Slide 1: 2014 Form 10-K Investor Call Slides
© 2016 Advanced Emissions Solutions, Inc. Company All rights reserved. 2014 Form 10-K Investor Call Slides March 1, 2016
Slide 2: Forward-looking statements
© 2016 Advanced Emissions Solutions, Inc. All rights reserved. -2- EVENT TITLE This presentation includes forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, which provides a "safe harbor" for such statements in certain circumstances. The forward- loo
Slide 3: Agenda
© 2016 Advanced Emissions Solutions, Inc. All rights reserved. -3- Agenda Welcome and safe harbor Upcoming events Priorities 2016 Significant restatement items ADES businesses Balance Sheets, Statement of Operations, Statement and Cash Flows ADES businesses segment reviews Refined Co
Slide 4: Upcoming Events
© 2016 Advanced Emissions Solutions, Inc. All rights reserved. -4- 1Q 2015 Forms 10-Q and 10-Ks 2016 corporate strategy NASDAQ application pending 2Q 2016 Q1 Form 10-Q June Annual stockholder meeting Upcoming Events
Slide 5: Priorities 2016
© 2016 Advanced Emissions Solutions, Inc. All rights reserved. -5- Refined Coal: Via Clean Coal Solutions, LLC (“CCS”), produce Refined Coal and generate cash by securing tax equity investors SEC Financial Reporting: Become current with our SEC filing requirements and relisted on NASDAQ Emissi
Slide 6: Significant Restatement Items
© 2016 Advanced Emissions Solutions, Inc. All rights reserved. -6- Significant Restatement Items Deconsolidation of CCS • No longer consolidate CCS in ADES financials • Earnings or losses from CCS recorded in earnings from equity method investments line on the Income Statement Revenue Recognitio
Slide 7: Significant restatement items (cont.)
© 2016 Advanced Emissions Solutions, Inc. All rights reserved. -7- Significant restatement items (cont.) Settlement and Royalty Indemnity Accounting • Expected ongoing payments (2011- 2018) related to the Norit lawsuit should have been recognized in 2011 in addition to lump sum payments already re
Slide 8: ADES Businesses
© 2016 Advanced Emissions Solutions, Inc. All rights reserved. -8- During the fourth quarter of 2015 the Company realigned its operating segments into two reportable segments: (1) Refined Coal ("RC"); (2) Emissions Control - Engineering and Technology Services ("EC - ETS"). Beginning with the Compan
Slide 9: Condensed Consolidated Balance Sheet
© 2016 Advanced Emissions Solutions, Inc. All rights reserved. -9- Condensed Consolidated Balance Sheet* (in thousands $) 2013 2014 ASSETS Current assets: Cash and cash equivalents 37,890 25,181 Receivables, net 12,943 17,070 Costs in excess of billings on uncompleted contracts 2,700 6,153 Total cur
Slide 10: Condensed Consolidated Statement of Operations
© 2016 Advanced Emissions Solutions, Inc. All rights reserved. -10- (in thousands $, except share data) 2012 2013 2014 Revenues: Equipment sales 7,584 5,747 12,044 Consulting services 8,017 6,790 4,488 Chemicals and other 715 749 391 Total revenues 16,316 13,286 16,923 Expenses: Cost of revenue 11,0
Slide 11: Condensed Statement of Cash Flows
© 2016 Advanced Emissions Solutions, Inc. All rights reserved. -11- (in thousands $) 2012 2013 2014 Cash Flows from Operating Activities Net income (loss) (13,129) (15,987) 1,387 Adjustments to reconcile net income (loss) to net cash used in operating activities: Depreciation and amortization 903 1,
Slide 12: Business Segment Review
© 2016 Advanced Emissions Solutions, Inc. All rights reserved. -12- Business Segment Review
Slide 13: Refined Coal - current status
© 2016 Advanced Emissions Solutions, Inc. All rights reserved. -13- Refined Coal-current status* Production Tons: Produced 11.4 million tons (2.6 million retained) of RC in the fourth quarter of 2015 Operating Facilities: 13 of 28 facilities in full-time operation Invested Facilities: 12 RC fa
Slide 14: CCS Consolidated Income Statement
© 2016 Advanced Emissions Solutions, Inc. All rights reserved. -14- CCS Consolidated Income Statement *Tonnage data previously released in 8-K filed June 23, 2015 and in multiple press releases issued in 2014-2015. (in thousands $, except tons) 2012 2013 2014 Revenue Coal Sales 157,898 174,043 412,4
Slide 15: Refined Coal market commentary
© 2016 Advanced Emissions Solutions, Inc. All rights reserved. -15- Refined Coal market commentary CCS modified its sales process in the second half of 2015 to add resources to help support and accelerate discussions at the right levels within an organization. Negotiations with new and existing
Slide 16: Equity Method Investments
© 2016 Advanced Emissions Solutions, Inc. All rights reserved. -16- (in thousands$) 2012 2013 2014 Earnings in Clean Coal Solutions 53 13,813 43,584 Earnings in Clean Coal Solutions Services 760 1,689 3,625 Loss in RCM6 - - (4,497) Earnings in equity method investments 813 15,502 42,712 Equity Metho
Slide 17: Accounting for CCS
© 2016 Advanced Emissions Solutions, Inc. All rights reserved. -17- Accounting for CCS ADES has received cash distributions from CCS in excess of the carrying value of the investment in CCS. Because there are no repayment obligations on the cash distributions, ADES recognizes the amount of cash
Slide 18: RC Facility - RCM6
© 2016 Advanced Emissions Solutions, Inc. All rights reserved. -18- RC Facility - RCM6 In February 2014, ADES purchased a 24.95% share in an RC facility (“RCM6”) for a cash payment of $2.4 million and the execution of a $13.3 million note payable In 2014 ADES made contributions and variable paym
Slide 19: Royalties
© 2016 Advanced Emissions Solutions, Inc. All rights reserved. -19- Royalties ADES receives a royalty from CCS for the use of its M-45™ technologies (“M-45 Royalty”). M-45 Royalty payments are based upon a percentage of margin or tax credits claimed at the RC facilities that utilize the licensed
Slide 20: 453A Installment Method
© 2016 Advanced Emissions Solutions, Inc. All rights reserved. -20- IRS section 453A requires taxpayers using the installment method to pay an interest charge on the portion of the tax liability that was deferred under the installment method ADES paid approximately $4.5 million in 453A interest
Slide 21: Emissions Control segment
© 2016 Advanced Emissions Solutions, Inc. All rights reserved. -21- Post MATS market shifting to include more Chemicals and Services Focus on selling products, both existing and new Delivering on our commitments and obligations (in thousands $, except share data) Revenues: 2012* 2013* 2014* Eq
Slide 22: Corporate Overview
© 2016 Advanced Emissions Solutions, Inc. All rights reserved. -22- CORPORATE OVERVIEW
Slide 23: 2015-2016 Corporate Transformation
© 2016 Advanced Emissions Solutions, Inc. All rights reserved. -23- 2015-2016 Corporate Transformation: Right size the organization and build a foundation allowing the EC business to succeed without the support of cash from the RC business Restructuring actions taken in the first nine months of
Slide 24: Liquidity and cash
© 2016 Advanced Emissions Solutions, Inc. All rights reserved. -24- At December 31, 2015, cash and cash equivalents was approximately $9 million. Restricted cash was $12 million, of which $6 million was used to secure letters of credit for equipment and $6 million to secure letters of credit for N
Slide 25: Financial obligations and liabilities
© 2016 Advanced Emissions Solutions, Inc. All rights reserved. -25- Letters of credit secured by restricted cash- $6 million to secure letters of credit for equipment and $6 million to secure letters of credit for royalty obligations Warranty and performance guarantees related to our EC equipmen
Slide 26: Tax Status
© 2016 Advanced Emissions Solutions, Inc. All rights reserved. -26- Tax assets from Net Operating Losses and the generation of Section 45 Tax Credits ADES has carried a full valuation allowance against its tax assets since 2012 These tax assets are subject to IRC Section 382 for Net Operating
Slide 27: Summary and Closing Remarks
© 2016 Advanced Emissions Solutions, Inc. All rights reserved. -27- Refined Coal execution and securing additional RC investors Completing our SEC filings and NASDAQ relisting Delivering on our existing equipment contract obligations and selling new products Transforming the company to move
Slide 28: Appendix
© 2016 Advanced Emissions Solutions, Inc. All rights reserved. -28- Appendix
Slide 29: Consolidated Balance Sheet
© 2016 Advanced Emissions Solutions, Inc. All rights reserved. -29- Consolidated Balance Sheet (in thousands $) 2013 2014 ASSETS Current assets: Cash and cash equivalents 37,890 25,181 Receivables, net 12,943 17,070 Receivables, related parties, net 630 1,439 Investment securities 105 Restricted cas
Slide 30: Consolidated Statement of Operations
© 2016 Advanced Emissions Solutions, Inc. All rights reserved. -30- Consolidated Statement of Operations (in thousands $, except share data) 2012 2013 2014 Revenues: Equipment sales 7,584 5,747 12,044 Consulting services 8,017 6,790 4,488 Chemicals and other 715 749 391 Total revenues 16,316 13,286
Slide 31: Consolidated Statement of Cash Flows
© 2016 Advanced Emissions Solutions, Inc. All rights reserved. -31- Consolidated Statement of Cash Flows (in thousands $) 2012 2013 2014 Cash Flows from Operating Activities Net income (loss) (13,129) (15,987) 1,387 Adjustments to reconcile net income (loss) to net cash used in operating activities:
Slide 32: Refined Coal - Accounting for CCS
© 2016 Advanced Emissions Solutions, Inc. All rights reserved. -32- Refined Coal- Accounting for CCS ADES does not record its share of CCS income until it equals the amount of distributions in excess of carrying value that were previously recognized in income. a) Beginning balance at 12/31/2012 b) A
Slide 33: Contact Information
© 2016 Advanced Emissions Solutions, Inc. All rights reserved. -33- Contact Information Graham Mattison- VP, Strategic Initiatives & Investor Relations 9135 South Ridgeline Blvd, Suite 200 Highlands Ranch, CO 80129 Corporate Office graham.mattison@adaes.com www.advancedemissionssolutions.com 720-598