Part I FINANCIAL INFORMATION This section presents Arch Resources' unaudited financial statements, notes, and management's discussion and analysis [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Arch Resources' unaudited financial statements and notes show a significant net income turnaround for Q3 and 9M 2021 [Condensed Consolidated Statements of Operations](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section details the company's revenues, income, net income, and EPS for Q3 and 9M ended September 30 Three Months Ended September 30, 2021 vs. 2020 (in thousands) | Metric | 2021 | 2020 | Change (2021 vs 2020) | | :---------------------------------- | :--------- | :--------- | :-------------------- | | Revenues | $594,412 | $382,261 | +$212,151 | | Income (loss) from operations | $95,398 | $(187,680) | +$283,078 | | Net income (loss) | $89,143 | $(191,467) | +$280,610 | | Basic earnings (loss) per share | $5.83 | $(12.64) | +$18.47 | | Diluted earnings (loss) per share | $4.92 | $(12.64) | +$17.56 | Nine Months Ended September 30, 2021 vs. 2020 (in thousands) | Metric | 2021 | 2020 | Change (2021 vs 2020) | | :---------------------------------- | :--------- | :--------- | :-------------------- | | Revenues | $1,402,345 | $1,107,014 | +$295,331 | | Income (loss) from operations | $128,266 | $(256,857) | +$385,123 | | Net income (loss) | $110,967 | $(266,090) | +$377,057 | | Basic earnings (loss) per share | $7.26 | $(17.57) | +$24.83 | | Diluted earnings (loss) per share | $6.49 | $(17.57) | +$24.06 | - Asset impairment and restructuring costs were **$0** for both three and nine months ended September 30, 2021, a significant decrease from **$163,106 thousand** and **$176,371 thousand** respectively in 2020[9](index=9&type=chunk) [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) This section presents total comprehensive income (loss) for Q3 and 9M ended September 30 Total Comprehensive Income (Loss) (in thousands) | Period | 2021 | 2020 | | :---------------------------------- | :--------- | :--------- | | Three Months Ended September 30 | $91,766 | $(187,082) | | Nine Months Ended September 30 | $119,511 | $(280,548) | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's assets, liabilities, and equity at September 30, 2021 and December 31, 2020 Balance Sheet Highlights (in thousands) | Metric | Sep 30, 2021 (Unaudited) | Dec 31, 2020 | | :---------------------------------- | :----------------------- | :------------------ | | Total current assets | $648,639 | $588,140 | | Property, plant and equipment, net | $1,135,399 | $1,007,303 | | Total assets | $1,930,949 | $1,722,472 | | Total current liabilities | $438,880 | $290,096 | | Long-term debt | $416,446 | $477,215 | | Total liabilities | $1,516,306 | $1,438,911 | | Total stockholders' equity | $414,643 | $283,561 | - Trade accounts receivable increased from **$110,869 thousand** at December 31, 2020, to **$226,206 thousand** at September 30, 2021[16](index=16&type=chunk) - Current maturities of debt significantly increased from **$31,097 thousand** to **$138,587 thousand**[16](index=16&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section summarizes cash flows from operating, investing, and financing activities for the nine months ended September 30 Cash Flow Summary (Nine Months Ended September 30, in thousands) | Activity | 2021 | 2020 | | :---------------------------------- | :--------- | :--------- | | Cash provided by operating activities | $91,582 | $55,914 | | Cash used in investing activities | $(132,834) | $(111,945) | | Cash provided by financing activities | $38,615 | $73,585 | | (Decrease) increase in cash and cash equivalents, including restricted cash | $(2,637) | $17,554 | - Capital expenditures increased to **$212,046 thousand** in 2021 from **$205,661 thousand** in 2020[19](index=19&type=chunk) - Net income (loss) improved from **$(266,090) thousand** in 2020 to **$110,967 thousand** in 2021, contributing to operating cash flow[19](index=19&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) This section outlines changes in stockholders' equity, including comprehensive income, paid-in capital, and retained earnings Total Stockholders' Equity (in thousands) | Date | Amount | | :---------------------------------- | :--------- | | January 1, 2021 | $283,561 | | September 30, 2021 | $414,643 | - Total comprehensive income (loss) for the nine months ended September 30, 2021, was **$119,511 thousand**, compared to **$(280,548) thousand** for the same period in 2020[11](index=11&type=chunk)[21](index=21&type=chunk) - Paid-in capital increased from **$767,484 thousand** to **$779,013 thousand**, and retained earnings increased from **$378,906 thousand** to **$489,914 thousand** from January 1, 2021, to September 30, 2021[21](index=21&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements [1. Basis of Presentation](index=11&type=section&id=1.%20Basis%20of%20Presentation) This note describes the company's primary business and the accounting principles used for interim financial reporting - The Company's primary business is the production of metallurgical and thermal coal from underground and surface mines in West Virginia, Wyoming, and Colorado[28](index=28&type=chunk) - Financial statements are unaudited and prepared in accordance with U.S. GAAP for interim financial reporting[29](index=29&type=chunk) [2. Accounting Policies](index=11&type=section&id=2.%20Accounting%20Policies) This note details the adoption of new accounting standards and the evaluation of potential impacts from upcoming pronouncements - Adopted ASU 2019-12, 'Income Taxes,' with minimal impact[31](index=31&type=chunk) - Evaluating ASU 2020-06, 'Accounting for Convertible Instruments,' effective for fiscal years beginning after December 15, 2021, for potential impact[32](index=32&type=chunk)[34](index=34&type=chunk) [3. Joint Venture with Peabody Energy](index=13&type=section&id=3.%20Joint%20Venture%20with%20Peabody%20Energy) This note outlines expenses related to the proposed joint venture with Peabody Energy, which were incurred only in 2020 - No expenses related to the proposed joint venture with Peabody Energy were incurred in 2021[35](index=35&type=chunk) - In 2020, expenses were **$4.4 million** (three months) and **$15.9 million** (nine months) before termination[35](index=35&type=chunk) [4. Gain on Property Insurance Recovery Related to Mountain Laurel Longwall](index=13&type=section&id=4.%20Gain%20on%20Property%20Insurance%20Recovery%20Related%20to%20Mountain%20Laurel%20Longwall) This note details the property insurance recovery gain recorded in 2020, with no related amounts in 2021 - A gain of **$23.5 million** was recorded in the nine months ended September 30, 2020, for property insurance recovery[36](index=36&type=chunk) - No amounts related to this recovery were incurred in 2

Financial Data and Key Metrics Changes - The company reported a nearly 50% increase in gross margin, generating more than $61 million in the metallurgical segment [6] - In the thermal segment, the gross margin was nearly $40 million, with a nearly 25% increase in sales volumes [7][13] - Operating cash flows totaled $20 million, with a significant build in working capital due to increased accounts receivable [28] Business Line Data and Key Metrics Changes - The metallurgical segment achieved a 20% increase in sales volume and a 25% increase in per ton margin [6][18] - The thermal segment expanded its sales commitments by approximately 7.6 million tons and increased per ton cash margin nearly threefold from $0.98 to $2.62 [7][23] Market Data and Key Metrics Changes - Global steel output is on pace to return to or exceed 2019 levels, driving strong demand for coking coal [14] - Thermal coal demand and pricing have strengthened due to natural gas prices trading above $4 and a robust global economic expansion [15] Company Strategy and Development Direction - The company is focused on a strategic pivot towards steel and coking coal markets while implementing a harvest strategy for legacy thermal assets [11][12] - The Leer South project is expected to enhance cash-generating capabilities and solidify the company's position as a low-cost coking coal supplier [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in a strong second half of the year, driven by improved market dynamics in both coking and thermal coal markets [8][14] - The company anticipates strong cash generation for the remainder of the year, supported by current market conditions and reduced capital spending [33] Other Important Information - The company became the first U.S. metallurgical coal producer to join ResponsibleSteel, an ESG-driven standard and certification initiative [26] - The company is exploring strategic alternatives for its thermal assets to maximize cash flows while managing long-term closure obligations [12] Q&A Session Summary Question: Can you comment on the incremental pricing on the metallurgical side? - Management noted that market price movements significantly influenced pricing, and they expect significant improvement in market pricing in the second half of the year [36][39] Question: What is the outlook for direct sales into China? - The company has seen growing opportunities to export volumes into China, with several vessels expected to be shipped in Q3 and Q4 [41][45] Question: What is the expected maintenance CapEx moving forward? - The expected maintenance CapEx is around $100 million annually, with the company generating substantial cash flow to cover this [46][52] Question: What is the current status of the thermal asset retirement obligation (ARO)? - The ARO is approximately $200 million, with expectations to reduce it to around $160 million by year-end through ongoing reclamation efforts [55][57] Question: How does the company plan to utilize free cash flow? - The company plans to fortify its balance sheet, reduce debt, and potentially initiate a capital return program, including share buybacks or dividends [47][48]

Arch Resources, Inc. (NYSE:ARCH) Q1 2021 Earnings Conference Call April 22, 2021 10:00 AM ET Company Participants Deck Slone - Senior Vice President of Strategy Paul Lang - Chief Executive Officer and President John Drexler - Senior Vice President and Chief Operating Officer Matt Giljum - Senior Vice President and Chief Financial Officer Conference Call Participants Matt Key - B. Riley Securities Nathan Martin - The Benchmark Company Lucas Pipes - B. Riley Securities Operator Good day, everyone. Welcome to ...

Financial Data and Key Metrics Changes - The company achieved cash costs of $61.13 per ton for the year, slightly above the midpoint of guidance despite a nearly 1 million ton reduction in coking coal shipments due to the pandemic [18] - Fourth quarter operating cash flows were $5 million, weaker than the third quarter, reflecting the semi-annual payment of production taxes [31] - Total liquidity at year-end was $315 million, with unrestricted cash of $284 million [32] Business Line Data and Key Metrics Changes - The company maintained a first quartile cost structure in its core coking coal segment despite significant market-driven volume reductions [7] - The Leer South growth project is expected to significantly improve cash-generating capabilities, with startup anticipated in about six months [18][20] - The company plans to produce around 2 million tons from Coal Creek in 2021, the final full year of operation before reclamation begins in 2022 [11] Market Data and Key Metrics Changes - Global steel production was up nearly 6% in December 2020 compared to December 2019, indicating a strong recovery in the steel market [13] - The price of hot rolled coil is trading at levels 50% to 150% above last year's pandemic-driven lows [14] - The US East Coast High-Vol A price assessment is up nearly 50% compared to last summer's lows, reflecting strong demand and reduced supply [15] Company Strategy and Development Direction - The company is strategically pivoting to focus on metallurgical coal, aiming to become a premier producer of metallurgical coal in the US [10] - Plans include reducing the operating footprint of thermal assets and optimizing cash generation for future reclamation [24] - The company is committed to environmental, social, and governance (ESG) leadership, achieving a loss time incident rate of 0.93, nearly three times better than the industry average [22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the ongoing impacts of COVID-19, with expectations for modest sequential increases in coking coal shipments in Q1 2021 [27] - The company is optimistic about the post-pandemic recovery, anticipating increased demand for metallurgical coal as economies stimulate growth [69] - Management highlighted the importance of operational excellence and continuous improvement across the enterprise [27] Other Important Information - The company reduced corporate staffing levels by 25% and cut overhead costs by $10 million per year through a voluntary separation program [8] - The divestiture of the Viper thermal mine reduced long-term undiscounted mine closure obligations by about $21 million [10] - The company plans to target a reduction of $40 million in Asset Retirement Obligation (ARO) at Coal Creek over the next 18 months [25] Q&A Session Summary Question: Can you provide a breakdown of growth CapEx with Leer versus maintenance sustaining capital in 2021? - Management indicated that they are trending towards the upper end of the $360 million to $390 million range for Leer South, with maintenance CapEx expected to run around $100 million post-startup [38][39] Question: What should we expect for thermal guidance and costs? - The thermal guidance is primarily influenced by PRB operations, with costs expected to be between $11.50 and $12 per ton [44] Question: What is the coking coal volume outlook for 2021? - Management expects flat shipment levels for Q1, with an increase anticipated in the second half of the year as Leer South comes online [48]

Part I Financial Information [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company reported a significant net loss in Q3 2020, driven by declining revenues and a substantial asset impairment charge Condensed Consolidated Statements of Operations Highlights (in thousands) | Metric | Three Months Ended Sep 30, 2020 | Three Months Ended Sep 30, 2019 | Nine Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2019 | | :--- | :--- | :--- | :--- | :--- | | **Revenues** | $382,261 | $619,467 | $1,107,014 | $1,744,872 | | **Income (loss) from operations** | $(187,680) | $106,481 | $(256,857) | $249,830 | | **Net income (loss)** | $(191,467) | $106,769 | $(266,090) | $242,350 | | **Diluted earnings (loss) per share** | $(12.64) | $6.34 | $(17.57) | $13.66 | Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | September 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Total current assets** | $562,982 | $706,747 | | **Total assets** | $1,653,337 | $1,867,756 | | **Total liabilities** | $1,287,691 | $1,227,220 | | **Total stockholders' equity** | $365,646 | $640,536 | Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Activity | Nine Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2019 | | :--- | :--- | :--- | | **Cash provided by operating activities** | $55,914 | $334,053 | | **Cash used in investing activities** | $(111,945) | $(154,002) | | **Cash provided by (used in) financing activities** | $73,585 | $(269,560) | - During Q3 2020, the company recorded a significant asset impairment charge of **$163.1 million** related to its thermal coal segments and an equity investment, driven by reduced demand, low prices, and the termination of the proposed joint venture with Peabody[33](index=33&type=chunk)[34](index=34&type=chunk)[35](index=35&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=48&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes poor Q3 2020 results to weak coal markets and COVID-19, leading to strategic shifts including thermal asset divestiture and dividend suspension - The proposed joint venture with Peabody Energy was blocked by the U.S. District Court on September 29, 2020, leading Arch to terminate the joint venture and pursue strategic alternatives for its thermal assets, including potential divestiture, to focus on metallurgical products[136](index=136&type=chunk) - The COVID-19 pandemic significantly impacted domestic and global economies, leading to demand destruction for coal, with the company receiving force majeure notices and deferring over **three million tons** of Powder River Basin contractual obligations[131](index=131&type=chunk)[133](index=133&type=chunk) - As of September 30, 2020, total liquidity was approximately **$265 million**, and the company suspended its quarterly dividend and share repurchase program in April 2020 to preserve capital and fund the Leer South development[197](index=197&type=chunk)[196](index=196&type=chunk) [Results of Operations](index=51&type=section&id=Results%20of%20Operations) Q3 2020 revenues declined **38.3%** to **$382.3 million** due to lower sales volumes and pricing, resulting in a significant operating loss and a nine-month net loss Coal Sales Performance (Q3 2020 vs Q3 2019) | Metric | Q3 2020 | Q3 2019 | Change | | :--- | :--- | :--- | :--- | | **Coal sales (in thousands)** | $382,261 | $619,467 | $(237,206) | | **Tons sold (in thousands)** | 17,128 | 26,257 | (9,129) | - The decrease in Q3 2020 coal sales was driven by an **$86.4 million** decline from Metallurgical operations, an **$89.1 million** decline from the Powder River Basin, and a **$61.6 million** decline from Other Thermal operations[138](index=138&type=chunk) - A major contributor to the operating loss in Q3 2020 was a **$163.1 million** asset impairment charge related to the Coal Creek, West Elk, and Viper thermal mines, and the Knight Hawk equity investment[139](index=139&type=chunk)[145](index=145&type=chunk) Coal Sales Performance (Nine Months 2020 vs 2019) | Metric | Nine Months 2020 | Nine Months 2019 | Change | | :--- | :--- | :--- | :--- | | **Coal sales (in thousands)** | $1,107,014 | $1,744,872 | $(637,858) | | **Tons sold (in thousands)** | 47,367 | 67,958 | (20,591) | [Operational Performance](index=61&type=section&id=Operational%20Performance) All operating segments experienced significant Adjusted EBITDA declines, with Metallurgical cash margin per ton collapsing due to lower pricing and Powder River Basin volumes decreasing Segment Performance (Three Months Ended September 30) | Segment | Metric | 2020 | 2019 | | :--- | :--- | :--- | :--- | | **Powder River Basin** | Adjusted EBITDA (in thousands) | $34,486 | $50,153 | | | Cash margin per ton sold | $2.38 | $2.25 | | **Metallurgical** | Adjusted EBITDA (in thousands) | $12,407 | $70,814 | | | Cash margin per ton sold | $6.26 | $34.00 | | **Other Thermal** | Adjusted EBITDA (in thousands) | $(2,870) | $16,659 | | | Cash margin per ton sold | $(2.96) | $8.36 | - The Metallurgical segment's performance was severely impacted by declining coking coal prices and lower shipment volumes due to COVID-19's effect on the steelmaking supply chain[173](index=173&type=chunk) - The Powder River Basin segment's volume decline was driven by competitive natural gas pricing, growth in renewable energy, and reduced electricity demand from COVID-19 responses[171](index=171&type=chunk) [Liquidity and Capital Resources](index=71&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity decreased to **$265 million** by Q3 2020, leading to dividend suspension and new financing, while cash from operations plummeted due to poor results - Total liquidity as of September 30, 2020 was approximately **$265 million**, comprising **$220 million** in cash and investments and **$44.6 million** in availability under credit facilities[197](index=197&type=chunk)[198](index=198&type=chunk) - In 2020, the company entered into a **$53.6 million** equipment financing arrangement and arranged for **$53.1 million** in tax-exempt bonds to finance the Leer South development project[194](index=194&type=chunk)[195](index=195&type=chunk) - Cash from operations for the nine months ended Sep 30, 2020, was **$55.9 million**, a significant decrease from **$334.1 million** in the same period of 2019, due to deteriorating operational results[199](index=199&type=chunk)[200](index=200&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=76&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces commodity price risk, particularly in coal markets, and uses derivatives to manage diesel fuel price exposure, with specific sales commitments detailed Sales Commitments as of October 22, 2020 (Priced Tons) | Segment | 2020 Tons (millions) | 2020 Price/ton | 2021 Tons (millions) | 2021 Price/ton | | :--- | :--- | :--- | :--- | :--- | | **Metallurgical (Coking & Thermal)** | 6.1 | - | 2.0 | - | | **Powder River Basin** | 53.6 | $12.35 | 42.8 | $12.56 | | **Other Thermal** | 3.2 | $30.12 | 1.7 | $34.28 | - The company is exposed to price risk for diesel fuel and uses derivatives to manage it, having protected prices on approximately **4 million gallons** through swaps and options for the remainder of 2020[208](index=208&type=chunk) [Controls and Procedures](index=78&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of September 30, 2020, with no material changes to internal controls - Based on an evaluation as of September 30, 2020, the CEO and CFO concluded that the company's disclosure controls and procedures were effective[210](index=210&type=chunk) Part II Other Information [Legal Proceedings](index=79&type=section&id=Item%201.%20Legal%20Proceedings) The U.S. District Court ruled in favor of the FTC on September 29, 2020, blocking the proposed joint venture with Peabody Energy, leading to its termination - On February 26, 2020, the FTC filed a complaint to block the proposed joint venture with Peabody Energy, alleging it would eliminate competition in the Southern Powder River Basin thermal coal market[215](index=215&type=chunk) - The U.S. District Court upheld the FTC's decision on September 29, 2020, after which the company and Peabody jointly terminated the joint venture[216](index=216&type=chunk) [Risk Factors](index=80&type=section&id=Item%201A.%20Risk%20Factors) The ongoing COVID-19 pandemic significantly impacts global economies, financial markets, and coal demand and prices, potentially exacerbating existing business risks - The COVID-19 pandemic has caused a widespread health crisis and economic downturn, which has negatively impacted and will continue to adversely affect the company's business, financial condition, and results of operations[218](index=218&type=chunk)[219](index=219&type=chunk) - The pandemic may heighten other risks, including those related to coal prices, market conditions, capital access, supply chain disruptions, and customer purchasing patterns[221](index=221&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=80&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not repurchase common stock in Q3 2020, with **$223 million** remaining under its **$1.05 billion** share repurchase authorization - No shares of common stock were repurchased during the quarter ended September 30, 2020[223](index=223&type=chunk) - As of September 30, 2020, approximately **$223 million** was remaining under the company's total **$1.05 billion** share repurchase authorization[224](index=224&type=chunk)[223](index=223&type=chunk) [Mine Safety Disclosures](index=81&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Mine safety violation information, as required by the Dodd-Frank Act, is provided in Exhibit 95 to this Quarterly Report on Form 10-Q - The statement concerning mine safety violations required by Section 1503(a) of the Dodd-Frank Act is included as Exhibit 95 to the Form 10-Q[225](index=225&type=chunk) [Exhibits](index=82&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including credit agreements, financing amendments, and CEO/CFO certifications - Lists various legal and financial documents filed as exhibits, including amendments to credit and receivables purchase agreements[227](index=227&type=chunk)[228](index=228&type=chunk) - Includes CEO and CFO certifications under Sarbanes-Oxley Sections 302 (Rule 13a-14(a)) and 906 (Section 1350)[233](index=233&type=chunk)

Arch Resources, Inc. (NYSE:ARCH) Q3 2020 Results Earnings Conference Call October 22, 2020 10:00 AM ET Company Participants Deck Slone - Senior Vice President of Strategy Paul Lang - President, Chief Executive Officer John Drexler - Senior Vice President, Chief Operating Officer Matt Giljum - Senior Vice President, Chief Financial Officer Conference Call Participants Lucas Pipes - B. Riley Financial Mark Levin - The Benchmark Company Wayne Cooperman - Cobalt Capital Operator Good day and welcome to the Arch ...

Arch Resources, Inc. (NYSE:ARCH) Q2 2020 Results Earnings Conference Call July 28, 2020 10:00 AM ET Company Participants Deck Slone - Senior Vice President, Strategy Paul Lang - President and CEO John Drexler - Chief Operating Officer Matt Giljum - Chief Financial Officer Conference Call Participants Scott Schier - Clarksons David Gagliano - BMO Capital Markets Mark Levin - The Benchmark Company Michael Dudas - Vertical Research Lucas Pipes - B. Riley FBR Operator Good day. And welcome to the Arch Resources ...