WARRIOR MET COAL, INC. Fair Value Disclosure
Note 19—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 indicates the level of the fair value hierarchy utilized to determine such fair value (in thousands):
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Fair Value Measurements as of December 31, 2025 Using: |
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Level 1 |
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Level 2 |
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Level 3 |
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Total |
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Liabilities: |
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Natural gas swap contracts |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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Fair Value Measurements as of December 31, 2024 Using: |
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Level 1 |
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Level 2 |
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Level 3 |
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Total |
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Liabilities: |
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Natural gas swap contracts |
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$ |
— |
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$ |
1,835 |
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$ |
— |
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$ |
1,835 |
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During the year ended December 31, 2025, 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 assets or liabilities.
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, receivables and accounts payable—The carrying amounts reported in the Consolidated Balance Sheets approximate fair value due to the short-term nature of these assets and liabilities.
Long-term investments and restricted cash—The amortized cost carrying amounts reported in the Consolidated Balance Sheets approximate fair value due to the nature of fixed income securities.
Debt—The Company's outstanding debt is carried at cost. As of December 31, 2025, the Company had no borrowings outstanding under the Amended ABL Facility, with $140.5 million available, net of $2.5 million of letters of credit issued and outstanding at such time. The estimated fair value of the Notes as of December 31, 2025 is approximately $159.1 million based upon observable market data (Level 2).
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 12, 2026 | Showing above |
| 2024 | Feb 13, 2025 | |
| 2023 | Feb 14, 2024 | |
| 2022 | Feb 15, 2023 | |
| 2021 | Feb 22, 2022 | |
| 2020 | Feb 24, 2021 | |
| 2019 | Feb 19, 2020 | |
| 2018 | Feb 21, 2019 | |
| 2017 | Feb 14, 2018 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.