S-1/A 1 conturas-1a3.htm S-1/A Document


As filed with the Securities and Exchange Commission on July 31, 2017.
Registration No. 333-217766        

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549  

Amendment No. 3
to
Form S-1
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933 

CONTURA ENERGY, INC.
(Exact Name of Registrant as Specified in its Charter)

Delaware
(State or Other Jurisdiction of
Incorporation or Organization)
 
1221
(Primary Standard Industrial
Classification Code Number)
 
81-3015061
(I.R.S. Employer
Identification Number)

Contura Energy, Inc.
340 Martin Luther King Jr. Blvd.
Bristol, Tennessee 37620
(423) 573-0300
(Address, including zip code and telephone number, including
area code, of registrant’s principal executive offices)

Kevin S. Crutchfield
Chief Executive Officer
Contura Energy, Inc.
340 Martin Luther King Jr. Blvd.
Bristol, Tennessee 37620
(423) 573-0300
(Name, address, including zip code and telephone number, including
area code, of agent for service)

Copies to:
Byron B. Rooney
Shane Tintle
Davis Polk & Wardwell LLP
450 Lexington Avenue
New York, New York 10017
Telephone: (212) 450-4000
Facsimile: (212) 701-5800
 
Mark M. Manno
 Executive Vice President, General Counsel
Contura Energy, Inc.
340 Martin Luther King Jr. Blvd.
Bristol, Tennessee 37620
Telephone: (423) 573-0300
Facsimile: (423) 573-0446
 
Ryan J. Maierson
John M. Greer
Latham & Watkins LLP
811 Main Street, Suite 3700
Houston, Texas 77002
Telephone: (713) 546-5400
Facsimile: (713) 546-5401

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.  ☐
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. 
Large accelerated filer
 
Accelerated filer
Non-accelerated filer
 
Smaller reporting company
(Do not check if a smaller reporting company)
 
 
Emerging growth company
 
If an emerging growth company, indicate by check mark if the registrant has not elected to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

CALCULATION OF REGISTRATION FEE
 
Title of Each Class of Securities
to be Registered
Amount
to be
Registered(1)
Proposed Maximum
Offering Price
Per Share(2)
Proposed Maximum
Aggregate Offering
Price
(1)(2)
Amount of
Registration Fee
(3)
Common Stock, $0.01 par value per share
6,900,000
$27.00
$186,300,000
$21,593
(1)
Includes 900,000 additional shares of common stock that the underwriters have the option to purchase.
(2)
Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(a) under the Securities Act.
(3)
The Registrant previously paid $11,590 in connection with the filing of this Registration Statement on May 8, 2017. Concurrently with the filing of this Amendment No. 3 to the Registration Statement, the Registrant has transmitted $10,003, representing the additional registration fee.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to such Section 8(a), may determine.




The information in this preliminary prospectus is not complete and may be changed. The securities described herein may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities, and it is not soliciting an offer to buy these securities, in any state or jurisdiction where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED JULY 31, 2017

PRELIMINARY PROSPECTUS
6,000,000 Shares
conturaa02.jpg
____________________________
Contura Energy, Inc.
Common Stock
____________________________

This is the initial public offering of 6,000,000 shares of common stock of Contura Energy, Inc. All of the shares of common stock are being offered by the selling stockholders identified in this prospectus. We will not receive any of the proceeds from the shares of common stock being sold in this offering.
This is our initial public offering, and we anticipate that the initial public offering price will be between $23.00 and $27.00 per share. We have been approved to list our common stock on the New York Stock Exchange under the symbol “CTRA.”
The underwriters have the option, exercisable within 30 days from the date of this prospectus, to purchase up to an additional 900,000 shares from the selling stockholders at the public offering price less the underwriting discount and commissions, solely to cover over-allotments.
Investing in our common stock involves risks. See “Risk Factors” beginning on page 22.
Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.
 
Price to Public
 
Underwriting
Discounts and
Commissions (1)
 
Proceeds, before
expenses, to Selling Stockholders
Per Share
$
 
 
$
 
 
$
 
Total
$
 
 
$
 
 
$
 
______________
(1)
We have agreed to reimburse all or a portion of the selling stockholders’ underwriting discounts and commissions. See “Underwriting” for additional information regarding underwriting compensation.
The underwriters expect to deliver the shares to purchasers on or about          , 2017 through the book-entry facilities of The Depository Trust Company.
____________________________
Citigroup
 
Jefferies
Credit Suisse
 
UBS Investment Bank
Barclays
 
BMO Capital Markets
Clarksons Platou Securities, Inc.
FBR
Seaport Global Securities
          , 2017




coalhands2a01.jpg




TABLE OF CONTENTS
 
Page

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______________
We, the selling stockholders and the underwriters have not authorized anyone to provide any information or to make any representations other than that contained in this prospectus or in any free writing prospectus prepared by or on behalf of us or to which we have referred you. We, the selling stockholders and the underwriters take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may provide you. Neither we, the selling stockholders nor the underwriters are making an offer to sell these securities in any jurisdiction where an offer or sale is not permitted. The information in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of shares of our common stock. The information in any free writing prospectus that we may provide to you in connection with this offering is accurate only as of the date of such free writing prospectus. Our business, financial condition, results of operations and future growth prospects may have changed since those dates. This prospectus contains forward-looking statements (including forward-looking estimates) that are subject to a number of risks and uncertainties, many of which are beyond our control. Please read “Risk Factors” and “Special Note Regarding Forward-Looking Statements.”
______________
Unless the context requires otherwise: (a) references to “Contura,” our “Company,” “we,” “us” or “our” refer to Contura Energy, Inc., a Delaware corporation, and its consolidated subsidiaries, and, where appropriate in context, the business set forth on a carve-out basis using Alpha’s historical basis in our assets, liabilities and operating results while under Alpha’s ownership, as acquired in connection with the Alpha Restructuring on July 26, 2016; (b) references to “Alpha” refer to Alpha Natural Resources, Inc., a Delaware corporation, and its consolidated subsidiaries and (c) references to “selling stockholders” refer to those entities identified as selling stockholders in “Principal and Selling Stockholders.”
We have provided definitions for some of the other industry terms used in this prospectus in the “Glossary” included elsewhere in this prospectus. Tonnage amounts in this prospectus are stated in short tons, unless otherwise indicated.
References to our “captive” coal volumes include coal produced and processed by us, as well as small volumes purchased from third-party producers to blend with our produced coal in order to meet customer specifications. References to our “T&L” coal volumes solely include those volumes purchased from third-party producers and sold through our Trading and Logistics business.
______________
Market and Industry Data and Forecasts
The data included in this prospectus regarding the coal industry, including descriptions of trends in the market, as well as our position within the industry, is based on a variety of sources, including independent industry publications, third-party studies, government publications and other published independent sources, including the U.S. Energy Information Administration, Bloomberg L.P., BP Statistical Review, the American Coalition for Clean Coal Electricity and Wood Mackenzie, none of which are affiliated with us, as well as information obtained from customers, distributors, suppliers, trade and business organizations and publicly available information, as well as our good faith estimates, which have been derived from management’s knowledge and experience in our industry. Although we believe the industry and market data to be reliable as of the date of this prospectus, this information could prove to be inaccurate. Industry and market data could be wrong because of the method by which sources obtained their data and because information cannot always be verified with complete certainty due to the limits on the availability and reliability of raw data, the voluntary nature of the data gathering process and other limitations and uncertainties. We, the selling stockholders and the underwriters do not know all of the assumptions regarding general economic conditions or growth that were used in preparing the forecasts from the sources relied upon or cited herein. Assumptions and estimates of our and our industry’s future performance are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in “Risk Factors” and “The Coal Industry.” These and other factors could cause future performance to differ materially from our assumptions and estimates.

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Coal Reserve Information
The estimates of our proven and probable reserves as of December 31, 2016 included in this prospectus were prepared by Marshall Miller & Associates, Inc., an independent mining and geological consulting firm (“MM&A”). The estimates of our proven and probable reserves are based on engineering, economic and geologic data, coal ownership information and current and proposed mine plans. Our proven and probable coal reserves are reported as “recoverable coal reserves,” which is the portion of the coal that could be economically and legally extracted or produced at the time of the reserve determination, taking into account mining recovery and preparation plant yield. These estimates are periodically updated to reflect past coal production, new testing information and other geologic or mining data. Acquisitions or dispositions of coal properties will also change these estimates. Changes in mining methods may increase or decrease the recovery basis for a coal seam, as will changes in preparation plant processes.
“Reserves” are defined by the U.S. Securities and Exchange Commission’s Industry Guide 7 as that part of a mineral deposit which could be economically and legally extracted or produced at the time of the reserve determination. Industry Guide 7 divides reserves between “proven (measured) reserves” and “probable (indicated) reserves,” which are defined as follows:
“Proven (Measured) Reserves.” Reserves for which (a) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes; grade and/or quality are computed from the results of detailed sampling and (b) the sites for inspection, sampling and measurement are spaced so closely and the geologic character is so well defined that size, shape, depth and mineral content of reserves are well-established.
“Probable (Indicated) Reserves.” Reserves for which quantity and grade and/or quality are computed from information similar to that used for proven (measured) reserves, but the sites for inspection, sampling, and measurement are farther apart or are otherwise less adequately spaced. The degree of assurance, although lower than that for proven (measured) reserves, is high enough to assume continuity between points of observation.
Please read “Business—Coal Reserves” for additional information regarding our reserves.
Non-GAAP Financial Measures
The prospectus contains “non-GAAP financial measures” that 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 (“GAAP”). Specifically, we make use of the non-GAAP financial measure “Adjusted EBITDA.”
Adjusted EBITDA represents net income (loss) before:
Interest expense (income);
Income tax benefit;
Depreciation, depletion and amortization;
Mark-to-market adjustment for warrant derivative liability;
Bargain purchase gain;
Mark-to-market adjustment for acquisition-related obligations;
Amortization of acquired intangibles, net;
Reorganization items, net;

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Asset impairment and restructuring charges;
Goodwill impairment;
Mark-to-market adjustment for other derivatives;
Loss on early extinguishment of debt; and
Secondary offering costs.
We also make use of the non-GAAP financial measures “CIB Free Cash Flow,” “CIB Cost of Coal Sales per Ton Sold” and “CIB SG&A Expense,” which are used to measure compensation performance. See “Executive Compensation–Performance Metrics.”
Adjusted EBITDA, CIB Free Cash Flow, CIB Cost of Coal Sales per Ton Sold and CIB SG&A Expense are not recognized terms under GAAP. Adjusted EBITDA does not purport to be an alternative to net income (loss) as a measure of operating performance. CIB Free Cash Flow does not purport to be an alternative to net income (loss) as a measure of liquidity. CIB Cost of Coal Sales per Ton Sold does not purport to be an alternative to Cost of Coal Sales per Ton. CIB SG&A Expense does not purport to be an alternative to Selling, General and Administrative Expenses. The presentations of these measures have limitations as analytical tools and should not be considered in isolation, or as a substitute for analysis of our results as reported under GAAP. Management compensates for the limitations of using non-GAAP financial measures by using them to supplement GAAP results to provide a more complete understanding of the factors and trends affecting the business than GAAP results alone. 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.

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PROSPECTUS SUMMARY
This summary highlights selected information contained elsewhere in this prospectus and does not contain all of the information you should consider in making your investment decision. Before investing in our common stock, you should carefully read this entire document, including our combined historical and pro forma financial statements and accompanying notes included elsewhere in this prospectus. You should also carefully consider, among other things, the matters discussed under “Risk Factors,” “Special Note Regarding Forward-Looking Statements” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Our Business
We are a large-scale, diversified provider of metallurgical (“met”) and steam coal to a global customer base. We operate high-quality coal mines across three major U.S. coal basins complemented by a robust Trading and Logistics business. Our portfolio of mining operations consists of six mining complexes, comprised of nine underground mines, four surface mines and four coal preparation plants. In 2016, we sold 4.0 million tons of met coal from mines in Central Appalachia (“CAPP”) and Northern Appalachia (“NAPP”) and 41.1 million tons of steam coal from mines in CAPP, NAPP and the Powder River Basin (“PRB”). In the three months ended March 31, 2017, we sold 1.1 million tons of met coal from mines in CAPP and NAPP as well as 10.9 million tons of steam coal from mines in CAPP, NAPP and the PRB. To supplement our mining operations, we operate a Trading and Logistics business that focuses on the sale of third-party coal into the international market. From the acquisition of our assets on July 26, 2016 (the “Acquisition Date”), through December 31, 2016, our Trading and Logistics business sold 1.5 million tons of met coal. In the three months ended March 31, 2017, our Trading and Logistics business sold 1.1 million tons of met coal. A strategic cornerstone of this business is our 65.0% interest in Dominion Terminal Associates (“DTA”), a coal export terminal. DTA provides us with the ability to fulfill a broad range of customer coal quality requirements through coal blending, while also providing storage capacity and transportation flexibility.
Our assets create a strong, diversified operational footprint and have the ability to generate cash flows across many different pricing environments. Our met coal business, together with our Trading and Logistics business, is expected to sell approximately 8.8 million tons of coal in 2017. This sales forecast is based on committed positions, which include actual sales of 4.5 million tons through June 30, 2017, and estimated demand based on customer discussions, expected production schedules and historical shipments. These anticipated sales volumes are not fully contracted, and therefore we may not ultimately be able to sell these amounts in full. As of July 7, 2017, our 2017 committed position was 3.6 million tons with 72% of anticipated sales volume priced for CAPP met coal. In addition to our operating met coal mines, we have three potential development projects that are primarily focused on met coal and provide opportunities for incremental production growth. Our steam portfolio is anchored by our Cumberland mine, which is expected to be in the first quartile of the 2018 NAPP coal basin “Operating Margin” curve for U.S. producers, according to Wood Mackenzie. A substantial portion of our steam coal, including from our PRB operations, is sold under long-term contracts (typically ranging from one year to five years), providing us with significant sales visibility.
We produce a diverse mix of coal products, which enables us to satisfy a broad range of customer needs across all our operations. In the CAPP coal basin, we predominantly produce low-ash and low-sulfur met coal, including high volatile A (“High-Vol. A”), high volatile B (“High-Vol. B”), middle volatile (“Mid-Vol.”), and specialty coals, which are shipped to domestic and international steel producers. In the NAPP coal basin, we produce high-BTU steam coal, as well as some High-Vol. B met coal. In the PRB coal basin, we produce low-sulfur steam coal from large surface mining operations. Our steam coal is primarily sold to the domestic power generation industry.
We have a substantial reserve base of over 1.0 billion tons of proven reserves and approximately 310 million tons of probable reserves, which results in an average remaining mine life of approximately 30 years based on our 2016 production levels. Our reserve base in CAPP consists of 71 million tons of proven and 22 million tons of probable reserves across the three mining complexes, of which substantially all is met coal. Our reserve base in NAPP consists of 326 million tons of proven and 279 million tons of probable reserves, of which approximately 7% is met coal, with substantially all of the remaining reserves principally characterized as high-BTU, Pittsburgh 8

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seam steam coal. In the PRB, we have 614 million tons of proven and 10 million tons of probable low-sulfur steam coal reserves.
Our Operations
Our CAPP operations consist of three high-quality met coal mining complexes: Toms Creek, McClure and Nicholas. According to Wood Mackenzie, in 2018, our met coal platform is expected to be positioned in the second quartile among domestic met coal producers based on “Total Cash Costs” as defined by Wood Mackenzie. From the acquisition of our assets on July 26, 2016 until December 31, 2016, our CAPP met coal quality was composed of 43.6% Mid-Vol., 39.7% High-Vol. A and 16.7% High-Vol. B. During this time period, we shipped approximately two-thirds of our met coal production from our CAPP operations internationally to customers in Europe, Asia and the Americas, with the remaining met coal production sold into the domestic market. In the three months ended March 31, 2017, our CAPP met coal quality was composed of 41.6% Mid-Vol., 46.3% High-Vol. A and 12.2% High-Vol. B. During this period, we shipped approximately three-fourths of our met coal production from our CAPP operations internationally to customers in Europe, Asia and the Americas, with the remaining met coal production sold into the domestic market.
Our NAPP operations consist of the large-scale, high-margin and high-quality Cumberland coal mining complex. Cumberland is located in Greene County, Pennsylvania and operates one highly efficient longwall mine supported by four continuous miner sections for longwall panel development. Our NAPP operations also include the idled Emerald mine complex, which is currently being used as an underground water treatment and holding facility, allowing Cumberland to realize significant cost savings on water management expenditures. According to Wood Mackenzie, Cumberland is expected to be in the first quartile for “Operating Margin” in 2018 among domestic steam coal producers in the NAPP coal basin. We are also able to sell part of our Cumberland coal production (0.4 million tons in 2016 and 0.1 million tons in the three months ended March 31, 2017) into the met coal market as High-Vol. B, achieving higher realized pricing than if sold as steam coal. The coal produced by the Cumberland mine is from the Pittsburgh 8 seam, which is recognized for its high-BTU, low chlorine content and desirable ash fusion properties. This makes Cumberland coal ideal for boilers and, accordingly, most of the domestic customer base for this mine consists of base load, scrubbed coal-fired power plants. Additionally, NAPP offers transportation optionality through rail and barge, allowing us to reach a broader customer base. As of July 7, 2017, 99% of our anticipated 2017 sales volume in NAPP was committed and priced.
Our PRB operations consist of the Belle Ayr and Eagle Butte mines. Our production from these mines is sold primarily to a well-established 8,400 to 8,600 BTU-specific market. Historically, the 8,400 to 8,600 BTU market has consisted of base load power generation plants and demand has been stable. A total of 34 million and 9 million tons of steam coal was shipped from these two mines in 2016 and the three months ended March 31, 2017, respectively, primarily to utilities located in the western, midwestern and southern United States. Our PRB mines are fully permitted with no Lease by Application (LBA) payments remaining on current federal leases. At current production rates, no LBA payments are expected for the next decade. Belle Ayr produces extremely low-sulfur coal that receives a premium to 8,400 BTU coal prices due to its high heat and low-sulfur content. Eagle Butte is expected to be in the first quartile for “Total Cash Costs” in 2018 among producers in the PRB, according to Wood Mackenzie. Our PRB mines historically have entered into long-term contracts with customers, which provide us with significant sales visibility. As of July 7, 2017, 98% of our anticipated 2017 sales volume in the PRB was committed and priced.
Our Trading and Logistics business purchases met coal from domestic producers and sells into international markets. Such purchases are predominantly made pursuant to long-term agreements, but we also purchase coal on the spot market when it is advantageous to our business. A strategic cornerstone of our Trading and Logistics business is our interest in the DTA coal export terminal. We recently increased our stake in the DTA coal export terminal from 40.6% to 65.0%, which provides us with 14 million tons of export capacity. Purchasing coal produced by various CAPP operators allows us to leverage our export capacity at DTA. Our Trading and Logistics platform complements our met coal operations by blending captive and third-party coal at DTA to achieve a broader portfolio of coal qualities. We typically build in margin for terminal fees, overhead and profit when purchasing third-party coal. Additionally, we sell capacity to third-party operators via throughput contracts. The Trading and Logistics business provides access to international markets and further diversifies our revenue sources.

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For the three months ended March 31, 2017, we:
Sold 13.1 million tons of coal (16% met coal and 84% steam coal);
Generated coal revenue of $509 million (63% met coal, 37% steam coal) and total revenue of $573 million; and
Generated net income of $37 million and Adjusted EBITDA of $129 million.
For the year ended December 31, 2016, on a pro forma basis, we:
Sold 46.7 million tons (12% met coal and 88% steam coal);
Generated coal revenue of $1,150 million (40% met coal and 60% steam coal) and total revenue of $1,297 million; and
Generated net loss of $63 million and Adjusted EBITDA of $177 million.
For the definition of Adjusted EBITDA and a reconciliation to its most directly comparable financial measure calculated and presented in accordance with GAAP, please read “Summary Historical and Pro Forma Financial Data—Summary Consolidated and Combined Financial and Other Data.”
Competitive Strengths
We believe we are well-positioned to execute our business strategies because we possess the following competitive strengths:
Diversified provider with a broad footprint of large scale met and steam coal operations. Our operational footprint consists of thirteen coal mines and four preparation plants in three major coal basins in the U.S.: CAPP, NAPP and the PRB. We operate as a “three-pronged” business: (i) met coal platform primarily in CAPP, (ii) steam coal platform largely in NAPP and PRB and (iii) a Logistics and Trading platform that owns a 65.0% interest in the DTA coal export terminal. Our high-quality met coal platform in CAPP has 94 million tons of proven and probable reserves as well as meaningful production growth opportunities. Our steam platform has 1,186 million tons of proven and probable coal reserves. In addition, we have also 44 million tons of proven and probable reserves of met coal in NAPP. The steam platform is anchored by our flagship Cumberland mine in NAPP and includes our cost-competitive PRB portfolio. Through our Trading and Logistics business, we sell various types of met coal, which allows us to meet the needs of our broad customer base of international steel producers. We benefit from strong customer relationships, and our operations have supplied many of our top customers continuously over the past decade.
A leading provider of met coal with a low cost profile. We operate three high-quality met coal complexes in Virginia and West Virginia – Toms Creek, McClure and Nicholas. Our high-quality met coal product is an important component within our customers’ overall coking coal requirements. Our complexes produce high-quality Mid-Vol., High-Vol. and specialty met coals known for low-ash and sulfur content. In 2017, we expect to sell approximately 3.8 million tons of met coal from mines in CAPP, 0.2 million tons from mines in NAPP and supply 4.8 million tons through our Trading and Logistics business. We believe our 2017 expected sales volume positions us to be one of the largest providers of met coal in the United States. As of December 31, 2016, our CAPP operations had a significant reserve base composed of 71 million tons of proven and 22 million tons of probable reserves of met coal. Our consolidated met portfolio is estimated to hold a second quartile position based on 2018 “Total Cash Costs,” as defined by Wood Mackenzie, among U.S. met producers. The quality of our met coal, coupled with the cost position of these assets, allows us to maximize cash flow generation throughout different met coal price environments.
Highly efficient steam coal operations with strong contract visibility. Our steam coal operations are anchored by our flagship Cumberland mine in NAPP and include our cost-competitive mines in the PRB. Our mines

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produce steam coal that is highly sought after by domestic utilities. In NAPP, we produce Pittsburgh 8 seam steam coal, a well-known product to utilities in several different markets. Our Cumberland mine is estimated to hold a first quartile “Operating Margin” position in 2018 among domestic NAPP steam producers, according to Wood Mackenzie. Our Belle Ayr and Eagle Butte mines in Wyoming are highly efficient surface mine operations that benefit from mining 75 foot and 100 foot seams, respectively. Belle Ayr-produced coal typically receives a premium to 8,400 BTU PRB coal prices due to its high-heat and low-sulfur content. Coal mined at our PRB mines can be sold 100% raw with no washing necessary. In 2017, we expect to sell approximately 32.1 million tons of steam coal in the PRB, 7.8 million tons in NAPP and 0.1 million tons in CAPP. Our 2017 sales forecast is based on committed positions, which include actual sales of 19.5 million tons through June 30, 2017, and estimated demand based on customer discussions, expected production schedules and historical shipments. These anticipated sales volumes are not fully contracted, and therefore we may not ultimately be able to sell these amounts in full. As of July 7, 2017, our 2017 steam coal committed position was 7.8 million tons with 100% of anticipated sales volume priced, 32.1 million tons with 98% of anticipated sales volume priced and less than 0.1 million tons with 23% of anticipated sales volume priced for NAPP, PRB and CAPP, respectively. As of July 7, 2017, we had contracted favorable pricing for 31.3 million tons from our PRB portfolio at $11.03 per ton. In addition, we have contracted 7.8 million tons from our NAPP portfolio at $42.13 per ton. We enter into long-term supply agreements, typically ranging from one to five years, to contract our steam coal production in advance, thereby reducing the risks associated with our steam coal portfolio in future years. As of July 7, 2017, 98% of our expected steam coal sales volume is already committed and priced for 2017. The table below outlines our current committed and priced volumes from 2017 to 2020, showing the degree of visibility into our future sales of steam coal.
2017-2020 Steam Coal Committed and Priced Volume by Basin as of July 7, 2017
Segment (tons in millions)
2017
 
2018
 
2019
 
2020
NAPP
7.8
 
5.7
 
3.1
 
1.0
PRB
31.3
 
18.3
 
9.7
 
4.9
Flexible Trading and Logistics business enhances strategic positioning and provides global customer access. Our Trading and Logistics business enhances the variety of coal products available for us to service export customers in the Americas, Europe and Asia, while also providing us with strategic East Coast port access. Through our 65.0% ownership of DTA, we have approximately 14 million tons of export capacity and guaranteed low-cost port access for our coal. DTA is a key pillar of our strategy to cater to the export met coal market. This facility complements our met operations by blending captive and third-party coal to achieve a broader portfolio of coal qualities. We typically build in margin for terminal fees, overhead, and profit when purchasing third-party coal. Additionally, we sell capacity via throughput contracts to third-party operators. Our Trading and Logistics Operations provide access to international markets and further diversify our revenue sources.
Scalable platform for organic growth and strategically positioned to take advantage of value-added acquisition opportunities. We believe our strong financial characteristics and geographic positioning provide us with the ability to execute on a variety of strategic opportunities, both organic and inorganic. We have identified several organic met coal growth opportunities that can be developed in supportive pricing environments, including:
Jerry Fork extension in CAPP, which could provide an incremental 0.2-0.3 million tons per year of High-Vol. B met coal;
Deep Mine #42 in CAPP, which could provide an incremental 1.0-1.5 million tons per year of High-Vol. A and Mid-Vol. met coal; and
Freeport mine in NAPP, which could provide an incremental 2.5-3.5 million tons per year of primarily High-Vol. B met coal, with some steam coal as byproduct.

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Production at these adjacent mines provides embedded growth potential while leveraging existing infrastructure. In addition, our operational footprint in multiple U.S. coal basins provides significant opportunities for potential synergies from domestic acquisitions.
Well-capitalized balance sheet with minimal legacy liabilities to support execution of our business plan. Our balance sheet reflects minimal legacy liabilities or post-retirement benefit obligations and no pension obligations. In the first quarter of 2017, we took steps to strengthen our balance sheet by extending the maturity of our debt and lowering our overall borrowing costs. We entered into a $125.0 million asset-based revolving credit facility, which was undrawn at closing, and a new $400.0 million term loan to retire high-cost indebtedness and improve our capital structure. Our conservative balance sheet allows us to operate our business effectively throughout the market cycle.
Proven and experienced management team with a primary focus on safety and environmental stewardship. Our management team has extensive knowledge of the coal mining industry as well as intimate operational knowledge of our assets. Our core management team brings over 17 years on average in the coal industry and over 9 years on average of experience managing and operating our assets. This management team has prioritized a focus on safe mining practices at its operations. Our safety process involves all employees in accident prevention and situational awareness and observation, changing behaviors and continuous improvement of mine safety conditions. We also believe that environmental stewardship is integral to safe, productive and cost-efficient mining operations. As a result, our mining operations have consistently earned recognition for outstanding safety and environmental performance, including numerous local, state and national awards.
Business Strategies
Our business objectives are to increase stockholder value and drive cash flow generation across various pricing environments by sustaining a cost-competitive, diversified operational asset portfolio. Our key strategies to achieve these objectives are described below:
Promote excellence in safety and environmental stewardship. We believe safety is the bedrock upon which our culture and success are built. By implementing a behavior-based safety process, every employee is empowered to engage in the elimination of at-risk behaviors in the workplace, and to be accountable not only for their own safety, but for the safety of those around them. We intend to operate safely and achieve environmental excellence. Minimizing workplace incidents and environmental violations improves our operating efficiency, which in turn improves our cost structure and financial performance.
Rigorously seek opportunities to expand domestic and international sales while maintaining relationships with long-standing customer base. Through our operations and reserves in three major U.S. coal producing basins, we are able to source coal from multiple mines to meet the needs of a long-standing global customer base, many of which have been served for over a decade. We are continuously evaluating opportunities to strategically cultivate current relationships to drive new business in our target growth markets that include India, Turkey and Brazil. Additionally, we remain focused on advancing our Trading and Logistics business to procure coal from additional sources to expand sales to potential international customers. Combined with our strong international customer relationships and logistics expertise, our recent acquisition of an incremental 24.4% capacity at DTA further enhances our ability to grow our Trading and Logistics business.
Opportunistically expand met coal production capacity depending on market dynamics. We carefully evaluate opportunities to expand productive capacity at our met mines depending on current and projected met coal market dynamics. Our ability to leverage existing infrastructure and the embedded growth potential at our mining complexes to expand adjacent facilities and production provides a platform for expansion as market conditions allow. We expect our conservatively levered balance sheet and strong cash flow generation to provide us the ability to execute on these opportunities.
Continuously evaluate strategic opportunities to acquire complementary high-quality coal assets or enter strategic alliances. Our experienced management team continues to analyze acquisitions, joint ventures and other

5




opportunities that would be accretive and synergistic to our existing asset portfolio. For example, given the geographic placement of our mines across three U.S. coal basins, we are strategically positioned to realize significant potential synergies from domestic acquisitions. We expect our strong financial position will help support execution of potential strategic acquisitions and alliances.
Remain committed to cost containment policies to ensure operations are as efficient and profitable as possible. We continue to leverage our strong base of experienced, well-trained employees through a culture of workforce engagement to drive cost savings and operational productivity. We also are continuing to efficiently manage our business and actively demonstrate financial discipline by maintaining a lean cost structure, prudently managing capital allocation and maintaining our flexible logistics and transportation platform.
Industry Overview
Coal is an abundant and inexpensive natural resource, making it a leading source for the world’s energy consumption and steel production needs. According to the BP Statistical Review, total global proven coal reserves were 1,256 billion tons at the end of 2016, and coal provided 28% of the world’s primary energy consumption. Coal is generally categorized into met and steam coal. Met coal is used to create coke for use in the steel-making process. Steam coal is primarily used by utilities and power producers to generate electricity. Per Wood Mackenzie, 75% of the world’s steel production in 2016 was estimated to be manufactured using methods that consume met coal. Coal has historically been a relatively inexpensive fuel for power generation and remains a major fuel for global energy.
Metallurgical Coal Industry Overview
Met coal is converted into coke, a critical input in the steel making process. The met coke is used as a fuel and reducing agent in steel blast furnaces to convert iron ore into iron and subsequently to create steel. High-quality met coal is a scarce commodity, with large scale reserves found primarily in the eastern U.S., western Canada, eastern Australia, Russia and China. Met coal is consumed domestically and sold into the seaborne market. According to Wood Mackenzie, in 2017, approximately 323 million tons are expected to be shipped in the seaborne market, while the total global met coal production is expected to be 1,230 million tons.
Coke and iron production are the primary demand drivers for met coal. In the integrated steel making process, iron ore must be converted or ‘reduced’ using the carbon in met coal. Basic oxygen / blast furnace is the most common method to produce steel. Global met import demand is forecast to be stable in the near-term and is expected to increase modestly annually from 2016 to 2018, according to Wood Mackenzie. Our key end markets are expected to have growth levels in steel production that exceed other steelmaking nations, providing additional upside for us. As an example, import met coal demand in Turkey, India and Germany is expected to grow 31%, 19% and 6% respectively, from 2016 to 2020 according to Wood Mackenzie.
Historically, the majority of met coal sold in the seaborne market has been priced based on a quarterly benchmark. The supply of met coal decreased 4% from 2014 through 2016, according to Wood Mackenzie, due to high cost volume taken offline in a price environment that declined from $143 per metric ton in Q1 2014 to $81 per metric ton in Q1 2016. By Q4 2016, however, the trend reversed and the Hard Coking Coal (“HCC”) benchmark rose substantially to $200 / metric ton. In 2016, restrictive coal output policies in China and difficult mining conditions in Australia, which combined represented 79% of 2016 global met coal production, led to further supply tightening across the world. There was an additional short-term supply tightening due to storm damage from Cyclone Debbie that caused major rail outages in Australia during early April 2017.
To supply China and other net importers of met coal, Australia, Canada and the U.S. are expected to contribute 85% of 2017 seaborne met coal exports, according to Wood Mackenzie. Due to reduced capital expenditures over the past several years and the permanent closure of many mines, growth from these countries is expected to stay relatively flat at the newly reduced production levels. The remaining met coal production is largely expected to come from countries such as Mozambique and Mongolia, which have had many greenfield projects delayed in recent years due to lack of funding and / or an uneconomic pricing environment.

6




Steam Coal Industry Overview
Steam coal is an abundant resource that is crucial to global electricity needs. Steam coal producers compete primarily with natural gas and increasingly with renewable forms of energy around the world. In 2016, steam coal accounted for approximately 28% of the world’s energy consumption, according to the BP Statistical Review. Despite increasing competition from other forms of energy, steam coal is expected to continue playing a significant role in satisfying growing global energy needs, primarily in base load power generation. At current production rates, proven coal reserves are expected to last for over 150 years, according to the BP Statistical Review, which is by far the largest reserve life of any fossil fuel.
Steam coal has long been a cost-effective option for energy needs throughout the world. Since 2005, the cost of using coal to generate electricity has been approximately 50% cheaper on a dollar per million BTU basis than natural gas, according to the Energy Information Administration (“EIA”). From 2016 to 2035, seaborne steam coal exports are expected to grow at a compound annual growth rate (“CAGR”) of 1.2%, according to Wood Mackenzie. This growth is being driven by Australia and the United States. In the U.S., steam coal is produced in all major coal basins. The PRB supplies the majority of domestic steam coal and is expected to account for approximately 45% of supply in 2017, according to Wood Mackenzie. Over 90% of U.S. steam coal production is consumed domestically with the remainder sold into the seaborne export market.
Because natural gas power generation is an alternative to coal, Henry Hub natural gas pricing is a key reference point for the steam coal outlook. Natural gas pricing volatility continues but steam coal remains the low-cost option. Henry Hub natural gas prices decreased from a high of $7.92 per million BTU in 2014 to a low of $1.49 per million BTU in March 2016. The natural gas volatility continued as prices increased to $3.58 per million BTU in December 2016 before stabilizing at above $3.00 per million BTU in April and May 2017.
Rising natural gas prices in 2017 and 2018 are expected to support higher steam coal prices, according to Wood Mackenzie. In addition to rising natural gas prices, the coal industry is expected to benefit from a reduced regulatory burden via recent and ongoing legislative and administrative action. In March, President Donald Trump signed the Executive Order on Promoting Energy Independence and Economic Growth, which aims to reduce regulatory restrictions intended to curb the production and use of fossil fuels. An important part of this Executive Order directs the Environmental Protection Agency (“EPA”) to commence regulatory proceedings to rescind or revise the Clean Power Plan. The Clean Power Plan had already been temporarily stayed by the U.S. Supreme Court pending judicial review. Potential repeal or revision of the Clean Power Plan and other potential actions from the current Administration should ease the pressure on coal-fired utilities to retire units prematurely, arguably increasing the life of the current domestic coal fleet.
Risks Related to our Business and Strategy
An investment in shares of our common stock involves substantial risks and uncertainties that may adversely affect our business, financial condition and results of operations and cash flows. Some of the more significant challenges and risks relating to an investment in our common stock include, but are not limited to:
Our business may suffer as a result of a substantial or extended decline in coal pricing, demand and other factors beyond our control, which could negatively affect our operating results and cash flows.
Coal mining involves many hazards and operating risks and is dependent upon many factors and conditions beyond our control, which may cause our profitability and our financial position to decline.
Significant competition, as well as changes in foreign markets or economics, could harm our sales, profitability and cash flows.
Extensive environmental, health and safety laws and regulations impose significant costs on our operations and future regulations could increase those costs, limit our ability to produce or adversely affect the demand for our products.

7




For additional risks relating to our business and this offering, see “Risk Factors” beginning on page 22 of this prospectus.
Recent Developments
Preliminary Second Quarter 2017 Results
Although our financial results for the three months ended June 30, 2017 are not yet finalized, the following information reflects our preliminary expectations with respect to our financial results based on information available to management.
For the three months ended June 30, 2017, we expect to report results as set forth in the tables below (all amounts in thousands, except per ton data).
Tons of Coal Sold:
 
Three Months Ended June 30,
 
2017
(Preliminary)
 
Successor
Tons sold:
 
Steam
8,524
Met
2,316
Total
10,840
 
Three Months Ended June 30,
 
2017
(Preliminary)
 
Successor
Tons sold:
 
CAPP Operations
990
NAPP Operations
1,839
PRB Operations
6,721
Trading and Logistics Operations
1,290
Total
10,840
Coal Revenues:
 
Three Months Ended June 30,
 
2017
(Preliminary)
 
Successor
Coal revenues (1):
 
Steam
147,370
Met
293,404
Total
440,774
______________
(1)
Does not include any portion of the price paid by our export customers to transport coal to the relevant outbound shipping port.


8




 
Three Months Ended June 30,
 
2017
(Preliminary)
 
% of Preliminary Total Coal Revenues
 
Successor
 
 
Coal revenues (1):
 
 
 

CAPP Operations
111,244
 
25.2
%
NAPP Operations
77,346
 
17.6
%
PRB Operations
72,912
 
16.5
%
Trading and Logistics Operations
179,272
 
40.7
%
Total
440,774
 
100.0
%
______________
(1)
Does not include any portion of the price paid by our export customers to transport coal to the relevant outbound shipping port.

Average Coal Sales Realization Per Ton:
 
Three Months Ended June 30,
 
2017
(Preliminary)
 
Successor
Average coal sales realizable per ton (1):
 
Steam
17.29
Met
126.69
Total
40.66
______________
(1)
Average coal sales realizable per ton is defined as coal revenues divided by tons sold.

 
Three Months Ended June 30,
 
2017
(Preliminary)
 
Successor
Average coal sales realizable per ton (1):
 
CAPP Operations
112.37
NAPP Operations
42.06
PRB Operations
10.85
Trading and Logistics Operations
138.97
Total
40.66
______________
(1)
Average coal sales realizable per ton is defined as coal revenues divided by tons sold.

Our estimated sales mix of met coal and steam coal based on volume is 21% and 79%, respectively, and our estimated sales mix of met coal and steam coal based on coal revenues is 67% and 33%, respectively, for the three months ended June 30, 2017. Our estimated average coal sales realization per ton is $40.66. CAPP, NAPP, PRB and Trading and Logistics Operations’ coal revenues are estimated to comprise approximately 25%, 18%, 16% and 41%, respectively, of total estimated coal revenues for the three months ended June 30, 2017.

9




Cost of Coal Sales:
 
Three Months Ended June 30,
 
2017
(Estimated Low)
 
2017
(Estimated High)
 
Successor
 
Successor
Cost of coal sales( 1):
 
 
 
CAPP Operations
72,000
 
74,000
NAPP Operations
61,000
 
63,000
PRB Operations
73,000
 
75,000
Trading and Logistics Operations
153,000
 
155,000
Total
359,000
 
367,000
______________
(1)
Cost of coal sales excludes costs associated with our All Other category.

Cost of Coal Sales Per Ton:
 
Three Months Ended June 30,
 
2017
(Estimated Low)
 
2017
(Estimated High)
 
Successor
 
Successor
Cost of coal sales( 1):
 
 
 
CAPP Operations
72.73
 
74.75
NAPP Operations
33.17
 
34.26
PRB Operations
10.86
 
11.16
Trading and Logistics Operations
118.60
 
120.16
Total
33.12
 
33.86
______________
(1)
Cost of coal sales excludes costs associated with our All Other category.

SG&A Expenses: Our SG&A expenses for the three months ended June 30, 2017 are expected to be approximately $25.0-$27.0 million, which includes charges of $4.9 million related to stock-based compensation and $1.6 million of charges related to our incentive bonus plans. The SG&A expenses also include one-time costs of approximately $1.4 million in connection with the preparation for this offering and company formation costs; approximately $9.1 million of expenses in connection with the payment of the Special Dividend (which is comprised of approximately $7.9 million of dividend equivalent payments pursuant to the award adjustment provisions of the Contura Energy, Inc. Management Incentive Plan (the “MIP”) and approximately $1.2 million of professional fees related to the payment of the Special Dividend) and approximately $1.6 million of business development expenses.
Management has prepared the estimates presented above in good faith based upon our internal reporting and expectations for the three months ending June 30, 2017. These estimated ranges are preliminary, unaudited, subject to completion, reflect our current good faith estimates and may be revised as a result of results posted during the remainder of the quarter and management’s further review of our results. We and our auditors have not completed our normal quarterly review procedures as of and for the three and six months ending June 30, 2017, and there can be no assurance that our final results for this quarterly period will not differ from these estimates. Any such changes could be material. During the course of the preparation of our consolidated financial statements and related notes as of and for the three and six months ending June 30, 2017, we may identify items that would require us to make material adjustments to the preliminary financial and operational information. These estimates should not be viewed as a substitute for full interim financial statements prepared in accordance with GAAP or final operational data. In addition, these preliminary estimates for the three months ending June 30, 2017 are not necessarily indicative of the

10




results to be achieved for the remainder of 2017 or any future period. Our consolidated financial statements and related notes as of and for three and six months ending June 30, 2017 are not expected to be filed with the SEC until after this offering is completed.
Second Quarter 2016 Results (Predecessor)
The following tables summarize certain financial results that have been derived from our combined financial statements for the three months ended June 30, 2016 (all amounts in thousands, except per ton data).
Tons of Coal Sold:
 
Three Months Ended June 30,
 
2016
(Actual)
 
Predecessor
Tons sold:
 
Steam
9,151
Met
1,223
Total
10,374
 
Three Months Ended June 30,
 
2016
(Actual)
 
Predecessor
Tons sold:
 
CAPP Operations
998
NAPP Operations
2,185
PRB Operations
7,071
Trading and Logistics Operations
120
Total
10,374
Coal Revenues:
 
Three Months Ended June 30,
 
2016
(Actual)
 
Predecessor
Coal revenues (1):
 
Steam
168,977
Met
69,317
Total
238,294
______________
(1)
Does not include any portion of the price paid by our export customers to transport coal to the relevant outbound shipping port.


11




 
Three Months Ended June 30,
 
2016
(Actual)
 
% of Total Coal Revenues
 
Predecessor
 
 
Coal revenues (1):
 
 
 
CAPP Operations
59,321
 
24.9
%
NAPP Operations
94,071
 
39.5
%
PRB Operations
78,500
 
32.9
%
Trading and Logistics Operations
6,402
 
2.7
%
Total
238,294
 
100.0
%
______________
(1)
Does not include any portion of the price paid by our export customers to transport coal to the relevant outbound shipping port.

Average Coal Sales Realization Per Ton:
 
Three Months Ended June 30,
 
2016
(Actual)
 
Predecessor
Average coal sales realizable per ton (1):
 
Steam
18.47
Met
56.68
Total
22.97
______________
(1)
Average coal sales realizable per ton is defined as coal revenues divided by tons sold.

 
Three Months Ended June 30,
 
2016
(Actual)
 
Predecessor
Average coal sales realizable per ton (1):
 
CAPP Operations
59.44
NAPP Operations
43.05
PRB Operations
11.10
Trading and Logistics Operations
53.35
Total
22.97
______________
(1)
Average coal sales realizable per ton is defined as coal revenues divided by tons sold.

Our sales mix of met coal and steam coal based on volume was 12% and 88%, respectively, and our sales mix of met coal and steam coal based on coal revenues was 29% and 71%, respectively, for the three months ended June 30, 2016. Average coal sales realization per ton was $22.97. CAPP, NAPP, PRB and Trading and Logistics Operations’ coal revenues comprised 25%, 39%, 33% and 3%, respectively, of total coal revenues for the three months ended June 30, 2016.

12




Cost of Coal Sales:
 
Three Months Ended June 30,
 
2016
(Actual)
 
Predecessor
Cost of coal sales (1):
 
CAPP Operations
62,970

NAPP Operations
73,963

PRB Operations
67,317

Trading and Logistics Operations
5,666

Total
209,916

______________
(1)
Cost of coal sales excludes costs associated with our All Other category.

Cost of Coal Sales Per Ton:
 
Three Months Ended June 30,
 
2016
(Actual)
 
Predecessor
Cost of coal sales (1):
 
CAPP Operations
63.10
NAPP Operations
33.85
PRB Operations
9.52
Trading and Logistics Operations
47.22
Total
20.23
______________
(1)
Cost of coal sales excludes costs associated with our All Other category.

SG&A Expenses: Our SG&A expenses for the three months ended June 30, 2016 were approximately $14.3 million, which included approximately $5.6 million of charges related to our incentive bonus plans.
Special Dividend
On June 16, 2017, our board of directors authorized and declared a special cash distribution of approximately $92.8 million in the aggregate (the “Special Dividend”), payable to eligible holders of record of our common stock as of the close of business on July 5, 2017. In addition, pursuant to the award adjustment provisions of the MIP, certain payments in an amount equal to the Special Dividend per share (approximately $7.9 million in the aggregate (including the amounts payable with respect to each share underlying outstanding stock option awards and restricted stock unit awards and outstanding restricted common stock under the MIP) based on the number of shares underlying outstanding MIP awards) were required to be paid to MIP participants with respect to their outstanding MIP awards. The aggregate amount of the Special Dividend and the related payments pursuant to the MIP is $100.7 million.
The Special Dividend and the related payments pursuant to the MIP were funded with available cash on hand and were paid on July 13, 2017.

13




In connection with the payment of the Special Dividend, we entered into the First Amendment to Credit Agreement and the First Amendment to Asset-Based Revolving Credit Agreement, amending the Credit Agreement, dated as of March 17, 2017 among Contura Energy, Inc. as Borrower, Jefferies Finance LLC, as Administrative Agent and Collateral Agent, and the other Lenders party thereto (the “Term Loan Credit Agreement”) and the Asset-Based Revolving Credit Agreement dated as of April 3, 2017 among Contura Energy, Inc., and certain of its Subsidiaries, as the Borrowers; the Guarantors Party thereto; Citibank, N.A., as Administrative Agent and Swingline Lender; Citibank, N.A., BMO Harris Bank N.A. and Credit Suisse AG, Cayman Islands Branch, as L/C Issuers and the other Lenders party thereto (the “Asset-Based Revolving Credit Agreement”), respectively. The amendments permit, among other things, an aggregate amount of $150.0 million of cash to be used for the (i) payment of a one-time cash dividend on our common stock no later than July 28, 2017, and (ii) repurchase of our common stock at any time no later than December 31, 2017, subject to certain terms and conditions. We repaid a portion of the loans at par concurrently with the payment of the Special Dividend in an aggregate principal amount equal to $10.0 million.
Corporate Information
We were incorporated in the State of Delaware on June 10, 2016 to acquire and operate certain of Alpha’s core coal operations, as part of Alpha’s restructuring. We began operations on July 26, 2016 upon Alpha’s emergence from Chapter 11 bankruptcy protection. Our principal executive offices are located at 340 Martin Luther King Jr. Blvd., Bristol, Tennessee 37620, and our telephone number is (423) 573-0300. Our website is www.conturaenergy.com. Our website and the information contained therein or connected thereto is not incorporated into this prospectus or the registration statement of which it forms a part.

14




The Offering
Shares of common stock to be sold in this offering by the selling stockholders
6,000,000 shares
Shares of common stock to be outstanding after this offering
30,332,131 shares
Underwriters’ option to purchase additional shares
The underwriters have a 30-day option to purchase up to 900,000 additional shares of common stock from the selling stockholders, solely to cover over-allotments. We will not receive any of the proceeds from the shares of common stock sold pursuant to the over-allotment option.

Use of proceeds
We will not receive any proceeds from the sale of our common stock in this offering. All of the proceeds from this offering will be received by the selling stockholders. See “Use of Proceeds.”

Dividend policy
While we have not made any cash distributions since our inception, our board of directors authorized and declared the Special Dividend on June 16, 2017, payable to eligible holders of record of our common stock as of the close of business on July 5, 2017. The Special Dividend was funded with available cash on hand and was paid on July 13, 2017. See “—Recent Developments.” If we decide to pay cash dividends in the future, the declaration and payment of such dividends will be at the sole discretion of our board of directors and may be discontinued at any time. In determining the amount of any future dividends, our board of directors will take into account any legal or contractual limitations, our actual and anticipated future earnings, cash flow, debt service and capital requirements, tax considerations and other factors that our board of directors may deem relevant.

Listing
We have been approved to list our common stock on the New York Stock Exchange under the symbol “CTRA.”

Risk factors
See “Risk Factors” in this prospectus beginning on page 22 for a discussion of factors you should carefully consider before investing in our common stock.

Tax considerations
See “Material U.S. Federal Income and Estate Tax Consequences to Non-U.S. Holders.”
Unless we specifically state otherwise or the context otherwise requires, the information in this prospectus assumes that (i) except for our historical financial statements included in this prospectus, the consummation of a stock split immediately prior to and contingent on the completion of this offering pursuant to which each share of common stock held of record by the holder thereof will be reclassified into 2.82 shares of common stock (the “Stock Split”) and (ii) the underwriters’ option to purchase up to an additional 900,000 shares of common stock from the selling stockholders is not exercised.
Unless we specifically state otherwise or the context otherwise requires, the share information in this prospectus is as of March 31, 2017 and does not give effect to or reflect the issuance of:
1,186,701 shares issuable upon the exercise of outstanding stock options under the MIP at a weighted-average exercise price of $8.14 per share after giving effect to the Stock Split;
22,822 shares issued and outstanding resulting from grants under the MIP occurring after March 31, 2017;

15




9,982 shares issued and outstanding resulting from warrant exercises occurring between April 1, 2017 and July 25, 2017; or
a maximum of 2,614,582 shares issuable upon exercise of the warrants outstanding as of July 25, 2017 at an exercise price of approximately $17.284 per share after giving effect to the Stock Split. However, such number of shares issuable upon exercise of the warrants and the exercise price are subject to adjustment upon the effective date of the Stock Split and will depend upon the number of warrants and shares outstanding as of such date.
In addition, the share information in this prospectus does not give effect to or reflect the issuance of 94,825 shares underlying restricted stock units to certain of our non-employee directors under the MIP (including 79,304 shares underlying restricted stock units that by their terms are expected to settle after completion of this offering), after giving effect to the Stock Split.

16




Summary Historical and Pro Forma Financial Data
The following tables set forth our summary consolidated and combined historical and pro forma financial data as of and for each of the periods indicated. The summary consolidated historical financial data for the Successor period, as of and for the three months ended March 31, 2017, and the summary combined historical financial data for the Predecessor period, for the three months ended March 31, 2016, have been derived from our unaudited financial statements included elsewhere in this prospectus. The summary consolidated financial data as of December 31, 2016 and for the Successor period from July 26, 2016 to December 31, 2016, the summary combined financial data for the Predecessor period from January 1, 2016 to July 25, 2016 and the years ended December 31, 2015 and 2014 have been derived from our audited Successor and Predecessor financial statements included elsewhere in this prospectus. The term “Successor” refers to Contura Energy, Inc. and its subsidiaries for periods beginning as of July 26, 2016 and thereafter. The term “Predecessor” refers to Contura on a carve-out basis using Alpha’s historical basis and our assets, liabilities and operating results while under Alpha’s ownership.
The summary pro forma condensed combined statement of operations data for the year ended December 31, 2016 is derived from the unaudited pro forma condensed combined statement of operations included elsewhere in this prospectus and assume the Acquisition and the Alpha Restructuring (collectively, the “Transactions”) occurred as of January 1, 2016. The summary unaudited pro forma financial data is based upon available information and certain assumptions that management believes are factually supportable, are reasonable under the circumstances and are directly related to the Transactions. The summary unaudited pro forma financial data is provided for informational purposes only and does not purport to represent what our results of operations or financial position actually would have been if the Transactions had occurred at any other date, and such data does not purport to project our results of operations for any future period.
You should read this summary consolidated and combined historical and pro forma financial data together with “Unaudited Pro Forma Condensed Combined Statement of Operations,” “Selected Historical Consolidated and Combined Financial Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the audited and unaudited Successor and Predecessor financial statements and related notes thereto, included elsewhere in this prospectus. Our historical results are not necessarily indicative of our future results of operations, financial position and cash flows.

17




Summary Consolidated and Combined Financial and Other Data
Statements of Operations Data:
(In thousands, except for share and per share data)
Successor
 
 
Predecessor
 
Pro Forma
 
Successor
 
 
Predecessor
Three Months Ended March 31, 2017
 
 
Three Months Ended March 31, 2016
 
Year Ended December 31, 2016
 
Period from
July 26, 2016 to December 31, 2016
 
 
Period from
January 1, 2016 to July 25, 2016
 
Year Ended December 31, 2015
 
Year Ended December 31, 2014
Revenues:
 
 
 
 
 
 
 
 

 
 
 

 
 
 
 
Coal revenues
$
508,890

 
 
$
231,341

 
$
1,149,567

 
$
612,247

 
 
$
537,320

 
$
1,243,690

 
$
1,464,316

Freight and handling revenues
60,223

 
 
22,889

 
122,620

 
70,544

 
 
52,076

 
97,237

 
98,109

Other revenues
4,320

 
 
4,290

 
25,170

 
6,628

 
 
18,542

 
20,704

 
24,600

Total revenues
573,433

 
 
258,520

 
1,297,357

 
689,419

 
 
607,938

 
1,361,631

 
1,587,025

Costs and expenses:
 
 
 
 
 
 
 
 

 
 
 

 
 
 
 
Cost of coal sales (exclusive of items shown separately below)
368,152

 
 
224,184

 
937,982

 
465,764

 
 
489,652

 
1,106,046

 
1,202,612

Freight and handling costs
60,223

 
 
22,889

 
122,620

 
70,544

 
 
52,076

 
97,237

 
98,109

Other expenses
1,453

 
 
2,212

 
7,452

 
2,559

 
 
4,893

 
(931
)
 
15,473

Depreciation, depletion and amortization
16,931

 
 
34,999

 
100,956

 
43,978

 
 
85,379

 
202,115

 
203,361

Amortization of acquired intangibles, net
19,658

 
 
404

 
105,000

 
61,281

 
 
11,567

 
2,223

 
(1,699
)
Selling, general and administrative expenses (exclusive of depreciation, depletion and amortization shown separately above)
13,829

 
 
11,742

 
48,272

 
19,135

 
 
29,567

 
44,158

 
52,256

Mark-to-market adjustment for acquisition-related obligations
(4,357
)
 
 

 
(10,616
)
 
(10,616
)
 
 

 

 

Secondary offering costs
942

 
 

 

 

 
 

 

 

Asset impairment and restructuring

 
 
496

 
3,755

 

 
 
3,755

 
558,699

 
6,849

Goodwill impairment

 
 

 

 

 
 

 

 
70,017

Total costs and expenses
476,831

 
 
296,926

 
1,315,421

 
652,645

 
 
676,889

 
2,009,547

 
1,646,978

Income (loss) from operations
96,602

 
 
(38,406
)
 
(18,064
)
 
36,774

 
 
(68,951
)
 
(647,916
)
 
(59,953
)
Other (expense) income:
 
 
 
 
 
 
 
 

 
 
 

 
 
 
 
Interest expense
(11,468
)
 
 
(4
)
 
(43,171
)
 
(20,792
)
 
 
(63
)
 
(437
)
 
(712
)
Interest income
31

 
 
29

 
52

 
23

 
 
29

 
4

 
7

Mark-to-market adjustment for warrant derivative liability
2,160

 
 

 
(33,975
)
 
(33,975
)
 
 

 

 

Loss on early extinguishment of debt
(38,701
)
 
 

 

 

 
 

 

 

Bargain purchase gain

 
 

 

 
7,719

 
 

 

 

Equity loss in affiliates
(1,211
)
 
 
(1,424
)
 
(5,006
)
 
(2,280
)
 
 
(2,726
)
 
(7,700
)
 
(9,810
)
Miscellaneous income, net
205

 
 
612

 
915

 
232

 
 
683

 
28

 
383

Total other expense, net
(48,984
)
 
 
(787
)
 
(81,185
)
 
(49,073
)
 
 
(2,077
)
 
(8,105
)
 
(10,132
)
Income (loss) before reorganization items and income taxes
47,618

 
 
(39,193
)
 
(99,249
)
 
(12,299
)
 
 
(71,028
)
 
(656,021
)
 
(70,085
)
Reorganization items, net

 
 
(14,554
)
 

 

 
 
(31,073
)
 
(16,134
)
 

Income (loss) before income taxes
47,618

 
 
(53,747
)
 
(99,249
)
 
(12,299
)
 
 
(102,101
)
 
(672,155
)
 
(70,085
)
Income tax (expense) benefit
(10,347
)
 
 
21,104

 
36,258

 
1,369

 
 
34,889

 
254,595

 
17,740

Net income (loss)
$
37,271

 
 
$
(32,643
)
 
$
(62,991
)
 
$
(10,930
)
 
 
$
(67,212
)
 
$
(417,560
)
 
$
(52,345
)
Historical earnings (loss) per share data(1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic income (loss) per common share
$
3.62

 
 
 
 
$
(6.11
)
 
$
(1.06
)
 
 


 


 



18




Diluted income (loss) per common share
$
3.47

 
 
 
 
$
(6.11
)
 
$
(1.06
)
 
 


 


 


Weighted average shares - basic
10,309,428

 
 
 
 
10,309,310

 
10,309,310

 
 
 
 
 
 
 
Weighted average shares - diluted
10,728,281

 
 
 
 
10,309,310

 
10,309,310

 
 
 
 
 
 
 
As adjusted earnings (loss) per share data(2)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As adjusted net income (loss)
$
37,271

 
 
 
 
$
(62,991
)
 
$
(10,930
)
 
 
 
 
 
 
 
As adjusted basic income (loss) per common share
$
1.28

 
 
 
 
$
(2.17
)
 
$
(0.38
)
 
 
 
 
 
 
 
As adjusted diluted income (loss) per common share
$
1.23

 
 
 
 
$
(2.17
)
 
$
(0.38
)
 
 
 
 
 
 
 
As adjusted weighted average shares - basic
29,072,587

 
 
 
 
29,072,254

 
29,072,254

 
 
 
 
 
 
 
As adjusted weighted average shares - diluted
30,253,752

 
 
 
 
29,072,254

 
29,072,254

 
 
 
 
 
 
 
______________
(1)
Historical share and per share information does not give effect to the consummation of the Stock Split to be effected upon the closing of this offering.
(2)
As adjusted amounts give effect to the consummation of the Stock Split to be effected upon the closing of this offering pursuant to which each share held by the holder of common stock will be reclassified into 2.82 shares,

Other Financial and Operating Data:
(In thousands except for per ton data)
Successor
 
 
Predecessor
 
Pro Forma
 
Successor
 
 
Predecessor
Three Months Ended March 31, 2017
 
 
Three Months Ended March 31, 2016
 
Year Ended December 31, 2016
 
Period from
July 26, 2016 to December 31, 2016
 
 
Period from
January 1, 2016 to July 25, 2016
 
Year Ended December 31, 2015
 
Year Ended December 31, 2014
Tons sold
13,086

 
 
10,406

 
46,706

 
22,481

 
 
24,225

 
51,710

 
52,329

Average coal sales realization per ton (1)
$
38.89

 
 
$
22.23

 
$
24.61

 
$
27.23

 
 
$
22.18

 
$
24.05

 
$
27.98

Cost of coal sales per ton (2)
$
28.13

 
 
$
21.54

 
$
20.08

 
$
20.72

 
 
$
20.21

 
$
21.39

 
$
22.98

Coal margin per ton (3)
$
10.76

 
 
$
0.69

 
$
4.53

 
$
6.51

 
 
$
1.97

 
$
2.66

 
$
5.00

Adjusted EBITDA(4)
$
128,770

 
 
$
(3,319
)
 
$
176,940

 
$
129,369

 
 
$
29,707

 
$
98,105

 
$
218,040

______________
(1)
Average coal sales realization per ton is defined as coal revenues divided by tons sold.
(2)
Cost of coal sales per ton is defined as cost of coal sales divided by tons sold.
(3)
Coal margin per ton is defined as coal revenues less cost of coal sales, divided by tons sold.
(4)
Adjusted EBITDA is a non-GAAP financial measure and has been presented in this prospectus as a supplemental measure of financial performance that is not required by, or presented in accordance with, GAAP. We calculate Adjusted EBITDA as net loss before interest expense (income), income tax benefit, depreciation, depletion and amortization, mark-to-market adjustment for warrant derivative liability, secondary offering costs, bargain purchase gain, mark-to-market adjustment for acquisition-related obligations, loss on early extinguishment of debt, amortization of acquired intangibles (net), reorganization items (net), asset impairment and restructuring charges, goodwill impairment and mark-to-market adjustment for other derivatives.
We believe that this non-GAAP financial measure provides additional insight into our operating performance, and it reflects how management analyzes our operating performance and compares that performance against other companies for purposes of business decision making by excluding the impact of certain items that management does not believe are indicative of our core operating performance. We believe Adjusted EBITDA assists management in comparing performance across periods, planning and forecasting future business operations and helping determine levels of operating and capital investments. Period-to-period comparisons of

19




Adjusted EBITDA are intended to help our management identify and assess additional trends potentially impacting our company that may not be shown solely by period-to-period comparisons of net loss. In addition, we believe that Adjusted EBITDA is a useful measure as some investors and analysts use Adjusted EBITDA to compare us against other companies. However, Adjusted EBITDA may not be comparable to similarly titled measures used by other entities.
The following table reconciles net income (loss) to Adjusted EBITDA for the periods presented.
(In thousands)
Successor
 
 
Predecessor
 
Pro Forma
 
Successor
 
 
Predecessor
Three Months Ended March 31, 2017
 
 
Three Months Ended March 31, 2016
 
Year Ended December 31, 2016
 
Period from
July 26, 2016 to December 31, 2016
 
 
Period from
January 1, 2016 to July 25, 2016
 
Year Ended December 31, 2015
 
Year Ended December 31, 2014
Net income (loss)
$
37,271

 
 
$
(32,643
)
 
$
(62,991
)
 
$
(10,930
)
 
 
$
(67,212
)
 
$
(417,560
)
 
$
(52,345
)
Interest expense
11,468

 
 
4

 
43,171

 
20,792

 
 
63

 
437

 
712

Interest income
(31
)
 
 
(29
)
 
(52
)
 
(23
)
 
 
(29
)
 
(4
)
 
(7
)
Income tax expense (benefit)
10,347

 
 
(21,104
)
 
(36,258
)
 
(1,369
)
 
 
(34,889
)
 
(254,595
)
 
(17,740
)
Depreciation, depletion and amortization
16,931

 
 
34,999

 
100,956

 
43,978

 
 
85,379

 
202,115

 
203,361

Mark-to-market adjustment for warrant derivative liability (a)
(2,160
)
 
 

 
33,975

 
33,975

 
 

 

 

Bargain purchase gain (b)

 
 

 

 
(7,719
)
 
 

 

 

Mark-to-market adjustment for acquisition-related obligations (c)
(4,357
)
 
 

 
(10,616
)
 
(10,616
)
 
 

 

 

Amortization of acquired intangibles, net (d)
19,658

 
 
404

 
105,000

 
61,281

 
 
11,567

 
2,223

 
(1,699
)
Secondary offering costs (e)
942

 
 

 

 

 
 

 

 

Loss on early extinguishment of debt (f)
38,701

 
 

 

 

 
 

 

 

Reorganization items, net (g)

 
 
14,554

 

 

 
 
31,073

 
16,134

 

Asset impairment and restructuring (h)

 
 
496

 
3,755

 

 
 
3,755

 
558,699

 
6,849

Goodwill impairment (i)

 
 

 

 

 
 

 

 
70,017

Mark-to-market adjustment for other derivatives (j)

 
 

 

 

 
 

 
(9,344
)
 
8,892

Adjusted EBITDA
$
128,770

 
 
$
(3,319
)
 
$
176,940

 
$
129,369

 
 
$
29,707

 
$
98,105

 
$
218,040

______________
(a)
Adjusts for the mark-to-market impact of warrants issued during the Successor period. The warrants are classified as a derivative liability and are marked-to-market with changes in value reflected in earnings.
(b)
Adjusts for the bargain purchase gain recognized through the Acquisition. The bargain purchase gain resulted from the excess of the fair value of the acquired assets over liabilities assumed through the Acquisition.
(c)
Adjusts for the mark-to-market impact of Acquisition-related obligations assumed through various settlement agreements entered into as part of the Alpha Restructuring.
(d)
Adjusts for the amortization of above and below market-priced coal supply agreements related to the Acquisition from Alpha, as well as other acquisitions during the Predecessor period.
(e)
Adjusts for secondary offering costs incurred in connection with this offering.
(f)
Adjusts for loss on early extinguishment of debt, primarily related to a prepayment premium on our 10.00% Senior Secured First Lien Notes and the write off of outstanding debt discounts on our 10.00% Senior Secured First Lien Notes and GUC Distribution Note in connection with the refinancing of these debt instruments in March 2017.
(g)
Adjusts for reorganization items such as realized gains and losses from the settlement of pre-petition liabilities and provisions for losses resulting from the Alpha Restructuring, as well as professional fees directly related to the Alpha Restructuring.

20




(h)
Adjusts for the impairment of certain long-lived assets or asset groups as a result of a longer than expected recovery in the metallurgical coal markets and lower production and shipment levels, as well as severance expenses, losses related to non-core property divestitures and other restructuring-related charges.
(i)
Adjusts for goodwill impairment charges.
(j)
Adjusts for the mark-to-market impact of commodity swap agreements used to mitigate the risk of price volatility for diesel fuel.

Balance Sheet Data:
 
Successor
(In thousands)
March 31,
2017
 
December 31,
2016
Cash and cash equivalents
$
240,607

 
$
127,948

Working capital (1)
$
282,409

 
$
206,604

Property, plant, and equipment, net
$
316,035

 
$
317,013

Total assets
$
999,899

 
$
946,752

Notes payable and long-term debt, including current portion, net
$
391,354

 
$
349,161

Total liabilities
$
924,020

 
$
909,528

Stockholders’ equity
$
75,879

 
$
37,224

______________
(1)
Working capital is defined as current assets less current liabilities.

21




RISK FACTORS
Investment in our common stock is subject to various risks, including risks and uncertainties inherent in our business. The following sets forth factors related to our business, operations, financial position or future financial performance or cash flows which could cause an investment in our common stock to decline and result in a loss. In addition, we may also face new risks as yet unidentified. You should carefully consider the information in this prospectus, including the following risks and the matters addressed under “Special Note Regarding Forward-Looking Statements” before making an investment decision. The trading price of our common stock could decline, and you may lose all or part of your investment.
Risks Relating to Our Industry and the Global Economy
Declines in coal prices would reduce our revenues and adversely affect our operating results, cash flows, financial condition, stock price and the value of our coal reserves.
Our results of operations are substantially dependent upon the prices we receive for our coal. Those prices depend upon factors beyond our control (some of which are described in more detail in other risk factors below), including:
the demand for domestic and foreign coal and coke, which depends significantly on the demand for electricity and steel;
the price and availability of natural gas, other alternative fuels and alternative steel production technologies;
domestic and foreign economic conditions, including economic downturns and the strength of the global and U.S. economies;
the consumption pattern of industrial customers, electricity generators and residential users;
adverse weather, climactic or other natural conditions, including natural disasters;
the quantity, quality and pricing of coal available in the resale market;
the effects of worldwide energy conservation or emissions measures;
competition from other suppliers of coal and other energy sources;
the legal, regulatory and tax environment for our industry and those of our customers; and
the proximity to and availability, reliability and cost of transportation and port facilities.
Declines in coal prices in the U.S. and other countries may materially adversely affect our operating results and cash flows, as well as the value of our coal reserves and may cause the number of risks that we face to increase in likelihood, magnitude and duration.
Lower demand for met coal by U.S. and foreign steel producers could reduce the price of our met coal, which would reduce our revenues.
We produce met coal that is used in both the U.S. and foreign steel industries. Met coal accounted for approximately 51% and 63% of our coal revenues for the period from July 26, 2016 to December 31, 2016 and the three months ended March 31, 2017, respectively. Any deterioration in conditions in the U.S. or the foreign steel industry, including the demand for steel and the continued financial viability of the industry, could reduce the demand for our met coal and could impact the collectability of our accounts receivable from U.S. or foreign steel

22




industry customers. The demand for foreign-produced steel both in foreign markets and in the U.S. market also depends on factors such as tariff rates on steel.
In addition, the steel industry’s demand for met coal is affected by a number of factors, including the cyclical nature of that industry’s business, technological developments in the steel-making process and the availability of substitutes for steel, such as aluminum, composites and plastics. The U.S. steel industry increasingly relies on processes to make steel that do not use coke, such as electric arc furnaces or pulverized coal processes. If this trend continues, the amount of met coal that we sell and the prices that we receive for it could decrease, thereby reducing our revenues and adversely impacting our earnings and the value of our coal reserves. Lower demand for met coal in international markets could reduce the amount of met coal that we sell and the prices that we receive for it, thereby reducing our revenues and adversely impacting our earnings and the value of our coal reserves. Foreign government policies related to coal production and consumption could negatively impact pricing and demand for our products.
Lower demand for steam coal by North American electric power generators could reduce the price of our steam coal, which would reduce our revenues.
Steam coal accounted for approximately 49% and 37% of our coal revenues for the period from July 26, 2016 to December 31, 2016 and the three months ended March 31, 2017, respectively. The majority of our sales of steam coal were to U.S. electric power generators. The North American demand for steam coal is affected primarily by:
the overall demand for electricity, which is in turn influenced by the global economy and the weather, among other factors (for example, mild North American winters typically result in lower demand);
the availability, quality and price of competing fuels, such as natural gas, nuclear fuel, oil and alternative energy sources such as wind, solar, and hydroelectric power, which may change over time as a result of, among other things, technological developments;
increasingly stringent environmental and other governmental regulations, including air emission standards for coal-fired power plants; and
the coal inventories of utilities.
Many North American electric power generators have shifted from coal to natural gas-fired power plants. Despite ongoing advancements in the availability and deployment of advanced coal and emissions reduction technologies, we expect that new power plants in the near-term will be fired by natural gas because natural gas-fired plants are less expensive to construct than coal-fired plants and natural gas is a cleaner-burning fuel, with plentiful supplies and low cost at the current time. Increasingly stringent regulations have also reduced the number of new power plants being built. A reduction in the amount of coal consumed by North American electric power generators would reduce the amount of steam coal that we sell and the price that we receive for it, thereby reducing our revenues and adversely impacting our earnings and the value of our coal reserves. In addition, uncertainty caused by federal and state regulations could cause steam coal customers to be uncertain of their coal requirements in future years, which could adversely affect our ability to sell coal to such customers under multi-year sales contracts.
Competition within the coal industry may adversely affect our ability to sell coal, and excess production capacity in the industry could put downward pressure on coal prices.
We compete with numerous other coal producers in various regions of the U.S. for domestic and international sales. We also compete in international markets against coal producers in other countries. International demand for U.S. coal exports also affects coal demand in the U.S. This competition affects domestic and foreign coal prices and our ability to retain or attract coal customers. Increased competition from the Illinois basin, the threat of increased production from competing mines, and natural gas price declines with large basis differentials have all historically contributed to soft market conditions.

23




In the past, high demand for coal and attractive pricing brought new investors to the coal industry, leading to the development of new mines and added production capacity. Subsequent overcapacity in the industry has contributed, and may in the future contribute, to lower coal prices.
Potential changes to international trade agreements, trade concessions, foreign currency fluctuations or other political and economic arrangements may benefit coal producers operating in countries other than the United States. Additionally, North American steel producers face competition from foreign steel producers, which could adversely impact the financial condition and business of our customers. We cannot assure you that we will be able to compete on the basis of price or other factors with companies that in the future may benefit from favorable foreign trade policies or other arrangements. Coal is sold internationally in U.S. dollars and, as a result, general economic conditions in foreign markets and changes in foreign currency exchange rates may provide our foreign competitors with a competitive advantage. If our competitors’ currencies decline against the U.S. dollar or against our foreign customers’ local currencies, those competitors may be able to offer lower prices for coal to customers. Furthermore, if the currencies of our overseas customers were to significantly decline in value in comparison to the U.S. dollar, those customers may seek decreased prices for the coal we sell to them. Consequently, currency fluctuations could adversely affect the competitiveness of our coal in international markets, which could have a material adverse effect on our business, financial condition, results of operations and cash flows. See “Business—Competition.” Similarly, currency fluctuations could adversely affect demand for U.S. steel.
Lower demand for U.S. coal exports would reduce our foreign sales, could negatively impact our revenues and could result in downward pressure on domestic coal prices.
Coal exports revenues accounted for approximately 48% and 58% of our total coal revenues for the period from July 26, 2016 to December 31, 2016 and the three months ended March 31, 2017, respectively. In addition to the factors described above, demand for and viability of U.S. coal exports is dependent upon a number of factors outside of our control, including ocean freight rates and port and shipping capacity. Additionally, China is the world’s largest importer of coal, and decreases in its demand could cause decreases in the prices we receive for our export shipments. Furthermore, if the amount of coal exported from the U.S. were to decline, increased domestic supply could cause competition among coal producers in the U.S. to intensify, potentially resulting in additional downward pressure on domestic coal prices.
Future governmental policy changes in China may be detrimental to the global coal market and impact our business, financial condition or results of operations.
The Chinese government has from time to time implemented regulations and promulgated new laws or restrictions on their domestic coal industry, sometimes with little advance notice, which may impact worldwide coal demand, supply and prices. According to Wood Mackenzie, China is the largest met coal producer and consumer in the world, consuming over 99% of its 2016 domestic production of 731 million tons of met coal. The recent rise from historic lows in prices was driven in part by government policies in China that curbed domestic supply. In early 2016, the Chinese government announced a 276-work day limitation on the annual operating days for coal mines, as well as a plan to close over 1,000 coal mines within the year. While in early 2017, the Chinese government set its capacity reduction target to 165 million tons for the year, it may not enforce this target or may reverse it in future periods. It is possible that policy changes from Beijing may be detrimental to the global coal market and, thus, impact our business, financial condition or results of operations.
In addition, similar actions by government entities in countries that produce and/or consume large quantities of coal and other energy related commodities may have a material impact on the prices at which we sell our product.
The loss of, or significant reduction in, purchases by our largest customers could adversely affect our revenues and profitability.
Our largest customer during the year ended December 31, 2016, on a pro forma basis, accounted for approximately 7% of our total coal revenues, and coal sales to our 10 largest customers accounted for approximately 41% of our total coal revenues. These customers may not continue to purchase coal from us as they have previously,

24




or at all. If these customers were to reduce their purchases of coal significantly or if we were unable to sell coal to them on terms as favorable to us, our revenues and profitability could suffer materially.
We may not be able to extend our existing long-term supply contracts or enter into new ones, and our existing supply contracts may contain certain provisions that may reduce protection from short-term coal price volatility, which could adversely affect the profitability of our operations.
A substantial portion of our steam coal is sold under long-term contracts. When our current contracts with customers expire or are otherwise renegotiated, our customers may decide to purchase fewer tons of coal than in the past or on terms, including pricing terms, that are not as favorable to us as the terms under our current agreements.
Further, in large part as a result of increasing and frequently changing regulation, and natural gas pricing, electric power generators are increasingly less willing to enter into long-term coal supply contracts, instead purchasing higher percentages of coal under short-term supply contracts. This industry shift away from long-term supply contracts could adversely affect us and the level of our revenues. For example, our having fewer customers with a contractual obligation to purchase coal from us increases the risk that we will not have a consistent market for our production and may require us to sell more coal in the spot market, where prices may be lower than we would expect a customer to pay for a contractually committed supply. Spot market prices also tend to be more volatile than contractual prices, which could result in decreased revenues. Our met coal supply contracts are typically priced on an annual, quarterly or spot basis, and therefore our met coal sales are particularly sensitive to re-pricing risk.
Generally, our long-term steam coal agreements contain committed volumes and fixed prices for a certain number of periods during which steam coal will be delivered. However, some of our long-term steam coal agreements do not provide for a fixed price through the life of the agreement. Those agreements contain price negotiation and similar provisions for upcoming unpriced contract periods, with negotiations generally considering either then current market prices and/or relevant market indices. Failure of the parties to agree on a price can lead to termination of the contract or litigation, the outcome of which would be uncertain. Further, during periods of economic weakness, some of our customers experience lower demand for their products and services and may be unwilling to take all of their contracted tonnage or may request a lower price. Customers may make similar requests when market prices drop significantly. Any adjustment or negotiation leading to a significantly lower contract price could result in decreased revenues. Accordingly, supply contracts with terms of one year or more may provide only limited protection during adverse or volatile market conditions.
Our ability to collect payments from our customers could be impaired if their creditworthiness and financial health deteriorate.
Our ability to receive payment for coal sold and delivered depends on the continued creditworthiness and financial health of our customers. Competition with other coal suppliers could force us to extend credit to customers and on terms that could increase the risk we bear on payment default. In recent years, downturns in the economy and disruptions in the global financial markets have, from time to time, affected the creditworthiness of our customers and limited their liquidity and credit availability. In addition, our customer base may change with deregulation as utilities sell or transfer their power plants to their non-regulated affiliates or third parties that may be less creditworthy, thereby increasing the risk we bear for customer payment default. These new power plant owners or operators may have credit ratings that are below investment grade, or may become below investment grade after we enter into contracts with them.
Customers in other countries may be subject to other pressures and uncertainties that may affect their ability to pay, including trade barriers, exchange controls and local economic and political conditions. In the period from July 26, 2016 to December 31, 2016 and the three months ended March 31, 2017, we derived 48% and 58%, respectively, of our total coal revenues from coal sales made to customers outside the U.S.

25




Economic downturns and disruptions in the global financial markets have had and could in the future have a material adverse effect on the demand for and price of coal, which could have a material negative effect on our sales, margins and profitability and ability to obtain financing, as well as our costs.
Economic downturns and disruptions in the global financial markets have from time to time resulted in, among other things, extreme volatility in securities prices, severely diminished liquidity and credit availability, rating downgrades of certain investments and declining valuations of others, including real estate. These sorts of disruptions, and in particular the tightening of credit in financial markets, could adversely affect our customers’ ability to obtain financing for operations and result in a decrease in demand, lower coal prices, the cancellation of some orders for our coal and the restructuring of agreements with some of our customers. Changes in the value of the U.S. dollar relative to other currencies, particularly where imported products are required for the mining process, could result in materially increased operating expenses. Any prolonged global, national or regional economic recession or other similar events could have a material adverse effect on the demand for and price of coal, on our sales, margins and profitability, and on our own ability to obtain financing. We are unable to predict the timing, duration and severity of any potential future disruptions in financial markets and potential future adverse economic conditions in the U.S. and other countries and the impact these events may have on our operations and the industry in general. Furthermore, because we seek to enter into long-term arrangements for the sale of a substantial portion of our coal, it is likely that the average sales price we receive for our coal will lag behind any general economic recovery.
Risks Relating to Regulatory and Legal Developments
Climate change or carbon dioxide emissions reduction initiatives could significantly reduce the demand for coal and reduce the value of our coal assets.
Global climate issues continue to attract considerable public and scientific attention. Numerous reports, such as the Fourth and Fifth Assessment Report of the Intergovernmental Panel on Climate Change, have also engendered concern about the impacts of human activity, and in particular the emissions of greenhouse gases (“GHG”), such as carbon dioxide and methane, on global climate issues. Combustion of fossil fuels like coal results in the creation of carbon dioxide, which is emitted into the atmosphere by coal end users such as coal-fired electric power generators, coke plants and steelmaking plants, and, to a lesser extent, by the combustion of fossil fuels by the mining equipment we use. In addition, coal mining can release methane from the mine, a GHG, directly into the atmosphere. Concerns associated with global climate change, and GHG emissions reduction initiatives designed to address them, have resulted, and are expected to continue to result, in decreased coal-fired power plant capacity and utilization, phasing out and closing many existing coal-fired power plants, reducing or eliminating construction of new coal-fired power plants in the United States and certain other countries, increased costs to mine coal, and decreased demand and prices for coal.
Emissions from coal consumption and production are subject to pending and proposed regulations as part of regulatory initiatives to address global climate change and global warming. Various international, federal, regional, foreign and state proposals are currently in place or being considered to limit emissions of GHGs, including possible future U.S. treaty commitments, new federal or state legislation, and regulation under existing environmental laws by the EPA and other regulatory agencies. These include:
the 2015 Paris climate summit agreement, which resulted in voluntary commitments by 197 countries (although on June 1, 2017, the Trump administration announced that the U.S. will withdraw from the agreement) to reduce their GHG emissions and could result in additional firm commitments by various nations with respect to future GHG emissions;
federal regulations such as the Clean Power Plan (“CPP”), which is currently stayed by the U.S. Supreme Court and would have required reductions in emissions from existing power plants, and new source performance standards for GHG emissions for new, modified or reconstructed coal and oil-fired power plants (“Power Plant NSPS”), which requires the use of partial carbon capture and sequestration (both of which are subject to potential suspension, revision or rescission);

26




state and regional climate change initiatives implementing renewable portfolio standards or cap-and-trade schemes;
challenges to or denials of permits for new coal-fired power plants or retrofits to existing plants by state regulators and environmental organizations due to concerns related to GHG emissions from the new or existing plants; and
private litigation against coal companies or power plant operators based on GHG-related concerns.
On March 28, 2017, President Trump signed the Executive Order for Promoting Energy Independence and Economic Growth (“March 2017 Executive Order”) that directed the United States Environmental Protection Agency (“EPA”) to review and, if appropriate, suspend, revise or rescind, both the CPP and the Power Plant NSPS as necessary to ensure consistency with the goals of energy independence, economic growth and cost-effective environmental regulation. On April 4, 2017, the EPA announced in the Federal Register that it is initiating its review of the CPP and the Power Plant NSPS. The EPA will also review the compliance dates set by the CPP, since some of these dates “have passed or will likely pass while the CPP continues to be stayed.” On April 28, 2017, the D.C. Circuit paused legal challenges to both the CPP and the Power Plant NSPS for 60 days to allow parties in each of those cases to brief the court on whether the case should be remanded to the agency or kept on hold. The outcome of these rulemakings is uncertain and likely to be subject to extensive notice and comment and litigation. More stringent standards for carbon dioxide pollution as a result of these rulemakings could further reduce demand for coal, and our business would be adversely impacted.
In addition, certain banks and other financing sources have taken actions to limit available financing for the development of new coal-fueled power plants, which also may adversely impact the future global demand for coal. Further, there have been recent efforts by members of the general financial and investment communities, such as investment advisors, sovereign wealth funds, public pension funds, universities and other groups, to divest themselves and to promote the divestment of securities issued by companies involved in the fossil fuel extraction market, such as coal producers. Those entities also have been pressuring lenders to limit financing available to such companies. These efforts may adversely affect the market for our securities and our ability to access capital and financial markets in the future.
Furthermore, several well-funded non-governmental organizations have explicitly undertaken campaigns to minimize or eliminate the use of coal as a source of electricity generation. These groups have sought to stop or delay coal mining activities, bringing numerous lawsuits, including against the Bureau of Land Management (“BLM”) and the Office of Surface Mining Reclamation and Enforcement (“OSM”) to challenge not only the issuance of individual coal leases and mine plan approvals and modifications, but also the federal coal leasing program more broadly. These efforts, as well as concerted conservation and efficiency efforts that result in reduced electricity consumption, and consumer and corporate preferences for non-coal fuel sources, could cause coal prices and sales of our coal to materially decline and could cause our costs to increase.
Any future laws, regulations or other policies or initiatives of the nature described above may adversely impact our business in material ways. The degree to which any particular law, regulation or policy impacts us will depend on several factors, including the substantive terms involved, the relevant time periods for enactment and any related transition periods. Considerable uncertainty is associated with these regulatory initiatives and legal developments, as the content of proposed legislation and regulation is not yet fully determined, many of the new regulatory initiatives remain subject to governmental and judicial review, and, with respect to federal initiatives, the current U.S. Presidential administration and/or Congress may further impact their development. We routinely attempt to evaluate the potential impact on us of any proposed laws, regulations or policies, which requires that we make several material assumptions. From time to time, we determine that the impact of one or more such laws, regulations or policies, if adopted and ultimately implemented as proposed, may result in materially adverse impacts on our operations, financial condition or cash flow; however, we often are not able to reasonably quantify such impacts.
In general, any future laws, regulations or other policies aimed at reducing GHG emissions have imposed and are likely to continue to impose significant costs on many coal-fired power plants, steel-making plants and industrial

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boilers, which may make them unprofitable. Accordingly, some existing power generators have switched to other fuels that generate fewer emissions and others are likely to switch, some power plants have closed and others are likely to close, and fewer new coal-fired plants are being constructed, all of which reduce demand for coal and the amount of coal that we sell and the prices that we receive for it, thereby reducing our revenues and adversely impacting our earnings and the value of our coal reserves.
Other extensive environmental laws, including existing and potential future legislation, treaties and regulatory requirements relating to air emissions, waste management and water discharges, affect our customers and could further reduce the demand for coal as a fuel source and cause prices and sales of our coal to materially decline.
Our customers’ operations are subject to extensive laws and regulations relating to environmental matters, including air emissions, wastewater discharges and the storage, treatment and disposal of wastes; and operational permits. In particular, the Clean Air Act and similar state and local laws extensively regulate the amount of sulfur dioxide, particulate matter, nitrogen oxides, mercury and other compounds emitted into the air from fossil-fuel fired power plants, which are the largest end-users of our coal. A series of more stringent requirements will or may become effective in coming years, including:
implementation of the current and more stringent proposed ambient air quality standards for sulfur dioxide, nitrogen oxides, particulate matter and ozone, including the EPA’s issuance in October 2015 of a more stringent ambient air quality standard for ozone;
implementation of the EPA’s Cross-State Air Pollution Rule (“CSAPR”) to significantly reduce nitrogen oxide and sulfur dioxide emissions from power plants in 28 states, and the CSAPR Update Rule, issued in September 2016, requiring further reductions in nitrogen oxides in 2017 in 22 states subject to CSAPR during the summertime ozone season;  
continued implementation of the EPA’s Mercury and Air Toxics Standards (“MATS”), which impose stringent limits on emissions of mercury and other toxic air pollutants from electric power generators, issued in December 2011 and in effect pending completion of judicial review proceedings;
implementation of the EPA’s August 2014 final rule on cooling water intake structures for power plants;
more stringent EPA requirements governing management and disposal of coal ash pursuant to a rule finalized in December 2014; and
implementation of the EPA’s November 2015 final rule setting effluent discharge limits on the levels of metals that can be discharged from power plants.
These environmental laws and regulations impose significant costs on our customers, which are increasing as these requirements become more stringent. These costs make coal more expensive to use and make it a less attractive fuel source of energy for our customers. Accordingly, some existing power generators have switched to other fuels that generate fewer emissions and others are likely to switch, some power plants have closed and others are likely to close, and fewer coal-fired plants are being constructed, all of which reduce demand for coal, the amount of coal that we sell and the prices that we receive for it, thereby reducing our revenues and adversely impacting our earnings and the value of our coal reserves.
In addition, regulations regarding sulfur dioxide emissions under the Clean Air Act, including caps on emissions and the price of emissions allowances, have a potentially significant impact on the demand for our coal based on its sulfur content. We sell both higher sulfur and low sulfur coal. More widespread installation by power generators of technology that reduces sulfur emissions may make high sulfur coal more competitive with our low sulfur coal. Decreases in the price of emissions allowances could have a similar effect. Significant increases in the price of emissions allowances could reduce the competitiveness of higher sulfur coal compared to low sulfur coal and possibly natural gas at power plants not equipped to reduce sulfur dioxide emissions. Any of these consequences

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could result in a decrease in revenues from some of our operations, which could adversely affect our business and results of operations.
The extensive regulation of the mining industry imposes significant costs on us, and future regulations or violations could increase those costs or limit our ability to produce coal.
Our operations are subject to a wide variety of federal, state and local environmental, health and safety, transportation, labor and other laws and regulations relating to matters such as:
blasting;
controls on emissions and discharges;
the effects of operations on surface water and groundwater quality and availability;
the storage, treatment and disposal of wastes;
the remediation of contaminated soil, surface water and groundwater;
surface subsidence from underground mining;
the classification of plant and animal species near our mines as endangered or threatened species;
the reclamation of mined sites; and
employee health and safety, and benefits for current and retired coal miners (described in more detail below).
These laws and regulations are becoming increasingly stringent. For example:
federal and state agencies and citizen groups have increasingly focused on the amount of selenium and other constituents in mine-related water discharges;
Mine Safety and Health Administration (“MSHA”) and the state of West Virginia have implemented and proposed changes to mine safety and health requirements to impose more stringent health and safety controls, enhance mine inspection and enforcement practices, increase sanctions, and expand monitoring and reporting; and
more stringent regulation of GHG emissions is being considered that, if expanded to cover coalbed methane emissions, could increase our costs, require additional controls, or compel us to limit our current operations, particularly at our underground coal mines.
In addition, these laws and regulations require us to obtain numerous governmental permits and comply with the requirements of those permits (described in more detail below).
We incur substantial costs to comply with the laws, regulations and permits that apply to our mining and other operations, and to address the outcome of inspections. The required compliance and actions to address inspection outcomes are often time-consuming and may delay commencement or continuation of exploration or production. In addition, due in part to the extensive and comprehensive regulatory requirements, violations of laws, regulations and permits occur at our operations from time to time and may result in significant costs to us to correct the violations, as well as substantial civil or criminal penalties and limitations or shutdowns of our operations. Contura is also required to ensure that one or more of its subsidiaries assumes responsibility for complying with the Section IX Osmotic Pressure Injunctive Relief requirements under a November 2014 Consent Decree between Alpha and

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several government agencies with regard to the Cumberland and Emerald mines. See “Environmental and Other Regulatory Matters—Clean Water Act—Wastewater Discharge.”
MSHA and state regulators may also order the temporary or permanent closing of a mine in the event of certain violations of safety rules, accidents or imminent dangers. In addition, regulators may order changes to mine plans or operations due to their interpretation or application of existing or new laws or regulations. Any required changes to mine plans or operations may result in temporary idling of production or addition of costs.
These factors have had and will continue to have a significant effect on our costs of production and competitive position, and as a result on our results of operations, cash flows and financial condition. New laws and regulations, as well as future interpretations or different enforcement of existing laws and regulations, may have a similar or more significant impact on us, including delays, interruptions or a termination of operations.
Our long-term growth may be materially adversely impacted if economic, commercially available carbon mitigation technologies for power plants are not developed and adopted in a timely manner.
Federal or state laws or regulations may be adopted that would impose new or additional limits on the emissions of GHGs, including, but not limited to, CO2 from electric generating units using fossil fuels such as coal or natural gas. In order to comply with such regulations, electric generating units using fossil fuels may be required to implement carbon capture or other emissions control technologies. For example, pursuant to the Power Plant NSPS finalized by the EPA in August 2015, the EPA has designated partial carbon capture and sequestration as the best system of emission reduction for newly constructed fossil fuel-fired steam generating units at power plants to employ to meet the standard. However, there is a risk that such technology, which may include storage, conversion, or other commercial use for captured carbon, may not be commercially practical in limiting emissions as otherwise required by the rule or similar rules that may be proposed in the future. The Power Plant NSPS is undergoing judicial and administrative review and may be revised or rescinded in whole or in part pursuant to the March 2017 Executive Order. If such legislative or regulatory programs are adopted, and economic, commercially available carbon capture or other carbon mitigation technologies for power plants are not developed or adopted in a timely manner, it would negatively affect our customers and would further reduce the demand for coal as a fuel source, causing coal prices and sales of our coal to decline, perhaps materially.
Decreases in consumer demand for electricity and changes in general energy consumption patterns attributable to energy conservation trends could adversely affect our business, financial condition and results of operations.
Due to efforts to promote energy conservation in recent years, there is a risk that both the demand for electricity and the general energy consumption patterns of consumers worldwide will decrease. The ability of energy conservation technologies, public initiatives and government incentives to reduce electricity consumption or to support other forms of renewable energy could also lead to a reduction in the price of coal. If prices for coal are not competitive, our business, financial condition and results of operations may be materially harmed.
Our operations may impact the environment or cause exposure to hazardous substances, and our properties may have environmental contamination, which could result in material liabilities to us.
Our operations use certain hazardous materials, and from time to time we generate limited quantities of hazardous wastes. We may be subject to claims under federal or state law for toxic torts, natural resource damages and other damages as well as for the investigation and clean-up of soil, surface water, sediments, groundwater and other natural resources. Such claims may arise out of current or former conditions at sites that we own or operate and at contaminated sites owned or operated by third parties to which we sent wastes for disposal. Our liability for such claims may be joint and several, so that we may be held responsible for more than our share of the contamination or other damages, or even for the entire share.
We operate and maintain coal slurry impoundments at a number of our mining complexes. These impoundments are subject to extensive regulation. Some slurry impoundments maintained by other coal mining operations have

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failed, causing extensive damage to the environment and natural resources, as well as liability for related personal injuries and property damages. Some of our impoundments overlie mined out areas, which can pose a heightened risk of failure and of resulting damages. If one of our impoundments were to fail, we could be subject to substantial claims for the resulting environmental contamination and associated liability, as well as for fines and penalties, and potential third-party claims for personal injury, property damage or other losses. In addition, we may become subject to such claims related to surface expressions of methane gas, which can result from underground coal mining activities.
These and other environmental impacts that our operations may have, as well as exposures to hazardous substances or wastes associated with our operations, could result in costs and liabilities that could render continued operations at certain mines economically unfeasible or impractical or otherwise materially and adversely affect our financial condition and results of operations.
We may be unable to obtain and renew permits, mine plan modifications and approvals, leases or other rights necessary for our operations, which would reduce our production, cash flows and profitability.
Mining companies must obtain numerous regulatory permits that impose strict conditions on various environmental and safety matters in connection with coal mining. The permitting rules are complex and change over time, potentially in ways that may make our ability to comply with the applicable requirements more difficult or impractical or even preclude the continuation of ongoing operations or the development of future mining operations. The public, including special interest groups and individuals, have certain rights under various statutes to comment upon, submit objections to and otherwise engage in the permitting process, including bringing citizens’ lawsuits to challenge permits or mining activities. In states where we operate, applicable laws and regulations also provide that a mining permit or modification can be delayed, refused or revoked if an officer or director of, a stockholder with a 10% or greater interest in, or certain other affiliates of, the applicant or permittee or an entity that is affiliated with or is in a position to control the applicant or permittee, has outstanding permit violations. Thus, past or ongoing violations of federal and state mining laws could provide a basis to revoke existing permits and to deny the issuance of additional permits or modification or amendment of existing permits. In recent years, the permitting required for coal mining has been the subject of increasingly stringent regulatory and administrative requirements and extensive litigation by environmental groups.
As a result, the permitting process is costly and time-consuming, required permits may not be issued or renewed in a timely fashion (or at all), and permits that are issued may be conditioned in a manner that may restrict our ability to conduct our mining activities efficiently. In some circumstances, regulators could seek to revoke permits previously issued. We are required under certain permits to provide data on the impact on the environment of proposed exploration for or production of coal to governmental authorities.
In particular, certain of our activities require a dredge and fill permit from the Army Corps of Engineers (the “COE”) under Section 404 of the Clean Water Act. In recent years, the Section 404 permitting process has been subject to increasingly stringent regulatory and administrative requirements and a series of court challenges, which have resulted in increased costs and delays in the permitting process. In addition, in 2015, the EPA and the COE issued a final rule, now known as the Clean Water Rule (“CWR”) under the Clean Water Act (“CWA”) that would further expand the circumstances when a Section 404 permit is needed. However, the CWR is currently stayed pending judicial review and, on February 28, 2017, President Trump signed an executive order directing the EPA and the COE to review the CWR for consistency with the goals of “promoting economic growth and minimizing regulatory uncertainty” and to consider a new rule that reflects Justice Scalia’s plurality opinion in the 2006 Supreme Court decision, Rapanos v. United States, that CWA jurisdiction attaches only to “navigable waters” and other waters with a relatively permanent flow, such as rivers or lakes. The EPA and the COE are expected to replace the CWR in a subsequent rule-making. The process to rescind or revise the CWR will likely be subject to extensive notice and comment and litigation. Additionally, we may rely on nationwide permits under the CWA Section 404 program for some of our operations. These nationwide permits are issued every five years, and the 2017 nationwide permit program was recently reissued in February 2017. If we are unable to use the nationwide permits and require an individual permit for certain work, that could delay operations. Some of our operations involve mining federal coal. Operations involving federal coal may require additional approvals, including from the US Department of the

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Interior, such as mine plan modifications and approvals and lease modifications under the Mineral Leasing Act. These approvals require compliance with other federal environmental laws, which require public comment processes and may be the subject of litigation by project opponents. OSM mine plan modifications in particular have been subject to appeals and litigation, including related to climate change analysis. If we are unable to receive these approvals, certain coal production may be delayed or unavailable.
Many of our permits are subject to renewal from time to time, and renewed permits may contain more restrictive conditions than our existing permits. For example, many of our permits governing surface stream and groundwater discharges and impacts will be subject to new and more stringent conditions to address various new water quality requirements upon renewal over the next several years. Although we have no estimates at this time, our costs to satisfy these conditions could be substantial.
Future changes or challenges to the permitting and mine plan modification and approval process could cause additional increases in the costs, time, and difficulty associated with obtaining and complying with the permits, and could delay or prevent commencing or continuing exploration or production operations, and as a result, adversely affect our coal production, cash flows and profitability.
We are in the process of obtaining transfer of certain permits held by Alpha for the operations we acquired from Alpha. All necessary applications for the transfer of such permits have been filed, and we are authorized to continue operating on such permits as the mine or facility operator until such transfers have been completed. There can be no assurance that such transfers will be completed on a timely basis, or at all. As of July 17, 2017, only one of 63 permit applications is awaiting approval. Failure to receive certain approvals or to complete certain transfers would result in us failing to possess the necessary authorizations to conduct our mining operations, which in turn could have a material impact on our business and results of operations.
Federal and state regulatory agencies have the authority to order any of our facilities to be temporarily or permanently closed under certain circumstances, which could materially adversely affect our ability to meet our customers’ demands.
Federal and state regulatory agencies have the authority following significant health and safety incidents, such as fatalities, to order a facility to be temporarily or permanently closed. If this were to occur, we may be required to incur capital expenditures to re-open the facility. In the event that these agencies order the closing of our facilities, our coal sales agreements and our take-or-pay contracts related to our export terminals may permit us to issue force majeure notices, which suspend our obligations to deliver coal under these contracts. However, our customers may challenge our issuances of force majeure notices. If these challenges are successful, we may have to purchase coal from third-party sources, if it is available, to fulfill these obligations, incur capital expenditures to re-open the facilities and/or negotiate settlements with the customers, which may include price reductions, the reduction of commitments or the extension of time for delivery or terminate customers’ contracts. Any of these actions could have a material adverse effect on our business and results of operations.
Certain U.S. federal income tax provisions currently available with respect to coal percentage depletion and exploration and development may be eliminated by future legislation.
From time to time, legislation is proposed that could result in the reduction or elimination of certain U.S. federal income tax provisions currently available to companies engaged in the exploration, development, and production of coal reserves. These proposals have included, but are not limited to; (1) the elimination of current deductions, the 60-month amortization period and the 10-year amortization period for exploration and development costs relating to coal and other hard mineral fossil fuels, (2) the repeal of the percentage depletion allowance with respect to coal properties, (3) the repeal of capital gains treatment of coal and lignite royalties, and (4) the elimination of the domestic manufacturing deduction for coal and other hard mineral fossil fuels. The passage of these or other similar proposals could increase our taxable income and negatively impact our cash flows and the value of an investment in our common stock.

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Changes in federal, state, or county tax laws, particularly in the areas of non-income taxes and royalties, could cause our financial position and profitability to deteriorate.
We pay federal and state royalties and federal, state and county non-income taxes on the coal we produce. A substantial portion of our royalties and non-income taxes are levied as a percentage of gross revenues, while others are levied on a per ton basis. For example, we pay royalties of 12.5% of gross proceeds to the federal government on coal extracted from leased federal lands. If the royalty and non-income tax rates were to significantly increase, our results of operations could be materially and adversely affected.
Risks Relating to Our Operations
Our coal mining production and delivery is subject to conditions and events beyond our control that could result in higher operating expenses and decreased production and sales. The occurrence of a significant accident or other event that is not fully insured could adversely affect our business and operating results and could result in impairments to our assets.
Our coal production at our mines is subject to operating conditions and events beyond our control that could disrupt operations, affect production and the cost of mining for varying lengths of time and have a significant impact on our operating results. Adverse operating conditions and events that we have experienced in the past and/or may experience in the future include:
changes or variations in geologic, hydrologic or other conditions, such as the thickness of the coal deposits and the amount of rock embedded in or overlying the coal deposit;
mining, processing and loading equipment failures and unexpected maintenance problems;
limited availability or increased costs of mining, processing and loading equipment and parts and other materials from suppliers;
difficulties associated with mining under or around surface obstacles;
unfavorable conditions with respect to proximity to and availability, reliability and cost of transportation facilities;
adverse weather and natural disasters, such as heavy snows, heavy rains and flooding, lightning strikes, hurricanes or earthquakes;
accidental mine water discharges, coal slurry releases and failures of an impoundment or refuse area;
mine safety accidents, including fires and explosions from methane and other sources;
hazards or occurrences that could result in personal injury and loss of life;
a shortage of skilled and unskilled labor;
security breaches or terroristic acts;
strikes and other labor-related interruptions;
delays or difficulties in, the unavailability of, or unexpected increases in the cost of acquiring, developing or permitting new acquisitions from the federal government and other new mining reserves and surface rights;

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competition and/or conflicts with other natural resource extraction activities and production within our operating areas;
the termination of material contracts by state or other governmental authorities; and
fatalities, personal injuries or property damage arising from train derailments, mined material or overburden leaving permit boundaries, underground mine blowouts, impoundment failures or other unexpected incidents.
If any of these or other conditions or events occur in the future at any of our mines or affect deliveries of our coal to customers, they may increase our cost of mining, delay or halt production or sales to our customers, result in regulatory action or lead to customers initiating claims against us. Any of these consequences could adversely affect our operating results or result in impairments to our assets.
In addition, our mining operations are concentrated in a small number of mines. As a result, the effects of any of these conditions or events may be exacerbated and may have a disproportionate impact on our results of operations and assets.
We maintain insurance policies that provide limited coverage for some, but not all, of these risks. Even where covered by insurance, these risks may not be fully covered and insurers may contest their obligations to make payments. Failures by insurers to make payments could have a material adverse effect on our cash flows, results of operations or financial condition.
A decline in demand for met coal would limit our ability to sell our high quality steam coal as higher priced met coal, which would reduce our revenues and profitability, and could affect the economic viability of some of our mines with higher operating costs.
We are able to mine, process and market some of our coal reserves as either met coal or high quality steam coal. In deciding our approach to these reserves, we assess the conditions in the met and steam coal markets, including factors such as the current and anticipated future market prices of steam coal and met coal, the generally higher price of met coal as compared to steam coal, the lower volume of saleable tons that results when producing coal for sale in the met market rather than the steam market, the increased costs of producing met coal, the likelihood of being able to secure a longer term sales commitment for steam coal and our contractual commitments to deliver different types of coal to our customers. A decline in demand for met coal relative to steam coal could cause us to shift coal from the met market to the steam market, thereby reducing our revenues and profitability.
Coal competes with natural gas and renewable energy sources, and factors affecting these industries could have an adverse impact on our coal sales.
Our coal competes with natural gas and renewable energy sources, and the price of these sources can therefore affect coal sales. The natural gas market has been volatile historically and prices in this market are subject to wide fluctuations in response to relatively minor changes in supply and demand. Changes in supply and demand could be prompted by any number of factors, such as worldwide and regional economic and political conditions; the level of global exploration, production and inventories; natural gas prices; and transportation availability. If natural gas prices decline significantly, it could lead to reduced coal sales and have a material adverse effect on our financial condition, results of operations and cash flows.
In addition, state and federal mandates for increased use of electricity from renewable energy sources also have an impact on the market for our coal. Several states have enacted legislative mandates requiring electricity suppliers to use renewable energy sources to generate a certain percentage of power. There have been numerous proposals to establish a similar uniform, national standard although none of these proposals have been enacted to date. Possible advances in technologies and incentives, such as tax credits, to enhance the economics of renewable energy sources could make these sources more competitive with coal. Any reduction in the amount of coal consumed by electric

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power generators could reduce the price of coal that we mine and sell, thereby reducing our revenues and materially and adversely affecting our business and results of operations.
Mining in Central and Northern Appalachia is more complex and involves more regulatory constraints than mining in other areas of the U.S., which could affect our mining operations and cost structures in these areas.
The geological characteristics of Northern and Central Appalachian coal reserves, such as depth of overburden and coal seam thickness, make them complex and costly to mine. As mines become depleted, replacement reserves may not be available or, if available, may not be able to be mined at costs comparable to those of the depleting mines. In addition, compared to mines in the Powder River Basin, permitting, licensing and other environmental and regulatory requirements are more costly and time consuming to satisfy. These factors could materially adversely affect the mining operations and cost structures of, and our customers’ ability to use coal produced by, our mines in Northern and Central Appalachia.
Our ability to operate our company effectively could be impaired if we fail to attract and retain key personnel.
Our ability to operate our business and implement our strategies depends in part on the efforts of our executive officers and other key employees. In addition, our business depends on, among other factors, our ability to attract and retain other qualified personnel. The loss of the services of any of our executive officers or other key employees or the inability to attract or retain other qualified personnel in the future could have a material adverse effect on our business or business prospects.
Disruptions in transportation services and increased transportation costs could impair our ability to supply coal to our customers, reduce demand and adversely affect our business.
During the period from July 26, 2016 to December 31, 2016 and the three months ended March 31, 2017, 88% and 82%, respectively, of our captive coal volume was transported from our mines to the customer by rail. Deterioration in the reliability of the service provided by rail carriers would result in increased internal coal handling costs and decreased shipping volumes, and if we are unable to find alternatives our business could be adversely affected. Some of our operations are serviced by a single rail carrier. Due to the difficulty in arranging alternative transportation, these operations are particularly at risk to disruptions, capacity issues or other difficulties with that carrier’s transportation services, which could adversely impact our revenues and results of operations.
We also depend upon trucks, beltlines, ocean vessels and barges to deliver coal to our customers. In addition, much of our eastern coal is transported from our mines to our loading facilities by trucks owned and operated by third parties. Disruption of any of these transportation services due to weather-related problems, mechanical difficulties, strikes, lockouts, bottlenecks, terrorist attacks and other events could impair our ability to supply coal to our customers, resulting in decreased shipments and revenue. Disruption in shipment levels over longer periods of time could cause our customers to look to other sources for their coal needs, negatively affecting our revenues and results of operations.
An increase in transportation costs could have an adverse effect on our ability to increase or to maintain production on a profit-making basis and could therefore adversely affect our revenues and earnings. Because transportation costs represent a significant portion of the total cost of coal for our customers, increases in transportation costs could also reduce overall demand for coal or make our coal production less competitive than coal produced from other sources or other regions.
Certain provisions in our coal supply agreements may result in economic penalties upon our failure to meet specifications.
Most of our coal supply agreements contain provisions requiring us to deliver coal meeting quality thresholds for certain characteristics such as BTU, sulfur content, ash content, grindability, moisture and ash fusion temperature. Failure to meet these specifications could result in economic penalties, including price adjustments, the rejection of deliveries or termination of the contracts. Further, some of our coal supply agreements allow our

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customers to terminate the contract in the event of regulatory changes that restrict the type of coal the customer may use at its facilities or the use of that coal or increase the price of coal or the cost of using coal beyond specified limits. In addition, our coal supply agreements typically contain force majeure provisions allowing temporary suspension of performance by us or the customer during specified events beyond the control of the affected party. As a result of these issues, we may not achieve the revenue or profit we expect to achieve from our coal supply agreements.
Expenditures for certain employee benefits could be materially higher than we have anticipated, which could increase our costs and adversely affect our financial results.
We are responsible for certain liabilities under a variety of benefit plans and other arrangements with employees, including certain obligations we assumed from Alpha as part of the bankruptcy reorganization. The unfunded status of these obligations as of March 31, 2017, as reflected in our financial statements, included $20.8 million of workers’ compensation obligations and $13.8 million of black lung obligations. These obligations have been estimated based on assumptions including actuarial estimates, discount rates, and changes in health care costs. We could be required to expend greater amounts than anticipated. In addition, future regulatory and accounting changes relating to these benefits could result in increased obligations or additional costs, which could also have a material adverse effect on our financial results. Several states in which we operate consider changes in workers’ compensation laws from time to time, which, if enacted, could adversely affect us.
We rely on Alpha to provide us with access to historical financial information pursuant to the terms of a transition services agreement for a limited transition period. If the transition period expires or if Alpha fails to perform its obligations under the agreement, we may be unable to implement substitute arrangements on a timely and cost-effective basis on terms favorable to us or at all.
Pursuant to the terms of a transition services agreement (the “Transition Services Agreement”) with Alpha, entered in connection with the Alpha Restructuring on July 26, 2016, Alpha provides us with access to historical financial information. We believe it is necessary for Alpha to provide this service to us to facilitate the efficient operation of our business as we transition to becoming a public company. See “Certain Relationships and Related Party Transactions—Transition Services Agreement.” Once the transition period specified in the Transition Services Agreement has expired or if Alpha fails to perform its obligations under the Transition Services Agreement, we may be unable to implement substitute arrangements on a timely and cost-effective basis on terms favorable to us or at all.
We require a skilled workforce to run our business. If we cannot hire qualified persons to meet replacement or expansion needs, we may not be able to achieve planned results.
Efficient coal mining using modern techniques and equipment requires skilled laborers with mining experience and proficiency as well as qualified managers and supervisors. The demand for skilled employees sometimes causes a significant constriction of the labor supply resulting in higher labor costs. When coal producers compete for skilled miners, recruiting challenges can occur and employee turnover rates can increase, which negatively affect operating efficiency and costs. If a shortage of skilled workers exists and we are unable to train or retain the necessary number of miners, it could adversely affect our productivity, costs and ability to expand production.
Federal healthcare legislation could adversely affect our financial condition and results of operations.
In March 2010, the Patient Protection and Affordable Care Act (“PPACA”) was enacted, impacting our costs of providing healthcare benefits to our eligible active and certain retired employees and workers’ compensation benefits related to occupational disease resulting from coal workers’ pneumoconiosis (black lung). The PPACA has both short-term and long-term implications on benefit plan standards. Implementation of this legislation is expected to extend through 2020. In the short term, our healthcare costs could increase due to, among other things, an increase in the maximum age for covered dependents to receive benefits, changes to benefits for occupational disease related illnesses, the elimination of lifetime dollar limits per covered individual and restrictions on annual dollar limits per

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covered individual. In the long term, our healthcare costs could increase due to, among other things, an excise tax on “high cost” plans and the elimination of annual dollar limits per covered individual.
Beginning in 2020, the PPACA will impose a 40% excise tax on employers to the extent that the value of their healthcare plan coverage exceeds certain dollar thresholds. We anticipate that certain governmental agencies will provide additional regulations or interpretations concerning the application of this excise tax. We will continue to evaluate the impact of the PPACA, including any new regulations or interpretations, as well as efforts to limit or repeal the PPACA.
If the assumptions underlying our accruals for reclamation and mine closure obligations prove to be inaccurate, we could be required to expend greater amounts than anticipated.
The SMCRA establishes operational, reclamation and closure standards for all aspects of surface mining as well as deep mining. We accrue for the costs of current mine disturbance and final mine closure, including the cost of treating mine water discharge where necessary. Estimates of our total reclamation and mine-closing liabilities total $191.4 million and $196.6 million as of December 31, 2016 and March 31, 2017, respectively, based upon permit requirements and the historical experience at our operations, and depend on a number of variables involving assumptions and estimation and therefore may be subject to change, including the estimated future asset retirement costs and the timing of such costs, estimated proven reserves, assumptions involving profit margins of third-party contractors, inflation rates and discount rates. Furthermore, these obligations are primarily unfunded. If these accruals are insufficient or our liability in a particular year is greater than currently anticipated, our future operating results and financial position could be adversely affected. In addition, significant changes from period to period could result in significant variability in our operating results, which could reduce comparability between periods and impact our liquidity. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Off-Balance Sheet Arrangements” for a description of our estimated costs of these liabilities.
Estimates of our economically recoverable coal reserves involve uncertainties, and inaccuracies in our estimates could result in lower than expected revenues, higher than expected costs, decreased profitability and asset impairments.
We base our estimates of our economically recoverable coal reserves on engineering, economic and geological data assembled and analyzed by our staff, including various engineers and geologists, and periodically reviewed by outside firms. Our estimates as to the quantity and quality of the coal in our reserves are updated annually to reflect production of coal from the reserves and new drilling, engineering or other data. These estimates depend upon a variety of factors and assumptions, many of which involve uncertainties and factors beyond our control and may vary considerably from actual results, such as:
geological and mining conditions that may not be fully identified by available exploration data or that may differ from experience in current operations;
historical production from the area compared with production from other similar producing areas;
the assumed effects of regulation and taxes by governmental agencies; and
assumptions about coal prices, operating costs, mining technology improvements, development costs and reclamation costs.
For these reasons, estimates of the economically recoverable quantities and qualities attributable to any particular group of properties, classifications of reserves based on risk of recovery and estimates of net cash flows expected from particular reserves prepared by different engineers or by the same engineers at different times may vary substantially. In addition, actual coal tonnage recovered from identified reserve areas or properties and revenues and expenditures with respect to our reserves may vary materially from estimates. Accordingly, our estimates may not accurately reflect our actual reserves. Any inaccuracy in our reserve estimates could result in lower than expected revenues, higher than expected costs, decreased profitability and asset impairments.

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Our business will be adversely affected if we are unable to timely develop or acquire additional coal reserves that are economically recoverable.
Our profitability depends substantially on our ability to mine in a cost-effective manner coal reserves of the quality our customers need. Although we have coal reserves that we believe will support current production levels for more than 20 years, we have not yet developed the mines for all our reserves. We may not be able to mine all of our reserves as profitably as we do at our current operations. In addition, in order to develop our reserves, we must receive various governmental permits. As discussed above, some of these permits are becoming increasingly more difficult and expensive to obtain and the review process continues to lengthen. We may be unable to obtain the necessary permits on terms that would permit us to operate profitably or at all.
Because our reserves are depleted as we mine our coal, our future success and growth depend in part on our ability to timely acquire additional coal reserves that are economically recoverable. Our planned development projects and acquisition activities may not result in significant additional reserves, and we may not succeed in developing new mines or expanding existing mines beyond our existing reserves. Replacement reserves may not be available when required or, if available, may not be able to be mined at costs comparable to those of the depleting mines. We may not be able to accurately assess the geological characteristics of any reserves that we now own or subsequently acquire, which may adversely affect our profitability and financial condition. Exhaustion of reserves at particular mines also may have an adverse effect on our operating results due to lost production capacity from diminished or discontinued operations at those mines, as well as lay-offs, write-off charges and other costs, potentially causing an adverse effect that is disproportionate to the percentage of overall production represented by those mines. Our ability to acquire other reserves in the future could be limited by restrictions under our existing or future debt agreements, competition from other coal companies for attractive properties or the lack of suitable acquisition candidates available on commercially reasonable terms, among other factors. If we are unable to replace or increase our coal reserves on acceptable terms, our production and revenues will decline as our reserves are depleted.
If we are unable to acquire surface rights to access our coal reserves, we may be unable to obtain a permit to mine coal we own and may be required to employ expensive techniques to mine around those sections of land we cannot access in order to access other sections of coal reserves, which could materially and adversely affect our business and our results of operations.
After we acquire coal reserves through the lease by application (“LBA”) process or otherwise, we are required to obtain a permit to mine the reserves through the applicable state agencies prior to mining the acquired coal. In part, permitting requirements provide that, under certain circumstances, we must obtain surface owner consent if the surface estate has been severed from the mineral estate, which is commonly known as a “severed estate.” At certain of our mines where we have obtained the underlying coal and the surface is held by one or more owners, we are engaged in negotiations for surface access with multiple parties. If we are unable to successfully negotiate surface access with any or all of these surface owners, or to do so on commercially reasonable terms, we may be denied a permit to mine some or all of our coal or may find that we cannot mine the coal at a profit. If we are denied a permit, this would create significant delays in our mining operations and materially and adversely impact our business and results of operations. Furthermore, if we decide to alter our plans to mine around the affected areas, we could incur significant additional costs to do so, which could increase our operating expenses considerably and could materially and adversely affect our results of operations.
Our future success and growth could be materially and adversely affected if we are unable to acquire additional reserves through the federal and state competitive leasing processes, or to do so on a cost-effective basis.
Federal and state governments own coal in the vicinity of some of our mines. The federal LBA process is a significant means of acquiring additional reserves. There is no requirement that the federal government lease coal subject to an LBA, lease its coal at all or give preference to any LBA applicant, and our bids may compete with other coal producers’ bids in the PRB. In the current coal pricing environment, LBAs are becoming increasingly more competitive and expensive to obtain, and the review process to submit an LBA bid continues to lengthen. We

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expect that this trend may continue. The increasing size of potential LBA tracts may make it easier for new mining operators to enter the market on economical terms and may, therefore, increase competition for LBAs. Increased opposition from non-governmental organizations and other third parties may also lengthen, delay, or complicate the LBA process. In order to win a lease in the LBA process and acquire additional coal, our bid for a coal tract must meet or exceed the fair market value of the coal based on the internal estimates of the BLM, which they do not publish. We have maintained a history of timely payments related to our LBAs. If we are unable to maintain our “good payor” status, we would be required to seek bonding for any remaining payments. If we are required to purchase bonding for lease obligations this would significantly increase our costs and materially and adversely affect our profitability.
If Congress determines to amend the bonus bid payment method, it could require us to make a single up-front bonus bid payment equal to 100% of the bonus bid for the LBAs for which we intend to bid, which would materially and adversely affect our cash position, future profitability and results of operations.
The LBA process also requires us to acquire rights to mine from surface owners overlying the coal, and these rights are becoming increasingly more difficult and costly to acquire. Certain federal regulations provide a specific class of surface owners, also known as qualified surface owners (“QSOs”), with the ability to prohibit the BLM from leasing its coal. If a QSO owns the land overlying a coal tract, federal laws prohibit us from leasing the coal tract without first securing surface rights to the land, or purchasing the surface rights from the QSO, which would allow us to conduct our mining operations. This right of QSOs allows them to exercise significant influence over negotiations to acquire surface rights and can delay the LBA process or ultimately prevent the acquisition of an LBA. If we are unable to successfully negotiate access rights with QSOs at a price and on terms acceptable to us, we may be unable to acquire LBAs for coal on land owned by the QSO. If the prices to acquire land owned by QSOs increase, it could materially and adversely affect our profitability.
We acquire a small percentage of our reserves through the Wyoming state leasing processes. We typically lease approximately 9% of our Wyoming reserves from Wyoming state leases, which are equally distributed between our two Wyoming operations. If, as part of our growth strategy, we desire to expand our operations into areas requiring state leases, and we are unable to do so on a cost-effective basis, our business strategy could be adversely affected.
Our work force could become increasingly unionized in the future and our unionized or union-free work force could strike, which could adversely affect the stability of our production and reduce our profitability.
Approximately 71% of our total workforce and approximately 60% of our hourly workforce is union-free as of March 31, 2017. However, under the National Labor Relations Act, employees have the right at any time to form or affiliate with a union. Any further unionization of our employees or the employees of third-party contractors who mine coal for us could adversely affect the stability of our production and reduce our profitability.
Certain of our subsidiaries have wage agreements with the United Mine Workers of America (“UMWA”) that are subject to termination by either the employer or the UMWA, without cause, on July 31, 2020. Either party may also reopen the wage agreements on July 26, 2018, for the sole purpose of renegotiating changes in the hourly wage rates, by giving written notice to the other party during the period from May 1, 2018 through June 1, 2018. As is the case with our union-free operations, the union-represented employees could strike, which would disrupt our production, increase our costs and disrupt shipments of coal to our customers, and could result in the closure of affected mines, all of which could reduce our profitability.
We are a new company and are in the process of developing and maintaining proper and effective disclosure controls and procedures and internal control over financial reporting. We may not complete our development or implementation of our disclosure controls and procedures or internal control over financial reporting in a timely manner, or our disclosure controls and procedures or internal control may have one or more material weaknesses, which may adversely affect the value of our common stock.
We are a new company and are in the costly and challenging process of compiling the systems and processing the documentation necessary to implement and evaluate the effectiveness of our disclosure controls and procedures

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and internal control over financial reporting. These activities may divert management’s attention from other business concerns. Further, during the development of these systems, it is possible that our financial statements could contain errors, which could have a material adverse effect on our business, financial condition, results of operations and cash flows, and cause investors to lose confidence in our reported results, thus affecting our ability to finance our business. To design, maintain and improve the effectiveness of our disclosure controls and procedures, we must commit significant resources, may be required to hire additional staff and need to continue to provide effective management oversight, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.
Conflicts with competing holders of mineral rights and rights to use adjacent, overlying or underlying lands could materially and adversely affect our ability to mine coal or do so on a cost-effective basis.
Our operations at times face potential conflicts with holders of other mineral interests such as coalbed methane, natural gas and oil reserves. Some of these minerals are located on, or are adjacent to, some of our coal reserves and active operations, potentially creating conflicting interests between us and the holders of those interests. From time to time we acquire these minerals ourselves to prevent conflicting interests from arising. If, however, conflicting interests arise and we do not acquire the competing mineral rights, we may be required to negotiate our ability to mine with the holder of the competing mineral rights. Furthermore, the rights of third parties for competing uses of adjacent, overlying or underlying lands, such as oil and gas activity, coalbed methane, pipelines, roads, easements and public facilities, may affect our ability to operate as planned if our title is not superior or arrangements cannot be negotiated. If we are unable to reach an agreement with these holders of such rights, or to do so on a cost-effective basis, we may incur increased costs and our ability to mine could be impaired, which could materially and adversely affect our business and results of operations.
Provisions in our federal and state lease agreements, defects in title in our mine properties or loss of leasehold rights could limit our ability to recover coal from our properties or result in significant unanticipated costs.
We conduct a significant part of our mining operations on properties that we lease. Title to most of our leased properties and mineral rights is not thoroughly verified until a permit to mine the property is obtained, and in some cases, title is not verified at all. Accordingly, actual or alleged defects in title or boundaries may exist, which may result in the loss of our right to mine on the property or in unanticipated costs to obtain leases or mining contracts to allow us to conduct our mining operations on the property, which could adversely affect our business and profitability. Furthermore, some leases require us to produce a minimum quantity of coal and/or pay minimum production royalties. If those requirements are not met, the leasehold interest may terminate.
Decreased availability or increased costs of key equipment and materials could impact our cost of production and decrease our profitability.
We depend on reliable supplies of mining equipment, replacement parts and materials such as explosives, diesel fuel, tires, steel, magnetite and other raw materials and consumables which, in some cases, do not have ready substitutes. The supplier base providing mining materials and equipment has been relatively consistent in recent years, although there continues to be consolidation, which has resulted in a limited number of suppliers for certain types of equipment and supplies. Any significant reduction in availability or increase in cost of any mining equipment or key supplies could adversely affect our operations and increase our costs, which could adversely affect our operating results and cash flows.
Some equipment and materials are needed to comply with regulations. For example, MSHA and other regulatory agencies sometimes make changes with regards to requirements for pieces of equipment. In 2015, MSHA promulgated a new regulation requiring the implementation of proximity detection devices on all continuous mining machines. Such changes could cause delays if manufacturers and suppliers are unable to make the required changes in compliance with mandated deadlines.
In addition, the prices we pay for these materials are strongly influenced by the global commodities markets. Coal mines consume large quantities of commodities such as steel, copper, rubber products, explosives and diesel

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and other liquid fuels. If the value of the U.S. dollar declines relative to foreign currencies with respect to certain imported supplies or other products, our operating expenses will increase, which could materially adversely impact our profitability. Some materials, such as steel, are needed to comply with regulatory requirements. Furthermore, operating expenses at our mining locations are sensitive to changes in certain variable costs, including diesel fuel prices, which is one of our largest variable costs. Our results depend on our ability to adequately control our costs. Any increase in the price we pay for diesel fuel will have a negative impact on our results of operations. A rapid or significant increase in the cost of these commodities could increase our mining costs because we have limited ability to negotiate lower prices.
We do not currently operate all of our mines, and our results of operations could be adversely affected if third-party mine operators fail to effectively operate the mines.
Five of our mines are operated by third-party contract mine operators. While we have certain contractual rights of oversight over these mines, which are operated under our permits, we do not control, and our employees do not participate in, the day-to-day operations of these mines. Operational difficulties at these mines, increased competition for contract miners from other coal producers and other factors beyond our control could affect the availability, cost and quality of coal produced for us by contractors. Disruption in our supply of contractor-produced coal could impair our ability to fill our customers’ orders or require us to pay higher prices to obtain the required coal from other sources. Any increase in the per-ton compensation for services we pay for the production of contractor-produced coal could increase our costs and therefore lower our earnings and adversely affect our results of operations.
Disruption in supplies of coal produced by third parties could impair our ability to fill customers’ orders, increase our costs or reduce revenues earned through our Trading and Logistics business.
We sold 2.1 million tons of coal purchased from third parties during the period from July 26, 2016 to December 31, 2016, representing approximately 10% of our total coal sales volume during such period. We sold 1.1 million tons of coal purchased from third parties during the three months ended March 31, 2017, representing approximately 8% of our total coal sales volume during such period. The availability of the coal we purchase may decrease and prices may increase as a result of, among other things, changes in overall coal supply and demand levels, consolidation in the coal industry and new laws or regulations. Furthermore, we purchase a substantial portion of this coal from one source. Disruption in our supply of purchased coal could impair our ability to fill our customers’ orders or require us to pay higher prices to obtain the required coal from other sources. Any increase in the prices we pay for purchased coal could increase our costs and therefore lower our earnings.
In addition, we earn margins on coal produced by others and sold through our Trading and Logistics business. Disruptions in the supply of coal sold through this business could reduce our revenues and adversely affect our results of operations.
Strategic transactions, including acquisitions, involve a number of risks, any of which could result in a material adverse effect on our business, financial condition or results of operations.
In the future, we may undertake strategic transactions such as the acquisition or disposition of coal mining and related infrastructure assets, interests in coal mining companies, joint ventures or other strategic transactions involving companies with coal mining or other energy assets. Our ability to complete these transactions is subject to the availability of attractive opportunities, including potential acquisition targets that can be successfully integrated into our existing business and provide us with complementary capabilities, products or services on terms acceptable to us, as well as general market conditions, among other things.
Risks inherent in these strategic transactions include:
uncertainties in assessing the value, strengths, and potential profitability, and identifying the extent of all weaknesses, risks, contingent liabilities and other liabilities of acquisition candidates and strategic partners;

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the potential loss of key customers, management and employees of an acquired business;
the ability to achieve identified operating and financial synergies from an acquisition or other strategic transactions in the amounts and on the time frame due to inaccurate assumptions underlying estimates of expected cost savings, the deterioration of general industry and business conditions, unanticipated legal, insurance and financial compliance costs, or other factors;
the ability of management to manage successfully our exposure to pending and potential litigation and regulatory obligations;
unanticipated increases in competition that limit our ability to expand our business or capitalize on expected business opportunities, including retaining current customers; and
unanticipated changes in business, industry, market, or general economic conditions that differ from the assumptions underlying our rationale for pursuing the acquisition or other strategic transactions.
The ultimate success of any strategic transaction we may undertake will depend in part on our ability to continue to realize the anticipated synergies, business opportunities and growth prospects from those transactions. We may not be able to successfully integrate the companies, businesses or properties that we acquire, invest in or partner with. Problems that could arise from the integration of an acquired business may involve:
coordinating management and personnel and managing different corporate cultures;
applying our safety program at acquired mines and facilities;
establishing, testing and maintaining effective internal control processes and systems of financial reporting for the acquired business;
the diversion of our management’s and our finance and accounting staff’s resources and time commitments, and the disruption of either our or the acquired company’s ongoing businesses;
tax costs or inefficiencies; and
inconsistencies in standards, information technology systems, procedures or policies.
Any one or more of these factors could cause us not to realize the benefits anticipated from a strategic transaction, adversely affect our ability to maintain relationships with clients, employees or other third parties or reduce our earnings.
Moreover, any strategic transaction we pursue could materially affect our liquidity and capital resources and may require us to incur indebtedness, seek equity capital or do both. Future transactions could also result in our assuming more long-term liabilities relative to the value of the acquired assets. Further, acquisition accounting rules require changes in certain assumptions made subsequent to the measurement period, as defined in current accounting standards, to be recorded in current period earnings, which could affect our results of operations.
Our estimates and judgments related to the acquisition of the assets, liabilities, operating results and cash flows in the Alpha Restructuring may be inaccurate and thus impact our business, operating results and financial condition.
The purchase price allocation related to the Acquisition includes provisional amounts for certain assets and liabilities. The purchase price allocation will continue to be refined during the one-year measurement period, which will end no later than July 26, 2017, under acquisition accounting primarily in the area of income taxes and other contingencies. During the measurement period, we expect to receive additional detailed information to refine the

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provisional allocation. Our financial condition could be materially and adversely impacted in future periods if our accounting judgments and estimates related to these calculations prove to be inaccurate.
We may be unable to generate sufficient taxable income from future operations, or other circumstances could arise, which may limit our ability to utilize our tax net operating loss carryforwards or maintain our deferred tax assets.
We acquired the core coal assets of Alpha as part of Alpha’s bankruptcy restructuring in transactions intended to be treated as a tax-free reorganization for U.S. federal income tax purposes. As a result of these transactions, we inherited the tax basis of the core assets and the net operating loss and other carryforwards of Alpha. These carryforwards and tax basis were subject to reduction on December 31, 2016 due to the cancellation of indebtedness resulting from Alpha’s bankruptcy restructuring. Due to the change in ownership, the net operating loss and other carryforwards will be subjected to limitations on their use in future years. In addition, we do not have a long history of operating results, and if we are unable to generate profits in the future, we may be unable to utilize these carryforwards. As of March 31, 2017, we recorded a full valuation allowance against our net deferred tax assets.
The enactment of legislation implementing changes in United States’ taxation policies could materially impact our tax net operating loss carryforwards and financial position.
The current presidential administration has made public statements indicating that it has made tax reform a priority, and key members of the U.S. Congress have conducted hearings and proposed a wide variety of potential changes. Certain changes to U.S. tax laws could affect the valuation of our net operating loss carryforwards and financial position. Our ability to use our net operating loss carryforwards may be subject to limitation and, thus, may result in increased future tax liability for us, both on the federal and state levels.
Our business requires substantial capital investment and maintenance expenditures, which we may be unable to provide.
Our business plan and strategy require substantial capital expenditures. We require capital for, among other purposes, acquisition of surface rights, equipment and the development of our mining operations, capital renovations, maintenance and expansions of plants and equipment and compliance with environmental laws and regulations. Before our emergence as a standalone entity, our operations and growth had been funded in large part through capital investments by our Predecessor. Future debt or equity financing may not be available or, if available, may result in dilution or not be available on satisfactory terms. If we are unable to obtain additional capital, we may not be able to maintain or increase our existing production rates and we could be forced to reduce or delay capital expenditures or change our business strategy, sell assets or restructure or refinance our indebtedness, all of which could have a material adverse effect on our business or financial condition.
Changes in the fair value of derivative instruments and other assets or liabilities that are marked to market could cause volatility in our earnings.
Derivative financial instruments are recognized as either assets or liabilities and are measured at fair value. Changes in fair value are recognized either in earnings or equity, depending on whether the transaction qualifies for cash flow hedge accounting, and if so, how effective the derivatives are at offsetting price movements in the underlying exposure.
We issued Series A Warrants on July 26, 2016 and classified the warrants as a derivative liability. The warrants we issued are recorded at fair value and marked to market in each reporting period, with changes in value reflected in earnings.
Any of these changes in fair value can have a significant non-cash impact on our earnings from period to period. For example, in the period from July 26, 2016 to December 31, 2016, the change in fair value of our derivative warrant liability was a charge of $34.0 million. For the three months ended March 31, 2017, the change in fair value of our derivative warrant liability was a gain of $2.2 million.

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Cybersecurity attacks, natural disasters, terrorist attacks and other similar crises or disruptions may negatively affect our business, financial condition and results of operations.
Our business may be impacted by disruptions such as cybersecurity attacks or failures, threats to physical security, and extreme weather conditions or other natural disasters. Strategic targets, such as energy-related assets, may be at greater risk of future terrorist or cybersecurity attacks than other targets in the U.S. These disruptions or any significant increases in energy prices that follow could result in government-imposed price controls. Our insurance may not protect us against such occurrences. It is possible that any of these occurrences, or a combination of them, could have a material adverse effect on our business, financial condition and results of operations. Further, as cybersecurity attacks continue to evolve, we may be required to expend additional resources to continue to modify or enhance our protective measures or to investigate and remediate any vulnerability to cybersecurity attacks.
Risks Relating to Our Liquidity
Our indebtedness exposes us to various risks.
At March 31, 2017, we had $406.6 million of indebtedness outstanding before discounts and issuance costs applied for financial reporting, of which $18.6 million will mature in the next three years.
Our indebtedness could have important consequences to our business. For example, it could:
make it more difficult for us to pay or refinance our debts as they become due during adverse economic and industry conditions because any related decrease in revenues could cause us to not have sufficient cash flows from operations to make our scheduled debt payments;
force us to seek additional capital, restructure or refinance our debts, or sell assets;
cause us to be less able to take advantage of significant business opportunities such as acquisition opportunities and to react to changes in market or industry conditions;
cause us to use a portion of our cash flow from operations for debt service, reducing the availability of working capital and delaying or preventing investments, capital expenditures, research and development and other business activities;
cause us to be more vulnerable to general adverse economic and industry conditions;
expose us to the risk of increased interest rates because certain of our borrowings are at variable rates of interest;
expose us to the risk of foreclosure on substantially all of our assets and those of most of our subsidiaries, which secure certain of our indebtedness if we default on payment or are unable to comply with covenants or restrictions in any of the agreements;
limit our ability to borrow additional monies in the future to fund working capital, capital expenditures and other general corporate purposes; and
result in a downgrade in the credit ratings of our indebtedness, which could harm our ability to incur additional indebtedness and result in more restrictive borrowing terms, including increased borrowing costs and more restrictive covenants, all of which could affect our internal cost of capital estimates and therefore impact operational and investment decisions.
Our ability to meet our debt service obligations will depend on our future cash flow from operations and our ability to restructure or refinance our debt, which will depend on the condition of the capital markets and our

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financial condition at that time. We may incur additional secured or unsecured indebtedness in the future, subject to compliance with covenants in our existing debt agreements. Any refinancing of our debt could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations. These alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations, and the terms of existing or future debt instruments may restrict us from adopting some of these alternatives.
Pressure on our business, cash flow and liquidity could materially and adversely affect our ability to fund our business operations or react to and withstand changing market and industry conditions. Additional sources of funds may not be available.
A significant source of liquidity is our cash balances. Access to additional funds from liquidity-generating transactions or other sources of external financing may not be available to us and, if available, would be subject to market conditions and certain limitations including our credit rating and covenant restrictions in our credit facility and indentures.
Our ability to make the required payments on our indebtedness depends on the cash flow generated by our subsidiaries, which may be constrained by legal, contractual, market or operating conditions from paying dividends to us.
We will depend to a significant extent on the generation of cash flow by our subsidiaries and their ability to make that cash available to us, by dividend, debt repayment or otherwise. These subsidiaries may not be able to, or be permitted to, make distributions to enable us to make payments in respect of our indebtedness. Each of these subsidiaries is a distinct legal entity and, under certain circumstances, legal and contractual restrictions, as well as the financial condition and operating requirements of our subsidiaries, may limit our ability to obtain cash from our subsidiaries. In the event that we do not receive distributions from our subsidiaries, we may be unable to make required payments of principal, premium, if any, and interest on our indebtedness.
As a result of recent coal producer bankruptcy filings, the coal industry has experienced increasing credit pressures that could result in demands for credit support by third parties or decisions by banks, surety bond providers, investors or other companies to reduce or eliminate their exposure to the coal industry, including our company. These credit pressures could materially and adversely impact our liquidity and ability to meet our regulatory requirements.
Recent coal producer bankruptcy filings have resulted in increased credit pressures on the coal industry. These credit pressures include, for example, (a) vendors, suppliers, customers and other commercial counterparties seeking prepayments, security deposits, letters of credit and other credit protections, and (b) banks, surety bond providers, investors and other companies reducing or eliminating their exposure to the coal industry. Although some of these credit pressures may be company-specific, many are directed to the coal industry in general due to the negative investor sentiment toward the industry. Any credit demands by third parties or refusals by banks, surety bond providers, investors or others to extend, renew or refinance credit on commercially reasonable terms may adversely impact our business, financial condition, results of operations, cash flows and liquidity. Surety bonds to secure our reclamation obligations are legally required as a condition of the permits for our mining operations. In some cases then, such as any collateral requirements imposed by surety bond providers to issue the surety bonds, our ability to meet these regulatory requirements may also be adversely impacted if we are not able to satisfy cash or other collateral requirements. As of December 31, 2016 and March 31, 2017, there were approximately $315.1 million and $348.4 million, respectively, in third-party surety bonds outstanding to primarily secure the performance of our reclamation and lease obligations.
We have agreed to provide certain guarantees and other support in certain circumstances in connection with the Alpha Restructuring settlement, which could increase our financial obligations.
In connection with Alpha’s bankruptcy reorganization, we agreed to provide certain support to the reorganized debtors (“ANR”) under certain circumstances. Pursuant to the Contingent Commitment, an unsecured obligation to

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ANR, we must provide ANR with revolving credit support in an aggregate total amount of $35 million from the Effective Date through September 30, 2018.
Pursuant to the UMWA VEBA Funding Settlement agreement, if federal legislation providing retirement health benefits to the UMWA Retirees has not been enacted or if moneys under the legislation have not become available for such benefits before August 1, 2017, on August 1, 2017, we are required to issue to the UMWA Contingent VEBA Funding Note 1 with a face value of approximately $8.8 million, and if federal legislation providing retirement health benefits to the UMWA Retirees has not been enacted or if moneys under the legislation have not become available for such benefits before December 1, 2017, on December 1, 2017, we are also required to issue to the VEBA the UMWA Contingent VEBA Funding Note 2 with a face value of approximately $8.8 million. The Miners Protection Act of 2017 (“MPA”) was introduced in the U.S. House on January 3, 2017 and in the Senate on January 17, 2017. On May 1, 2017, legislators announced that a tentative agreement had been reached on the Omnibus Appropriations Act, including funding of the MPA. On May 5, 2017, President Trump signed into law H.R. 244, the Consolidated Appropriations Act of 2017, which provides long-term funding for the health benefits of certain retired union miners. Specifically covered are any currently enrolled beneficiaries in the Plan whose health benefits would be denied or reduced as a result of a bankruptcy proceeding commenced in 2012 or 2015.
Pursuant to the Environmental Groups Settlement Agreement dated June 24, 2016 as part of the Alpha Restructuring, we agreed to the Environmental Groups Settlement Guarantee, which is a guarantee of ANR’s obligations to make payments of $1.6 million on each of March 31, 2017 and March 31, 2018. ANR made the first $1.6 million payment by March 31, 2017. Additionally, pursuant to the Reclamation Funding Agreement dated July 12, 2016, Restricted Cash Reclamation Accounts were established for certain federal and state environmental regulatory authorities to provide certain funding for the reclamation, mitigation and water treatment, and certain management work to be done at reclaim-only sites related to certain obligations under the various permits associated with ANR’s retained assets. Pursuant to the Reclamation Funding Agreement, under certain circumstances, we will be required to pay up to an aggregate amount of $50.0 million into various Restricted Cash Reclamation Accounts from 2021 through 2025.
Pursuant to a November 28, 2016 settlement, we agreed to provide a letter of credit of $4.0 million or similar instrument, in support of ANR’s payment obligations under the Permitting and Reclamation Plan Settlement Agreement for the State of West Virginia, dated as of July 12, 2016 and the Reclamation Funding Agreement dated July 12, 2016. Pending the letter of credit or similar instrument to be put in place, we placed $4.0 million in cash, pursuant to the Deposit Account Control Agreement with PNC Bank, National Association, dated as of December 22, 2016, to be kept in escrow. We also provided a secured guaranty, dated as of December 22, 2016, for ANR’s payment obligations under the two agreements described above, in an amount not to exceed $4.5 million and on March 31, 2017, we placed $4.5 million in cash, pursuant to the Deposit Account Control Agreement with PNC Bank, National Association, dated as of March 23, 2017, to be kept in escrow. See “Business—Legal Proceedings.”
ANR is newly emerged from the bankruptcy process, and it may not be able to operate at a profit or generate significant cash flows. If we are required to provide support under these various commitments, it would significantly increase our financial obligations and increase the related risks that we now face.
Under the terms of the asset purchase agreement between Alpha and Contura, liabilities, including those related to environmental matters, associated with Alpha or its predecessors’ pre-sale operations were explicitly retained by Alpha, subject to certain exceptions. Pursuant to Alpha’s Plan of Reorganization and the order of the Bankruptcy Court confirming it, the assets acquired by Contura were transferred “free and clear” of any liabilities or claims of any nature relating to Alpha or any of its predecessors except as otherwise provided in the Alpha asset purchase agreement or under the terms of the order of the Bankruptcy Court (and subject to the settlements described above). In doing so, the Bankruptcy Court found that the sale was at arm’s-length and did not render us an alter ego or corporate successor of Alpha. In addition, in connection with certain of the settlements described above, certain federal and state governmental authorities released us from certain reclamation and environmental liabilities associated with the assets retained by Alpha or its pre-sale operations. Notwithstanding the foregoing, we could become the subject of claims relating to liabilities of Alpha or Alpha’s predecessors arising from pre-sale operations. For such claims to succeed, claimants would need to demonstrate, among other things, that they did not receive

46




proper notice of Alpha’s Plan of Reorganization (or were otherwise not subject to discharge), that the claims arose after the confirmation of Alpha’s Plan of Reorganization, that the claims are not subject to the releases contained in the settlements and that we are successors to the liabilities of Alpha, notwithstanding the findings and order of the Bankruptcy Court to the contrary and the terms of the asset purchase agreement allocating such liabilities to Alpha. Although we believe the possibility of us becoming subject to the liabilities of Alpha to be remote, if we were to become subject to such liabilities, we could be required to pay substantial fines, penalties and/or damages, which we cannot estimate at this time and which could have a material adverse effect on our consolidated financial condition or results of operations.
Failure to obtain or renew surety bonds on acceptable terms could affect our ability to secure reclamation and coal lease obligations, which could adversely affect our ability to mine or lease coal.
Federal and state laws require us to obtain surety bonds to secure payment of certain long-term obligations such as mine closure or reclamation costs, federal and state workers’ compensation costs (including related to black lung), coal leases and other obligations. These bonds are typically renewable annually. Under the terms of a settlement we entered into in connection with the Alpha Restructuring, we were required to replace Alpha’s self-bonds with surety bonds or other traditional financial assurance mechanisms, and under applicable regulations, self-bonding may not be available to us as a means to comply with our reclamation bonding obligations for the foreseeable future. Surety bond issuers and holders may not continue to renew the bonds, may demand less favorable terms upon renewal or may impose new or increased collateral requirements. As of December 31, 2016 and March 31, 2017, we had outstanding surety bonds with third parties of $315.1 million and $348.4 million, respectively. Surety bond issuers and holders may demand additional collateral, unfavorable terms or higher fees. Our failure to retain, or inability to acquire, surety bonds or to provide a suitable alternative could adversely affect our ability to mine or lease coal, which would materially adversely affect our business and results of operations. That failure could result from a variety of factors, including lack of availability, higher expense or unfavorable market terms, the exercise by third-party surety bond issuers of their right to refuse to renew the surety bonds, restrictions on availability of collateral for current and future third-party surety bond issuers under the terms of any credit arrangements then in place, or our inability to comply with our reclamation bonding obligations through self-bonding. In addition, as a result of increasing credit pressures on the coal industry, it is possible that surety bond providers could demand cash collateral as a condition to providing or maintaining surety bonds. Any such demands, depending on the amount of any cash collateral required, could have a material adverse impact on our liquidity and financial position. If we are unable to meet cash collateral requirements and cannot otherwise obtain or retain required surety bonds, we may be unable to satisfy legal requirements necessary to conduct our mining operations.
We have partly secured our bonding obligations for our operations in Wyoming, which as of March 31, 2017 totals approximately $263.8 million, through an arrangement whereby we have granted the State of Wyoming a security interest in some of our real property and equipment. Certain citizen groups have filed objections to these arrangements as contrary to applicable regulations. We are in the process of replacing the security interests in our personal property with third-party surety bonds.
Difficulty in acquiring surety bonds, or additional collateral requirements, would increase our costs and likely require greater use of alternative sources of funding for this purpose, which would reduce our liquidity. If we are unable to provide the financial assurance that is required by state and federal law to secure our reclamation and coal lease obligations, our ability to mine or lease coal and, as a result, our results of operations could be adversely affected.
The terms of our borrowing arrangements limit our and our subsidiaries’ ability to take certain actions, which may limit our operating and financial flexibility and adversely affect our business.
Our borrowing arrangements contain a number of significant restrictions and covenants that limit our ability and our subsidiaries’ ability to, among other things, incur additional indebtedness, enter into sale and leaseback transactions, pay dividends, make redemptions and repurchases of certain capital stock, make loans and investments, create liens, sell certain assets, engage in transactions with affiliates, and merge or consolidate with other companies or sell substantially all of our assets. These covenants could adversely affect our ability to finance our future

47




operations or capital needs or to execute preferred business strategies. In addition, complying with these covenants may make it more difficult for us to successfully execute our business strategy and compete against companies who are not subject to such restrictions. We regularly evaluate opportunities to enhance our capital structure and financial flexibility through a variety of methods, including repayment or repurchase of outstanding debt, amendment of our credit facility and other facilities, and other methods. As a result of any of these actions, the restrictions and covenants that apply to us may become more restrictive or otherwise change.
Operating results below current levels, or other adverse factors, including a significant increase in interest rates, could result in our being unable to comply with our covenants and payment obligations contained in our borrowing arrangements. If we violate these covenants or obligations under any of these agreements and are unable to obtain waivers from our lenders, our debt under all of these agreements would be in default and could be accelerated by our lenders. If our indebtedness is accelerated, we may not be able to repay our debt or borrow sufficient funds to refinance it. Even if we were able to obtain new financing, it may not be on commercially reasonable terms or on terms that are acceptable to us. If our debt is in default for any reason, our business, financial condition, results of operations and cash flows could be materially and adversely affected.
The need to maintain capacity for required letters of credit could limit our ability to provide financial assurance for self-insured obligations and negatively impact our ability to fund future working capital, capital expenditure or other general corporate requirements.
On April 3, 2017, we entered into the Asset-Based Revolving Credit Agreement, amended on June 9, 2017, which among other things includes a letter of credit facility that provides for the issuance of letters of credit. Obligations secured by letters of credit may increase in the future. If we do not maintain sufficient borrowing capacity under our letter of credit facility, we may be unable to provide financial assurance for self-insured obligations and could negatively impact our ability to fund future working capital, capital expenditure or other general corporate requirements.
Risks Relating to this Offering and the Ownership of our Common Stock
The requirements of being a public company, including compliance with the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the requirements of the Sarbanes-Oxley Act, may strain our resources, increase our costs and distract management, and we may be unable to comply with these requirements in a timely or cost-effective manner.
As a public company, we will need to comply with new laws, regulations and requirements, certain corporate governance provisions of the Sarbanes-Oxley Act of 2002, related regulations of the SEC and the requirements of the NYSE, with which we are not required to comply as a private company. Complying with these statutes, regulations and requirements will occupy a significant amount of time for our board of directors and management and will significantly increase our costs and expenses. We will need to:
institute a more comprehensive compliance function;
comply with rules promulgated by the NYSE;
continue to prepare and distribute periodic public reports in compliance with our obligations under the federal securities laws;
establish new internal policies, such as those relating to insider trading; and
involve and retain to a greater degree outside counsel and accountants in the above activities.
Our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our controls are documented, designed, operated or reviewed. Compliance with

48




these requirements may strain our resources, increase our costs and distract management, and we may be unable to comply with these requirements in a timely or cost-effective manner.
In addition, we expect that being a public company subject to these rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified individuals to serve on our board of directors or as executive officers. We are currently evaluating these rules, and we cannot predict or estimate the amount of additional costs we may incur or the timing of such costs.
The initial public offering price of our common stock may not be indicative of the market price of our common stock after this offering. In addition, an active, liquid and orderly trading market for our common stock may not develop or be maintained, and our stock price may be volatile.
Prior to this offering, our common stock was traded on the OTC Pink® under the ticker symbol “CNTE.” An active, liquid and orderly trading market for our common stock may not develop or be maintained after this offering. Active, liquid and orderly trading markets usually result in less price volatility and more efficiency in carrying out investors’ purchase and sale orders. The market price of our common stock could vary significantly as a result of a number of factors, some of which are beyond our control. In the event of a drop in the market price of our common stock, you could lose a substantial part or all of your investment in our common stock. The initial public offering price will be negotiated between us, the selling stockholders and the representative of the underwriters, based on numerous factors which we discuss in “Underwriting,” and may not be indicative of the market price of our common stock after this offering. Consequently, you may not be able to sell shares of our common stock at prices equal to or greater than the price paid by you in this offering.
The following factors could affect our stock price:
our operating and financial performance, including reserve estimates;
quarterly variations in the rate of growth of our financial indicators, such as net income per share, net income and revenues;
the public reaction to our press releases, our other public announcements and our filings with the SEC;
strategic actions by our competitors;
changes in revenue or earnings estimates, or changes in recommendations or withdrawal of research coverage, by equity research analysts;
speculation in the press or investment community;
the failure of research analysts to cover our common stock;
sales of our common stock by us, our directors or officers or the selling stockholders or the perception that such sales may occur;
our payment of dividends;
changes in accounting principles, policies, guidance, interpretations or standards;
additions or departures of key management personnel;
actions by our stockholders;

49




general market conditions, including fluctuations in commodity prices;
domestic and international economic, legal and regulatory factors unrelated to our performance; and
the realization of any risks described under this “Risk Factors” section.
The stock markets in general have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. These broad market fluctuations may adversely affect the trading price of our common stock. Securities class action litigation has often been instituted against companies following periods of volatility in the overall market and in the market price of a company’s securities. Such litigation, if instituted against us, could result in very substantial costs, divert our management’s attention and resources and harm our business, operating results and financial condition.
Future sales of our common stock in the public market, or the perception that such sales may occur, could reduce our stock price, and any additional capital raised by us through the sale of equity or convertible securities may dilute your ownership in us.
We may issue additional shares of common stock or convertible securities in subsequent public offerings. After the completion of this offering, we will have 30,332,131 outstanding shares of common stock, assuming no exercise of outstanding options, no settlement of outstanding restricted stock units that by their terms are expected to settle after completion of this offering and no exercise of outstanding warrants. This number includes the 6,000,000 shares of common stock that the selling stockholders are selling in this offering and the 900,000 shares of common stock that the selling stockholders may sell in this offering if the underwriters’ option to purchase additional shares is fully exercised. All shares sold in this offering will be freely tradable, except that any shares acquired by our affiliates, as that term is defined in Rule 144 under the Securities Act, in this offering may only be sold in compliance with certain limitations.
In connection with this offering, we intend to file a registration statement with the SEC on Form S-8 providing for the registration of 2,325,000 shares of our common stock issued or reserved for issuance under our equity incentive plans. Upon satisfaction of vesting conditions and the expiration of lock-up agreements, shares registered under the registration statement on Form S-8 will be available for resale immediately in the public market without restriction, subject to Rule 144 limitations with respect to affiliates. In addition, as described below, 26,367,000 shares of common stock and 806,970 warrants issued in reliance on Section 1145(a)(1) of the Bankruptcy Code pursuant to Alpha’s Plan of Reorganization (and the shares of common stock issuable upon exercise of such warrants) may be resold without registration unless the seller is an “underwriter” with respect to those securities, and 1,833,000 shares of common stock sold pursuant to Section 4(a)(2) of the Securities Act in connection with Alpha’s Plan of Reorganization may be resold without registration pursuant to Rule 144 under the Securities Act. See “Shares Eligible for Future Sale.”
We cannot predict the size of future issuances of our common stock or securities convertible into common stock or the effect, if any, that future issuances and sales of shares of our common stock will have on the market price of our common stock or the dividend amount payable per share on our common stock. Sales of substantial amounts of our common stock (including shares issued in connection with an acquisition), or the perception that such sales could occur, may adversely affect prevailing market prices of our common stock or the dividend amount payable per share on our common stock. In addition, the issuance of shares of common stock upon the exercise of outstanding options will result in dilution to the interests of other stockholders. See “Description of Capital Stock.”
The underwriters of this offering may waive or release parties to the lock-up agreements entered into in connection with this offering, which could adversely affect the price of our common stock.
We, our officers and directors and the selling stockholders have entered or will enter into lock-up agreements pursuant to which we and they will be subject to certain restrictions with respect to the sale or other disposition of our common stock for a period of 180 days following the date of this prospectus. The representatives of the underwriters, at any time and without notice, may release all or any portion of the common stock subject to the

50




foregoing lock-up agreements. See “Underwriting” for more information on these agreements. In addition, holders of 61% of our common stock are not subject to any contractual restrictions on their ability to sell such stock and may do so at any time. If the restrictions under the lock-up agreements are waived for such shares subject to restriction, then the common stock, along with such freely tradable shares, subject to compliance with the Securities Act or exceptions therefrom, will be available for sale into the public markets, which could cause the market price of our common stock to decline and impair our ability to raise capital.
We may issue preferred stock whose terms could adversely affect the voting power or value of our common stock.
Our amended and restated certificate of incorporation authorizes us to issue, without the approval of our stockholders, one or more classes or series of preferred stock having such designations, preferences, limitations and relative rights, including preferences over our common stock respecting dividends and distributions, as our board of directors may determine. The terms of one or more classes or series of preferred stock could adversely impact the voting power or value of our common stock. For example, we might grant holders of preferred stock the right to elect some number of our directors in all events or on the happening of specified events or the right to veto specified transactions. Similarly, the repurchase or redemption rights or liquidation preferences we might assign to holders of preferred stock could affect the residual value of the common stock.
If securities or industry analysts do not publish research or reports about our business, if they adversely change their recommendations regarding our common stock or if our operating results do not meet their expectations, our stock price could decline.
The trading market for our common stock will be influenced by the research and reports that industry or securities analysts publish about us or our business. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline. Moreover, if one or more of the analysts who cover our company downgrades our common stock or if our operating results do not meet their expectations, our stock price could decline.
Our results as a public company could be significantly different from those portrayed in our historical financial results.
The historical financial information included in this prospectus has been derived from the consolidated financial statements of Alpha and may not reflect what our financial position, results of operations, cash flows, costs or expenses would have been had we been a separate public company during the periods presented. Alpha did not account for us, and we were not operated, as a separate public company for the historical periods presented. The historical costs and expenses reflected in our consolidated financial statements also include allocations of certain general and administrative costs and Alpha’s headquarters costs. These expenses are estimates and were based on what we and Alpha considered to be reasonable allocations of the historical costs incurred by Alpha to provide these services required in support of our business.
As a public company, our cost structure will be different and will include both additional recurring costs and nonrecurring costs that we will incur during our transition to being a public company. Accordingly, our historical consolidated financial information may not be reflective of our financial position, results of operations or cash flows or costs had we been a public company during the periods presented, and the historical financial information may not be a reliable indicator of what our financial position, results of operations or cash flows will be in the future. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
The pro forma condensed consolidated financial information in this prospectus is based on estimates and assumptions that may prove to be materially different from our actual experience.
In preparing the pro forma condensed consolidated financial information included elsewhere in this prospectus, we have made certain adjustments to the historical consolidated financial information based upon currently available

51




information and upon estimates and assumptions that our management believes are reasonable in order to reflect, on a pro forma basis, the impact of the structuring transactions, the debt financing transactions, the issuance of restricted stock to our directors and employees in connection with this offering and the issuance of common stock in this offering. However, these estimates are predicated on assumptions, judgments and other information which are inherently uncertain.
These estimates and assumptions used in the preparation of the pro forma condensed consolidated financial information in this prospectus may be materially different from our actual experience as a public company. The pro forma condensed consolidated financial information included elsewhere in this prospectus does not purport to represent what our results of operations would actually have been had we operated as a public company during the periods presented, nor do the pro forma data give effect to any events other than those discussed in the unaudited pro forma condensed consolidated financial information and related notes. See “Unaudited Pro Forma Condensed Combined Statement of Operations.”
Estimates of our future financial and operating results involve uncertainties, and actual results may materially differ from our estimates.
This prospectus contains estimates of and forward-looking statements concerning future finance and operating results, including sales volumes, cost of coal sales and selling, general and administrative expenses. We have prepared these estimates in good faith based upon our internal reporting and budgeted plans, as well as current expectations of market conditions, customer demand, expected production schedules and our operations for these future periods. We have not received an opinion or report from a third party on these estimates. Although we consider our assumptions to be reasonable as of the date of this prospectus, these estimates and our ability to achieve such results are subject to a wide variety of significant business, economic and competitive risks and uncertainties. There can be no assurance that our future results will not differ from these estimates. We may revise these estimates in the future due to results posted in future periods. Any such changes could be material. These estimates should not be viewed as a substitute for full financial statements prepared in accordance with GAAP after such future periods are completed. Investors are cautioned not to place undue reliance on these estimates due to the uncertainties involved in estimating future financial and operating results.
We may not pay additional cash dividends on our common stock in the foreseeable future.
We may not pay cash dividends in the future. While we have not made any cash distributions since our inception, our board of directors authorized and declared the Special Dividend on June 16, 2017, payable to holders of record of our common stock as of the close of business on July 5, 2017. The Special Dividend was paid on July 13, 2017. In addition, the Special Dividend will be funded with available cash on hand, thereby reducing our liquidity.
If we decide to pay cash dividends in the future, the declaration and payment of such dividends will be at the sole discretion of our board of directors and may be discontinued at any time. In determining the amount of any future dividends, our board of directors will take into account any legal or contractual limitations, our actual and anticipated future earnings, cash flow, debt service and capital requirements, tax considerations and other factors that our board of directors may deem relevant.
Provisions in our organizational documents and the instruments governing our debt may discourage a takeover attempt even if doing so might be beneficial to our stockholders.
Provisions contained in our certificate of incorporation and bylaws could impose impediments to the ability of a third-party to acquire us even if a change of control would be beneficial to our stockholders. Provisions of our certificate of incorporation and bylaws impose various procedural and other requirements, which could make it more difficult for stockholders to effect certain corporate actions. For example, our certificate of incorporation authorizes our board of directors to determine the rights, preferences, privileges and restrictions of unissued series of preferred stock, without any vote or action by our stockholders. Thus, our board of directors can authorize the issuance of shares of preferred stock with voting or conversion rights that could adversely affect the voting or other rights of

52




holders of our common stock. These provisions may have the effect of delaying or deterring a change of control of our company, and could limit the price that certain investors might be willing to pay in the future for shares of our common stock. See “Description of Capital Stock—Anti-Takeover Effects of Certain Provisions of Our Amended and Restated Certificate of Incorporation and our Amended and Restated Bylaws.”
A Change of Control (as defined in the Term Loan Credit Agreement and the Asset-Based Revolving Credit Agreement) is an event of default under the Term Loan Credit Agreement and the Asset-Based Revolving Credit Agreement, permitting our lenders to accelerate the maturity of certain borrowings. Further, our borrowing arrangements impose other restrictions on us, including with respect to mergers or consolidations with other companies and the sale of substantially all of our assets. These provisions could prevent or deter a third-party from acquiring us even where the acquisition could be beneficial to our stockholders.
Our amended and restated bylaws will provide, subject to certain exceptions, that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for certain stockholder litigation matters, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or stockholders.
Our amended and restated bylaws will provide, subject to limited exceptions, that the Court of Chancery of the State of Delaware will, to the fullest extent permitted by law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf; (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders; (iii) any action asserting a claim against us, any director or our officers or employees arising pursuant to any provision of the DGCL, our amended and restated certificate of incorporation (including any certificate of designations relating to any class or series of preferred stock) or our amended and restated bylaws; or (iv) any action asserting a claim against us, any director or our officers or employees that is governed by the internal affairs doctrine. Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be deemed to have notice of and to have consented to the provisions of our amended and restated bylaws described above. This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors, officers, other employees or stockholders which may discourage lawsuits with respect to such claims. Alternatively, if a court were to find the choice of forum provision that will be contained in our amended and restated bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could materially adversely affect our business, financial condition and results of operations.



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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements that are not statements of historical fact and may involve a number of risks and uncertainties. These statements relate to analyses and other information that are based on forecasts of future results and estimates of amounts not yet determinable. These statements may also relate to our future prospects, developments and business strategies.
We have used the words “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “should” and similar terms and phrases, including references to assumptions, in this prospectus to identify forward-looking statements. These forward-looking statements are made based on expectations and beliefs concerning future events affecting us and are subject to uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control, that could cause our actual results to differ materially from those matters expressed in or implied by these forward-looking statements.
We do not undertake any responsibility to release publicly any revisions to these forward-looking statements to take into account events or circumstances that occur after the date of this prospectus. Additionally, we do not undertake any responsibility to update you on the occurrence of any unanticipated events which may cause actual results to differ from those expressed or implied by the forward-looking statements contained in this prospectus.
The following factors are among those that may cause actual results to differ materially from our forward-looking statements:
successful implementation of our business strategies;
our liquidity, results of operations and financial condition;
depressed levels or declines in coal prices;
worldwide market demand for coal, electricity and steel, including demand for U.S. coal exports, and competition in coal markets;
foreign currency fluctuations;
utilities switching to alternative energy sources such as natural gas, renewables and coal from basins where we do not operate;
reductions or increases in customer coal inventories and the timing of those changes;
our production capabilities and costs;
our ability to develop or acquire coal reserves in an economically feasible manner;
inherent risks in the coal mining industry beyond our control;
geologic, equipment, site access and operational risks and new technologies related to mining;
changes in domestic or environmental, health and safety laws and regulations, agency actions and court decisions, including those directly affecting our coal mining and production, and those affecting our customers’ coal usage, including potential climate change initiatives;
our relationships with, and other conditions affecting, our customers, including the inability to collect payments from our customers if their creditworthiness declines;

54




changes in, renewal or acquisition of, terms of and performance of customers under coal supply arrangements and the refusal by our customers to receive coal under agreed contract terms;
our ability to obtain, maintain or renew any necessary permits or rights, and our ability to mine properties due to defects in title on leasehold interests;
attracting and retaining key personnel and other employee workforce factors, such as labor relations;
funding for and changes in employee benefit obligations and workers’ compensation benefits;
litigation, including claims not yet asserted;
cybersecurity attacks or failures, threats to physical security, extreme weather conditions or other natural disasters;
climate change concerns and our operations’ impact on the environment;
reclamation and mine closure obligations;
our assumptions concerning economically recoverable coal reserve estimates;
our ability to negotiate new union wage agreements on terms acceptable to us, increased unionization of our workforce in the future, and any strikes by our workforce;
disruptions in delivery or changes in pricing from third-party vendors of key equipment, components and materials that are necessary for our operations, such as diesel fuel, steel products, explosives and tires;
inflationary pressures on supplies and labor and significant or rapid increases in commodity prices;
railroad, barge, truck and other transportation availability, performance and costs;
disruption in third-party coal supplies;
the consummation of financing or refinancing transactions, acquisitions or dispositions and the related effects on our business and financial position;
our indebtedness and potential future indebtedness;
our ability to generate sufficient cash or obtain financing to fund our business operations;
our ability to obtain or renew surety bonds on acceptable terms or maintain our current bonding status; and
other factors, including those discussed in “Risk Factors.”

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USE OF PROCEEDS
We will not receive any proceeds from the sale of our common stock in this offering, including from any exercise of the underwriters’ option to purchase additional shares of our common stock. All of the net proceeds from this offering will be received by the selling stockholders. See “Principal and Selling Stockholders.”

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DIVIDEND POLICY
We may not pay additional cash dividends in the future. While we have not made any cash distributions since our inception, our board of directors authorized and declared the Special Dividend on June 16, 2017, payable to eligible holders of record of our common stock as of the close of business on July 5, 2017, resulting in distributions to such holders in the aggregate amount of approximately $92.8 million. The Special Dividend was funded with available cash on hand and was paid on July 13, 2017.
If we decide to pay cash dividends in the future, the declaration and payment of such dividends will be at the sole discretion of our board of directors and may be discontinued at any time. In determining the amount of any future dividends, our board of directors will take into account any legal or contractual limitations, our actual and anticipated future earnings, cash flow, debt service and capital requirements, tax considerations, the trading price of our common stock and other factors that our board of directors may deem relevant.
Our ability to pay dividends on our common stock is limited by covenants in our debt facilities and may be further restricted by the terms of any future debt or preferred securities. See “Risk Factors—Risks Related to this Offering and Our Common Stock—We May Not Pay Cash Dividends on Our Common Stock in the Foreseeable Future.”

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CAPITALIZATION
The following table sets forth our cash and cash equivalents and capitalization as of March 31, 2017 on a historical and as adjusted basis to reflect the Special Dividend paid to common stockholders, the dividend equivalent paid to participants in the MIP, and estimated payment to our Term Loan Credit Facility lenders in conjunction with our Special Dividend. The selling stockholders will receive all proceeds from the sale of the shares of common stock offered pursuant to this prospectus. We will not receive any proceeds from the sale of common stock pursuant to this prospectus.
This table should be read in conjunction with “Selected Historical Consolidated and Combined Financial Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Unaudited Pro Forma Condensed Combined Statement of Operations,” and the audited and unaudited Successor and Predecessor financial statements and related notes and other financial information included elsewhere in this prospectus.
(Amounts in thousands, except share and per share data)
As of March 31, 2017 (Unaudited)
 
Historical
 
As Adjusted
Cash and cash equivalents (1)(3)(5)
$
240,607

 
$
129,872

Debt:
 
 
 
Term Loan Credit Facility (3)
400,000

 
390,000

Other debt
6,616

 
6,616

Debt discount and issuance costs
(15,262
)
 
(15,262
)
Total debt (2)
391,354

 
381,354

Equity:
 
 
 
Preferred stock - par value $0.01, 30.0 million shares authorized, none issued at March 31, 2017 (4)

 

Common stock - par value $0.01, 300.0 million shares authorized, 30.3 million issued and outstanding at March 31, 2017 (4)
107

 
107

Additional paid-in capital (3)
47,416

 

Accumulated other comprehensive income
2,016

 
2,016

Treasury stock, at cost: 228 shares issued at March 31, 2017 (4)
(1
)
 
(1
)
Retained earnings (accumulated deficit) (3)
26,341

 
(26,978
)
Total equity (deficit)
75,879

 
(24,856
)
Total capitalization
$
467,233

 
$
356,498

______________
(1)
Cash and cash equivalents consist of cash held with reputable depository institutions and highly liquid, short-term investments with original maturities of three months or less. Excludes long-term restricted cash of $49.3 million as of March 31, 2017.
(2)
On April 3, 2017, we entered into the Asset-Based Revolving Credit Agreement, under which we may borrow cash or draw letters of credit, on a revolving basis, in an aggregate amount of up to $125.0 million, of which no more than $80.0 million may be drawn through letters of credit. Any borrowings under the Asset-Based Revolving Credit Agreement will have a maturity date of April 4, 2022 and will bear interest based on the character of the loan (defined as either “base rate loan” or “eurocurrency rate loan”) plus an applicable rate ranging from 1.00% to 2.50% depending on loan type. See Note 24 to our unaudited interim financial statements included elsewhere in this prospectus for further disclosures on this subsequent event.
(3)
On June 16, 2017, we declared a Special Dividend of approximately $92.8 million payable to eligible holders of record of our common stock as of the close of business on July 5, 2017. In addition, pursuant to the terms of the MIP, a dividend equivalent in the amount of approximately $7.9 million (including the amounts payable with respect to each share underlying outstanding stock option awards and restricted stock unit awards and outstanding restricted common stock under the MIP) will be awarded to plan participants. At least three

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business days prior to the payment of the Special Dividend, we will make an offer to all Term Loan Credit Facility lenders to repay the loans at par concurrently with the payment of the Special Dividend in an aggregate principal amount equal to $10.0 million. See “Prospectus Summary — Recent Developments” for additional information.
(4)
As adjusted to give effect to the Stock Split.
(5)
We have agreed to reimburse all or a portion of the selling stockholders’ underwriting discounts and commissions. Based on the number of shares offered and the midpoint of the range set forth on the cover of this prospectus (not including any exercise of the underwriters’ over-allotment option), such amount may be up to $9.0 million. This amount is not reflected in the table above. Please see “Underwriting” for additional information.


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DILUTION
Dilution is the amount by which the offering price paid by the purchasers of shares of common stock sold in this offering will exceed the net tangible book value per share of common stock after this offering. Our net tangible book value as of March 31, 2017 was $75.9 million or $2.51 per share of common stock. Our net tangible book value as of March 31, 2017, as adjusted for the Special Dividend of approximately $92.8 million and the dividend equivalent payments pursuant to the MIP of approximately $7.9 million and the Stock Split, was $(24.9) million or $(0.82) per share of common stock.
Because all of the shares of common stock to be sold in this offering, including those subject to any exercise of the underwriters’ option to purchase additional shares, will be sold by the selling stockholders, there will be no increase in the number of shares of our common stock outstanding as a result of this offering. The common stock to be sold by the selling stockholders is common stock that is issued and outstanding. Accordingly, our as adjusted net tangible book value as of March 31, 2017, would be unchanged as a result of the offering at approximately $(24.9) million, or $(0.82) per share of common stock, prior to giving effect to the payment by us of estimated offering expenses of $4.7 million in connection with this offering.
After deducting the payment of the Company’s estimated offering expenses, including approximately $9.0 million of underwriter discounts and commissions of which the Company will reimburse the selling stockholders for all or a portion of, in connection with this offering, our pro forma as adjusted net tangible book value as of March 31, 2017 would be approximately $(38.6) million, or $(1.27) per share of common stock. This represents an immediate decrease in the as adjusted net tangible book value of $0.45 per share to our existing shareholders and an immediate dilution in as adjusted net tangible book value of $26.27 per share to investors purchasing shares of common stock in this offering, based on the assumed initial public offering price of $25.00 per share (the midpoint of the range set forth on the cover of this prospectus), as illustrated in the following table:
Assumed initial public offering price per share
 
$
25.00

Net tangible book value per share as of March 31, 2017
 
 
    As adjusted net tangible book value per share as of March 31, 2017
$
(0.82
)
 
    Decrease in as adjusted net tangible book value per share as of March 31, 2017 attributable to this offering
$
(0.45
)
 
Pro forma as adjusted net tangible book value per share as of March 31, 2017
 
$
(1.27
)
Immediate dilution per share to new investors in this offering (1)
 
$
26.27

______________
(1)
As we have agreed to pay all or a portion of the selling stockholders’ underwriting discount and commissions, the offering expenses payable by us and the total number of shares outstanding following this offering will be impacted by any exercise of the underwriters’ option to purchase additional shares of common stock from the selling stockholders. Assuming full exercise of the underwriters’ option, there will be up to approximately $(0.08) of additional dilution in net tangible book value per share of common stock to purchasers in this offering.
Each $1.00 increase or decrease in the assumed initial public offering price of $25.00 per share, which is the midpoint of the estimated offering price range set forth on the cover of this prospectus, would not affect our as adjusted net tangible book value per share to purchasers, but would increase or decrease, as applicable, the dilution per share to purchasers in this offering by $1.00.
The following table sets forth the total number of shares issued and outstanding as of March 31, 2017, which include the 6,000,000 shares to be sold by the selling stockholders in this offering at the assumed initial public offering price of $25.00 per share (the midpoint of the range set forth on the cover of this prospectus), together with the total consideration paid and average price per share paid for such shares, before deducting underwriting discounts and commissions and estimated offering expenses.

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(Amounts in thousands, except share and per share data)

 
 
 
 
 
 
 
Shares Purchased
 
Total Consideration(1)
&#