Note 15 - Derivatives

9 Months Ended

Sep. 30, 2021

Notes to Financial Statements

Derivative Instruments and Hedging Activities Disclosure [Text Block]

NOTE 15—DERIVATIVES

Interest Rate Risk Management

During the year ended December 31, 2019, the Company entered into interest rate swaps to manage exposures to interest rate risk on long-term debt in order to achieve a mix of fixed and variable rate debt that it deems appropriate. These interest rate swaps have been designated as cash flow hedges of future variable interest payments. For additional information on these arrangements, refer to Note 13 - Long-Term Debt.

Coal Price Risk Management Positions

The Company may sell or purchase forward contracts, swaps and options in the over-the-counter coal market in order to manage its exposure to coal prices. The Company has exposure to the risk of fluctuating coal prices related to forecasted or index-priced sales of coal or to the risk of changes in the fair value of a fixed price physical sales contract. As of September 30, 2021, the Company held coal-related financial contracts related to a portion of its forecasted sales for an aggregate notional volume of 2.0 million metric tons, which will settle in 2022.

Tabular Derivatives Disclosures

The Company has master netting agreements with all of its counterparties which allow for the settlement of contracts in an asset position with contracts in a liability position in the event of default or termination. Such netting arrangements reduce the Company's credit exposure related to these counterparties to the extent the Company has any liability to such counterparties. For classification purposes, the Company records the net fair value of all the positions with a given counterparty as a net asset or liability in the Consolidated Balance Sheets. The fair value of derivatives reflected in the accompanying Consolidated Balance Sheets are set forth in the table below.

	September 30, 2021					December 31, 2020
	Asset Derivatives		Liability Derivatives			Asset Derivatives		Liability Derivatives
Coal Contracts Related to Forecasted Sales	$	—	$	(167,743	)	$	—	$	—
Effect of Counterparty Netting		—		—			—		—
Net Derivatives as Classified in the Consolidated Balance Sheets	$	—	$	(167,743	)	$	—	$	—

The net amount of liability derivatives is included in Other Accrued Liabilities and Other Liabilities in the accompanying Consolidated Balance Sheets.

Currently, the Company does not seek cash flow hedge accounting treatment for its coal-related derivative financial instruments and therefore, changes in fair value are reflected in current earnings. During the three and nine months ended September 30, 2021, the Company recognized unrealized losses on its coal-related derivatives of $147,306 and $167,743, respectively. These unrealized losses are included in Unrealized Loss on Commodity Derivative Instruments on the accompanying Consolidated Statements of Income.

The Company classifies the cash effects of its derivatives within the Cash Flows from Operating Activities section of the Consolidated Statements of Cash Flows.