Long-term Debt

12 Months Ended

Dec. 31, 2023

The Company’s total indebtedness as of December 31, 2023 and 2022 consisted of the following:


	December 31,
Debt Instrument (defined below, as applicable)	2023		2022
	(Dollars in millions)






3.250% Convertible Senior Notes due March 2028 (2028 Convertible Notes)	$	320.0	$	320.0

Finance lease obligations	22.3		23.6
Less: Debt issuance costs	(8.1)		(9.8)
	334.2		333.8
Less: Current portion of long-term debt	13.5		13.2
Long-term debt	$	320.7	$	320.6

As further described below, during 2022, the Company utilized various methods allowable or required under its then-existing debt agreements to retire all of its senior secured long-term debt, leaving only its 2028 Convertible Notes, which are further described below, and various finance lease obligations outstanding at December 31, 2022.

2022 Debt Retirements

Upon maturity on March 31, 2022, the Company retired the remaining principal balance of senior secured notes for $23.1 million.

During the year ended December 31, 2022, $62.5 million principal amount of the Company’s senior secured notes maturing in 2024 was retired using proceeds from the offering of 2028 Convertible Notes, as further described below, and the remaining $0.1 million principal amount was retired through a mandatory repurchase offer required under the terms of the notes’ indenture and the Company’s then-existing letter of credit facility. In addition to the $0.1 million principal amount of senior secured notes maturing in 2024 repurchased through such offers, the Company repurchased $42.2 million of aggregate priority lien obligations under the then-existing letter of credit facility during 2022 at approximately 95%. The repurchases of commitments under the then-existing letter of credit facility were effected by the posting of $40.1 million of collateral with the administrative agent and did not reduce the availability under the facility.

During the year ended December 31, 2022, $257.4 million principal amount of the Company’s senior secured notes maturing in 2025 was retired using proceeds from the offering of 2028 Convertible Notes, as further described below. The remaining senior secured notes maturing in 2025 were retired through an open market repurchase of $11.4 million principal amount at 98.00% and, in accordance with the notes’ indenture, a voluntary prepayment of $66.1 million principal amount at 101.59%.

The Company’s senior secured term loan maturing in 2025 was retired through various open market purchases of $44.1 million principal amount throughout 2022 at an aggregate cost of $42.1 million, scheduled quarterly principal amortization payments of $3.0 million, and, in accordance with the terms of the then-existing credit agreement, a voluntary prepayment of $276.2 million principal amount at par.

The senior secured notes and senior secured term loans maturing in 2024 held by certain wholly-owned subsidiaries of the Company (Co-Issuers) were subject to mandatory prepayment offers. During the year ended December 31, 2022, the Company prepaid $18.5 million principal amount of the Co-Issuer senior secured notes maturing in 2024 at an aggregate cost of $19.2 million and $17.2 million principal amount of the Co-Issuer senior secured term loans maturing in 2024 at par.

Voluntary repurchases of Co-Issuer senior secured term loans maturing in 2024 were permissible through various methods, including a modified Dutch auction process in which the Company could solicit acceptable prices from holders. During the year ended December 31, 2022, the Company solicited bids from all holders of Co-Issuer senior secured term loans for the repurchase of the remaining outstanding principal amount, resulting in the valid tender and purchase of $185.9 million principal amount at an aggregate cost of $195.8 million.

The underlying terms of the Co-Issuer senior secured notes and senior secured term loans maturing in 2024 required parity between holders of Co-Issuer senior secured term loans and holders of Co-Issuer senior secured notes with respect to repurchase offers such as those undertaken through the auction processes described above. As such, the Company solicited commensurate bids from all holders of Co-Issuer senior secured notes at various dates during the year ended December 31, 2022 for the repurchase of the remaining outstanding principal amount, resulting in the valid tender and purchase of $147.3 million principal amount at an aggregate cost of $154.1 million.

Subsequent to the modified Dutch auction processes and related transactions, the Company voluntarily prepaid the remaining $28.1 million principal amount of the Co-Issuer senior secured notes maturing in 2024 and $2.9 million principal amount of Co-Issuer senior secured term loans maturing in 2024 at an aggregate cost of $32.8 million, including certain make whole premium amounts.

The Company’s various debt retirements during 2022 resulted in the realization of net losses from early debt extinguishment of $34.9 million, excluding the loss recorded in connection with the issuance of 2028 Convertible Notes described below.

3.250% Convertible Senior Notes due 2028

On March 1, 2022, the Company issued $320.0 million in aggregate principal amount of 3.250% Convertible Senior Notes due 2028 (the 2028 Convertible Notes) through a private offering. The 2028 Convertible Notes are senior unsecured obligations of the Company and are governed under an indenture.

The Company used the proceeds of the offering of the 2028 Convertible Notes and available cash to redeem $62.6 million of senior secured notes maturing in 2024 and $257.4 million of senior secured notes maturing in 2025, and to pay related premiums, fees and expenses relating to the offering and redemptions. The Company capitalized $11.2 million of debt issuance costs related to the offering and recognized a loss on early debt extinguishment of $23.0 million during the three months ended March 31, 2022.

The 2028 Convertible Notes will mature on March 1, 2028, unless earlier converted, redeemed or repurchased in accordance with their terms. The 2028 Convertible Notes bear interest at a rate of 3.250% per year, payable semi-annually in arrears on March 1 and September 1 of each year.

The 2028 Convertible Notes are convertible at the option of the holders only in the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ended June 30, 2022, if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price for each of at least 20 trading days during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter; (2) during the five consecutive business days immediately after any five consecutive trading day period (such five consecutive trading day period, the Measurement Period) in which the trading price per $1,000 principal amount of 2028 Convertible Notes for each trading day of the Measurement Period was less than 98% of the product of the last reported sale price per share of the Company’s common stock on such trading day and the conversion rate on such trading day; (3) upon the occurrence of certain corporate events or distributions on the Company’s common stock; (4) if the Company calls any 2028 Convertible Notes for redemption; and (5) at any time from, and including, September 1, 2027 until the close of business on the second scheduled trading day immediately before the maturity date.

Upon conversion, the Company may satisfy its conversion obligation by paying or delivering, as applicable, cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election, in the manner and subject to the terms and conditions provided in the indenture. The initial conversion rate for the 2028 Convertible Notes was 50.3816 shares of the Company’s common stock per $1,000 principal amount of 2028 Convertible Notes, which represented an initial conversion price of approximately $19.85 per share of the Company’s common stock. The terms of the indenture require conversion rate adjustments upon the payment of dividends to holders of the Company’s common stock once such cumulative dividends impact the conversion rate by at least 1%. Under the applicable conversion rate formula, the dividends declared and paid during the year ended December 31, 2023 and the dividend declared during the three months ending March 31, 2024, yielded a revised conversion rate which met the 1% threshold to impact the existing conversion rate of 50.3816. As such, effective February 21, 2024, the conversion rate was increased to 51.0440 shares of the Company’s common stock per $1,000 principal amount of 2028 Convertible Notes. The conversion rate is subject to further adjustment under certain circumstances in accordance with the terms of the indenture. If certain corporate events described in the indenture occur prior to the maturity date, or the Company delivers a notice of redemption (as described below), the conversion rate will be increased for a holder who elects to convert its 2028 Convertible Notes in connection with such corporate event or notice of redemption, as the case may be, in certain circumstances.

The Company may not redeem the 2028 Convertible Notes prior to March 1, 2025. The Company may redeem for cash all or any portion of the 2028 Convertible Notes, at its option, on or after March 1, 2025 and on or before the 40th scheduled trading day immediately before the maturity date, at a cash redemption price equal to 100% of the principal amount of the 2028 Convertible Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, but only if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price on (1) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice; and (2) the trading day immediately before the date the Company sends such notice. However, the Company may not redeem less than all of the outstanding 2028 Convertible Notes unless at least $75 million aggregate principal amount of 2028 Convertible Notes are outstanding and not called for redemption as of the time the Company sends the related redemption notice. No sinking fund is provided for the 2028 Convertible Notes.

If the Company undergoes a fundamental change (as defined in the indenture), noteholders may require the Company to repurchase their 2028 Convertible Notes at a cash repurchase price equal to 100% of the principal amount of the 2028 Convertible Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date.

During the fourth quarter of 2022, the Company’s reported common stock prices prompted the conversion feature of the 2028 Convertible Notes. As a result, the 2028 Convertible Notes were convertible at the option of the holders during the first quarter of 2023. However, the Company did not receive any conversion requests.

During the year ended December 31, 2023, the Company’s reported common stock prices did not prompt the conversion feature of the 2028 Convertible Notes. As a result, the 2028 Convertible Notes were not convertible at the option of the holders during 2023, and will not be similarly convertible during the first quarter of 2024.

As of December 31, 2023, the if-converted value of the 2028 Convertible Notes exceeded the principal amount by $74.7 million.

Margin Financing Arrangement

In March 2022, the Company entered into a discrete credit agreement which provided for a $150 million unsecured revolving credit facility. The revolving facility was scheduled to mature in April 2025 and bore interest at a rate of 10.0% per annum on drawn amounts. The revolving facility was intended to support the Company’s near-term liquidity requirements, particularly with respect to the cash margin requirements associated with the coal derivative contracts, which fluctuate depending upon underlying market coal prices. Concurrently with the Company’s then-existing credit agreement, the Company entered into a related agreement for an at-the-market equity offering program for up to $225.0 million of the Company’s common stock.

During the three months ended March 31, 2022, the Company borrowed and repaid $225.0 million under the revolving facility using net proceeds of $222.0 million from at-the-market issuances of 10.1 million shares of common stock and available cash. The Company made no additional borrowings and terminated the facility in August 2022.

Interest Charges

The following table presents the components of the Company’s interest expense related to its indebtedness and financial assurance instruments such as surety bonds and letters of credit. Additionally, the table sets forth the amount of cash paid for interest and the amount of non-cash interest expense primarily related to the amortization of debt issuance costs.


	Year Ended December 31,
	2023		2022		2021
	(Dollars in millions)
Indebtedness	$	21.6	$	87.0	$	132.3
Financial assurance instruments	38.2		53.3		51.1
Interest expense	$	59.8	$	140.3	$	183.4

Cash paid for interest	$	61.9	$	118.5	$	174.9
Non-cash interest expense	$	4.6	$	17.7	$	21.3

Covenant Compliance

The Company was compliant with all relevant covenants under its debt and other finance agreements at December 31, 2023. The April 2023 termination of the Company’s then-existing credit agreement and related letter of credit facility, as described in Note 20. “Financial Instruments, Guarantees With Off-Balance-Sheet Risk and Other Guarantees,” eliminated the related compliance requirements as of March 31, 2023 and prospectively.

Revolving Credit Facility

On January 18, 2024, the Company established a new revolving credit facility with a maximum aggregate principal amount of $320.0 million in revolving commitments by entering into a credit agreement, dated as of January 18, 2024 (the 2024 Credit Agreement), by and among the Company, as borrower, certain subsidiaries of the Company party thereto, PNC Bank, National Association, as administrative agent, and the lenders party thereto.

The revolving commitments and any related loans, if applicable (any such loans, the Revolving Loans), established by the 2024 Credit Agreement terminate or mature, as applicable, on January 18, 2028, subject to certain conditions relating to the Company’s outstanding 2028 Convertible Notes. The Revolving Loans bear interest at a secured overnight financing rate (SOFR) plus an applicable margin ranging from 3.50% to 4.25%, depending on the Company’s total net leverage ratio (as defined under the 2024 Credit Agreement) or a base rate plus an applicable margin ranging from 2.50% to 3.25%, at the Company’s option.

The 2024 Credit Agreement contains customary covenants that, among other things and subject to certain exceptions (including compliance with financial ratios), may limit the Company and its subsidiaries’ ability to incur additional indebtedness, make certain restricted payments or investments, sell or otherwise dispose of assets, enter into transactions with affiliates, create or incur liens, and merge, consolidate or sell all or substantially all of their assets. The 2024 Credit Agreement is secured by substantially all assets of the Company and its U.S. subsidiaries, as well as a pledge of two Australian subsidiaries.

Finance Lease Obligations

Refer to Note 11. “Leases” for additional information associated with the Company’s finance leases, which pertain to the financing of mining equipment used in operations.