WARRIOR MET COAL, INC. (Form: 10-Q, Received: 08/03/2017 16:55:26)

Large accelerated filer o

Accelerated filer o

Non-accelerated filer ý

(Do not check if a

smaller reporting company)

Smaller reporting company o

Emerging growth company ý

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q



ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2017
or
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to

Commission File Number: 001-38061

Warrior Met Coal, Inc.

(Exact name of registrant as specified in its charter)



Delaware (State or other jurisdiction of incorporation or organization)		81-0706839 (I.R.S Employer Identification No.)
16243 Highway 216 Brookwood, Alabama (Address of principal executive offices)		35444 (Zip Code)

(205) 554-6150

(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a 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.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ý

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No ý

Number of shares of common stock outstanding as of July 31, 2017: 53,444,810

TABLE OF CONTENTS



Forward-Looking Statements		1
Explanatory Note		3
Part I-Financial Information		4
Item 1.	Financial Statements	5
	Condensed Balance Sheets as of June 30, 2017 (Unaudited) and December 31, 2016	5
	Condensed Statements of Operations for the three and six months ended June 30, 2017 (Unaudited), for the three months ended June 30, 2016 (Unaudited) and for the three months ended March 31, 2016	6
	Condensed Statement of Changes in Stockholders' Equity as of June 30, 2017 (Unaudited)	7
	Condensed Statements of Cash Flows for the three and six months ended June 30, 2017 (Unaudited), for the three months ended June 30, 2016 (Unaudited) for the three months ended March 31, 2016	8
	Notes to Condensed Financial Statements	9
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	37
Item 4.	Controls and Procedures	37
Part II - Other Information		39
Item 1.	Legal Proceedings	39
Item 1A .	Risk Factors	39
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	39
Item 3.	Defaults on Senior Securities	39
Item 4.	Mine Safety Disclosures	40
Item 5.	Other Information	40
Item 6.	Exhibits	41
Signatures		42

FORWARD-LOOKING STATEMENTS

This quarterly report on Form 10-Q includes statements of our expectations, intentions, plans and beliefs that constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and are intended to come within the safe harbor protection provided by those sections. These statements, which involve risks and uncertainties, relate to analyses and other information that are based on forecasts of future results and estimates of amounts not yet determinable and may also relate to our future prospects, developments and business strategies. We have used the words “anticipate,” “approximately,” “assume,” “believe,” “could,” “contemplate,” “continue,” “estimate,” “expect,” “target,” “future,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should” and similar terms and phrases, including in references to assumptions, in this report 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. These risks and uncertainties include, but are not limited to:


•	successful implementation of our business strategies;


•	a substantial or extended decline in pricing or demand for met coal;


•	global steel demand and the downstream impact on met coal prices;


•	inherent difficulties and challenges in the coal mining industry that are beyond our control;


•	geologic, equipment, permitting, site access, operational risks and new technologies related to mining;


•	impact of weather and natural disasters on demand and production;


•	our relationships with, and other conditions affecting, our customers;


•	unavailability of, or price increases in, the transportation of our met coal;


•	competition and foreign currency fluctuations;


•	our ability to comply with covenants in our asset-based revolving credit facility (“ABL Facility”);


•	significant cost increases and fluctuations, and delay in the delivery of raw materials, mining equipment and purchased components;


•	work stoppages, negotiation of labor contracts, employee relations and workforce availability;


•	adequate liquidity and the cost, availability and access to capital and financial markets;


•	any consequences related to our transfer restrictions under our certificate of incorporation;


•	our obligations surrounding reclamation and mine closure;


•	inaccuracies in our estimates of our met coal reserves;


•	our ability to develop or acquire met coal reserves in an economically feasible manner;


•	challenges to our licenses, permits and other authorizations;


•	challenges associated with environmental, health and safety laws and regulations;


•	regulatory requirements associated with federal, state and local regulatory agencies, and such agencies’ authority to order temporary or permanent closure of our mines;


•	climate change concerns and our operations’ impact on the environment;


•	failure to obtain or renew surety bonds on acceptable terms, which could affect our ability to secure reclamation and coal lease obligations;


•	costs associated with our pension and benefits, including post-retirement benefits;


•	costs associated with our workers’ compensation benefits;


•	litigation, including claims not yet asserted;


•	our ability to continue paying our quarterly dividend or pay any special dividend;


•	our ability to commence a stock repurchase program; and


•	terrorist attacks or security threats, including cybersecurity threats;

These forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. Forward-looking statements should, therefore, be considered in light of various factors, including those set forth under “Part I, Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Quarterly Report, and those set forth from time to time in our other filings with the Securities and Exchange Commission (the “SEC”). These documents are available through our website or through the SEC's Electronic Data Gathering and Analysis Retrieval system at http://www.sec.gov. In light of such risks and uncertainties, we caution you not to place undue reliance on these forward-looking statements.

When considering forward-looking statements made by us in this Quarterly Report on Form 10-Q (this “Form 10-Q”), or elsewhere, such statements speak only as of the date on which we make them. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect us. We have no duty to, and do not intend to, update or revise the forward-looking statements in this Form 10-Q after the date of this Form 10-Q, except as may be required by law. In light of these risks and uncertainties, you should keep in mind that any forward-looking statement made in this Form 10-Q or elsewhere might not occur.

EXPLANATORY NOTE

On April 12, 2017, Warrior Met Coal, LLC, a Delaware limited liability company, converted into Warrior Met Coal, Inc., a Delaware corporation, as described under “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Factors Affecting the Comparability of our Financial Statements-Corporate Conversion and Initial Public Offering.” We refer to this transaction herein as the “corporate conversion.” As used in this Quarterly Report on Form 10-Q, unless the context otherwise requires, references to the “Company,” “Warrior,” “we,” “us,” “our” or “Successor” refer to Warrior Met Coal, LLC, a Delaware limited liability company, and its subsidiaries for periods beginning as of April 1, 2016 and ending immediately before the completion of our corporate conversion and to Warrior Met Coal, Inc., a Delaware corporation and its subsidiaries for periods beginning with the completion of our corporate conversion and thereafter. In the corporate conversion, 3,832,139 units of Warrior Met Coal, LLC converted into 53,442,532 shares of common stock of Warrior Met Coal, Inc. using an approximate 13.9459-to-one conversion ratio. For the convenience of the reader, except as the context otherwise requires, all information included in this Quarterly Report on Form 10-Q about the Company is presented giving effect to the corporate conversion.

PART I - FINANCIAL INFORMATION

WARRIOR MET COAL, INC.

CONDENSED BALANCE SHEETS

(in thousands)



	Successor
	June 30, 2017 (Unaudited)		December 31, 2016

ASSETS
Current assets:
Cash and cash equivalents	$	155,792	$	150,045
Short-term investments	17,501		17,501
Trade accounts receivable	92,551		65,896
Other receivables	4,700		5,901
Inventories, net	75,286		39,420
Prepaid expenses	16,684		12,010
Total current assets	362,514		290,773
Mineral interests, net	134,597		143,231
Property, plant and equipment, net	495,072		496,959
Other long-term assets	18,178		16,668
Total assets	$	1,010,361	$	947,631
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	13,821	$	6,043
Accrued expenses	61,791		47,339
Other current liabilities	4,622		8,405
Current portion of long-term debt	2,906		2,849
Total current liabilities	83,140		64,636
Long-term debt	2,257		3,725
Deferred income taxes	1,944		1,944
Asset retirement obligations	97,708		96,050
Other long-term liabilities	28,192		28,309
Total liabilities	213,241		194,664
Commitments and contingencies (Note 9)
Stockholders’ Equity:
Common stock, $0.01 par value per share (Authorized-140,000,000 shares, issued and outstanding-53,444,810 and 53,442,532, respectively)	534		533
Preferred stock, $0.01 par value per share (10,000,000 shares authorized, no shares issued and outstanding)	—		—
Additional paid in capital	610,759		802,107
Retained earnings (accumulated deficit)	185,827		(49,673		)
Total stockholders’ equity	797,120		752,967
Total liabilities and stockholders’ equity	$	1,010,361	$	947,631

The accompanying notes are an integral part of these condensed financial statements.

WARRIOR MET COAL, INC.

CONDENSED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)



	Successor (Unaudited)									Predecessor
	For the three months ended June 30,						For the six months ended June 30,			For the three months ended March 31,
	2017			2016			2017			2016
Revenues:
Sales	$	351,788		$	85,415		$	592,844		$	65,154
Other revenues	11,582			6,059			24,490			6,229
Total revenues	363,370			91,474			617,334			71,383
Costs and expenses:
Cost of sales (exclusive of items shown separately below)	160,152			103,866			266,296			72,297
Cost of other revenues (exclusive of items shown separately below)	7,795			5,126			15,974			4,698
Depreciation and depletion	19,650			15,821			34,232			28,958
Selling, general and administrative	8,660			5,815			13,830			9,008
Other postretirement benefits	—			—			—			6,160
Restructuring costs	—			—			—			3,418
Transaction and other costs	3,837			10,475			12,873			—
Total costs and expenses	200,094			141,103			343,205			124,539
Operating income (loss)	163,276			(49,629		)	274,129			(53,156		)
Interest expense, net	(642		)	(434		)	(1,250		)	(16,562		)
Reorganization items, net	—			—			—			7,920
Income (loss) before income tax expense	162,634			(50,063		)	272,879			(61,798		)
Income tax expense	32,769			—			34,706			18
Net income (loss)	$	129,865		$	(50,063	)	$	238,173		$	(61,816	)
Basic and diluted net income per share:
Net income (loss) per share—basic and diluted	$	2.46		$	(0.95	)	$	4.52
Weighted average number of shares outstanding—basic and diluted	52,721			52,640			52,702
Dividends per share:	$	0.05		$	—		$	3.61

The accompanying notes are an integral part of these condensed financial statements.

WARRIOR MET COAL, INC.

CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

(in thousands)



	Common Stock		Preferred Stock		Additional Paid in Capital			Retained Earnings (Accumulated deficit)			Total Stockholders’ Equity
Balance at December 31, 2016 (Successor)	$	533	$	—	$	802,107		$	(49,673	)	$	752,967
Net income	—		—					238,173			238,173
Dividends paid ($3.61 per share)	—		—		(190,000		)	(2,673		)	(192,673		)
Purchase accounting measurement period adjustment (See Note 3)	—		—		(3,525		)	—			(3,525		)
Equity award modification (See Note 10)	—		—		1,255			—			1,255
Stock compensation	—		—		922			—			922
Common shares issued	1		—		—			—			1
Balance at June 30, 2017 (Successor) (Unaudited)	$	534	$	—	$	610,759		$	185,827		$	797,120

The accompanying notes are an integral part of these condensed financial statements.

WARRIOR MET COAL, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(in thousands)



	Successor (Unaudited)									Predecessor
	For the three months ended June 30,						For the six months ended June 30,			For the three months ended March 31,
	2017			2016			2017			2016
OPERATING ACTIVITIES
Net income (loss)	$	129,865		$	(50,063	)	$	238,173		$	(61,816	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and depletion	19,650			15,821			34,232			28,958
Deferred income tax expense	—			—			—			18
Stock based compensation expense	922			125			922			390
Non-cash reorganization items	—			—			—			(18,882		)
Amortization of debt issuance costs and debt discount, net	427			376			889			10,164
Accretion of asset retirement obligations	904			735			1,899			1,169
Changes in operating assets and liabilities:
Trade accounts receivable	3,629			(28,041		)	(26,655		)	15,097
Other receivables	1,442			124			1,200			1,070
Inventories	(4,339		)	14,677			(32,931		)	677
Prepaid expenses and other current assets	(2,507		)	(9,675		)	(4,674		)	13,020
Accounts payable	(2,459		)	(7,349		)	7,778			(15,338		)
Accrued expenses and other current liabilities	17,072			28,593			10,017			(16,083		)
Other	(3,202		)	5,789			(3,893		)	858
Net cash provided by (used in) operating activities	161,404			(28,888		)	226,957			(40,698		)
INVESTING ACTIVITIES
Purchase of property, plant and equipment	(16,885		)	(6,014		)	(28,263		)	(5,422		)
Proceeds from sale of property, plant and equipment	—			34			—			—
Cash paid for acquisition, net of cash acquired	—			(24,107		)	—			—
Proceeds from termination of life insurance policy	—			12,857			—			—
Purchases of short-term investments	—			(17,000		)	—			—
Net cash used in investing activities	(16,885		)	(34,230		)	(28,263		)	(5,422		)
FINANCING ACTIVITIES
Dividends paid	(2,673		)	—			(192,673		)	—
Proceeds from Rights Offering	—			200,000			—			—
Proceeds from issuance of debt	—			—			—			15,723
Retirements of debt	(766		)	(765		)	(1,531		)	(285		)
Net cash transfers to Parent	—			—			—			(13,290		)
Debt issuance costs paid	—			(4,515		)	—			(8,388		)
Net cash provided by (used in) financing activities	(3,439		)	194,720			(194,204		)	(6,240		)
Net increase (decrease) in cash and cash equivalents and restricted cash	141,080			131,602			4,490			(52,360		)
Cash and cash equivalents and restricted cash at beginning of period	16,066			—			152,656			84,462
Cash and cash equivalents and restricted cash at end of period	$	157,146		$	131,602		$	157,146		$	32,102

The accompanying notes are an integral part of these condensed financial statements.

WARRIOR MET COAL, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

SIX MONTHS ENDED JUNE 30, 2017 (UNUDITED)

Note 1—Business and Basis of Presentation

Description of the Business

Warrior Met Coal, LLC (the “Company” or, for the periods beginning as of April 1, 2016, the “Successor”) was formed on September 3, 2015 by certain Walter Energy, Inc. (“Walter Energy” or the “Parent”) lenders under the 2011 Credit Agreement, dated as of April 1, 2011 (the “2011 Credit Agreement”) and the noteholders under the 9.50% Senior Secured Notes due 2019 (such lenders and noteholders, collectively, “Walter Energy’s First Lien Lenders”) in connection with the acquisition by the Company of certain core operating assets of Walter Energy under section 363 under Chapter 11 of Title 11 (the "Chapter 11 Cases") of the U.S. Bankruptcy Code (“U.S. Bankruptcy Code”) in the Northern District of Alabama, Southern Division (the "Bankruptcy Court"). These operating assets acquired and liabilities assumed are referred to as the “Predecessor” for all periods on or before March 31, 2016. The Company and its Predecessor are a U.S. based producer and exporter of metallurgical (“met”) coal for a diversified customer base of blast furnace steel producers located primarily in Europe and South America. The Company also generates ancillary revenues from the sale of natural gas extracted as a byproduct from the underground coal mines and royalty revenues from leased properties.

On November 5, 2015, Walter Energy and certain of its wholly owned U.S. subsidiaries (collectively, the "Walter Energy Debtors") entered into an asset purchase agreement (as amended, the “Asset Purchase Agreement”) with the Company, pursuant to which, among other things, the Company, on behalf of Walter Energy’s First Lien Lenders, agreed to acquire the Predecessor through a credit bid of $ 1.1 billion and a release of the liens under the 2011 Credit Agreement and the 9.50% Senior Secured Notes due 2019 (“Walter Energy First Lien Obligations”), to assume certain liabilities of the Walter Energy Debtors and to pay cash consideration in accordance with sections 363 and 365 of the U.S. Bankruptcy Code (the “Asset Acquisition”). On January 8, 2016, the Bankruptcy Court approved the Asset Acquisition, which closed on March 31, 2016.

In connection with the Asset Acquisition, the Company also conducted rights offerings to Walter Energy’s First Lien Lenders and certain qualified unsecured creditors to purchase newly issued Class B Units of the Company, which diluted the Class A Units on a pro rata basis (the “Rights Offerings”). Proceeds from the Rights Offerings were used to pay certain costs associated with the Asset Acquisition and for general working capital purposes.

Special Distribution

On March 31, 2017, our board of managers declared a cash distribution payable to holders of our then outstanding Class A Units, Class B Units and Class C Units as of March 27, 2017, resulting in distributions to such holders in the aggregate amount of $ 190.0 million (the “Special Distribution”). The Special Distribution was funded with available cash on hand and was paid to Computershare Trust Company, N.A., as disbursing agent, on March 31, 2017.

Corporate Conversion and Initial Public Offering

On April 12, 2017, in connection with the Company’s initial public offering (“IPO”), Warrior Met Coal, LLC filed a certificate of conversion, whereby Warrior Met Coal, LLC effected a corporate conversion from a Delaware limited liability company to a Delaware corporation and changed its name to Warrior Met Coal, Inc. In connection with this corporate conversion, the Company filed a certificate of incorporation. Pursuant to the Company’s certificate of incorporation, the Company is authorized to issue up to 140,000,000 shares of common stock $ 0.01 par value per share and 10,000,000 shares of preferred stock $ 0.01 par value per share. All references in the unaudited interim condensed financial statements to the number of shares and per share amounts of common stock have been retroactively recast to reflect the corporate conversion.

On April 19, 2017, the Company completed its IPO whereby the selling stockholders named in the Registration Statement on Form S-1 (File No. 333-216499) sold 16,666,667 shares of common stock at a price to the public of $ 19.00 per share. The Company did not receive any proceeds from the sale of common stock in the IPO, and will not receive any proceeds from the exercise of the underwriters’ option to purchase additional shares of common stock, if any. All of the net proceeds from the IPO were received by the selling stockholders.

WARRIOR MET COAL, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS (Continued)

SIX MONTHS ENDED JUNE 30, 2017 (UNAUDITED)

The aggregate net proceeds to the selling stockholders in the IPO were $296.9 million , net of underwriting discounts and commissions of $19.8 million . The Company has paid cumulative offering expenses of $15.9 million on behalf of the selling stockholders. Upon the closing of the IPO, 53,442,532 shares of common stock were outstanding. On April 13, 2017, our common stock began trading on the New York Stock Exchange under the ticker symbol "HCC" and on April 19, 2017, we closed our IPO.

Basis of Presentation

Prior to the closing of the Asset Acquisition on March 31, 2016, the Company had no operations and nominal assets.

The accompanying financial statements have been presented on a condensed consolidated basis for the “Successor” periods subsequent to the Asset Acquisition, which include the three and six months ended June 30, 2017, and on a condensed combined basis for the “Predecessor” periods prior to the Asset Acquisition, which includes the three months ended March 31, 2016. The financial information of the Company has been separated by a vertical line on the face of the financial statements to identify these different bases of accounting for Predecessor and Successor periods.

The accompanying financial statements are presented in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In our opinion the financial statements include all adjustments (consisting of normal recurring accruals) necessary in order to make the financial statements not misleading. Operating results for the three and six months ended June 30, 2017 (Successor) are not necessarily indicative of the final results that may be expected for the year ended December 31, 2017. These unaudited financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2016 included in the final prospectus for the IPO dated April 12, 2017 and filed pursuant to Rule 424(b)(4) with the Securities and Exchange Commission (the “SEC”) on April 14, 2017 (the “IPO Prospectus”), which is part of our registration statement on Form S-1 (File No. 333-216499).

Predecessor Presentation

The Predecessor’s condensed combined financial statements for the three months ended March 31, 2016, have been “carved-out” from the accounting records of Walter Energy.

Historically, the Predecessor did not operate as an independent standalone company. For periods subsequent to filing the Chapter 11 Cases and prior to March 31, 2016, the Predecessor applied the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 852, Reorganizations, in preparing its condensed combined financial statements. ASC 852 requires that the financial statements distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. Accordingly, certain revenues, expenses, realized gains and losses and provisions for losses that were realized or incurred in the Chapter 11 Cases have been recorded in a reorganization line item on the Condensed Combined Statements of Operations.

Preparation of the condensed combined financial statements for the three months ended March 31, 2016, included making certain adjustments necessary to reflect all costs of doing business to present the historical records on a basis as if the Predecessor had been a separate stand alone entity. These adjustments include, for example, allocations of Parent overhead and selling, general and administrative expenses.

The historical costs and expenses reflected in the condensed combined financial statements include an allocation for certain corporate functions historically provided by the Parent. Substantially all of the Predecessor’s senior management were employed by the Parent and certain functions critical to the Predecessor’s operations were centralized and managed by the Parent. Historically, the centralized functions have included executive senior management, financial reporting, financial planning and analysis, accounting, shared services, information technology, tax, risk management, treasury, legal, human resources, and strategy and development. The costs of each of these services has been allocated to the Predecessor on the basis of the Predecessor’s relative headcount, revenue and total assets to that of the Parent. These cost allocations were $ 7.8 million for the three months ended March 31, 2016 (Predecessor).

All intracompany transactions have been eliminated. The net effect of the settlement of transactions between the Predecessor, the Parent and other affiliates of the Parent, together with cash transfers to and from the Parent’s cash management

WARRIOR MET COAL, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS (Continued)

SIX MONTHS ENDED JUNE 30, 2017 (UNAUDITED)

accounts are reflected in the Condensed Statements of Changes in Stockholders' Equity and Parent Net Investment as net transfers to Parent and in the Condensed Statements of Cash Flows as a financing activity.

The allocation methodologies have been described in the notes to the financial statements where appropriate, and management considers the allocations to be reasonable. The financial information included herein may not necessarily reflect the financial position, results of operations and cash flows of the Predecessor in the future or what they would have been had the Predecessor been a separate, standalone entity during the periods presented.

Note 2—Summary of Significant Accounting Policies

Our significant accounting policies are consistent with those disclosed in Note 2 to our audited financial statements included in our IPO Prospectus.

Cash and Cash Equivalents and Restricted Cash

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



	Successor
	June 30, 2017		December 31, 2016
Cash and cash equivalents	$	155,792	$	150,045
Restricted cash included in other long-term assets	1,354		2,611
Total cash and cash equivalents and restricted cash included in the Statements of Cash Flows	$	157,146	$	152,656

Cash and cash equivalents include short-term deposits and highly liquid investments that have original maturities of three months or less when purchased and are stated at cost, which approximates fair value. As of June 30, 2017 (Successor) and December 31, 2016 (Successor), restricted cash included in other long-term assets in the Condensed Balance Sheet represents amounts funded to an escrow account as collateral for coal royalties due under certain underground coal mining lease contracts.

Short-Term Investments

Instruments with maturities greater than three months, but less than twelve months, are included in short-term investments. The Company purchases United States Treasury bills with maturities ranging from six to twelve months which are classified as held to maturity and are carried at amortized cost, which approximates fair value. Securities classified as held to maturity securities are those securities that management has the intent and ability to hold to maturity.

As of June 30, 2017 (Successor) and December 31, 2016 (Successor), the Company’s short-term investments consisted of $17.5 million in Treasury bills with a maturity of six months . These Treasury bills were posted as collateral for the self-insured black lung related claims asserted by or on behalf of former employees of Walter Energy and its subsidiaries, which were assumed in the Asset Acquisition and relate to periods prior to March 31, 2016.

New Accounting Pronouncements

In September 2015, the FASB issued ASU 2015-16, “Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments,” which eliminates the requirement that an acquirer in a business combination account for measurement-period adjustments retrospectively. Instead, an acquirer will recognize a measurement-period adjustment during the period in which it determines the amount of the adjustment. The guidance is effective for public business entities for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. We adopted the amendments of ASU 2015-16, effective January 1, 2017. We recognized a $3.5 million measurement-period adjustment during the three months ended March 31, 2017 (Successor), which we reflected prospectively (see Note 3).

WARRIOR MET COAL, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS (Continued)

SIX MONTHS ENDED JUNE 30, 2017 (UNAUDITED)

In August 2015, the FASB issued ASU 2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date,” which defers the effective date of ASU 2014-09 by one year. ASU 2015-14 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period and permits early adoption on a limited basis. ASU 2014-09, “Revenue from Contracts with Customers”, requires an entity to recognize revenue upon transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The guidance also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. The Company is currently in the process of evaluating the impact of this new pronouncement on its consolidated results of operations. The Company plans to complete its assessment of the impact of the new standard in 2017 and expects to be compliant by the first quarter of 2018.

Note 3—Acquisition of the Predecessor

On November 5, 2015, the Walter Energy Debtors entered into the Asset Purchase Agreement with the Company, pursuant to which, among other things, the Company, on behalf of Walter Energy’s First Lien Lenders, agreed to acquire the Predecessor via a credit bid and release of the liens on the Walter Energy First Lien Obligations. On January 8, 2016, the Bankruptcy Court approved the Asset Acquisition, which closed on March 31, 2016.

The cash consideration of $ 50.8 million included the funding of escrow accounts to be used to pay certain expenses on behalf of the Walter Energy Debtors, some of which required residual amounts contained in the escrow accounts to be refunded to the Company after a specified time period. The net cash paid for the Asset Acquisition was $ 24.1 million , which was $ 50.8 million of cash paid less cash and cash equivalents acquired of $ 26.7 million .

The purchase consideration has been allocated to the assets acquired and liabilities assumed based upon their estimated fair values at the date of the Asset Acquisition. During the first quarter of 2017, the Company completed the valuation of the assets and liabilities with the assistance of an independent third party and recorded a measurement-period adjustment to the preliminary purchase price allocation. The measurement-period adjustment was due to updated estimates for the acquired mineral interests including estimates for future royalty income, production volumes and timing which resulted in a $3.5 million decrease in fair value allocated to mineral interests as compared to the December 31, 2016 preliminary fair value. This also resulted in a decrease to additional paid in capital. The measurement-period adjustment was recorded during the first quarter of 2017 and had no impact on reported earnings for the three and six months ended June 30, 2017 (Successor).

In determining the fair values of net assets acquired in the Asset Acquisition, the Company considered, among other factors, the analyses of the Predecessor’s historical financial performance and estimates of the future performance of the acquired business, as well as the highest and best use of the acquired assets.

Working capital, excluding inventory, and non-current restricted cash were recorded at the Predecessor’s carrying value, which is representative of the fair value on the date of acquisition. Inventory was valued at its net realizable value.

Mineral interest was recorded at fair value utilizing the income approach. The income approach utilized the Company’s operating projections as of the valuation date. Under the income approach, fair value was estimated based upon the present value of future cash flows. A number of significant assumptions and estimates were involved in forecasting the future cash flows including sales volumes and prices, costs to produce (including costs for labor, commodity supplies and contractors), transportation costs, capital spending, working capital changes and a risk adjusted, after-tax cost of capital (all of which generally constitute unobservable Level 3 inputs under the fair value hierarchy).

Property, plant and equipment, and other assets were recorded at fair values based on the cost and market approaches. The cost approach utilized trending and direct costing techniques to develop replacement costs. The market approach is based on independent secondary market data (which generally constitute Level 2 inputs under the fair value hierarchy).

Black lung obligations and asset retirement obligations were recorded at fair value using a combination of market data, operational data and discounted cash flows and were adjusted by a discount rate factor reflecting current market conditions at the time of acquisition.

The following tables summarize the final purchase price allocation, including the applicable measurement-period adjustments made upon finalization during the first quarter of 2017 (in thousands):

WARRIOR MET COAL, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS (Continued)

SIX MONTHS ENDED JUNE 30, 2017 (UNAUDITED)



Final purchase price:
Cash paid	$	50,830
Fair value of First Lien Obligations relinquished in exchange for net assets of the Predecessor	598,607
Total purchase price	$	649,437



Final fair values of assets acquired and liabilities assumed:
Cash and cash equivalents	$	26,723
Trade and other receivables	14,358
Inventories	46,464
Prepaid expenses and other current assets	30,722
Mineral interests	144,224
Property, plant and equipment	533,441
Other long-term assets	28,865
Total assets	824,797
Accounts payable	10,470
Accrued expenses	12,843
Other current liabilities	24,044
Current debt	2,879
Long-term debt	5,758
Deferred income taxes	1,400
Other long-term liabilities	117,966
Total liabilities	175,360
Total fair value of net assets acquired	$	649,437

Supplemental Unaudited Pro Forma Financial Information

The following unaudited pro forma results of operations give effect to the Asset Acquisition as if it had occurred on January 1, 2015. This unaudited pro forma financial information should not be relied upon as necessarily being indicative of the historical results that would have been obtained if the Asset Acquisition had actually occurred on that date, nor the results of operations in the future. The 2016 supplemental unaudited pro forma financial information was adjusted to (i) reflect the impact of certain fair value adjustments, including an adjustment to depreciation and depletion expense as a result of a change in the basis of Property, Plant and Equipment and Mineral Interests, (ii) eliminate historical interest expense related to the notes, loans and other debt that was not assumed by the Company as part of the Asset Acquisition, (iii) eliminate a gain on reorganization items associated with the Chapter 11 Cases and (iv) eliminate the Predecessor's historical other postretirement benefit expense associated with the Predecessor's historical other postretirement benefit obligations for retiree medical and life insurance benefits, which were not assumed by the Company.

WARRIOR MET COAL, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS (Continued)

SIX MONTHS ENDED JUNE 30, 2017 (UNAUDITED)



	Predecessor
	For the three months ended March 31, 2016
(in thousands)	As reported			Pro forma
Revenue	$	71,383		$	71,383
Net loss	$	(61,816	)	$	(31,759	)

Note 4—Inventories, net

Inventories, net are summarized as follows (in thousands):



	Successor
	June 30, 2017		December 31, 2016
Coal	$	52,738	$	18,788
Raw materials, parts, supplies and other, net	22,548		20,632
Total inventories, net	$	75,286	$	39,420

Note 5—Income Taxes

The Company calculates the interim income tax provision using actual year to date financial results. The tax effect of unusual or infrequently occurring items, including effects of changes in tax laws or rates, are reported in the interim period in which they occur.

The Company records deferred tax assets to the extent these assets will more likely than not be realized. In making such determination, the Company considered all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent financial performance. Based upon the review of all positive and negative evidence, including its recent history of operating losses, the Company concluded that a full valuation allowance was necessary for net deferred tax assets at June 30, 2017 (Successor) and December 31, 2016 (Successor), exclusive of certain deferred tax liabilities that have an indefinite life.

Results of operations of the Predecessor have historically been included in the federal and state income tax returns of the Parent. Accordingly, the income tax provision included in the Predecessor financial statements was calculated using a method consistent with a separate return basis, as if the Predecessor had been a separate taxpayer. Similarly, historical tax attributes (net operating losses, alternative minimum tax credits, etc.) have been allocated to the Predecessor’s business utilizing a reasonable method of allocation.

As of each reporting date, the Company’s management considers new evidence, both positive and negative, that could impact management’s view with regard to future realization of deferred income tax assets. As part of the Asset Acquisition, the Company succeeded to certain tax attributes and assumed the tax bases of the acquired assets and assumed liabilities. The tax attributes included net operating losses and alternative minimum tax and general business tax credits. As part of the evaluation of the acquired assets and assumed liabilities as of April 1, 2016, management determined that a valuation allowance was needed for deferred tax assets not expected to provide future tax benefits. If it is later determined that the Company will more likely than not realize all, or a portion, of the deferred tax assets, the Company will adjust the valuation allowance in a future period. Future recognized tax benefits in relation to the valuation allowance will result in a tax benefit in the period recognized.

The Company recognized income tax expense of $32.8 million and $34.7 million for the three and six months ended June 30, 2017 (Successor), respectively. The Company recognized no income tax expense for the three months ended June 30, 2016 (Successor) and recognized income tax expense of $18.0 thousand for the three months ended March 31, 2016 (Predecessor).

WARRIOR MET COAL, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS (Continued)

SIX MONTHS ENDED JUNE 30, 2017 (UNAUDITED)

The Company continues to utilize a discrete period method to calculate taxes for the three and six months ended June 30, 2017, as it does not believe that the annual effective tax rate method would represent a reliable estimate given current circumstances. The effective tax rate for the three months ended June 30, 2017 of 20.1% is less than the statutory tax rate primarily as a result of changes in the valuation allowance and percentage depletion. The Company continues to maintain a significant valuation allowance against deferred tax asset positions due to our cumulative losses in recent years, which limit its ability to look to future taxable income in assessing the realizability of these assets. Additionally, the Company's utilization of available net operating losses ("NOL") is currently limited in the amount that can be used in any given year due to changes in ownership that occurred in connection with the Asset Acquisition for purposes of Internal Revenue Code ("IRC") Section 382. During the three months ended June 30, 2017 (Successor), the Company exceeded the estimated annual limit under IRC Section 382 for utilization of these available NOLs, which caused the increase in the effective tax rate from the three months ended June 30, 2016.

Note 6—Debt

On April 1, 2016, the Company entered into an Asset-Based Revolving Credit Agreement (the “ABL Facility”) with certain lenders and Citibank, N.A. (together with its affiliates, “Citibank”), as administrative agent and collateral agent, with an aggregate lender commitment to make a revolving loan of up to $50.0 million , subject to borrowing base availability. On January 23, 2017, the Company entered into Amendment No. 1 to the ABL Facility to, among other things, (i) increase the aggregate lender commitment to $100.0 million , (ii) reduce the applicable interest rate margins by 100 basis points ("bps"), (iii) permit the corporate conversion and (iv) allow the IPO to be consummated without triggering a change of control. On March 24, 2017, the Company entered into Amendment No. 2 to the ABL Facility to modify certain terms relating to the restricted payment covenant, which provides the Company with improved flexibility to pay dividends, including the Special Distribution. On May 15, 2017, the Company entered into an Amendment No. 3 to the ABL Facility to, among other things, (i) allow for the posting of cash collateral to secure certain swap and hedging arrangements permitted under the ABL Facility and (ii) allow for the payment of dividends permitted under the ABL Facility within 60 days of declaration thereof. At June 30, 2017 (Successor), the Company had $100.0 million of availability under the ABL Facility.

In connection with the Asset Acquisition, the Company assumed a security agreement and promissory note, which had an outstanding balance of $5.2 million as of June 30, 2017 (Successor), of which $2.9 million was classified as a current obligation. The amount owed in respect of the promissory note was originally used for the purchase of underground mining equipment and such note is secured by the same mining equipment. The promissory note matures on March 31, 2019 and bears a fixed interest rate of 4.00% per annum. The Company is required to make monthly payments of principal and interest during the term of the promissory note.

Note 7—Net Income (Loss) per Share

Basic and diluted net income (loss) per share was calculated as follows (in thousands, except per share data):



	Successor (Unaudited)
	For the three months ended June 30,					For the six months ended June 30,
	2017		2016			2017
Numerator:
Net income (loss)	$	129,865	$	(50,063	)	$	238,173
Denominator:
Weighted-average shares used to compute net income (loss) per share—basic and diluted	52,721		52,640			52,702
Net income (loss) per share—basic and diluted	$	2.46	$	(0.95	)	$	4.52

As of June 30, 2017 (Successor), there were 798,124 shares of common stock issued under our 2016 Equity Incentive Plan (the "2016 Equity Plan") to certain directors and employees, for which neither the performance nor market based vesting

WARRIOR MET COAL, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS (Continued)

SIX MONTHS ENDED JUNE 30, 2017 (UNAUDITED)

conditions were met as of the measurement date. As such, these common shares have been excluded from basic and diluted earnings per share. As of June 30, 2017 (Successor), there were 43,580 shares of our common stock contingently issuable upon the settlement of a vested phantom unit award under our 2016 Equity Plan and 13,157 shares of our common stock contingently issuable upon the settlement of a vested restricted stock unit award under our 2017 Equity Incentive Plan (the "2017 Equity Plan"). The settlement date is the earlier of a change in control as described in our 2016 Equity Plan and 2017 Equity Plan or five years from the grant date. These awards are vested and as such have been included in the weighted-average shares used to compute basic and diluted net income per share. As of June 30, 2017 (Successor), there were 17,582 shares of common stock issued under our 2017 Equity Plan to certain directors and employees.

On March 31, 2017 (Successor), our board of managers declared a cash distribution of $3.56 per share, totaling $190.0 million , which was paid on March 31, 2017 to holders of our Class A Units, Class B Units and Class C Units of record as of March 27, 2017.

On May 17, 2017, the board of directors of the Company (the "Board") adopted a policy (the "Dividend Policy") of paying a quarterly cash dividend of $0.05 per share. The initial quarterly dividend of $2.7 million was paid on June 13, 2017 to stockholders of record on May 30, 2017. The Dividend Policy also states the following: In addition to the regular quarterly dividend and to the extent that the Company generates excess cash that is beyond the then current requirements of the business, the Board may consider returning all or a portion of such excess cash to stockholders through a special dividend or implementation of a stock repurchase program. Any future dividends or stock repurchases will be at the discretion of the Board and subject to consideration of a number of factors, including business and market conditions, future financial performance and other strategic investment opportunities. The Company will also seek to optimize its capital structure to improve returns to stockholders while allowing flexibility for the Company to pursue very selective strategic growth opportunities that can provide compelling stockholder returns.

On July 31, 2017, the Board declared a regular quarterly cash dividend of $0.05 per share to be paid on August 23, 2017, to stockholders of record as of the close of business on August 14, 2017.

Note 8—Related Party Transactions

In connection with the Asset Acquisition the Company acquired a 50% interest in Black Warrior Methane (“BWM”) and Black Warrior Transmission (“BWT”), which are accounted for under the proportionate consolidation method and equity method, respectively. The Company has granted the rights to produce and sell methane gas from its coal mines to BWM and BWT. The Company’s net investments in, advances to/from BWT and equity in earnings or loss of BWT are not material to the Company. The Company supplied labor to BWM and incurred costs, including property and liability insurance, to support the joint venture. The Company charged the joint venture for such costs on a monthly basis, which were $0.1 million and $0.8 million for the three and six months ended June 30, 2017, respectively, and $0.3 million for each of the three months ended June 30, 2016 (Successor) and the three months ended March 31, 2016 (Predecessor).

The Predecessor also received revenue from coal sales to affiliates of the Parent that were not acquired in connection with the Asset Acquisition. The Predecessor recognized revenue from these affiliates of $1.4 million for the three months ended March 31, 2016 (Predecessor).

Note 9—Commitments and Contingencies

Environmental Matters

The Company is subject to a wide variety of laws and regulations concerning the protection of the environment, both with respect to the construction and operation of its plants, mines and other facilities and with respect to remediating environmental conditions that may exist at its own and other properties.

The Company believes that it is in substantial compliance with federal, state and local environmental laws and regulations. The Company accrues for environmental expenses resulting from existing conditions that relate to past operations when the costs are probable and can be reasonably estimated. As of June 30, 2017 (Successor) and December 31, 2016 (Successor), there were no accruals for environmental matters other than asset retirement obligations for mine reclamation.

WARRIOR MET COAL, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS (Continued)

SIX MONTHS ENDED JUNE 30, 2017 (UNAUDITED)

Miscellaneous Litigation

From time to time, the Company is party to a number of lawsuits arising in the ordinary course of their businesses. The Company records costs relating to these matters when a loss is probable and the amount can be reasonably estimated. The effect of the outcome of these matters on the Company’s future results of operations cannot be predicted with certainty as any such effect depends on future results of operations and the amount and timing of the resolution of such matters. As of June 30, 2017 (Successor) and December 31, 2016 (Successor), there were no items accrued for miscellaneous litigation.

Indemnifications

In the ordinary course of business, the Company entered into a contractual arrangement under which the Company has agreed to indemnify a third party to such arrangement from any losses arising from certain events as specified in the particular contracts, which may include, for example, litigation or claims relating to past performance. The Company had accrued $0.3 million as of June 30, 2017 (Successor) and December 31, 2016 (Successor), which is included in other long-term liabilities. The remaining maximum exposure under this arrangement is $0.2 million .

Commitments and Contingencies—Other

The Company is party to various transportation and throughput agreements with rail and barge transportation providers and the Alabama State Port Authority. These agreements contain annual minimum tonnage guarantees with respect to coal transported from the mine sites to the Port of Mobile, Alabama, unloading of rail cars or barges, and the loading of vessels. If the Company does not meet its minimum throughput obligations, which are based on annual minimum amounts, it is required to pay the transportation providers or the Alabama State Port Authority a contractually specified amount per metric ton for the difference between the actual throughput and the minimum throughput requirement. At June 30, 2017 (Successor), the Company had no liability recorded for minimum throughput requirements. At December 31, 2016 (Successor), the Company had accrued a liability of $2.1 million as a result of not meeting the required minimums, which is included in accrued expenses on the Condensed Balance Sheet.

Royalty and Lease Obligations

The Company’s leases are primarily for mining equipment and automobiles. At June 30, 2017 (Successor) and December 31, 2016 (Successor), the Company had no future minimum payments due under non-cancellable operating leases.

A substantial amount of the coal that the Company mines is produced from mineral reserves leased from third-party land owners. These leases convey mining rights to the Company in exchange for royalties to be paid to the land owner as either a fixed amount per ton or as a percentage of the sales price. Although coal leases have varying renewal terms and conditions, they generally last for the economic life of the reserves. Coal royalty expense was $30.7 million and $52.2 million , for the three and six months ended June 30, 2017 (Successor) and $3.9 million and $3.6 million for three months ended June 30, 2016 (Successor) and March 31, 2016 (Predecessor), respectively.

Note 10—Stockholders' Equity

Pursuant to the Company's certificate of incorporation, the Company is authorized to issue up to 140,000,000 shares of common stock $0.01 par value per share and 10,000,000 shares of preferred stock $0.01 par value per share. As of June 30, 2017, there were 53,444,810 shares of common stock issued and outstanding.

On March 31, 2017, the board of managers declared a cash distribution payable to holders of our then outstanding Class A Units, Class B Units and Class C Units as of March 27, 2017, resulting in distributions to such holders in the aggregate amount of $ 190.0 million (the “Special Distribution”). In connection with the conversion of Warrior Met Coal, LLC into Warrior Met Coal, Inc., the Class C Units, which were issued pursuant to the 2016 Equity Plan, were converted into restricted shares (the "Restricted Shares") of common stock of the Company, par value $0.01 per share, and the Special Distribution with respect to such Restricted Shares was not paid but held in trust pending their vesting. As of June 30, 2017 (Successor), approximately $3.1 million is held in the trust and is included within other long term assets in the accompanying Condensed Balance Sheets.

WARRIOR MET COAL, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS (Continued)

SIX MONTHS ENDED JUNE 30, 2017 (UNAUDITED)

On June 1, 2017, the Compensation Committee (the "Committee") of the board of directors approved the modification described below (the “Modification”) to the award agreements (the “Awards”) for the Restricted Shares to certain officers, directors and employees of the Company. Pursuant to the Modification, the Committee waived certain vesting requirements with respect to the Special Distribution for the Restricted Shares such that funds currently held in trust as described above with respect to the Special Distribution will vest immediately for recipients that received less than $100.0 thousand and for recipients that received greater than $100.0 thousand , 50% of the Restricted Shares vest immediately. However, funds held in trust with respect to the Special Distribution for the remaining 50% of the Restricted Shares will not be released until such shares vest pursuant to the original terms of the Awards on the basis of the passage of time and the Company’s achievement of certain metrics.

In addition and pursuant to the Modification, the holders of the Restricted Shares were permitted to elect to receive the 2017 Dividend released from trust as described above with respect to their Restricted Shares (i) 100% in cash; (ii) 50% in cash and 50% in restricted stock units (“RSUs”); or (iii) 100% in RSUs.

In connection with the Modification, the Committee approved a form of Restricted Stock Unit Award Agreement (the “RSU Award Agreement”) pursuant to the 2017 Equity Plan on June 1, 2017 (the “Grant Date”) for those Holders who elected to receive the Special Distribution, in whole or in part, in RSUs (the “Participants”). The RSU Award Agreement provides that RSUs awarded pursuant to the Modification shall be fully vested on the Grant Date and shall be settled in shares of Common Stock on a one -for-one basis on the earliest of (i) one-third on each of the first three anniversaries of the Grant Date; (ii) a Change in Control (as defined in the Plan); (iii) the Participant’s separation from service with the Company or its affiliates; or (iv) death of the Participant.

In connection with the Modification, for the three and six months ended June 30, 2017 (Successor), the Company recognized a reduction to dividends payable of $0.2 million associated with the holders that elected to receive cash and $1.3 million was treated as an adjustment to equity for those that elected RSUs. Also, due to the Company's IPO, the Company also recognized approximately $0.5 million of stock compensation expense for awards granted under the 2016 Equity Plan.

For the three and six months ended June 30, 2017 (Successor), the Company also recognized approximately $0.4 million of compensation expense for awards granted under the 2017 Equity Plan.

Note 11—Derivative Instruments

The Company enters into natural gas swap contracts to hedge the exposure to variability in expected future cash flows associated with the fluctuations in the price of natural gas related to the Company’s forecasted sales. As of June 30, 2017 (Successor), the Company had natural gas swap contracts outstanding with notional amounts totaling 3,960 million British thermal units maturing in the fourth quarter of 2017 and 2,400 million maturing in the fourth quarter of 2018. As of December 31, 2016 (Successor), the Company had natural gas swap contracts outstanding with notional amounts totaling 7,920 million British thermal units maturing in the fourth quarter of 2017.

The Company’s natural gas swap contracts economically hedge certain risk but are not designated as hedges for financial reporting purposes. All changes in the fair value of these derivative instruments are recorded as other revenues in the Condensed Statements of Operations. The Company records all derivative instruments at fair value and had an asset of $0.4 million related to natural gas swap contracts outstanding as of June 30, 2017 (Successor), of which $0.2 million was included in prepaid expenses and $0.2 million was included in other long-term assets and $3.8 million as of December 31, 2016 (Successor) included in other current liabilities in the accompanying Condensed Balance Sheets.

Note 12—Fair Value of Financial Instruments

The following table presents information about the Company’s financial liabilities measured at fair value on a recurring basis and indicate the level of the fair value hierarchy utilized to determine such fair values (in thousands):

WARRIOR MET COAL, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS (Continued)

SIX MONTHS ENDED JUNE 30, 2017 (UNAUDITED)



	Successor
	Fair Value Measurements as of June 30, 2017 Using:
	Level 1		Level 2		Level 3		Total
Assets:
Natural gas swap contracts	$	—	$	440	$	—	$	440



	Successor
	Fair Value Measurements as of December 31, 2016 Using:
	Level 1		Level 2		Level 3		Total
Liabilities:
Natural gas swap contracts	$	—	$	3,784	$	—	$	3,784

The Company has no assets or any other liabilities measured at fair value on a recurring basis as of June 30, 2017 (Successor) or December 31, 2016 (Successor). During the three and six months ended June 30, 2017 (Successor), there were no transfers between Level 1, Level 2 and Level 3. The Company uses quoted dealer prices for similar contracts in active over-the-counter markets for determining fair value of Level 2 liabilities. There were no changes to the valuation techniques used to measure liability fair values on a recurring basis during the three and six months ended June 30, 2017 (Successor).

The following methods and assumptions were used to estimate the fair value for which the fair value option was not elected:

Cash and cash equivalents, short-term investments, restricted cash, receivables and accounts payable— The carrying amounts reported in the Condensed Balance Sheet approximate fair value due to the short-term nature of these assets and liabilities.

Debt— The Company's outstanding promissory note approximates fair value.

Note 13—Reorganization Items, Net

Expenses and income directly associated with the Chapter 11 Cases are reported separately in the Condensed Statements of Operations as reorganization items as required by ASC 852. Reorganization items also include adjustments to reflect the carrying value of liabilities subject to compromise at their estimated allowed claim amounts, as such adjustments are determined.

Reorganization items include an allocation of professional fees incurred in relation to the Chapter 11 Cases. For the three months ended March 31, 2016 (Predecessor), the cost of these professional fees was allocated on the basis of the Predecessor’s assets as compared to the total assets of the Parent for each reporting period.

The following table presents reorganization items (in thousands):



	Predecessor
	For the three months ended March 31, 2016
Professional fees	(10,962		)
Rejected executory contracts, leases and other	18,882
Reorganization items, net	$	7,920

Net cash paid for reorganization items for the three months ended March 31, 2016 (Predecessor) totaled approximately $ 12.3 million .

WARRIOR MET COAL, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS (Continued)

SIX MONTHS ENDED JUNE 30, 2017 (UNAUDITED)

Note 14—Restructuring Costs

For the three months ended March 31, 2016 (Predecessor), the Predecessor recognized restructuring charges of approximately $ 3.4 million due to workforce reductions at the Alabama No. 7 underground mine, the Alabama No. 4 underground mine and corporate headquarters in conjunction with cost containment initiatives implemented in response to the deterioration in the metallurgical coal market. The restructuring charges consist primarily of severance and related benefits costs. The Company does not expect to incur any additional restructuring charges in the Successor periods in connection with the Predecessor restructuring actions.

Note 15—Segment Information

The Company identifies a business as an operating segment if: i) it engages in business activities from which it may earn revenues and incur expenses; ii) its operating results are regularly reviewed by the Chief Operating Decision Maker (“CODM”), who is the Company’s Chief Executive Officer, to make decisions about resources to be allocated to the segment and assess its performance; and iii) it has available discrete financial information. The Company has determined that its two underground mining operations are its operating segments. The CODM reviews financial information at the operating segment level to allocate resources and to assess the operating results and financial performance for each operating segment. Operating segments are aggregated into a reportable segment if the operating segments have similar quantitative economic characteristics and if the operating segments are similar in the following qualitative characteristics: i) nature of products and services; ii) nature of production processes; iii) type or class of customer for their products and services; iv) methods used to distribute the products or provide services; and v) if applicable, the nature of the regulatory environment.

The Company has determined that the two operating segments are similar in both quantitative and qualitative characteristics and thus the two operating segments have been aggregated into one reportable segment. The Company has determined that its natural gas and royalty businesses did not meet the criteria in ASC 280 to be considered as operating or reportable segments. Therefore, the Company has included their results in an “all other” category as a reconciling item to consolidated amounts.

The Company does not allocate all of its assets, or its depreciation and depletion expense, selling, general and administrative expenses, other post-retirement benefits, transactions costs, restructuring costs, interest expense, reorganization items, net and income tax expense by segment.

The following tables include reconciliations of segment information to consolidated amounts (in thousands):



	Successor						Predecessor
	For the three months ended June 30,				For the six months ended June 30,		For the three months ended March 31,
	2017		2016		2017		2016
Revenues
Mining	$	351,788	$	85,415	$	592,844	$	65,154
All other	11,582		6,059		24,490		6,229
Total revenues	$	363,370	$	91,474	$	617,334	$	71,383

WARRIOR MET COAL, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS (Continued)

SIX MONTHS ENDED JUNE 30, 2017 (UNAUDITED)



	Successor					Predecessor
	For the three months ended June 30,			For the six months ended June 30,		For the three months ended March 31,
	2017	2016		2017		2016
Capital Expenditures
Mining	16,093	$	5,343	$	26,586	$	4,588
All other	792	671		1,677		834
Total capital expenditures	16,885	$	6,014	$	28,263	$	5,422

The Company evaluates the performance of its segment based on Segment Adjusted EBITDA, which is defined as net income (loss) adjusted for other revenues, cost of other revenues, depreciation and depletion, selling, general and administrative, other postretirement benefits, and certain transactions or adjustments that the CODM does not consider for the purposes of making decisions to allocate resources among segments or assessing segment performance. Segment Adjusted EBITDA does not represent and should not be considered as an alternative to cost of sales under GAAP and may not be comparable to other similarly titled measures used by other companies. Below is a reconciliation of Segment Adjusted EBITDA to net income (loss), which is its most directly comparable financial measure calculated and presented in accordance with GAAP (in thousands):



	Successor									Predecessor
	For the three months ended June 30,						For the six months ended June 30,			For the three months ended March 31,
	2017			2016			2017			2016
Segment Adjusted EBITDA	$	191,636		$	(18,451	)	$	326,548		$	(7,143	)
Other revenues	11,582			6,059			24,490			6,229
Cost of other revenues	(7,795		)	(5,126		)	(15,974		)	(4,698		)
Depreciation and depletion	(19,650		)	(15,821		)	(34,232		)	(28,958		)
Selling, general and administrative	(8,660		)	(5,815		)	(13,830		)	(9,008		)
Other postretirement benefits	—			—			—			(6,160		)
Restructuring charges	—			—			—			(3,418		)
Transaction and other costs	(3,837		)	(10,475		)	(12,873		)	—
Interest expense, net	(642		)	(434		)	(1,250		)	(16,562		)
Reorganization items, net	—			—			—			7,920
Income tax expense	(32,769		)	—			(34,706		)	(18		)
Net income (loss)	$	129,865		$	(50,063	)	$	238,173		$	(61,816	)

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis provides a narrative of our results of operations and financial condition for the three and six months ended June 30, 2017 (Successor), the three months ended June 30, 2016 (Successor) and the three months ended March 31, 2016 (Predecessor). You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and related notes appearing in this Quarterly Report on Form 10-Q and the audited financial statements for the year ended December 31, 2016 included in the final prospectus for the Company's initial public offering ( “ IPO ” ) dated April 12, 2017 and filed pursuant to Rule 424(b)(4) with the Securities and Exchange Commission (the “ SEC ” ) on April 14, 2017 (the “ IPO Prospectus ” ), which is part of our registration statement on Form S-1 (File No. 333-216499). Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business and related financing, includes forward ‑ looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the “ Risk Factors ” section of this Quarterly Report on Form 10-Q, our actual results could differ materially from the results described in, or implied by, the forward ‑ looking statements contained in the following discussion and analysis. Please see “ Forward-Looking Statements. ”

Overview

We are a large scale, low cost U.S.-based producer and exporter of premium met coal operating two highly productive underground mines in Alabama.

As of December 31, 2016 (Successor), Mine No. 4 and Mine No. 7, our two operating mines, had approximately 107.8 million metric tons of recoverable reserves and our undeveloped Blue Creek Energy Mine contained 103.0 million metric tons of recoverable reserves. The hard coking coal (“HCC”) we produce is of a similar quality to coal once referred to as the “benchmark HCC” produced in Australia, which was used to set quarterly pricing for the met coal industry. Our HCC, mined from the Southern Appalachian portion of the Blue Creek coal seam, is characterized by low sulfur, low-to-medium ash, and low-to-medium volatility. These qualities make our coal ideally suited as a coking coal for the manufacture of steel.

We sell substantially all of our met coal production to steel producers. Met coal, which is converted to coke, is a critical input in the steel production process. Met coal is both consumed domestically in the countries where it is produced and exported by several of the largest producing countries, such as China, Australia, the United States, Canada and Russia. Therefore, demand for our coal will be highly correlated to conditions in the global steelmaking industry. The steelmaking 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 steelmaking process and the availability of substitutes for steel such as aluminum, composites and plastics. A significant reduction in the demand for steel products would reduce the demand for met coal, which would have a material adverse effect upon our business. Similarly, if alternative ingredients are used in substitution for met coal in the integrated steel mill process, the demand for met coal would materially decrease, which could also materially adversely affect demand for our met coal.

Industry Overview

The global met coal market remains volatile primarily due to the temporary supply disruption impact of Cyclone Debbie in Australia. The industry benchmark price was replaced in the second quarter by a new average index pricing methodology, which varies by supplier, but was based on the average of the Platts premium low-volatile ("low-vol") index. The Steel Index ("TSI") premium coking coal index and, in some instances, the Argus Index for the months of March, April and May. For our traditional benchmark customers, we used an average of the Platts premium low-vol and the TSI premium coking coal index which resulted in a second quarter benchmark index price of approximately $194.00 per metric ton. This is a decrease of approximately $91.00 or 32% from the first quarter of 2017 price of $285.00 per metric ton. We expect that our new index pricing formula for each quarter will be the average prices of the Platts premium low-vol and TSI premium coking coal index on a one month lag basis. It is likely that this method will be adjusted in the future.

Basis of Presentation

Our results on a “Predecessor” basis relate to the assets acquired and liabilities assumed by Warrior Met Coal, LLC from Walter Energy in the Asset Acquisition and the related periods ending on or prior to March 31, 2016. Our results on a “Successor” basis relate to Warrior Met Coal, LLC and its subsidiaries for periods beginning as of April 1, 2016 and Warrior Met Coal, Inc. after giving effect to our corporate conversion on April 12, 2017 from a Delaware limited liability company into a Delaware corporation, which we refer to as the “corporate conversion.” Our results have been separated by a vertical line to

identify these different bases of accounting.

The historical costs and expenses reflected in the Predecessor combined results of operations include an allocation for certain corporate functions historically provided by Walter Energy. Substantially all of the Predecessor’s senior management were employed by Walter Energy and certain functions critical to the Predecessor’s operations were centralized and managed by Walter Energy. Historically, the centralized functions have included executive senior management, financial reporting, financial planning and analysis, accounting, shared services, information technology, tax, risk management, treasury, legal, human resources, and strategy and development. The costs of each of these services has been allocated to the Predecessor on the basis of the Predecessor’s relative headcount, revenue and total assets to that of Walter Energy.

The condensed combined financial statements of our Predecessor included elsewhere in this Form 10-Q and discussed in this discussion and analysis may not be indicative of what our financial condition, results of operations and cash flows would actually have been had we been a separate stand-alone entity, nor are they indicative of what our financial position, results of operations and cash flows may be in the future.

Factors Affecting the Comparability of our Financial Statements

Asset Acquisition

On March 31, 2016, we consummated the acquisition of the Predecessor on a debt free basis with minimum legacy liabilities. The Asset Acquisition included Mine No. 4 and Mine No. 7, which management believes to be two of the highest quality and lowest cost met coal mines in the United States. Prior to the Asset Acquisition, the Company had no operations and nominal assets. We acquired the Predecessor for an aggregate cash consideration of $50.8 million and the release of claims associated with the 2011 Credit Agreement and Walter Energy’s 9.50% Senior Secured Notes due 2019. In connection with the closing of the Asset Acquisition and in exchange for a portion of the outstanding first lien debt, Walter Energy’s First Lien Lenders were entitled to receive, on a pro rata basis, a distribution of our Class A Units. We accounted for the Asset Acquisition as a business combination under Accounting Standard Codification (“ASC”) Topic 805, Business Combinations .

Corporate Conversion and Initial Public Offering

On April 12, 2017, in connection with the IPO, Warrior Met Coal, LLC filed a certificate of conversion, whereby Warrior Met Coal, LLC effected a corporate conversion from a Delaware limited liability company to a Delaware corporation and changed its name to Warrior Met Coal, Inc. As part of the corporate conversion, holders of Class A, Class B Units (which included the Class B Units which had converted into Class A Units) and Class C Units of Warrior Met Coal, LLC received shares of our common stock for each unit held immediately prior to the corporate conversion using an approximate 13.9459-to-one conversion ratio. In connection with this corporate conversion, the Company filed a certificate of incorporation. Pursuant to the Company’s certificate of incorporation, the Company is authorized to issue up to 140,000,000 shares of common stock $0.01 par value per share and 10,000,000 shares of preferred stock $0.01 par value per share. All references in the Management's Discussion and Analysis of Financial Condition to the number of shares and per share amounts of common stock have been retroactively recast to reflect the corporate conversion.

On April 19, 2017, the Company completed its IPO whereby the selling stockholders named in the Registration Statement on Form S-1 sold 16,666,667 shares of common stock at a price to the public of $19.00 per share. The Company did not receive any proceeds from the sale of common stock in the IPO, and will not receive any proceeds from the exercise of the underwriters’ option to purchase additional shares of common stock, if any. All of the net proceeds from the IPO were received by the selling stockholders.

The aggregate net proceeds to the selling stockholders in the IPO were $296.9 million, net of underwriting discounts and commissions of $19.8 million. The Company paid the offering expenses of $15.9 million on behalf of the selling stockholders. Upon the closing of the IPO, 53,442,532 shares of common stock were outstanding. On April 13, 2017, our common stock began trading on the New York Stock Exchange under the ticker symbol "HCC" and on April 19, 2017, we closed our IPO.

How We Evaluate Our Operations

Our primary business, the mining and exporting of met coal for the steel industry, is conducted in one business segment: Mining. All other operations and results are reported under the “All Other” category as a reconciling item to consolidated amounts, which includes the business results from our sale of natural gas extracted as a byproduct from our

underground coal mines and royalties from our leased properties. Our natural gas and royalty businesses do not meet the criteria in ASC 280, Segment Reporting , to be considered as operating or reportable segments.

Our management uses a variety of financial and operating metrics to analyze our performance. These metrics are significant factors in assessing our operating results and profitability and include: (i) Segment Adjusted EBITDA; (ii) sales volumes and average selling price, which drive coal sales revenue; (iii) cash cost of sales, a non-GAAP financial measure; and (iv) Adjusted EBITDA, a non-GAAP financial measure.



	Successor (Unaudited)							Predecessor
	For the three months ended June 30,					For the six months ended June 30,		For the three months ended March 31,
	2017		2016			2017		2016
(in thousands)
Segment Adjusted EBITDA	$	191,636	$	(18,451	)	$	326,548	$	(7,143	)
Metric tons sold	1,762		1,022			2,784		777
Metric tons produced	1,732		828			3,195		801
Average selling price per metric ton	$	199.65	$	83.57		$	212.94	$	83.85
Cash cost of sales per metric ton	$	90.62	$	68.14		$	95.30	$	69.74
Adjusted EBITDA	$	188,482	$	8,073		$	323,947	$	(9,048	)

Segment Adjusted EBITDA

We define Segment Adjusted EBITDA as net income (loss) adjusted for other revenues, cost of other revenues, depreciation and depletion, selling, general and administrative, and certain transactions or adjustments that the CEO, our Chief Operating Decision Maker does not consider for the purposes of making decisions to allocate resources among segments or assessing segment performance. Segment Adjusted EBITDA is used as a supplemental financial measure by management and by external users of our financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess:


•	our operating performance as compared to the operating performance of other companies in the coal industry, without regard to financing methods, historical cost basis or capital structure;


•	the ability of our assets to generate sufficient cash flow to pay distributions;


•	our ability to incur and service debt and fund capital expenditures; and


•	the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities.

Sales Volumes and Average Selling Price

We evaluate our operations based on the volume of coal we can safely produce and sell in compliance with regulatory standards, and the prices we receive for our coal. Our sales volume and sales prices are largely dependent upon the terms of our annual coal sales contracts, for which prices generally are set on a quarterly basis. The volume of coal we sell is also a function of the pricing environment in the domestic and international met coal markets. We evaluate the price we receive for our coal on an average sales price per metric ton basis. Our average sales price per metric ton represents our coal sales revenue divided by total metric tons of coal sold. In addition, there are certain quality specification adjustments that may occur that would result in a difference between our average realized sales price per metric ton and our average gross realized price.

Cash Cost of Sales

We evaluate our cash cost of sales on a cost per metric ton basis. Cash cost of sales is based on reported cost of sales and includes items such as freight, royalties, manpower, fuel and other similar production and sales cost items, and may be adjusted for other items that, pursuant to GAAP, are classified in the Condensed Statements of Operations as costs other than cost of sales, but relate directly to the costs incurred to produce met coal and sell it free-on-board at the Port of Mobile. Our cash cost of sales per metric ton is calculated as cash cost of sales divided by the metric tons sold. Cash cost of sales is used as a supplemental financial measure by management and by external users of our financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess:


•	our operating performance as compared to the operating performance of other companies in the coal industry, without regard to financing methods, historical cost basis or capital structure; and


•	the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities.

We believe that this non-GAAP financial measure provides additional insight into our operating performance, and reflects how management analyzes our operating performance and compares that performance against other companies on a consistent basis 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 that cash costs of sales presents a useful measure of our controllable costs and our operational results by including all costs incurred to produce met coal and sell it free-on-board at the Port of Mobile. Period-to-period comparisons of cash cost of sales are intended to help management identify and assess additional trends potentially impacting our Company that may not be shown solely by period-to-period comparisons of cost of sales. Cash cost of sales should not be considered an alternative to cost of sales or any other measure of financial performance or liquidity presented in accordance with GAAP. Cash cost of sales excludes some, but not all, items that affect cost of sales, and our presentation may vary from the presentations of other companies. As a result, cash cost of sales as presented below may not be comparable to similarly titled measures of other companies.

The following table presents a reconciliation of cash cost of sales to total cost of sales, the most directly comparable GAAP financial measure, on a historical basis for each of the periods indicated.



	Successor (Unaudited)									Predecessor
	For the three months ended June 30,						For the six months ended June 30,			For the three months ended March 31,
	2017			2016			2017			2016
(in thousands)
Cost of sales	$	160,152		$	103,866		$	266,296		$	72,297
Asset retirement obligation accretion	(401		)	(267		)	(882		)	(93		)
Stock compensation expense	(75		)	—			(75		)	—
Mine No. 4 idle costs ⁽¹⁾	—			(5,342		)	—			(10,173		)
VEBA contribution ⁽²⁾	—			(25,000		)	—			—
Other (operating overhead, etc.)	—			(3,614		)	—			(7,843		)
Cash cost of sales	$	159,676		$	69,643		$	265,339		$	54,188


(1)	Represents idle costs incurred, such as electricity, insurance and maintenance labor. This mine was idled in early 2016 and restarted in August 2016.


(2)	We entered into a new initial collective bargaining agreement with the United Mine Workers Association ("UMWA") pursuant to which we agreed to contribute $25.0 million to a Voluntary Employees' Beneficiary Association ("VEBA") trust formed and administered by the UMWA.

Adjusted EBITDA

We define Adjusted EBITDA as net income (loss) before net interest expense, income tax expense, depreciation and depletion, net reorganization items, restructuring costs, transaction and other costs, Mine No. 4 idle costs, non-cash stock compensation expense and non-cash asset retirement obligation accretion. Adjusted EBITDA is used as a supplemental

financial measure by management and by external users of our financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess:


•	our operating performance as compared to the operating performance of other companies in the coal industry, without regard to financing methods, historical cost basis or capital structure; and


•	the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities.

We believe that the presentation of Adjusted EBITDA in this report provides information useful to investors in assessing our financial condition and results of operations. The GAAP measure most directly comparable to Adjusted EBITDA is net income (loss). Adjusted EBITDA should not be considered an alternative to net income or loss or any other measure of financial performance or liquidity presented in accordance with GAAP. Adjustments excludes some, but not all, items that affect net loss and our presentation of Adjusted EBITDA may vary from that presented by other companies.

The following table presents a reconciliation of Adjusted EBITDA to net income (loss), the most directly comparable GAAP financial measure, on a historical basis for each of the periods indicated.



	Successor (Unaudited)							Predecessor
	For the three months ended June 30,					For the six months ended June 30,		For the three months ended March 31,
	2017		2016			2017		2016

Net income (loss)	$	129,865	$	(50,063	)	$	238,173	$	(61,816	)
Interest expense, net	642		434			1,249		16,562
Income tax expense	32,769		—			34,706		18
Depreciation and depletion	19,650		15,821			34,232		28,958
Asset retirement obligation accretion ⁽¹⁾	797		939			1,792		1,169
Stock compensation expense ⁽²⁾	922		125			922		390
Transaction and other costs ⁽³⁾	3,837		10,475			12,873		—
Reorganization items, net ⁽⁴⁾	—		—			—		(7,920		)
Restructuring costs ⁽⁵⁾	—		—			—		3,418
Mine No. 4 idle costs ⁽⁶⁾	—		5,342			—		10,173
VEBA contribution ⁽⁷⁾	—		25,000			—		—
Adjusted EBITDA	$	188,482	$	8,073		$	323,947	$	(9,048	)


(1)	Represents non-cash accretion expense associated with our asset retirement obligations.


(2)	Represents non-cash stock compensation expense associated with equity awards.


(3)	Represents non-recurring costs incurred by the Company in connection with our IPO.


(4)	Represents expenses and income directly associated with the Predecessor’s Chapter 11 Cases (as defined in Note 1 and Note 13 to the condensed financial statements).


(5)	Represents cost and expenses in connection with workforce reductions at Mine No. 4 and Mine No. 7 and corporate headquarters. (See Note 14 to the condensed financial statements)


(6)	Represents idle costs incurred, such as electricity, insurance and maintenance labor. This mine was idled in early 2016 and restarted in August 2016.


(7)	We entered into a new initial collective bargaining agreement with the UMWA pursuant to which we agreed to contribute $25.0 million to a VEBA trust formed and administered by the UMWA.

Results of Operations

The results of operations, cash flows and financial condition for the Predecessor and Successor periods reflect different bases of accounting due to the impact of the Asset Acquisition on the financial statements. To aid the reader in understanding the results of operations of each of these distinctive periods, we have provided the following discussion of our historical results for the three months ended June 30, 2017 and 2016 (Successor), the six months ended June 30, 2017 (Successor) and the three months ended March 31, 2016 (Predecessor).

Three Months Ended June 30, 2017 and 2016 (Successor)

The following table summarizes certain unaudited financial information for the periods ended June 30, 2017 and 2016 (Successor).



	Successor
	For the three months ended June 30,
(in thousands)	2017			2016
Revenues:
Sales	$	351,788		85,415
Other revenues	11,582			6,059
Total revenues	363,370			91,474
Costs and expenses:
Cost of sales (exclusive of items shown separately below)	160,152			103,866
Cost of other revenues (exclusive of items shown separately below)	7,795			5,126
Depreciation and depletion	19,650			15,821
Selling, general and administrative	8,660			5,815
Transaction and other costs	3,837			10,475
Total costs and expenses	200,094			141,103
Operating income	163,276			(49,629	)
Interest expense, net	(642		)	(434	)
Income before income taxes	162,634			(50,063	)
Income tax expense	32,769			—
Net income	$	129,865		(50,063	)

Sales and cost of sales components on a per unit basis for the three months ended June 30, 2017 and 2016 (Successor) were as follows:



	Successor
	For the three months ended June 30,
	2017		2016
Met Coal (metric tons in thousands)
Metric tons sold	1,762		1,022
Metric tons produced	1,732		828
Average selling price per metric ton	$	199.65	$	83.57
Cash cost of sales per metric ton	$	90.62	$	68.14

Sales for the three months ended June 30, 2017 (Successor) were $351.8 million compared to $85.4 million for the three months ended June 30, 2016 (Successor). The $266.4 million increase in revenues was primarily due to a $204.5 million increase due to a $116.08 increase in the average selling price per metric ton of met coal and a $61.8 million increase in revenue due to a 740 thousand metric ton increase in met coal sales volume. The increase in sales volume is partially attributable to the fact that Mine No. 4 and Mine No. 7 were both operational during the three months ended June 30, 2017 (Successor) as compared to only Mine No. 7 being in operation during the three months ended June 30, 2016 (Successor).

Other revenues for the three months ended June 30, 2017 (Successor) were $11.6 million compared to $6.1 million for the three months ended June 30, 2016 (Successor). Other revenues are comprised of revenue derived from our natural gas operations, as well as earned royalty revenue. The $5.5 million increase in other revenues is primarily due to an increase in the average selling price of natural gas prices as well as a gain of $0.5 million recognized on the fair value adjustment related to our natural gas swap contracts. Cost of other revenues increased $2.7 million primarily due to an increase in volume as we continue to maximize production.

Cost of sales (exclusive of items shown separately below) for the three months ended June 30, 2017 (Successor) was $160.2 million compared to $103.9 million for the three months ended June 30, 2016 (Successor). The $56.3 million increase is driven by a $50.4 million increase due to an increase in met coal sales with the remainder of the increase due to an increase in the average cash cost of sales per metric ton. Costs of sales for the months ended June 30, 2016 (Successor) also includes the $25.0 million VEBA contribution and $5.3 million of carrying costs for the idled Mine No. 4.

Depreciation and depletion for the three months ended June 30, 2017 (Successor) were $19.7 million compared to $15.8 million for the three months ended June 30, 2016 (Successor), driven primarily by an increase in depletion due to an increase in metric tons produced.

Selling, general and administrative expenses for the three months ended June 30, 2017 (Successor) were $8.7 million compared to $5.8 million for the three months ended June 30, 2016 (Successor), driven primarily by an increase in costs associated with being a publicly traded company, an increase in salaried employees as we continue to maximize production and an increase in stock compensation to our employees.

Transaction and other costs for the three months ended June 30, 2017 (Successor) of $3.8 million was comprised of professional fees incurred in connection with our initial public offering and the $10.5 million incurred for the three months ended June 30, 2016 (Successor) was comprised of professional fees incurred in connection with the Asset Acquisition.

Interest expense for the three months ended June 30, 2017 (Successor) was $0.6 million compared to $0.4 million for the three months ended June 30, 2016 (Successor) and is comprised of interest on our security agreement and promissory note, and amortization of our ABL Facility debt issuance costs.

Income tax expense for the three months ended June 30, 2017 (Successor) was $32.8 million compared to $0 million for the three months ended June 30, 2016 (Successor). We continue to utilize a discrete period method to calculate taxes for the three and six months ended June 30, 2017 (Successor) as we do not believe the annual effective tax rate method would represent a reliable estimate given our current circumstances. Our effective tax rate for the three months ended June 30, 2017 (Successor) of 20.1% is less than the statutory tax rate primarily as a result of changes in our valuation allowance and percentage depletion. We continue to maintain a significant valuation allowance against net deferred tax asset positions due to our cumulative losses in recent years which limit our ability to look to future taxable income in assessing the realizability of these assets. Additionally, our utilization of available net operating losses (“NOL”) is currently limited in the amount that can be used in any given year, due to changes in ownership that occurred in connection with the Asset Acquisition for purposes of Internal Revenue Code (“IRC”) Section 382 limitation. During the three months ended June 30, 2017 (Successor), we exceeded the estimated annual limit under IRC Section 382 for utilization of these available NOLs which caused the increase in our effective tax rate from the three months ended June 30, 2016.

Since we have exceeded the estimated annual limit under IRC Section 382 for 2017, we would expect our effective tax rate for the remainder of 2017 to be closer to the statutory rate dependent upon many factors including the volatile met coal pricing environment and the Company’s evaluation of its need for valuation allowance against deferred tax assets. In addition, if we receive a favorable decision on the private letter ruling that was submitted to the Internal Revenue Service (“IRS”), it would allow us to utilize all of our federal NOL carryforwards without an annual Section 382 limitation which would significantly reduce our tax rate for the remainder of 2017. There can be no assurance the IRS will grant this private letter ruling or that they will rule favorably on our request.

Six Months Ended June 30, 2017 (Successor)



	Successor
(in thousands)	For the six months ended June 30, 2017 (Unaudited)			% of Total Revenues
Revenues:
Sales	$	592,844		96.0	%
Other revenues	24,490			4.0	%
Total revenues	617,334			100.0	%
Costs and expenses:
Cost of sales (exclusive of items shown separately below)	266,296			43.1	%
Cost of other revenues (exclusive of items shown separately below)	15,974			2.6	%
Depreciation and depletion	34,232			5.5	%
Selling, general and administrative	13,830			2.2	%
Transaction and other costs	12,873			2.1	%
Total costs and expenses	343,205			55.6	%
Operating income	274,129			44.4	%
Interest expense, net	(1,250		)	(0.2	)%
Income before income taxes	272,879			44.2	%
Income tax expense	34,706			5.6	%
Net income	$	238,173		38.6	%

Sales and cost of sales components on a per unit basis for the six months ended June 30, 2017 (Successor) were as follows:



	Successor
	For the six months ended June 30, 2017 (Unaudited)
Met Coal (metric tons in thousands)
Metric tons sold	2,784
Metric tons produced	3,195
Average selling price per metric ton	$	212.94
Cash cost of sales per metric ton	$	95.30

Total revenues were $617.3 million for the six months ended June 30, 2017 (Successor).

Sales were $592.8 million for the six months ended June 30, 2017 (Successor), and were comprised of met coal sales of 2.8 million metric tons at an average selling price of $212.94 per metric ton. Mine No. 4 and Mine No. 7 were both operational during the three months ended June 30, 2017 (Successor), with one longwall at Mine No. 4 and two longwalls at Mine No. 7.

Other revenues were $24.5 million , and were comprised of revenue derived from our natural gas operations, as well as earned royalty revenue. Other revenues includes a gain of $0.5 million recognized on the fair value adjustment related to our natural gas swap contracts. Cost of other revenues was $16.0 million , representing 2.6% of total revenues and 67.0% of other revenues.

Cost of sales (exclusive of items shown separately below) was $266.3 million , or 43.1% of total revenues, and was primarily comprised of met coal sales of 2.8 million metric tons at an average cash cost of sales of $95.3 per metric ton. Our cash cost of sales reflects our new collective bargaining agreement wages and benefits and renegotiated transportation and royalty contracts, which allows for our cash cost of sales to move with changes in the price that we realize for our coal.

Depreciation and depletion was $34.2 million , or 5.5% of total revenues, and was primarily related to depreciation of machinery and equipment and depletion of mineral interests.

Selling, general and administrative expenses were $13.8 million , or 2.2% of total revenues, reflecting the benefits of a restructured business without the legacy costs and liabilities which were not assumed in the Asset Acquisition. Our selling, general and administrative expenses also include costs associated with being a publicly traded entity.

Transaction and other costs associated with our initial public offering were $12.9 million , or 2.1% of total revenues, which was comprised primarily of professional fees incurred in connection with the initial public offering.

Interest expense of $1.3 million , or 0.2% of total revenues, is comprised of interest on our security agreement and promissory note, and amortization of our ABL Facility debt issuance costs.

Income tax expense of $34.7 million resulted primarily from the utilization of the Company's available NOLs. We continue to utilize a discrete period method to calculate taxes for the three and six months ended June 30, 2017 (Successor) as we do not believe the annual effective tax rate method would represent a reliable estimate given our current circumstances. Our effective tax rate for the three months ended June 30, 2017 (Successor) of 20.1% is less than the statutory tax rate primarily as a result of changes in our valuation allowance and percentage depletion. We continue to maintain a significant valuation allowance against net deferred tax asset positions due to our cumulative losses in recent years which limit our ability to look to future taxable income in assessing the realizability of these assets. Additionally, our utilization of available NOL is currently limited in the amount that can be used in any given year, due to changes in ownership that occurred in connection with the Asset Acquisition for purposes of IRC Section 382 limitation.

Three Months Ended March 31, 2016 (Predecessor)

The following table summarizes certain financial information relating to the Predecessor’s operating results that have been derived from our audited financial statements for the three months ended March 31, 2016 (Predecessor).



	Predecessor
(in thousands)	For the three months ended March 31, 2016			% of Total Revenues
Revenues:
Sales	$	65,154		91.3	%
Other revenues	6,229			8.7	%
Total revenues	71,383			100.0	%
Costs and expenses:
Cost of sales (exclusive of items shown separately below)	72,297			101.3	%
Cost of other revenues (exclusive of items shown separately below)	4,698			6.6	%
Depreciation and depletion	28,958			40.6	%
Selling, general and administrative	9,008			12.6	%
Other postretirement benefits	6,160			8.6	%
Restructuring cost	3,418			4.8	%
Total costs and expenses	124,539			174.5	%
Operating loss	(53,156		)	(74.5	)%
Interest expense, net	(16,562		)	(23.2	)%
Reorganization items, net	7,920			11.1	%
Loss before income taxes	(61,798		)	(86.6	)%
Income tax expense	18			—
Net loss	$	(61,816	)	(86.6	)%

Sales and cost of sales components on a per unit basis for the three months ended March 31, 2016 (Predecessor) were as follows:



	Predecessor
	For the three months ended March 31, 2016
Met Coal (metric tons in thousands)
Metric tons sold	777
Metric tons produced	801
Average selling price per metric ton	$	83.85
Cash cost of sales per metric ton	$	69.74

Total revenues were $71.4 million for the three months ended March 31, 2016.

Sales were $65.2 million for the three months ended March 31, 2016, and were comprised of met coal sales of 0.8 million metric tons at an average selling price of $83.85 per metric ton.

Other revenues were $6.2 million, and were comprised of revenue derived from our natural gas operations, as well as earned royalty revenue. Cost of other revenues was $4.7 million, representing 6.6% of total revenues and 75.4% of other revenues.

Cost of sales (exclusive of items shown separately below), was $72.3 million, or 101.3% of total revenues, and was primarily comprised of met coal sales of 0.8 million metric tons at an average cash cost of sales of $69.74 per metric ton. Our cost of sales were negatively impacted by carrying costs of $10.2 million for the idled Mine No. 4. During the three months ended March 31, 2016, only one longwall within Mine No. 7 was in operation.

Depreciation and depletion expense was $29.0 million, or 40.6% of total revenues, and was primarily related to depreciation of machinery and equipment and mine development costs.

Selling, general and administrative expenses were $9.0 million, or 12.6% of total revenues, and were primarily comprised of employee salaries and benefits.

Other postretirement benefits were $6.2 million, or 8.6% of total revenues, and represent postretirement healthcare benefits of the Predecessor.

Restructuring cost of $3.4 million, or 4.8% of total revenues, resulted from the Predecessor idling Mine No. 4 and workforce reductions at both Mine No. 4 and Mine No. 7 and corporate headquarters due to the continued decline in met coal prices.

Interest expense of $16.6 million, or 23.2% of total revenues, represents interest on liabilities subject to compromise, which were attributed to the Predecessor.

Reorganization items, net, was $7.9 million, or 11.1% of total revenues, and was comprised of an allocation of corporate professional fees incurred by the Predecessor in relation to the Chapter 11 Cases of $11.0 million offset by rejected executory contracts and leases of $18.9 million.

An income tax expense of $18.0 thousand was recognized for the three months ended March 31, 2016 as a result of the recognition of a full valuation allowance.

Liquidity and Capital Resources

Overview

Our sources of cash have been coal and natural gas sales to customers, proceeds received from the Rights Offering and access to our ABL Facility. Our primary uses of cash have been for funding the operations of our coal and natural gas production operations, our capital expenditures, our reclamation obligations, professional fees and other costs incurred in connection with the Asset Acquisition and our IPO. In addition, we use available cash on hand to pay our quarterly dividend as well as the Special Distribution, both of which reduce cash and cash equivalents.

Going forward, we may need cash to fund operating activities, working capital, capital expenditures, and strategic investments. Our ability to fund our capital needs going forward will depend on our ongoing ability to generate cash from operations and borrowing availability under the ABL Facility, and, in the case of any future strategic investments or capital expenditures, our ability to access the debt and equity markets to raise additional capital. We believe that our future cash flow from operations, together with cash on our balance sheet and borrowing availability under our ABL Facility, will provide adequate resources to fund our planned operating and capital expenditure needs for at least the next twelve months.

If our cash flows from operations are less than we require, we may need to incur additional debt or issue additional equity. From time to time we may need to access the long-term and short-term capital markets to obtain financing. Although we believe we can currently finance our operations on acceptable terms and conditions, our access to, and the availability of, financing on acceptable terms and conditions in the future will be affected by many factors, including: (i) our credit ratings, (ii) the liquidity of the overall capital markets, (iii) the current state of the global economy and (iv) restrictions in our ABL Facility and any other existing or future debt agreements. There can be no assurance that we will have or continue to have access to the capital markets on terms acceptable to us. See “Part II, Item 1A, Risk Factors.”

Our available liquidity as of June 30, 2017 (Successor) was $255.8 million , consisting of cash and cash equivalents of $155.8 million and $100.0 million available under our ABL Facility. We currently do not have any outstanding borrowings under the ABL Facility. For the six months ended June 30, 2017 (Successor), cash flows provided by operating activities were $227.0 million , cash flows used in investing activities were $28.3 million and cash flows used in financing activities were $194.2 million .

Statements of Cash Flows

Cash balances were $155.8 million and $150.0 million at June 30, 2017 (Successor) and December 31, 2016 (Successor), respectively.

The following table sets forth, a summary of the net cash provided by (used in) operating, investing and financing activities for the period (in thousands):



	Successor (Unaudited)									Predecessor
	For the three months ended June 30,						For the six months ended June 30,			For the three months ended March 31,
	2017			2016			2017			2016

Net cash provided by (used in) operating activities	$	161,404		$	(28,888	)	$	226,957		$	(40,698	)
Net cash used in investing activities	(16,885		)	(34,230		)	(28,263		)	(5,422		)
Net cash provided by (used in) financing activities	(3,439		)	194,720			(194,204		)	(6,240		)
Net increase (decrease) in cash and cash equivalents and restricted cash	$	141,080		$	131,602		$	4,490		$	(52,360	)

Operating Activities

Net cash flows from operating activities consist of net income (loss) adjusted for noncash items, such as depreciation and depletion of property, plant and equipment and mineral interests, deferred income tax expense (benefit), stock-based compensation, non-cash reorganization items, amortization of debt issuance costs and debt discount, gain on extinguishment of debt, asset impairment charges, accretion of asset retirement obligations and changes in net working capital. The timing between the conversion of our billed and unbilled receivables into cash from our customers and disbursements to our vendors is the primary driver of changes in our working capital.

Net cash provided by operating activities was $227.0 million for the six months ended June 30, 2017 (Successor), and was primarily attributed to net income of $238.2 million adjusted for depreciation and depletion expense of $34.2 million , amortization of debt issuance costs and debt discount of $0.9 million and accretion of asset retirement obligations of $1.9 million , offset by a net increase in our working capital of $45.3 million . The increase in our working capital was primarily driven by an increase in trade accounts receivable, an increase in inventories offset partially by an increase in accounts payable and accrued expenses and other current liabilities. The increase in our accounts receivable is primarily driven by an increase in the average selling price per metric ton of our coal coupled with an increase in metric tons sold and the increase in inventories is primarily driven by an increase in metric tons produced.

Net cash used in operating activities was $40.7 million for the three months ended March 31, 2016 (Predecessor), and was primarily attributed to a net loss of $61.8 million adjusted for depreciation and depletion expense of $29.0 million, non-cash reorganization items of $18.9 million, amortization of debt issuance costs and debt discount of $10.2 million and accretion of asset retirement obligations of $1.2 million, offset partially by a net decrease in our working capital of $1.6 million. The net decrease in our working capital was primarily driven by higher disbursements for accounts payable and accrued expenses and other current liabilities in the period associated with our purchases from vendors, partially offset by a decrease in trade accounts receivable.

Investing Activities

Net cash used in investing activities was $28.3 million and $5.4 million for the six months ended June 30, 2017 (Successor) and March 31, 2016 (Predecessor), respectively, primarily due to purchases of property, plant and equipment.

Financing Activities

Net cash used in financing activities was $194.2 million for the six months ended June 30, 2017 (Successor), primarily due to the Special Distribution (as defined below) of $190.0 million which was paid on March 31, 2017 and our quarterly dividend of $2.7 million which was paid on June 13, 2017. Net cash used in financing activities was $6.2 million for the three months ended March 31, 2016 (Predecessor) primarily due to net transfers to/from Walter Energy and net payments on debt.

Dividend Policy

On July 31, 2017, the Board declared a regular quarterly cash dividend of $0.05 per share to be paid on August 23, 2017, to stockholders of record as of the close of business on August 14, 2017.

Special Distribution

On March 31, 2017, our board of managers declared a cash distribution payable to holders of our Class A Units, Class B Units and Class C Units as of March 27, 2017, resulting in distributions to such holders in the aggregate amount of $190.0 million (the “Special Distribution”). The Special Distribution was funded with available cash on hand and was paid to Computershare Trust Company, N.A., as disbursing agent, on March 31, 2017.

Public Company Transaction Expenses

General and administrative expenses related to being a publicly traded company include: Exchange Act reporting expenses; expenses associated with listing on the NYSE; incremental independent auditor fees; incremental legal fees; investor relations expenses; registrar and transfer agent fees; incremental director and officer liability insurance costs; and director compensation. As a publicly traded company, we expect that general and administrative expenses will increase in future periods.

ABL Facility

On January 23, 2017, the Company entered into Amendment No. 1 to the ABL Facility to, among other things, (i) increase the aggregate lender commitment to $100.0 million, (ii) reduce the applicable interest rate margins by 100 basis points (“bps”), (iii) permit the corporate conversion and (iv) allow the IPO to be consummated without triggering a change of control.

On March 24, 2017, the Company entered into Amendment No. 2 to the ABL Facility to modify certain terms relating to the restricted payment covenant, which provides the Company with improved flexibility to pay dividends, including the Special Distribution.

On May 15, 2017, the Company entered into Amendment No. 3 to the ABL Facility to, among other things, (i) allow

for the posting of cash collateral to secure certain swap and hedging arrangements permitted under the ABL Facility and (ii) allow for the payment of dividends permitted under the ABL Facility within 60 days of declaration thereof.

Under the ABL Facility, up to $10.0 million of the commitments may be used to incur swingline loans from Citibank and up to $50.0 million of the commitments may be used to issue letters of credit. The ABL Facility will mature on April 1, 2019. As of June 30, 2017 (Successor), no amounts were outstanding under the ABL Facility and there were no outstanding letters of credit. At June 30, 2017 (Successor), we had $100.0 million of availability under the ABL Facility.

The ABL Facility contains customary covenants for asset-based credit agreements of this type, including among other things: (i) requirements to deliver financial statements, other reports and notices; (ii) restrictions on the existence or incurrence of certain indebtedness; (iii) restrictions on the existence or incurrence of certain liens; (iv) restrictions on making certain restricted payments; (v) restrictions on making certain investments; (vi) restrictions on certain mergers, consolidations and asset dispositions; (vii) restrictions on certain transactions with affiliates; and (viii) restrictions on modifications to certain indebtedness. Additionally, the ABL Facility contains a springing fixed charge coverage ratio of not less than 1.00 to 1.00, which ratio is tested if availability under the ABL Facility is less than a certain amount. As of June 30, 2017 (Successor), we were not subject to this covenant. Subject to customary grace periods and notice requirements, the ABL Facility also contains customary events of default.

We were in compliance with all applicable covenants under the ABL Facility as of June 30, 2017 (Successor).

Promissory Note

As of June 30, 2017 (Successor), we had debt outstanding of $5.2 million , $2.9 million of which was classified as current, which represents a security agreement and promissory note assumed in the Asset Acquisition. The promissory note matures on March 31, 2019 and bears a fixed interest rate of 4.00% per annum. We are required to make periodic payments of principal and interest over the term of the promissory note. The promissory note is secured by the underground mining equipment it was used to purchase.

Restricted Cash

As of June 30, 2017 (Successor), restricted cash included $1.4 million in other long-term assets in the Condensed Balance Sheet which represents amounts funded to an escrow account as collateral for coal royalties due under certain underground coal mining lease contracts.

Capital Expenditures

Our mining operations require investments to maintain, expand, upgrade or enhance our operations and to comply with environmental regulations. Maintaining and expanding mines and related infrastructure is capital intensive. Specifically, the exploration, permitting and development of met coal reserves, mining costs, the maintenance of machinery and equipment and compliance with applicable laws and regulations require ongoing capital expenditures. While a significant amount of the capital expenditures required at our mines has been spent, we must continue to invest capital to maintain our production. In addition, any decisions to increase production at our mines or to develop the high-quality met coal recoverable reserves at our Blue Creek Energy Mine in the future could also affect our capital needs or cause future capital expenditures to be higher than in the past and/or higher than our estimates.

To fund our capital expenditures, we may be required to use cash from our operations, incur debt or sell equity securities. Our ability to obtain bank financing or our ability to access the capital markets for future equity or debt offerings may be limited by our financial condition at the time of any such financing or offering and the covenants in our current or future debt agreements, as well as by general economic conditions, contingencies and uncertainties that are beyond our control.

Our capital expenditures were $16.9 million and $28.3 million for the three and six months ended June 30, 2017 (Successor), respectively, $6.0 million for the three months ended June 30, 2016 (Successor) and $5.4 million for the three months ended March 31, 2016 (Predecessor). Capital expenditures for these periods primarily related to investments required to maintain our property, plant and equipment. We expect that the long lead times on purchasing new equipment or rebuilding key pieces of machinery and equipment will result in the majority of our capital expenditures to occur in the second half of 2017. We evaluate our spending on an ongoing basis in connection with our mining plans and the prices of met coal taking into consideration the funding available to maintain our operations at optimal production levels.

We have a significant capital investment program underway in 2017 to upgrade all key production equipment to further improve efficiency and reliability. Our capital spending is expected to range from $97.0 to $117.0 million for the full year 2017 (consisting of sustaining capital expenditures of approximately $65.0 million, catch-up capital expenditures of approximately $32.0 million and discretionary capital expenditures of approximately $20.0 million), including discretionary spending that had been deferred in prior years due to the low met coal pricing environment. These amounts do not include any potential spending associated with our Blue Creek Energy Mine should we decide to develop it for production in the future.

Off-Balance Sheet Arrangements

In the ordinary course of our business, we are required to provide surety bonds and letters of credit to provide financial assurance for certain transactions and business activities. Federal and state laws require us to obtain surety bonds or other acceptable security to secure payment of certain long-term obligations including mine closure or reclamation costs and other miscellaneous obligations. As of June 30, 2017 (Successor), we had outstanding surety bonds and letters of credit with parties for post-mining reclamation at all of our U.S. mining operations totaling $ 37.9 million , and $ 2.1 million , respectively, for miscellaneous purposes.

Recently Adopted Accounting Standards

A summary of recently adopted accounting pronouncements is included in Note 2 to our unaudited interim condensed financial statements included elsewhere in this Form 10-Q.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Commodity Price Risk

We are exposed to commodity price risk on sales of coal. We sell most of our met coal under contracts primarily with pricing terms of three months and volume terms of up to one year. Sales commitments in the met coal market are typically not long-term in nature, and we are, therefore, subject to fluctuations in market pricing.

We enter into natural gas swap contracts to hedge the exposure to variability in expected future cash flows associated with the fluctuations in the price of natural gas related to our forecasted sales. As of June 30, 2017 (Successor), we had natural gas swap contracts outstanding with notional amounts totaling 3,960 million British thermal units maturing in the fourth quarter of 2017 and 2,400 million maturing in the fourth quarter of 2018. Our natural gas swap contracts economically hedge certain risk but are not designated as hedges for financial reporting purposes. All changes in the fair value of these derivative instruments are recorded as other revenues in the Condensed Statements of Operations. All of our derivative instruments were entered into for hedging purposes rather than speculative trading.

We have exposure to price risk for supplies that are used directly or indirectly in the normal course of production, such as diesel fuel, steel, explosives and other items. We manage our risk for these items through strategic sourcing contracts in normal quantities with our suppliers. We historically have not entered into any derivative commodity instruments to manage the exposure to changing price risk for supplies.

Credit Risk

Financial instruments that potentially subject us to a concentration of credit risk consist principally of trade receivables. We provide our products to customers based on an evaluation of the financial condition of our customers. In some instances, we require letters of credit, cash collateral or prepayments from our customers on or before shipment to mitigate the risk of loss. Exposure to losses on receivables is principally dependent on each customer’s financial condition. We monitor the exposure to credit losses and maintain allowances for anticipated losses. As of June 30, 2017 (Successor) and December 31, 2016 (Successor), we did not have any allowance for credit losses associated with our trade accounts receivables.

Interest Rate Risk

On April 1, 2016, we entered into the ABL Facility, as amended, that bears an interest rate equal to LIBOR plus an applicable margin, which is based on the average availability of the commitments under the ABL Facility, ranging currently from 200 bps to 250 bps. Any debt that we incur under the ABL Facility will expose us to interest rate risk. If interest rates increase significantly in the future, our exposure to interest rate risk will increase. As of June 30, 2017 (Successor), assuming we had $100.0 million outstanding under our ABL Facility, a 100 bps point increase or decrease in interest rates would increase or decrease our annual interest expense under the ABL Facility by approximately $1.0 million.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As required by Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), our management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) under the Exchange Act) as of June 30, 2017 . Based on the evaluation of our disclosure controls and procedures as of June 30, 2017 , our Chief Executive Officer and Chief Financial Officer have concluded that, as of June 30, 2017 , our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is (1) recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and (2) accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosures.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during our most recently completed fiscal quarter that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on the Effectiveness of Disclosure Controls and Procedures

In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

See Note 9 of the “Notes to Condensed Financial Statements” in this Form 10-Q for a description of current legal proceedings, which is incorporated by reference in this Part II, Item 1.

We and our subsidiaries are parties to a number of other lawsuits arising in the ordinary course of our business. We record costs relating to these matters when a loss is probable and the amount can be reasonably estimated. The effect of the outcome of these matters on our future results of operations cannot be predicted with certainty as any such effect depends on future results of operations and the amount and timing of the resolution of such matters. While the results of litigation cannot be predicted with certainty, we believe that the final outcome of such litigation will not have a material adverse effect on our financial statements.

Item 1A. Risk Factors.

There have been no material changes to the risk factors disclosed in “Risk Factors” in our IPO Prospectus and Part II, "Item 1A." of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2017. Our business, financial condition, operating results and cash flows can be impacted by a number of factors, any one of which could cause actual results to vary materially from recent results or from anticipated future results. In addition to the other information set forth in this report, you should carefully consider the risks discussed in “Management's Discussion and Analysis of Financial Condition and Results of Operations,” “Industry Overview,” and “Business” in our IPO Prospectus, which could materially affect our business, financial condition or future results. However, the risks described in our IPO Prospectus and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2017 are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

As previously disclosed, on April 12, 2017, Warrior Met Coal, LLC, a Delaware limited liability company, converted into Warrior Met Coal, Inc., a Delaware corporation, in anticipation of our initial public offering, and, in connection therewith, all outstanding Class A Units, Class B Units and Class C Units of Warrior Met Coal, LLC converted into an aggregate of 53,442,532 shares of our common stock. The members of Warrior Met Coal, LLC did not pay any other consideration for such shares of common stock.

Item 3. Defaults on Senior Securities.

None.

Item 4. Mine Safety Disclosures.

The information concerning mine safety violations and other regulatory matters is filed as Exhibit 95 to this quarterly report on Form 10-Q pursuant to the requirements of Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 229.104).

Item 5. Other Information.

None.

Item 6. Exhibits



Exhibit Number		Description
3.1		Certificate of Incorporation of Warrior Met Coal, Inc. (incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form S-8 (File No. 333-217389) filed with the Commission on April 19, 2017).

3.2		Bylaws of Warrior Met Coal, Inc. (incorporated by reference to Exhibit 3.2 to the Registrant's Current Report on Form S-8 (File No. 333-217389) filed with the Commission on April 19, 2017).

10.1*		Amendment No. 3 to Asset-Based Revolving Credit Agreement, dated as of May 15, 2017, to the Asset-Based Revolving Credit Agreement, dated as of April 1, 2016, among Warrior Met Coal, Inc. and certain of its subsidiaries, as borrowers, the guarantors party thereto, Citibank, N.A., as administrative agent and collateral agent, each lender providing additional commitment pursuant to the Amendment, as commitment increase lenders, and the other lenders party to the Credit Agreement, as existing lenders.

10.2*		Registration Rights Agreement, dated as of April 19, 2017, among Warrior Met Coal, Inc. and certain of its equity holders party thereto.

10.3†		Form of Warrior Met Coal, Inc. 2017 Equity Incentive Plan Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K (File No. 001-38061) filed with the Commission on June 5, 2017).

31.1*		Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended.

31.2*		Certification of Chief Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended.

32.1**		Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18. U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

95*		Mine Safety Disclosures Pursuant to Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 299.104)

101*		XBRL (Extensible Business Reporting Language) - The following materials from Warrior Met Coal, Inc.'s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2017, formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Balance Sheets, (ii) the Condensed Statements of Operations, (iii) the Condensed Statements of Changes in Stockholders' Equity, (v) the Condensed Statements of Cash Flows, and (vi) Notes to Condensed Financial Statements.


*	Filed herewith.


**	Furnished herewith.


†	Management contract, compensatory plan or arrangement.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



	Warrior Met Coal, Inc.

	By:		/s/ Dale W. Boyles
			Dale W. Boyles
			Chief Financial Officer (on behalf of the registrant and as Principal Financial and Accounting Officer)

			Date: August 3, 2017

EXHIBIT INDEX



Exhibit Number		Description
3.1		Certificate of Incorporation of Warrior Met Coal, Inc. (incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form S-8 (File No. 333-217389) filed with the Commission on April 19, 2017).

3.2		Bylaws of Warrior Met Coal, Inc. (incorporated by reference to Exhibit 3.2 to the Registrant's Current Report on Form S-8 (File No. 333-217389) filed with the Commission on April 19, 2017).

10.1*		Amendment No. 3 to Asset-Based Revolving Credit Agreement, dated as of May 15, 2017, to the Asset-Based Revolving Credit Agreement, dated as of April 1, 2016, among Warrior Met Coal, Inc. and certain of its subsidiaries, as borrowers, the guarantors party thereto, Citibank, N.A., as administrative agent and collateral agent, each lender providing additional commitment pursuant to the Amendment, as commitment increase lenders, and the other lenders party to the Credit Agreement, as existing lenders.

10.2*		Registration Rights Agreement, dated as of April 19, 2017, among Warrior Met Coal, Inc. and certain of its equity holders party thereto.

10.3†		Form of Warrior Met Coal, Inc. 2017 Equity Incentive Plan Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K (File No. 001-38061) filed with the Commission on June 5, 2017).

31.1*		Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended.

31.2*		Certification of Chief Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended.

32.1**		Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18. U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

95*		Mine Safety Disclosures Pursuant to Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 299.104)

101*		XBRL (Extensible Business Reporting Language) - The following materials from Warrior Met Coal, Inc.'s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2017, formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Balance Sheets, (ii) the Condensed Statements of Operations, (iii) the Condensed Statements of Changes in Stockholders' Equity, (v) the Condensed Statements of Cash Flows, and (vi) Notes to Condensed Financial Statements.


*	Filed herewith.


**	Furnished herewith.


†	Management contract, compensatory plan or arrangement.

E-1

EXHIBIT 10.1

AMENDMENT NO. 3 TO ASSET-BASED REVOLVING CREDIT AGREEMENT AND AMENDMENT NO. 1 TO PLEDGE AND SECURITY AGREEMENT

THIS AMENDMENT NO. 3 TO ASSET BASED REVOLVING CREDIT AGREEMENT AND AMENDMENT NO. 1 TO PLEDGE AND SECURITY AGREEMENT is entered into as of May 15, 2017 (this “ Amendment ”) by and among Warrior Met Coal, Inc., a Delaware corporation (f/k/a Warrior Met Coal, LLC, a Delaware limited liability company) (“ Holdings ”), certain of its subsidiaries identified therein as borrowers (together with Holdings, each a “ Borrower ” and collectively, the “ Borrowers ”), each lender from time to time party to the Credit Agreement (the “ Lenders ”) and Citibank, N.A., as administrative agent and collateral agent (in such capacities, including any successor thereto, the “ Administrative Agent ”).

W I T N E S S E T H :

WHEREAS, Holdings, certain of its subsidiaries, the Lenders and the Administrative Agent are parties to that certain Asset-Based Revolving Credit Agreement, dated as of April 1, 2016 (as amended by (i) that certain Amendment No. 1 to Asset-Based Revolving Credit Agreement, dated as of January 23, 2017, (ii) that certain Amendment No. 2 to Asset-Based Revolving Credit Agreement, dated as of March 24, 2017, and (iii) as further amended, restated, supplemented, and/or otherwise modified from time to time prior to the date hereof, the “ Credit Agreement ” and as amended by this Amendment, the “ Amended Credit Agreement ”);

WHEREAS, Holdings, certain of its subsidiaries, the Lenders and the Administrative Agent are parties to that certain Pledge and Security Agreement, dated as of April 1, 2016 (as amended, restated, supplemented, and/or otherwise modified from time to time prior to the date hereof, the “ Security Agreement ” and as amended by this Amendment, the “ Amended Security Agreement ”); capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Amended Credit Agreement or the Amended Security Agreement, as applicable;

WHEREAS, the Borrowers have requested that the Administrative Agent and the Lenders amend certain provisions of the Credit Agreement and the Security Agreement as provided herein;

WHEREAS, pursuant to such request, the Administrative Agent and the undersigned Lenders, constituting the Required Lenders, are willing to amend the terms of the Credit Agreement and the Security Agreement, in each case, subject to the terms and conditions hereof;

NOW, THEREFORE, in consideration of the mutual agreements contained in this Amendment, the Amended Credit Agreement and the Amended Security Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

Section 1 . Amendments.

(a) Section 1.01 of the Credit Agreement is hereby amended by amending and restating clause (v) of the definition of “ABL Priority Collateral” in its entirety as follows:

“(v) all cash, Money and Cash Equivalents (other than (1) identifiable Proceeds of any Non-ABL Priority Collateral and (2) cash solely for so long as it is pledged to third parties to the extent permitted under Sections 7.01(f), (g) or (s));”

(b) Section 7.01 of the Credit Agreement is hereby amended by (1) deleting “and” immediately after clause (r) thereof, (2) re-ordering clause (s) thereof as a new clause (t), and (3) adding the following as a new clause (s):

“(s) Liens on cash securing Indebtedness to the extent permitted by Section 7.02(f); and ”.

“Notwithstanding anything in this Agreement to the contrary, the foregoing provisions of this Section 7.06 will not prohibit the payment of any Restricted Payment within 60 days after the date of declaration thereof if at the date of declaration such payment would have complied with the provisions of this Agreement if made on such date of declaration.”

(d) Section 2.01(b) of the Security Agreement is hereby amended by (1) deleting “and” immediately after clause (x) thereof, (2) re-ordering clause (xi) thereof as a new clause (xii), and (3) adding the following as a new clause (xi):

“(xi) any cash solely for so long as it is pledged to third parties to the extent permitted by Sections 7.01 (f), (g) and (s) of the Credit Agreement; and”.

SECTION 2 Representations and Warranties. Each Loan Party represents and warrants to the Administrative Agent and the Lenders, as of the Third Amendment Effective Date, that:

(a) No Default . Immediately after giving effect to this Amendment, no Default or Event of Default has occurred and is continuing.

(b) Representations and Warranties True and Correct . Immediately after giving effect to this Amendment, each of the representations and warranties of the Loan Parties set forth in the Loan Documents shall be true and correct in all material respects (or, with respect to any representation or warranty that is itself modified or qualified by materiality or a “Material Adverse Effect” standard, such representation or warranty shall be true and correct in all respects) with the same effect as if made on the Third Amendment Effective Date, except to the extent such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall be true and correct in all material respects (or, with respect to any representation or warranty that is itself modified or qualified by materiality or a “Material Adverse Effect” standard, such representation or warranty shall be true and correct in all respects) as of such earlier date.

SECTION 3 . Effectiveness. This Amendment shall become effective on the date (the “ Third Amendment Effective Date ”) on which the Administrative Agent shall have received:

(a) a signed counterpart of this Amendment from each Loan Party and each Lender;

(b) no Default or Event of Default shall have occurred and be continuing, or would result from, the consummation of the transactions contemplated by this Amendment (including any Credit Extension to be made on the Third Amendment Effective Date and the application of the proceeds thereof);

(c) the representations and warranties of each Loan Party and its Subsidiaries contained in this Amendment and each other Loan Document, shall be true and correct in all material respects (or, if such representation or warranty is subject to a materiality or Material Adverse Effect qualification, in all respects) on and as of the Third Amendment Effective Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects (or, if such representation or warranty is subject to a materiality or Material Adverse Effect qualification, in all respects) as of such earlier date; and

(d) a certificate signed by a Responsible Officer of Holdings certifying that the conditions set forth in Sections 3(b) and 3(c) have been satisfied as of such date

SECTION 4 . Reaffirmation and Consent .

(a) Each Loan Party hereby consents to the execution, delivery and performance of this Amendment and agrees that each reference to the Credit Agreement or to the Security Agreement in the Loan Documents shall, on and

after the Third Amendment Effective Date, be deemed to be a reference to the Amended Credit Agreement or the Amended Security Agreement, respectively.

(b) Each Guarantor party hereto hereby consents to the terms and conditions of this Amendment, the Amended Credit Agreement and the Amended Security Agreement.

(c) Each Borrower and each Guarantor hereby acknowledges and agrees that (i) all of its respective obligations and liabilities under the Credit Agreement and the Security Agreement, as applicable, are reaffirmed, and remain in full force and effect, and (ii) after giving effect to this Amendment, all of its respective obligations and liabilities under the Loan Documents to which it is a party, as such obligations and liabilities have been amended by this Amendment, are reaffirmed, and remain in full force and effect.

(d) Each Loan Party hereby irrevocably and unconditionally ratifies and reaffirms each Lien granted by it to the Administrative Agent for the benefit of the Secured Parties under each of the Loan Documents to which it is a party, which Liens shall continue in full force and effect during the term of the Amended Credit Agreement, and shall continue to secure the Obligations, in each case, on and subject to the terms and conditions set forth in the Amended Credit Agreement, the Amended Security Agreement and the other Loan Documents.

(e) Nothing in this Section 4 shall create or otherwise give rise to any right to consent on the part of the Guarantors to the extent not required by the express terms of the Loan Documents.

SECTION 5 Costs and Expense . Each Borrower hereby reconfirms its obligations pursuant to Section 11.04(a) of the Credit Agreement to pay and reimburse the Administrative Agent for all reasonable costs and expenses (including, without limitation, reasonable fees of counsel) incurred in connection with the negotiation, preparation, execution and delivery of this Amendment and all other documents and instruments delivered in connection herewith.

SECTION 6 No Waiver; Continuing Effect . This Amendment shall be effective only in this specific instance for the specific purpose set forth herein. Except as otherwise expressly provided herein, the Credit Agreement and the other Loan Documents are, and shall continue to be, in full force and effect and are hereby ratified and confirmed in all respects. Without limiting the generality of the foregoing, the Collateral Documents and all of the Collateral described therein shall continue to secure the payment of all Obligations of the Loan Parties, as amended by this Amendment. Except as expressly provided herein, the execution, delivery and effectiveness of this Amendment shall not operate as an amendment or waiver of any right, power or remedy of the Administrative Agent or the Lenders under the Credit Agreement or any other Loan Document, nor constitute a waiver of, or consent to, any Default or Event of Default now existing or hereafter arising under the Credit Agreement or any other Loan Document and the Administrative Agent and the Lenders expressly reserve all of their rights and remedies under the Credit Agreement and the other Loan Documents, under applicable law or otherwise. This Amendment shall constitute a Loan Document.

SECTION 7 . Governing Law; etc. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. The provisions in Sections 11.14(b), 11.14(c) and 11.15 of the Credit Agreement are incorporated herein by reference, mutatis mutandis .

SECTION 8 . Counterparts. This Amendment may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Amendment by telecopy shall be effective as delivery of a manually executed counterpart of this Amendment.

SECTION 9 . Headings . Section headings in this Amendment are included for convenience of reference only and shall not affect the interpretation of this Amendment.

SECTION 10 . Binding Effect; Illegality. This Amendment shall be binding upon and inure to the benefit of the Loan Parties, the Administrative Agent and the Lenders and their respective successors and assigns in accordance

with the terms of the Amended Credit Agreement. The illegality or unenforceability of any provision of this Amendment or any instrument or agreement required hereunder shall not in any way affect or impair the legality or enforceability of the remaining provisions of this Amendment or any instrument or agreement required hereunder.

SECTION 11 . No Novation. Neither this Amendment nor the Amended Credit Agreement shall constitute a novation of the Credit Agreement or any of the Obligations thereunder.

[ Signature Pages Follow ]

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written.

BORROWERS AND GUARANTORS:

WARRIOR MET COAL, INC.

WARRIOR MET COAL GAS, LLC

WARRIOR MET COAL MINING, LLC

WARRIOR MET COAL TRI, LLC

WARRIOR MET COAL BCE, LLC

WARRIOR MET COAL LAND, LLC

WARRIOR MET COAL WV, LLC

WARRIOR MET COAL LA, LLC ,

By: /s/ Dale W. Boyles
Name: Dale W. Boyles
Title: Chief Financial Officer

WARRIOR MET COAL INTERMEDIATE HOLDCO, LLC

By: Warrior Met Coal, Inc., its sole member and manager

By: /s/ Dale W. Boyles

Name: Dale W. Boyles

Title: Chief Financial Officer

[Signature Page to Amendment No. 3 to ABL Credit Agreement]

CITIBANK, N.A. ,
as Administrative Agent, a Lender,

L/C Issuer and Swingline Lender

By: /s/ Allister Chan
    Name: Allister Chan
    Title: Vice President

[Signature Page to Amendment No. 3 to ABL Credit Agreement]

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH ,
as a Lender and L/C Issuer

By: /s/ Robert Hetu
    Name: Robert Hetu
    Title: Authorized Signatory

By: /s/ Lingzi Huang
    Name: Lingzi Huang
    Title: Authorized Signatory

[Signature Page to Amendment No. 3 to ABL Credit Agreement]

MORGAN STANLEY SENIOR FUNDING, INC. ,
as a Lender

By: /s/ Dmitriy Barskiy
    Name: Dmitriy Barskiy
    Title: Vice President

[Signature Page to Amendment No. 3 to ABL Credit Agreement]

ROYAL BANK OF CANADA ,
as a Lender

By: /s/ John Bruzzese
    Name: John Bruzzese
    Title: Attorney in Fact

[Signature Page to Amendment No. 3 to ABL Credit Agreement]

BMO HARRIS BANK, N.A.,

as a Lender

By: /s/ Sarah Yates
    Name: Sarah Yates
    Title: Vice President

[Signature Page to Amendment No. 3 to ABL Credit Agreement]

EXHIBIT 10.2

REGISTRATION RIGHTS AGREEMENT

This REGISTRATION RIGHTS AGREEMENT (this “ Agreement ”), dated as of April 19, 2017, is entered into by and among Warrior Met Coal, Inc., a Delaware corporation (the “ Company ”), the Persons set forth on Schedule A attached hereto, and the other Persons who become signatories hereto following the date hereof (collectively, “ Holders ”).

WHEREAS, the Company has agreed to grant the Holders the registration rights and other rights set forth in this Agreement, as contemplated under Section 10.13 of that certain Amended and Restated Limited Liability Company Agreement of Warrior Met Coal, LLC, dated as of March 31, 2016, in connection with the Company’s initial public offering.

NOW, THEREFORE, in consideration of the premises, mutual covenants and agreements hereinafter contained, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I
DEFINITIONS


SECTION 1.1.	Definitions . In addition to the definitions set forth above, the following terms, as used herein, have the following meanings:

“ Affiliate ” means, with respect to any Person, any Person who, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with such Person, including portfolio companies of such Person. The term “ Affiliated ” shall have a correlative meaning. Notwithstanding the foregoing, a non-discretionary sub-advising relationship shall not confer Affiliate status.

“ Agreement ” shall have the meaning set forth in the introductory paragraph hereof.

“ Business Day ” means any day other than a Saturday, Sunday or a day on which state or federally chartered banking institutions in New York City, New York are not required to be opened.

“ Board of Directors ” means the board of directors of the Company.

“ Commission ” means the United States Securities and Exchange Commission.

“ Common Stock ” means the common stock, par value $0.01 per share, of the Company, and any shares or capital stock for or into which such common stock hereafter is exchanged, converted, reclassified or recapitalized by the Company or pursuant to an agreement to which the Company is a party.

“ Common Stock Equivalents ” means, without duplication, Common Stock and any rights, warrants, options, convertible securities or Indebtedness, exchangeable securities or Indebtedness, or other rights, exercisable for or convertible or exchangeable into, directly or indirectly, Common Stock and securities convertible or exchangeable into Common Stock, whether at the time of issuance or upon the passage of time or the occurrence of some future event.

“ Company Underwriter ” shall have the meaning set forth in SECTION 2.2(b) .

“ Contracting Parties ” shall have meaning set forth in SECTION 3.10 .

“ Demand Registration ” shall have the meaning set forth in SECTION 2.1(a) .

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“ FINRA ” means Financial Industry Regulatory Authority, Inc.

“ Governmental Authority ” means the government of any nation, state, city, locality or other political subdivision thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, and any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing.

“ Holdback Period ” shall have the meaning set forth in SECTION 2.6(a) .

“ Holder ” shall have the meaning set forth in the introductory paragraph hereof, and “ Holders ” means all Holders, collectively.

“ Holders’ Counsel ” shall have meaning set forth in SECTION 2.7(a)(i) .

“ IM Underwriter ” shall have meaning set forth in SECTION 2.1(a) .

“ Incidental Registration ” shall have the meaning set forth in SECTION 2.2(a) .

“ Indemnified Party ” shall have meaning set forth in SECTION 2.11(c) .

“ Indemnifying Party ” shall have meaning set forth in SECTION 2.11(c) .

“ Initiating Holders ” shall have the meaning set forth in SECTION 2.1(a) .

“ Liability ” shall have the meaning set forth in SECTION 2.11(a) .

“ Non-Initiating Holders ” shall have the meaning set forth in SECTION 2.2(a) .

“ Non-party Affiliates ” shall have meaning set forth in SECTION 3.10 .

“ Person ” means any individual, corporation, company, voluntary association, partnership, joint venture, limited liability company, trust, estate, unincorporated organization, Governmental Authority or other entity and shall include any “group” within the meaning of the regulations promulgated by the Commission under Section 13(d) of the Exchange Act

“ Records ” means an Inspector as defined in SECTION 2.7(a).7 .

“ Registrable Securities ” means any Common Stock (including any issuable or issued upon exercise, exchange or conversion of any Common Stock Equivalents) at any time owned, either of record or beneficially, by any Holder and any additional securities that may be issued or distributed or be issuable in respect of any Common Stock by way of conversion, dividend, stock-split, distribution or exchange, merger, consolidation, exchange, recapitalization or

reclassification or similar transactions until a registration statement covering such shares has been declared effective by the Commission and such shares have been disposed of pursuant to such effective registration statement.

“ Registration Expenses ” shall have the meaning set forth in SECTION 2.10 .

“ Rule 144 ” means Rule 144 promulgated under the Securities Act, as amended from time to time, or any similar successor rule thereto that may be promulgated by the Commission.

“ Permitted Transferee ” has the meaning set forth in the Stockholders Agreement.

“ S-3 Non-Initiating Holders ” shall have the meaning set forth in SECTION 2.5(a) .

“ S-3 Registration ” shall have the meaning set forth in SECTION 2.5(a) .

“ Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations promulgated by the Commission thereunder.

“ Subsidiary ” means, with respect to any Person, any other Person, whether incorporated or unincorporated, in which the Company or any one or more of its other Subsidiaries, directly or indirectly, owns or controls: (i) fifty percent (50%) or more of the securities or other ownership interests, including profits, equity or beneficial interests; or (ii) securities or other interests having by their terms ordinary voting power to elect more than fifty percent (50%) of the board of directors or others performing similar functions with respect to such other Person that is not a corporation.

“ Valid Business Reason ” shall have the meaning set forth in SECTION 2.1(a) .

ARTICLE II
REGISTRATION RIGHTS

SECTION 2.1. Demand Registration Right.

(a) Each Holder or group of Holders, which collectively hold an aggregate of at least five percent of the Common Stock (collectively, the “ Initiating Holders ”), may make a written request (specifying the intended method of disposition and the amount of Registrable Securities proposed to be sold) that the Company effect, and the Company shall use its reasonable best efforts to effect, a registration of its Common Stock (a “ Demand Registration ”) of all or any requested portion of the Registrable Securities collectively held by such Holders (subject to SECTION 2.4(a) ). The Company shall not be obligated to effect a Demand Registration if the Registrable Securities requested by the Initiating Holder to be registered have an estimated aggregate public offering price (before deduction of any underwriting discounts and commissions) of less than twenty five million dollars ($25,000,000). If the Board of Directors, in its good faith judgment, determines that any registration of the Registrable Securities should not be made or continued because it would materially interfere with any material financing, acquisition, corporate reorganization or merger or other material transaction involving the Company (a “ Valid Business Reason ”), the Company may (i) postpone filing a Registration Statement relating to a Demand Registration until such Valid Business Reason no longer exists, but in no event for more than one hundred and eighty (180) days, and (ii) in case a Registration Statement has been filed relating to a Demand Registration, if the Valid Business Reason has not resulted from actions taken by the Company, the Company, upon the approval of a majority of the Board of Directors, acting in good faith, may cause such Registration Statement to be withdrawn and its effectiveness terminated; provided , however , that a new Registration Statement is filed within one hundred and eighty (180) days thereafter, or may postpone amending or supplementing such Registration Statement, but in no event for more than one hundred and eighty (180) days; provided , however , that

if the registration of Registrable Securities is postponed pursuant to clause (i), the Company shall not be permitted to register under the Securities Act any Common Stock of the Company owned by other Holders of the Company during any such postponement. The Company shall give written notice of its determination to postpone or withdraw a Registration Statement and of the fact that the Valid Business Reason for such postponement or withdrawal no longer exists, in each case, promptly after the occurrence thereof. Notwithstanding anything to the contrary contained herein, the Company may not postpone or withdraw a filing under this SECTION 2.1 more than once in any twelve (12) month period. For the avoidance of doubt, any postponement or withdrawal of a Registration Statement shall result in the related registration of Registrable Securities not constituting a Demand Registration for purposes of SECTION 2.3 hereof.

(b) The Company shall use its reasonable best efforts to cause such Demand Registration to be in the form of a firm commitment underwritten offering and the managing underwriter or underwriter selected for such offering shall be selected by the Initiating Holders (the “ IM Underwriter ”). In connection with any Demand Registration under this SECTION 2.1 involving an underwritten offering, none of the Registrable Securities held by an Initiating Holder making a request for inclusion of such Registrable Securities shall be included in such underwritten offering unless such Initiating Holder accepts the terms of the offering as agreed upon by the Company and the IM Underwriter, such terms to be in an underwriting agreement in customary form, and then only in such quantity as will not, in the reasonable determination of the Company based on discussions with the IM Underwriter, jeopardize the success of such offering.

SECTION 2.2. Piggyback Registration Right.

(a) Within ten (10) Business Days following receipt by the Company of a request from the Initiating Holders to effect a Demand Registration, the Company shall give written notice of such request to each other Holder (together with its Affiliates) (the “ Non-Initiating Holders ”) which shall describe the anticipated filing date, the proposed registration and plan of distribution, and offer the Non-Initiating Holders the opportunity to register their pro rata share (based on the ownership of the Non-Initiating Holders as compared to the ownership of the Initiating Holders) of Registrable Securities (an “ Incidental Registration ”) in such registration. Following the receipt of such notice, each Non-Initiating Holder shall be entitled, by delivery of a written request to the Company delivered no later than ten (10) Business Days following receipt of notice from the Company, to include all or any portion of their Registrable Securities in such Demand Registration (subject to SECTION 2.4(a) ). The right of each Non-Initiating Holder to have Registrable Securities included in a Demand Registration pursuant to this SECTION 2.2(a) shall be conditioned upon each Non-Initiating Holder entering into (together with the Initiating Holders) an underwriting agreement in customary form with the IM Underwriter. Subject to SECTION 2.4 , the Company shall use its reasonable best efforts (within ten (10) Business Days of the notice provided for above) to cause the IM Underwriter to permit the Non-Initiating Holders to participate in the Incidental Registration to include its Registrable Securities in such offering on the same terms and conditions as the Registrable Securities being sold for the account of the Initiating Holders.

(b) In connection with an offering by the Company for its own account or for the benefit of any Holder (other than a registration statement on Form S-4 or S-8 or any successor thereto), the Company shall give written notice to all of the Holders at least twenty (20) Business Days prior to the proposed offering. Following the receipt of such notice, each Holder (together with its Affiliates) shall be entitled, by delivery of a written request to the Company delivered no later than ten (10) days following receipt of notice from the Company, to include all or any portion of its Registrable Securities in such offering (subject to SECTION 2.4(b) ). The right of each Holder to have Registrable Securities included in an offering pursuant to this SECTION 2.2(b) shall be conditioned (if an underwritten offering) upon each Holder entering into (together with the Company) an underwriting agreement in customary form with the managing underwriter or underwriters selected for such underwriting by the Company (the “ Company Underwriter ”).

Subject to SECTION 2.4 , the Company shall use its reasonable best efforts (within ten (10) Business Days of the notice provided for above) to cause the Company Underwriter to permit the Holders to participate in a registration pursuant to this SECTION 2.2(b) to include their Registrable Securities in such offering on the same terms and conditions as the Registrable Securities being sold for the account of the Company or any other Holder.

SECTION 2.3. Effective Demand Registration . The Company shall use its reasonable commercial efforts to cause any Demand Registration to become effective not later than one hundred and twenty (120) days after it receives a request under SECTION 2.1(a) hereof and to remain effective for the lesser of (i) the period during which all Common Stock registered in the Demand Registration are sold and (ii) one hundred and twenty (120) days, provided , however , that a registration shall not constitute a Demand Registration if (x) after such Demand Registration has become effective, such registration or the related offer, sale or distribution of Registrable Securities thereunder is interfered with by any stop order, injunction or other order or requirement of the Commission or other Governmental Authority for any reason not solely attributable to the Initiating Holder and such interference is not thereafter eliminated or (y) the conditions specified in the underwriting agreement, if any, entered into in connection with such Demand Registration are not satisfied or waived, other than by reason of a failure by the Initiating Holder. Subject to the exceptions described in SECTION 2.1 and this SECTION 2.3 , the Company shall only be obligated to effect an aggregate of four (4) Demand Registrations under this Agreement and shall not be required to effect more than one (1) Demand Registration in any three month period.

SECTION 2.4. Cutback.

(a) If the Company shall reasonably determine (after consultation with the IM Underwriter) that the amount of Registrable Securities requested to be included in such Demand Registration exceeds the amount which can be sold in such offering without adversely affecting the distribution of the Registrable Securities being offered, then the Company will reduce the Registrable Securities to be included in such offering pro rata based on the number of Registrable Securities owned by each such Initiating Holder and Non-Initiating Holder.

(b) If the Company reasonably determines (after consultation with the relevant underwriter) that the amount of Registrable Securities requested to be included in an underwritten offering contemplated by SECTION 2.2(b) exceeds the amount which can be sold in such offering without adversely affecting the distribution of the Registrable Securities being offered, then the Company will reduce the Registrable Securities to be included in such offering by (i) first only including the Registrable Securities (or portion thereof) being sold for the account of the Company that the Company so determines can be included and (ii) second, to the extent that all Registrable Securities being sold for the account of the Company can be included, then only including the total number of Registrable Securities of the Holders in such offering as the Company so determines can be included (in addition to all such Registrable Securities being sold for the account of the Company) with each such Holder entitled to include its pro rata share based on the number of Registrable Securities owned and proposed to be included by such Holder.

SECTION 2.5. Form S-3 Registration.

(a) S-3 Registration . Upon the Company becoming eligible for use of Form S-3 (or any successor form thereto) under the Securities Act in connection with a public offering of its Common Stock, in the event that the Company shall receive from any Holder (together with its Affiliates) (the “ S-3 Initiating Holder ”) a written request that the Company register, under the Securities Act on Form S-3 (or any successor form then in effect) (an “ S-3 Registration ”), all or a portion of the Common Stock owned by such S-3 Initiating Holder, the Company shall give written notice of such request to all of the other Holders (other than S-3 Initiating Holder) at least twenty (20) Business Days before the anticipated filing date of such Form S-3, and such notice shall describe the proposed registration and offer such other Holders the opportunity to register the number of shares of Common Stock as each other Holder may

request in writing to Company, given within ten (10) Business Days after their receipt from the Company of the written notice of such registration. If requested by the S-3 Initiating Holder, such S-3 Registration shall be for an offering on a continuous basis pursuant to Rule 415 under the Securities Act. The Company shall use its reasonable best efforts to (x) cause such registration pursuant to this SECTION 2.5(a) to become and remain effective as soon as practicable, but in any event not later than forty-five (45) days after it receives a request therefor and (y) include in such offering the Common Stock of the other Holders (other than S-3 Initiating Holder) (the “ S-3 Non-Initiating Holders ”) who have requested in writing to participate in such S-3 Registration on the same terms and conditions as the Stock of the S-3 Initiating Holder.

(b) Delay of S-3 Registration . If the Board of Directors has a Valid Business Reason, the Company may (x) postpone filing a Registration Statement relating to a S-3 Registration until such Valid Business Reason no longer exists, but in no event for more than ninety (90) days, and (y) in case a Registration Statement has been filed relating to a S-3 Registration, if the Valid Business Reason has not resulted from actions taken by the Company, the Company, upon the approval of a majority of the Board of Directors acting in good faith, may cause such Registration Statement to be withdrawn and its effectiveness terminated or may postpone amending or supplementing such Registration Statement. The Company shall give written notice to the Holders of its determination to postpone or withdraw a Registration Statement and of the fact that the Valid Business Reason for such postponement or withdrawal no longer exists, in each case, promptly after the occurrence thereof. Notwithstanding anything to the contrary contained herein, the Company may not postpone or withdraw a filing due to a Valid Business Reason more than once in any twelve (12) month period. The Company shall not be required to effect any registration pursuant to SECTION 2.5 , (i) within ninety (90) days after the effective date of any other Registration Statement of the Company, (ii) if Form S-3 is not available for such offering by the S-3 Initiating Holder or (iii) if the Registrable Securities requested by the S-3 Initiating Holder to be registered have an estimated aggregate public offering price of less than ten million dollars ($10,000,000).

SECTION 2.6. Holdback Agreements .

(a) To the extent not inconsistent with applicable law and requested by the underwriters, in the case of an underwritten public offering by the Company or by the Holders pursuant to this Agreement, each Holder agrees not to effect any public sale or distribution of any Registrable Securities or of any securities convertible into or exchangeable or exercisable for such Registrable Securities, including a sale pursuant to Rule 144 under the Securities Act, or offer to sell, contract to sell (including any short sale), grant any option to purchase or enter into any hedging or similar transaction with the same economic effect as a sale of Registrable Securities, in each case, during the ninety (90) day period (or such lesser period as the underwriter may agree) beginning on the effective date of the registration statement (except as part of such registration) for such public offering (such period of time, the “ Holdback Period ”); provided , however , that the Holdback Period shall be the same with respect to all Holders.

(b) The Company agrees not to effect any public sale or distribution of any of its securities, or any securities convertible into or exchangeable or exercisable for such securities (except pursuant to registrations on Form S-4 or S-8 or any successor thereto), during the period beginning on the effective date of any Registration Statement filed pursuant to SECTION 2.1 in which the Holders are participating and ending on the earlier of (i) the date on which all Registrable Securities on such registration statement are sold and (ii) one hundred and eighty (180) days (or such lesser period as the underwriter may agree) after the effective date of such registration statement (except as part of such registration).

SECTION 2.7. Registration Procedures.

(a) Whenever registration of Registrable Securities has been requested pursuant to SECTION 2.1 , SECTION 2.2 or SECTION 2.5 , the Company shall use its reasonable best efforts to effect the registration and sale of such Registrable Securities in accordance with the intended method of distribution thereof as quickly as practicable, and in connection with any such request, the Company shall, as expeditiously as possible (as used in this SECTION 2.7 , the term Registrable Securities shall also include Common Stock):

(i) prepare and file with the Commission a Registration Statement on any form for which the Company then qualifies or which counsel for the Company shall deem appropriate and which form shall be available for the sale of such Registrable Securities in accordance with the intended method of distribution thereof, and cause such Registration Statement to become effective; provided , however , that (x) before filing a Registration Statement or prospectus or any amendments or supplements thereto, the Company shall provide one legal counsel selected by holders of a majority of the Registrable Securities to be included in such Registration Statement (“ Holders’ Counsel ”) with an adequate and appropriate opportunity to review and comment on such Registration Statement and each prospectus included therein (and each amendment or supplement thereto) to be filed with the Commission, subject to such documents being under the Company’s control, and (y) the Company shall promptly notify the Holders’ Counsel and each seller of Registrable Securities of any stop order issued or threatened by the Commission and promptly take all action required to prevent the entry of such stop order or to remove it if entered;

(ii) prepare and file with the Commission such amendments and supplements to such Registration Statement and the prospectus used in connection therewith as may be necessary to keep such Registration Statement effective for the lesser of (x) one hundred and twenty (120) days and (y) such shorter period which will terminate when all Registrable Securities covered by such Registration Statement have been sold; provided , however , that if the S-3 Initiating Holder has requested that an S-3 Registration be for an offering on a continuous basis pursuant to Rule 415 under the Securities Act, then the Company shall keep such Registration Statement effective until all Registrable Securities covered by such Registration Statement have been sold; and shall comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such Registration Statement during such period in accordance with the intended methods of disposition by the sellers thereof set forth in such Registration Statement;

(iii) furnish to each seller of Registrable Securities, prior to filing a Registration Statement, a reasonable number of copies of such Registration Statement as is proposed to be filed, and thereafter such number of copies of such Registration Statement, each amendment and supplement thereto (in each case, including all exhibits thereto), and the prospectus included in such Registration Statement (including each preliminary prospectus) and any prospectus filed under Rule 424 under the Securities Act as each such seller may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such seller;

(iv) register or qualify such Registrable Securities under such other securities or “blue sky” laws of such jurisdictions as any seller of Registrable Securities may request, and to continue such qualification in effect in such jurisdiction for as long as permissible pursuant to the laws of such jurisdiction, or for as long as any such seller requests or until all of such Registrable Securities are sold, whichever is shortest, and do any and all other acts and things which may be reasonably necessary or advisable to enable any such seller to consummate the disposition in such jurisdictions of the Registrable Securities owned by such seller; provided , however , that the Company shall not be

required to (x) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this SECTION 2.7(a)(iv) , (y) subject itself to taxation in any such jurisdiction or (z) consent to general service of process in any such jurisdiction;

(v) notify each seller of Registrable Securities at any time when a prospectus relating thereto is required to be delivered under the Securities Act, upon discovery that, or upon the happening of any event as a result of which, the prospectus included in such Registration Statement contains an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading and the Company shall promptly prepare a supplement or amendment to such prospectus and furnish to each seller of Registrable Securities a reasonable number of copies of such supplement to or an amendment of such prospectus as may be necessary so that, after delivery to the purchasers of such Registrable Securities, such prospectus shall not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;

(vi) enter into and perform customary agreements (including an underwriting agreement in customary form with the Company Underwriter) and take such other actions as are prudent and reasonably required in order to expedite or facilitate the disposition of such Registrable Securities, including causing its officers to participate in “road shows” and other information meetings organized by the IM Underwriter or the Company Underwriter;

(vii) upon execution of confidentiality agreements in form and substance reasonably satisfactory to the Company, which shall be consistent with the due diligence and disclosure obligations under securities laws applicable to the Company and the Holders, make available at reasonable times for inspection by any managing underwriter participating in any disposition of such Registrable Securities pursuant to a Registration Statement, Holders’ Counsel and any attorney, accountant or other agent retained by any managing underwriter, all financial and other records, pertinent corporate documents and properties of the Company and its Subsidiaries (collectively, the “ Records ”) as shall be reasonably necessary to enable them to exercise their due diligence responsibility, and cause the Company’s and its Subsidiaries’ officers, directors and employees, and the independent public accountants of the Company, to supply all information reasonably requested by any such Person in connection with such Registration Statement;

(viii) if such sale is pursuant to an underwritten offering, obtain “cold comfort” letters dated the effective date of the Registration Statement and the date of the closing under the underwriting agreement from the Company’s independent public accountants in customary form and covering such matters of the type customarily covered by “cold comfort” letters as Holders’ Counsel or the managing underwriter reasonably requests;

(ix) furnish, at the request of any seller of Registrable Securities on the date such securities are delivered to the underwriters for sale pursuant to such registration or, if such securities are not being sold through underwriters, on the date the Registration Statement with respect to such securities becomes effective, an opinion, dated such date, of counsel representing the Company for the purposes of such registration, addressed to the underwriters, if any, and to the seller making such request, covering such legal matters with respect to the registration in respect of which such opinion is being given as the underwriters, if any, and such seller may reasonably request and are customarily included in such opinions;

(x) comply with all applicable rules and regulations of the Commission, and make generally available to its security holders, as soon as reasonably practicable but no later than fifteen (15) months after the effective date of the Registration Statement, an earnings statement covering a period of twelve (12) months beginning after the effective date of the Registration Statement, in a manner which satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder;

(xi) cause all such Registrable Securities to be listed on each securities exchange on which similar securities issued by the Company are then listed provided that the applicable listing requirements are satisfied;

(xii) keep Holders’ Counsel advised as to the initiation and progress of any registration under SECTION 2.1 , SECTION 2.2 or SECTION 2.5 hereunder;

(xiii) cooperate with each seller of Registrable Securities and each underwriter participating in the disposition of such Registrable Securities and their respective counsel in connection with any filings required to be made with the FINRA; and

(xiv) take all other steps reasonably necessary to effect the registration of the Registrable Securities contemplated hereby.

SECTION 2.8. Seller Information . The Company may require each seller of Registrable Securities as to which any registration is being effected to furnish, and such seller shall furnish, to the Company such information regarding the distribution of such securities as the Company may from time to time reasonably request in writing, as a condition to including such Registrable Securities in such Registration Statement.

SECTION 2.9. Notice to Discontinue . Each Holder agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in SECTION 2.7(a)(v) , such Holder shall forthwith discontinue disposition of Registrable Securities pursuant to the Registration Statement covering such Registrable Securities until such Holders’ receipt of the copies of the supplemented or amended prospectus contemplated by SECTION 2.7(a)(v) and, if so directed by the Company, such Holder shall deliver to the Company (at the Company’s expense) all copies, other than permanent file copies then in such Holders’ possession, of the prospectus covering such Registrable Securities which is current at the time of receipt of such notice. If the Company shall give any such notice, the Company shall extend the period during which such Registration Statement shall be maintained effective pursuant to this Agreement (including the period referred to in SECTION 2.7(a)(ii) ) by the number of days during the period from and including the date of the giving of such notice pursuant to SECTION 2.7(a)(v) to and including the date when sellers of such Registrable Securities under such Registration Statement shall have received the copies of the supplemented or amended prospectus contemplated by and meeting the requirements of SECTION 2.7(a)(v) .

SECTION 2.10. Registration Expenses . The Company shall pay all expenses arising from or incident to its performance of, or compliance with, this Agreement, including (i) Commission, stock exchange and FINRA registration and filing fees, (ii) all fees and expenses incurred in complying with securities or “blue sky” laws (including reasonable fees, charges and disbursements of counsel to any underwriter incurred in connection with “blue sky” qualifications of the Registrable Securities as may be set forth in any underwriting agreement), (iii) all printing, messenger and delivery expenses, (iv) the fees, charges and expenses of counsel to the Company and of its independent public accountants and any other accounting fees, charges and expenses incurred by the Company (including any expenses arising from any “cold comfort” letters or any special audits incident to or required by any registration or qualification) and, in an amount not exceeding fifty thousand dollars ($50,000) in the case of a registration on Form S-3 and two hundred fifty thousand dollars ($250,000) in the case of any other registration, the reasonable legal fees, charges and expenses of a single

counsel to the Holders incurred by such Holders participating in any registration as a group, and (v) any liability insurance or other premiums for insurance obtained in connection with any Demand Registration or piggy-back registration thereon, Incidental Registration or S-3 Registration pursuant to the terms of this Agreement, regardless of whether such Registration Statement is declared effective. All of the expenses described in the preceding sentence of this SECTION 2.10 are referred to herein as “ Registration Expenses ”. The holder of Registrable Securities sold pursuant to a Registration Statement shall bear the expense of any broker’s commission or underwriter’s discount or commission relating to registration and sale of such Holders’ Registrable Securities and, subject to clause (iv) above, shall bear the fees and expenses of their own counsel.

SECTION 2.11. Indemnification; Contribution.

(a) Indemnification by the Company . The Company shall indemnify and hold harmless each Holder, its partners, directors, officers, Affiliates and each Person who controls (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) the Holder from and against any and all claims, liabilities, damages, losses, costs and expenses (including amounts paid in satisfaction of judgments, in compromises and settlements, as fines and penalties and legal or other costs and reasonable expenses of investigating or defending against any claim or alleged claim) (each, a “ Liability ” and collectively, “ Liabilities ”), arising out of or based upon any untrue, or allegedly untrue, statement of a material fact contained in any Registration Statement, prospectus or preliminary prospectus (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto) or arising out of or based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading (or in the case of any prospectus, in light of the circumstances such statements were made), except insofar as such Liability arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission contained in such Registration Statement, preliminary prospectus or final prospectus in reliance and in conformity with information concerning any Holder furnished in writing to the Company by such Holder expressly for use therein, including the information furnished to the Company pursuant to SECTION 2.11(b) . The Company shall also provide customary indemnities to any underwriters of the Registrable Securities, their officers, directors and employees and each Person who controls such underwriters (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) to the same extent as provided above with respect to the indemnification of the Holders.

(b) Indemnification by the Holders . In connection with any Registration Statement in which any Holder is participating pursuant to SECTION 2.1 , SECTION 2.2 or SECTION 2.5 hereof, each Holder shall promptly furnish to the Company in writing such information with respect to such Holder as the Company may reasonably request or as may be required by law for use in connection with any such Registration Statement or prospectus and all information required to be disclosed in order to make the information previously furnished to the Company by such Holder not materially misleading or necessary to cause such Registration Statement not to omit a material fact with respect to such Holder necessary in order to make the statements therein not misleading. Each Holder agrees to indemnify and hold harmless the Company, its partners, directors, officers, Affiliates, any underwriter retained by the Company and each Person who controls the Company or such underwriter (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) from and against any and all Liabilities arising out of or based upon any untrue, or allegedly untrue, statement of a material fact contained in any Registration Statement, prospectus or preliminary prospectus (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto) or arising out of or based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading (or in the case of any prospectus, in light of the circumstances such statements were made), but if and only to the extent that such Liability arises out of or is based upon any untrue statement or alleged omission or alleged untrue statement or omission contained in such Registration Statement, preliminary prospectus or final prospectus in reliance and in conformity with information

concerning such Holder furnished in writing by such Holder expressly for use therein, provided , however , that the total amount to be indemnified by each Holder pursuant to this SECTION 2.11(b) shall be limited to such Holders’ pro rata portion of the net proceeds (after deducting the underwriters’ discounts and commissions) received by such Holder in the offering to which the Registration Statement or prospectus relates.

(c) Conduct of Indemnification Proceedings . Any Person entitled to indemnification under this SECTION 2.11 (the “ Indemnified Party ”) agrees to give prompt written notice to the indemnifying party (the “ Indemnifying Party ”) after the receipt by the Indemnified Party of any written notice of the commencement of any action, suit, proceeding or investigation or threat thereof made in writing for which the Indemnified Party intends to claim indemnification or contribution pursuant to this Agreement; provided , however , that the failure so to notify the Indemnifying Party shall not relieve the Indemnifying Party of any Liability that it may have to the Indemnified Party hereunder (except to the extent that the Indemnifying Party is prejudiced or otherwise forfeits substantive rights or defenses by reason of such failure). If notice of commencement of any such action is given to the Indemnifying Party as above provided, the Indemnifying Party shall be entitled to participate in and, to the extent it may wish, jointly with any other Indemnifying Party similarly notified, to assume the defense of such action at its own expense, with counsel chosen by it and reasonably satisfactory to such Indemnified Party. The Indemnified Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be paid by the Indemnified Party unless (i) the Indemnifying Party agrees to pay the same, (ii) the Indemnifying Party fails to assume the defense of such action with counsel reasonably satisfactory to the Indemnified Party or (iii) the named parties to any such action (including any impleaded parties) include both the Indemnifying Party and the Indemnified Party and the Indemnified Party has been advised by such counsel that either (x) representation of such Indemnified Party and the Indemnifying Party by the same counsel would be inappropriate under applicable standards of professional conduct or (y) there may be one or more legal defenses available to the Indemnified Party which are different from or additional to those available to the Indemnifying Party. In any of such cases, the Indemnifying Party shall not have the right to assume the defense of such action on behalf of such Indemnified Party, it being understood, however, that the Indemnifying Party shall not be liable for the fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) for all Indemnified Parties. No Indemnifying Party shall be liable for any settlement entered into without its written consent (such consent not to be unreasonably withheld or delayed). No Indemnifying Party shall, without the consent of such Indemnified Party, effect any settlement of any pending or threatened proceeding in respect of which such Indemnified Party is a party and indemnity has been sought hereunder by such Indemnified Party, unless such settlement includes an unconditional release of such Indemnified Party from all liability for claims that are the subject matter of such proceeding.

(d) Contribution . If the indemnification provided for in this SECTION 2.11 from the Indemnifying Party is held by a court of competent jurisdiction to be unavailable to an Indemnified Party hereunder in respect of any Liabilities referred to herein, then the Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Liabilities in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party on the one hand and Indemnified Party on the other in connection with the statements or omissions which resulted in such Liabilities, as well as other relevant equitable considerations. The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by such Indemnifying Party or Indemnified Party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid or payable by a party as a result of the Liabilities referred to above shall be deemed to include, subject to the limitations set forth in SECTION 2.11(a) , SECTION 2.11(b) and SECTION 2.11(c) , any legal or other fees, charges or expenses reasonably incurred by such party in connection with any investigation

or proceeding; provided , however , that the total amount to be contributed by any Holder shall be limited to the net proceeds (after deducting the underwriters’ discounts and commissions) received by the Holder in the offering.

(e) Fraud . The parties hereto agree that it would not be just and equitable if contribution pursuant to SECTION 2.11(d) were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.

ARTICLE III
MISCELLANEOUS

SECTION 3.1.

Specific Performance . The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement are not performed in accordance with their specific terms or are otherwise breached, including if the parties hereto fail to take any action required of them hereunder to consummate this Agreement. It is accordingly agreed that, in addition to any other applicable remedies at law or equity, the parties and the third party beneficiaries of this Agreement shall be entitled to an injunction or injunctions, without proof of damages, to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement. Each party hereto agrees that it will not oppose the granting of an injunction, specific performance or other equitable relief on the basis that (i) the other party has an adequate remedy at law or (ii) an award of specific performance is not an appropriate remedy for any reason at law or in equity. Each of the parties hereto hereby waives (x) any defenses in any action for specific performance, including the defense that a remedy at law would be adequate and (y) any requirement under any law to post a bond or other security as a prerequisite to obtaining equitable relief.

SECTION 3.2.

Term . In the event that a given Holder ceases to “beneficially own” (as such term is defined under the Exchange act) one percent (1%) or more of the outstanding Common Stock, all of such Holder’s rights and obligations under this Agreement shall expire and such Holder will cease to be a “Holder” for all purposes hereunder without any further action of the Company or any other party hereto.


SECTION 3.3.	Amendments and Waivers .

(a) No failure or delay on the part of the Company or any Holder in exercising any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy. The remedies provided for herein are cumulative and are not exclusive of any remedies that may be available to the Company or any Holder at law or in equity or otherwise.

(b) The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, in each case without the written consent of the Company and the Holders of a majority of the Registrable Securities; provided, that any amendment that has the effect of adversely affecting any Holder or group of Holders differently than any other Holder or group of Holders shall only be effective against such Holder(s) with the written consent of such Holder(s).


SECTION 3.4.	Notices . Any notices or other communications required or permitted hereunder shall be in writing, and shall be sufficiently given if made by hand delivery, by facsimile or registered or

certified mail, postage prepaid, return receipt requested, addressed as follows (or at such other address as may be substituted by notice given as herein provided):

If to the Company:

Warrior Met Coal, Inc.
Attn: Dale W. Boyles
Address: 16243 Highway 216 Brookwood, AL 35444 Telephone No.: (205) 554-6150 Facsimile No.: (205) 554-6011

with copies (which shall not constitute notice) to:

Akin Gump Stauss Hauer & Feld LLP

Attn: James Savin

Daniel I. Fisher

Address: 1333 New Hampshire Avenue, NW

Washington, DC 20036

Telephone: (202) 887-4417

(202) 887-4121

Facsimile No: (202) 887-4288

If to any Holder, at its address and the address of its representative, if any, as provided to the Company by such Holder or otherwise listed in the books of the Company.

Any notice or communication hereunder shall be deemed to have been given or made as of the date so delivered if personally delivered; when answered back, if telexed; when receipt is acknowledged, if telecopied; and on receipt if sent by registered or certified mail.

Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders.

SECTION 3.5.

Successors and Assigns . The rights and obligations of the Holders under this Agreement shall not be assignable by any Holder to any Person that is not a Holder; provided , that in the event of a valid transfer of Registrable Securities by a Holder, the rights and obligations of the transferor under this Agreement (solely with respect to the Registrable Securities so transferred) shall be transferred to the transferee, subject to such transferee executing a joinder to this Agreement; provided , for the avoidance of doubt, that the transferor in such transaction shall retain its rights and obligations under this Agreement with respect to any Registrable Securities not so transferred. This Agreement shall be binding upon the parties hereto and their respective successors, assigns and transferees.

SECTION 3.6.

Counterparts . This Agreement may be executed in any number of counterparts, each of which will be deemed to be an original copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement. This Agreement and any signed agreement entered into in connection herewith or contemplated hereby, and any amendments hereto or thereto, to the extent signed and delivered by facsimile, by electronic mail in “portable document

format” (“.pdf”) form, or any other electronic transmission, shall be treated in all manner and respects as an original contract and shall be considered to have the same binding legal effects as if it were the original signed version thereof delivered in person.

SECTION 3.7.

Governing Law: Venue: Jurisdiction . THIS AGREEMENT AND ALL CLAIMS OR CAUSES OF ACTION (WHETHER IN CONTRACT OR TORT) THAT MAY BE BASED UPON, ARISE OUT OF OR RELATE TO THIS AGREEMENT OR THE NEGOTIATION, EXECUTION OR PERFORMANCE OF THIS AGREEMENT (INCLUDING ANY CLAIM OR CAUSE OF ACTION BASED UPON, ARISING OUT OF OR RELATED TO ANY REPRESENTATION OR WARRANTY MADE IN OR IN CONNECTION WITH THIS AGREEMENT) SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. Each party hereby agrees that any action based upon, arising out of or relating to this Agreement (including any action concerning the violation or threatened violation of this Agreement) shall be heard and determined in any state or federal court sitting in the Court of Chancery of the State of Delaware (or, if the Chancery Court of the State of Delaware declines to accept jurisdiction over a particular matter, in the United States District Court for the District of Delaware), and the parties hereto hereby irrevocably submit to the exclusive jurisdiction of such courts (and, in the case of appeals, appropriate appellate courts therefrom) in any such action or proceeding and irrevocably waive the defense of an inconvenient forum to the maintenance of any such action or proceeding. In addition, each party consents to process being served in any such lawsuit, action or proceeding by mailing, certified mail, return receipt requested, a copy thereof to such party at the address in effect for notices hereunder, and agrees that such services shall constitute good and sufficient service of process and notice thereof. The consents to jurisdiction set forth in this paragraph shall not constitute general consents to service of process in the State of Delaware and shall have no effect for any purpose except as provided in this SECTION 3.7 and shall not be deemed to confer rights on any Person other than the parties hereto. Nothing in this SECTION 3.7 shall affect or limit any right to serve process in any other manner permitted by law.

SECTION 3.8.

WAIVER OF JURY TRIAL. EACH PARTY HEREBY WAIVES ITS RESPECTIVE RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT WHETHER BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. EACH PARTY RECOGNIZES AND AGREES THAT THE FOREGOING WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS AGREEMENT. EACH PARTY REPRESENTS AND WARRANTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

SECTION 3.9.

Severability . Any provision of this Agreement which is prohibited, unenforceable or not authorized in any jurisdiction is, as to such jurisdiction, ineffective to the extent of any such prohibition, unenforceability or nonauthorization without invalidating the remaining provisions hereof, or affecting the validity, enforceability or legality of such provision in any other jurisdiction, unless the ineffectiveness of such provision would result in such a material change as to cause

completion of the transactions contemplated hereby to be unreasonable. Upon a determination that any provision of this Agreement is prohibited, unenforceable or not authorized, the parties hereto agree to negotiate in good faith to modify this Agreement so as to effect the original intent of the parties hereto as closely as possible, in a mutually acceptable manner, in order that the transactions contemplated hereby are consummated as originally contemplated to the fullest extent possible.

SECTION 3.10.

Non-Recourse . All claims, obligations, liabilities, or causes of action (whether in contract or in tort, in law or in equity, or granted by statute) that may be based upon, in respect of, arise under, out or by reason of, be connected with, or relate in any manner to this Agreement, or the negotiation, execution, or performance of this Agreement (including any representation or warranty made in, in connection with, or as an inducement to, this Agreement), may be made only against (and are expressly limited to) the entities that are expressly identified as parties in the preamble to this Agreement (“ Contracting Parties ”). No Person who is not a Contracting Party, including without limitation any director, officer, employee, incorporator, member, partner, manager, stockholder, Affiliate, agent, attorney, or representative of, and any financial advisor or lender to, any Contracting Party, or any director, officer, employee, incorporator, member, partner, manager, stockholder, Affiliate, agent, attorney, or representative of, and any financial advisor or lender to, any of the foregoing (“ Non-party Affiliates ”), shall have any liability (whether in contract or in tort, in law or in equity, or granted by statute) for any claims, causes of action, obligations, or liabilities arising under, out of, in connection with, or related in any manner to this Agreement or based on, in respect of, or by reason of this Agreement or its negotiation, execution, performance, or breach; and, to the maximum extent permitted by law, each Contracting Party hereby waives and releases all such liabilities, claims, causes of action, and obligations against any such Non-party Affiliates.

SECTION 3.11.

Recapitalization, Exchanges Etc., Affecting Securities . The provisions of this Agreement shall apply, to the full extent set forth herein with respect to the Registrable Securities and to any and all Common Stock of the Company or any successor or assign of the Company (whether by merger, consolidation, sale of assets or otherwise, including shares issued by a parent company in connection with a triangular merger) which may be issued in respect of, in exchange for, or in substitution of Registrable Securities, appropriately adjusted for any stock dividends, splits, reverse splits, combinations, reclassifications and the like occurring after the date hereof.


SECTION 3.12.	Entire Agreement . This Agreement (including all schedules and exhibits hereto) contains the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral or written, with respect to such matters.


SECTION 3.13.	Aggregation of Common Stock . All Registrable Securities held by a Holder, its Affiliates and its other Permitted Transferees shall be aggregated together for purposes of determining the availability of any rights under this Agreement.


SECTION 3.14.	Headings . The section headings of this Agreement are for convenience of reference only and shall not, for any purpose, be deemed to be part of this Agreement or otherwise affect the interpretation of this Agreement.


SECTION 3.15.	No Third Party Beneficiaries . Except as provided in SECTION 3.5 , nothing express or implied herein is intended or shall be construed to confer upon any person or entity, other than the parties hereto and their respective successors and assigns and all Indemnified Parties, any rights, remedies or other benefits under or by reason of this Agreement.

* * * * * * * * * *

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.

COMPANY

WARRIOR MET COAL, INC.

By: /s/ Dale W. Boyles

Name: Dale W. Boyles

Title: Chief Financial Officer

AESI (HOLDINGS) II, L.P.


By:	Apollo European Strategic Management, L.P., its investment manager


By:	Apollo European Strategic Management GP, LLC, its general partner

By: /s/ Joseph D. Glatt

Name: Joseph D. Glatt

Title: Vice President

Date: April 19, 2017

APOLLO CENTRE STREET PARTNERSHIP, L.P.

By: Apollo Centre Street Management, LLC, its investment manager

By: /s/ Joseph D. Glatt

Name: Joseph D. Glatt

Title: Vice President

Date: April 19, 2017

APOLLO CREDIT MASTER FUND LTD.

By: Apollo ST Fund Management LLC, its investment manager

By: /s/ Joseph D. Glatt

Name: Joseph D. Glatt

Title: Vice President

Date: April 19, 2017

APOLLO CREDIT OPPORTUNITY FUND III AIV I LP


By:	Apollo Credit Opportunity Management III LLC, its investment manager

By: /s/ Joseph D. Glatt

Name: Joseph D. Glatt

Title: Vice President

Date: April 19, 2017

APOLLO CREDIT STRATEGIES MASTER FUND LTD.

By: Apollo ST Fund Management LLC,
its investment manager

By: /s/ Joseph D. Glatt

Name: Joseph D. Glatt

Title: Vice President

Date: April 19, 2017

APOLLO FRANKLIN PARTNERSHIP, L.P.

By: Apollo Franklin Management, LLC,
its investment manager

By: /s/ Joseph D. Glatt

Name: Joseph D. Glatt

Title: Vice President

Date: April 19, 2017

APOLLO LINCOLN PRIVATE CREDIT FUND, L.P.


By:	Apollo Lincoln Private Credit Management, LLC, its investment manager

By: /s/ Joseph D. Glatt

Name: Joseph D. Glatt

Title: Vice President

Date: April 19, 2017

APOLLO SPECIAL OPPORTUNITIES MANAGED ACCOUNT, L.P.

By: Apollo SVF Management, L.P., its investment manager

By: Apollo SVF Management GP, LLC, its general partner

By: /s/ Joseph D. Glatt

Name: Joseph D. Glatt

Title: Vice President

Date: April 19, 2017

APOLLO SPN INVESTMENTS I (CREDIT), LLC

By: /s/ Joseph D. Glatt

Name: Joseph D. Glatt

Title: Vice President

Date: April 19, 2017

APOLLO VALUE INVESTMENT MASTER FUND, L.P.

By: Apollo Value Management, L.P., its investment manager

By: Apollo Value Management GP, LLC, its general partner

By: /s/ Joseph D. Glatt

Name: Joseph D. Glatt

Title: Vice President

Date: April 19, 2017

SKSI REAL PROPERTY HOLDINGS LTD.

By: Apollo SK Strategic Investments, L.P., its sole shareholder

By: Apollo SK Strategic Management, LLC, its investment manager

By: /s/ Joseph D. Glatt

Name: Joseph D. Glatt

Title: Vice President

Date: April 19, 2017

ZEUS INVESTMENTS, L.P.

By: Apollo Zeus Strategic Advisors, L.P., its general partner

By: Apollo Zeus Strategic Advisors, LLC, its general partner

By: /s/ Joseph D. Glatt

Name: Joseph D. Glatt

Title: Vice President

Date: April 19, 2017

VULCAN HOLDINGS, L.P.

Partner A:

By: Apollo Advisors VIII, L.P., its general partner

By: Apollo Capital Management VIII, LLC, its general partner

By: /s/ Laurie D. Medley

Name: Laurie D. Medley
Title: Vice President

Partner B :

By: Apollo ANRP Advisors, L.P., its general partner

By: Apollo ANRP Capital Management, LLC, its general partner

By: /s/ Laurie D. Medley

Name: Laurie D. Medley
Title: Vice President

Date: April 19, 2017

CASPIAN BD LTD.

By: /s/ Adele Kittredge Murray

Name: Adele Kittredge Murray

Title: Authorized Signatory

Date: 4/18/17

CASPIAN BD 2 LTD.

By: /s/ Adele Kittredge Murray

Name: Adele Kittredge Murray

Title: Authorized Signatory

Date: 4/18/17

CASPIAN SC HOLDINGS, L.P.

By: /s/ Adele Kittredge Murray

Name: Adele Kittredge Murray

Title: Authorized Signatory

Date: 4/18/17

CASPIAN SOLITUDE MASTER FUND, L.P.

By: /s/ Adele Kittredge Murray

Name: Adele Kittredge Murray

Title: Authorized Signatory

Date: 4/18/17

FS GLOBAL CREDIT OPPORTUNITIES FUND

By: GSO Capital Partners LP as Sub-Advisor

By: /s/ Marisa J. Beeney
Name: Marisa J. Beeney

Title: Authorized Signatory

Date: April 19, 2017

GSO ADGM LOCOMOTIVE BLOCKER LTD.

By: /s/ Marisa J. Beeney
Name: Marisa J. Beeney

Title: Director

Date: April 19, 2017

Witnessed by: /s/ Steve Flantsbaum

Name: Steve Flantsbaum, Attorney

GSO CACTUS CREDIT OPPORTUNITIES FUND LP


By:	GSO Capital Partners LP, its Investment Manager

By: /s/ Marisa J. Beeney
Name: Marisa J. Beeney

Title: Authorized Signatory

Date: April 19, 2017

GSO CHURCHILL PARTNERS LP


By:	GSO Capital Partners LP, its Investment Manager

By: /s/ Marisa J. Beeney
Name: Marisa J. Beeney

Title: Authorized Signatory

Date: April 19, 2017

GSO COASTLINE CREDIT PARTNERS LP


By:	GSO Capital Partners LP, its Investment Manager

By: /s/ Marisa J. Beeney
Name: Marisa J. Beeney

Title: Authorized Signatory

Date: April 19, 2017

GSO CREDIT ALPHA FUND AIV-2 LP


By:	GSO Credit Alpha Associates, LLC, its general partner

By: /s/ Marisa J. Beeney
Name: Marisa J. Beeney

Title: Authorized Signatory

Date: April 19, 2017

GSO CREDIT-A PARTNERS LP


By:	GSO Capital Partners LP, its Investment Manager

By: /s/ Marisa J. Beeney
Name: Marisa J. Beeney

Title: Authorized Signatory

Date: April 19, 2017

GSO PALMETTO OPPORTUNISTIC INVESTMENT PARTNERS LP


By:	GSO Capital Partners LP, its Investment Manager

By: /s/ Marisa J. Beeney
Name: Marisa J. Beeney

Title: Authorized Signatory

Date: April 19, 2017

GSO SPECIAL SITUATIONS FUND LP


By:	GSO Capital Partners LP, its Investment Manager

By: /s/ Marisa J. Beeney
Name: Marisa J. Beeney

Title: Authorized Signatory

Date: April 19, 2017

GSO SSOMF LOCOMOTIVE BLOCKER LTD.

By: /s/ Marisa J. Beeney
Name: Marisa J. Beeney

Title: Director

Date: April 19, 2017

Witnessed by: /s/ Steve Flantsbaum

Name: Steve Flantsbaum, Attorney

STEAMBOAT LOCOMOTIVE BLOCKER LTD.

By: /s/ Marisa J. Beeney
Name: Marisa J. Beeney

Title: Director

Date: April 19, 2017

Witnessed by: /s/ Steve Flantsbaum

Name: Steve Flantsbaum, Attorney

EQ ADVISORS TRUST – AXA/MUTUAL

LARGE CAP EQUITY MANAGED VOLATILITY PORTFOLIO

By: Franklin Mutual Advisers, LLC

By: /s/ Peter Langerman

Name: Peter Langerman