Hallador Energy Company · NASDAQ:HNRG
Hallador Energy — Shareholder Meeting (May 2017)
27 slides from Hallador Energy's shareholder meeting presentation, May 31, 2017
Slide 1: Annual Shareholder Meeting
f HALLADOR ENERGY COMPANY ANNUAL SHAREHOLDER MEETING Indianapolis, Indiana May 25, 2017
Slide 2: Forward-looking statements
This presentation contains “forward-looking statements” — thatis, statementsrelated to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance, and often contain words such as “expects,” “projects, anticipates,” “inte
Slide 3: 2016 Safety Training Hours
2016 Safety Training Hours Safety 6,000 Fire Fighting 5,000 Mine Rescue 4,000 Other 1,000 Total 16,000 HALLADOR ENERGY COMPANY Training
Slide 4: Sunrise vs. National Averages
Sunrise vs. National Averages VPID* 37% Better S & S Rate** 27% Better “Violations Per Inspection Day Significant & Substantial Citations HALLADOR ENERGY COMPANY 25 4s os Safety Report veID sas Rate a) mSurriseCoal mi Nationalaverage
Slide 5: 2016 Nationwide Mine Rescue
2016 Nationwide Mine Rescue Skills eal ia
Slide 6: 85,000 hours Without MSHA Reportable Incident
85,000 hours Without MSHA Reportable Incident SUNRISECOAL Awarded - MSHA Certificate of Achievement in Safety HALLADOR ENERGY COMPANY I ayia
Slide 7: Purchased Assets from Blackhawk Mining's Freelandville Mine for $18.25 MM
Purchased Assets from Blackhawk Mining’s Freelandville Mine for $18.25 MM Sales Contracts 1.4 MM tons Contiguous Reserves 16.0 MM tons Advanced Royalties $1.7 MM HALLADOR ENERGY COMPANY ey
Slide 8: Hallador Energy Company
HALLADOR ENERGY COMPANY
Slide 9: Savoy Energy, LP sold a 25% interest to Lubar Equity Fund
Savoy Energy, LP sold a 25% interest to Lubar Equity Fund Distribution to HNRG was $1.3MM Sale brings HNRG’s ownership in Savoy to 30.6% valued at the time of sale at $11.6 MM HALLADOR ENERGY COMPANY ey
Slide 10: Purchased More Assets from Blackhawk Mining for $4.1 MM
Purchased More Assets from Blackhawk Mining for $4.1 MM Sales Contracts .6 MM tons HALLADOR ENERGY COMPANY ey
Slide 11: EPS, Adjusted EBITDA, Free Cash Flow, Dividends
EPS $ 42 Adjusted EBITDA ($MM)* 81 Free Cash Flow ($MM)** 58 Dividends/Share $ ©6116 Dividend Yield 2.1% Book Value / Share (w/ dividends) $ 9.07 Average Book Value Growth (8yrs) 11.3% HALLADOR ENERGY COMPANY ey
Slide 12: Cash Flow Summary
Cash from Operations $61 Asset Purchases (22) Capex (20) Debt Payments (35) Net Borrowings 24 Refinancing Costs (2) Dividends (5) Net Cash Generated 1 Cash Beginning of Period 16 Cash End of Period $17 HALLADOR ENERGY COMPANY a)
Slide 13: Net Income and Return on Equity
“2009 "2010 "2011 ‘2012 "2013 ‘2014 "2015 "2016 Net Income 20 22 360«(«4 20a Depreciation 9 12 14 16 19 29 44 36 Maintenance Capex (13) (15) (17) (15) (15) _-(23)_—«@3)_—(10) Adjusted Net Income 16 19 33 25 26 17 41 38 Avg Equity 89 112 135 152 165 184 210 247 Return On Equity 18% 17% 25% 16% 16% 9%
Slide 14: Return on Equity
“The long-term average return of equity ofan American business is 12 percent.” The Warren Buffett Way, by Robert Hagstrom, Jr. Return on Equity 25% 20% 15% 10% 5% 2009 2010 201d 2012 2013 2o1e 2015 2016 —Halidor- — Long-term average HALLADOR ENERGY COMPANY ey
Slide 15: 2017 Signals Change
2017 Signals Change The “War on Coal” Ends p uta DIGS COAL
Slide 16: Trump and US Supreme Court actions
Trump » Revoked Stream Buffer Zone Rule » Stayed Effluent Guideline Standards - Chose Scott Pruitt as EPA Administrator. » Has Proposed to Reduce the EPA Budget by 31% US Supreme Court » Stayed Clean Power Plan HALLADOR ENERGY COMPANY ey
Slide 17: The "War on Coal" Ends
The “War on Coal” Ends Scott Pruitt - EPA Administrator
Slide 18: Scott Pruitt
Scott Pruitt » Froze all EPA spending on grants/research - As the former Attorney General for Oklahoma - Sued the EPA to stop the Clean Power Plan - In April, while speaking on Fox Business’s “Varney & Co.”, Pruitt argued that using coal for electricity is necessary for the reliability of the electr
Slide 19: Secretary Rick Perry grid reliability study
Secretary Rick Perry has commissioned a study to examine whether renewable energy sources such as wind and solar power threaten grid reliability at the expense of coal and nuclear HALLADOR ENERGY COMPANY ey
Slide 20: Oaktown Cash Costs
30 29 28 24 23 Oaktown Cash Costs 10.2016 20.2016 40.2015 22 30.2015 HALLADOR ENERGY COMPANY 30.2016 40.2016 10.2017 a)
Slide 21: Sustainable Cost Structure: Adding More Battery Cars
Sustainable Cost Structure Adding More Battery Cars
Slide 22: Sustainable Cost Structure: New Elevator
Sustainable Cost Structure New Elevator @ Oaktown I \DOR ENERGY COMPANY
Slide 23: Sustainable Cost Structure: Sealed Carlisle Old Works
Sustainable Cost Structure Sealed 79% of Carlisle Old Works Carlisle Mine m™ North - Sealed in 2017 South - Sealed in 2015 m West HALLADOR ENERGY COMPANY <>
Slide 24: Henry Hub ($/MMBTU)
$5.00 Henry Hub ($/MMBTU) EVA Forecast --®-- NYMEX [March-1st] $4.50 $4.00 $3.93 $351 $3.51 $3.50 $3.00 $2.60 $2.83 $2.50 SS $2.00 2015 2016 2017 2018 2019 2020
Slide 25: Historical Contracted
Historical Contracted 2014 2015 2016 2017 2018 2019 2020 Sunrise Tons Sold 10.7 Te) 6.4 6.1 SHO) 33) 3.0 Actual Average Price Forecast Natural Gas Price $4.35 $2.60 $2.46 $3.51 $3.51 $3.34 $3.93 HALLADOR ENERGY COMPANY ey
Slide 26: EPS, Adjusted EBITDA, Free Cash Flow, Dividends
EPS $ 25 Adjusted EBITDA ($MM)* 24 Free Cash Flow ($MM)** 20 Dividends/Share $ 04 *We define Adjusted EBITDA as EBITDA plus amortization of stock compensation plus ARO Accretion plus impairment charges. "We define free cash flow as net income plus deferred income taxes plus DDA plus amortization of
Slide 27: roy
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