Capital Stock

12 Months Ended

Dec. 31, 2022

Capital Stock

Capital Stock

17. Capital Stock

Dividends

The Company declared and paid cash dividends per share during the periods presented below:

2022:	Dividends per share		Amount (in thousands)
1st quarter	$	0.25	$	3,851
2nd quarter		8.11		150,716
3rd quarter		6.00		110,071
4th quarter		10.75		191,754
Total cash dividends declared and paid	$	25.11	$	456,392

			Amount
2021:	Dividends per share		(in thousands)
1st quarter	$	—	$	—
2nd quarter		—		—
3rd quarter		—		—
4th quarter		0.25		3,830
Total cash dividends declared and paid	$	0.25	$	3,830

Future dividend declarations will be subject to ongoing Board review and authorization will be based on a number of factors, including business and market conditions, the Company’s future financial performance and other capital priorities.

Share Repurchase Program

During the second quarter of 2022, the Board of Directors increased the remaining outstanding authorization for share repurchases to $500 million. The timing of any future share purchases, and the ultimate number of shares of common stock to be purchased, will depend on a number of factors, including business and market conditions, future financial performance, and other capital priorities. The shares will be acquired in the open market or through private transactions in accordance with Securities and Exchange Commission requirements. The share repurchase program has no termination date, but may be amended, suspended or discontinued at any time and does not commit the Company to repurchase shares of its common stock. The actual number and value of the shares to be purchased will depend on the performance of the Company’s stock price and other market conditions.

On August 16, 2022, the Inflation Reduction Act of 2022 (“IRA”) was signed into law. This legislation introduces a 1% excise tax on stock buybacks among its key tax provisions. The IRA is effective for years beginning after December 31, 2022.

During 2022, the Company repurchased 1,118,457 shares at an average price of $141.97 for an aggregate purchase price of approximately $158.8 million. As of December 31, 2022, the Company had repurchased 11,206,835 shares at an average share price of $87.99 per share for an aggregate purchase price of approximately $986.1 million since inception of the stock repurchase program, and the remaining authorized amount for stock repurchases under this program is approximately $341.2 million.

Outstanding Warrants

In October 2016, the Company emerged from Chapter 11 which became known as the “Effective Date”. On the Effective Date, the Company entered into a warrant agreement (the “Warrant Agreement”) with American Stock Transfer & Trust Company, LLC as warrant agent and, pursuant to the terms of the Plan, issued warrants (“Warrants”) to purchase up to an aggregate of 1,914,856 shares of Class A Common Stock, par value $0.01 per share, of Arch Resources (the “Class A Common Stock”) to certain holders of claims in the Chapter 11 case. Each Warrant expires on October 5, 2023, and is initially exercisable for one share of Class A Common Stock at an initial exercise price of $57.00 per share. The Warrants are exercisable by a holder paying the exercise price in cash or on a cashless basis, at the election of the holder. The Warrants contain anti-dilution adjustments for stock splits, reverse stock splits, stock dividends, dividends and distributions of cash, other securities or other property, spin-offs and tender and exchange offers by Arch Resources or its subsidiaries to purchase Class A Common Stock at above-market prices.

If, in connection with a merger, recapitalization, business combination, transfer to a third party of substantially all of Arch Resources’ consolidated assets or other transaction that results in a change to the Class A Common Stock (each, a “Transaction”), (i) the Transaction is consummated prior to the fifth anniversary of the Effective Date and the Transaction consideration to holders of Class A Common Stock is 90% or more listed common stock or common stock of a company that provides publicly available financial reporting, and holds management calls regarding the same, no less than quarterly (“Reporting Stock”) or (ii) regardless of the consideration, the Transaction is consummated on or after the fifth anniversary of the Effective Date, the Warrants will be assumed by the surviving company and will become exercisable for the consideration that the holders of Class A Common Stock receive in such Transaction; provided that if the consideration such holders receive consists solely of cash, then upon the consummation of such Transaction, Arch Resources will pay for each Warrant an amount of cash equal to the greater of (i) (x) the amount of cash payable with respect to the number of shares of Class A Common Stock underlying the Warrant minus (y) the exercise price per share then in effect multiplied by the number of shares of Class A Common Stock underlying the Warrant and (ii) $0.

During 2022, holders of warrants exercised 573,341 of the warrants, leaving 1,252,082 warrants outstanding at December 31, 2022.

As provided in ASC 825-20, “Financial Instruments,” the warrants are considered equity because they can only be physically settled in Company shares, can be settled in unregistered shares, the Company has adequate authorized shares to settle the outstanding warrants and each warrant is fixed in terms of settlement to one share of Company stock subject only to remote contingency adjustment factors designed to assure the relative value in terms of shares remains fixed.