019.

Three Months Ended September 30, 2020

(In thousands, except for per ton data) Met CAPP - ThermalAll OtherConsolidated

Non-GAAP Cost of coal sales $221,415$ 29,242 $(7) $250,650

Less: cost of purchased coal sold (12,511) 70 - (12,441)

Adjusted cost of produced coal sold $208,904$ 29,312 $(7) $238,209

Produced tons sold 3,142 636 - 3,778

Adjusted cost of produced coal sold per ton^ (1)$66.49 $ 46.09 $- $63.05

^(1) Cost of produced coal sold per ton for our operations is calculated asnon-GAAP cost of produced coal sold divided by produced tons sold.

Three Months Ended December 31, 2020

(In thousands, except for per ton data) Met CAPP - ThermalAll OtherConsolidated

Non-GAAP Cost of coal sales $222,288$ 23,663 $(62) $245,889

Less: cost of purchased coal sold (19,993) (93) - (20,086)

Adjusted cost of produced coal sold $202,295$ 23,570 $(62) $225,803

Produced tons sold 2,939 535 - 3,474

Adjusted cost of produced coal sold per ton^ (1)$68.83 $ 44.06 $- $65.00

^(1) Cost of produced coal sold per ton for our operations is calculated asnon-GAAP cost of produced coal sold divided by produced tons sold.

Three Months Ended December 31, 2019

(In thousands, except for per ton data) Met CAPP - ThermalAll OtherConsolidated

Non-GAAP Cost of coal sales $269,318$ 43,943 $665 $313,926

Less: cost of purchased coal sold (43,091) (598) - (43,689)

Adjusted cost of produced coal sold $226,227$ 43,345 $665 $270,237

Produced tons sold 2,779 876 8 3,663

Adjusted cost of produced coal sold per ton^ (1)$81.41 $ 49.48 $83.13 $73.77

^(1) Cost of produced coal sold per ton for our operations is calculated asnon-GAAP cost of produced coal sold divided by produced tons sold.

Year Ended December 31, 2020

(In thousands, except for per ton data) Met CAPP - ThermalAll OtherConsolidated

Non-GAAP Cost of coal sales $917,407$115,031 $244 $1,032,682

Less: cost of purchased coal sold (85,769) (925) - (86,694)

Adjusted cost of produced coal sold $831,638$114,106 $244 $945,988

Produced tons sold 11,941 2,423 6 14,370

Adjusted cost of produced coal sold per ton^ (1)$69.65 $47.09 $40.67 $65.83

^(1) Cost of produced coal sold per ton for our operations is calculated asnon-GAAP cost of produced coal sold divided by produced tons sold.

Year Ended December 31, 2019

(In thousands, except for per ton data) Met CAPP - ThermalAll OtherConsolidated

Non-GAAP Cost of coal sales $1,134,120$234,027 $665 $1,368,812

Less: cost of purchased coal sold (237,681) (6,976) - (244,657)

Adjusted cost of produced coal sold $896,439 $227,051 $665 $1,124,155

Produced tons sold 10,727 4,091 8 14,826

Adjusted cost of produced coal sold per ton^ (1)$83.57 $55.50 $83.13 $75.82

^(1) Cost of produced coal sold per ton for our operations is calculated asnon-GAAP cost of produced coal sold divided by produced tons sold.

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SOURCE Alpha Metallurgical Resources, Inc.