Slide 1: 2015 Form 10-K & Corporate Strategy Discussion
© 2015 Advanced Emissions Solutions, Inc. Company All rights reserved. Confidential and Proprietary. 2015 Form 10-K & Corporate Strategy Discussion April 19, 2016
Slide 2: Safe Harbor
© 2016 Advanced Emissions Solutions, Inc. All rights reserved. Confidential and Proprietary. -2- Safe Harbor 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 c
Slide 3: Agenda
© 2016 Advanced Emissions Solutions, Inc. All rights reserved. Confidential and Proprietary. -3- Agenda 1. 2015 Financials Review 2. Assets & Intellectual Property 3. Strategic Alternatives: Emissions Control Segment 4. Cost Containment & Cash Preservation 5. Refined Coal Update 6. Emissions Control
Slide 4: 2015: A Year of Transformation
© 2016 Advanced Emissions Solutions, Inc. All rights reserved. Confidential and Proprietary. -4- 2015: A Year of Transformation Financial filings now up to date Second half of year included numerous strategic priorities and decisions: 1. Realignment of our organization and management team, 2. An
Slide 5: 2015 Financials Review
© 2016 Advanced Emissions Solutions, Inc. All rights reserved. Confidential and Proprietary. -5- 2015 Financials Review Revenue (and associated expense) increased primarily due to completion of Emissions Control equipment contracts, which significantly mitigated exposure to performance guarantees
Slide 6: Major Components of Net Loss
© 2016 Advanced Emissions Solutions, Inc. All rights reserved. Confidential and Proprietary. -6- Major Components of Net Loss Major Components of 2015 Net Loss Amount (millions) GAAP Net Loss ($30.1) Non-Cash Items ($13.9) EC Manufacturing, R&D Businesses/Ventures ($10.0) Restatement Expenses ($9.5)
Slide 7: Undervalued Stock Price + Underappreciated Assets
© 2016 Advanced Emissions Solutions, Inc. All rights reserved. Confidential and Proprietary. -7- Undervalued Stock Price + Underappreciated Assets Value Potential Amount (millions) CCS Tax Equity Investor Payments (2016-2021) $ 650 - Cumulative SG&A Estimated for CCS (2016-2021) ($ 54) CCS Net Cash
Slide 8: Undervalued Stock Price + Underappreciated Assets, continued
© 2016 Advanced Emissions Solutions, Inc. All rights reserved. Confidential and Proprietary. -8- Undervalued Stock Price + Underappreciated Assets, continued Assets Financial Drivers Refined Coal Assets CCS Investment - Tax Credits • 16 facilities not yet invested • $3-4 per ton • $8-14M potential c
Slide 9: Parallel Path & Strategic Alternatives Process
© 2016 Advanced Emissions Solutions, Inc. All rights reserved. Confidential and Proprietary. -9- Parallel Path & Strategic Alternatives Process Hired investment banker to explore strategic alternatives around all or a portion of the Emissions Control (EC) portfolio of products and intellectual pro
Slide 10: Cost Containment, Risk Mitigation & Cash Preservation Initiatives
© 2016 Advanced Emissions Solutions, Inc. All rights reserved. Confidential and Proprietary. -10- Cost Containment, Risk Mitigation & Cash Preservation Initiatives 2015 Reduced corporate and operating headcount by over 40 positions between May and December 2015 Eliminated BCSI manufacturing/fabr
Slide 11: Expected Go Forward Overhead Cost Base
© 2016 Advanced Emissions Solutions, Inc. All rights reserved. Confidential and Proprietary. -11- $0.0 $12.5 $25.0 $37.5 $50.0 ($ m ill ions ) Expected Go Forward Overhead Cost Base $45M $12 - $14M ~70% Reduction in SG&A, Manufacturing and Payroll Costs (1) Cost Base represents total estimated SG&A
Slide 12: Full-time Operations Roadmap
© 2016 Advanced Emissions Solutions, Inc. All rights reserved. Confidential and Proprietary. -12- Full-time Operations Roadmap POTENTIAL 28 RC facilities in full-time operation Target remains 24 invested and 4 retained (75-100 MT/Year) 9 RC facilities installed 2016 2021 As of December 31, 2015 12 R
Slide 13: Refined Coal: Components of Earnings
© 2016 Advanced Emissions Solutions, Inc. All rights reserved. Confidential and Proprietary. -13- Refined Coal: Components of Earnings Components of RC Segment Earnings 2015 2014 RC Segment Earnings CCS $ 8,651 $ 43,584 CCSS $ 4,838 $ 3,625 RCM6 $ (4,568) $ (4,497) Consulting $ 55 $ 665 Royalties, r
Slide 14: Non-GAAP Reconciliation of 2015 Net Income to 2015 Distributions
© 2016 Advanced Emissions Solutions, Inc. All rights reserved. Confidential and Proprietary. -14- Non-GAAP Reconciliation of 2015 Net Income to 2015 Distributions Amount (millions) ADES Share Net Income Available to Class A Members $87.3 $35.3 - Change in Deferred Revenue ($43.2) - Change in Prepaid
Slide 15: Refined Coal Momentum Building
© 2016 Advanced Emissions Solutions, Inc. All rights reserved. Confidential and Proprietary. -15- Refined Coal Momentum Building Modified sales process and expanded broker network in second half of 2015 to help support and accelerate discussions with tax equity investors Now targeting multiple l
Slide 16: RC Cash Flow Significant Today with Strong Growth Potential
© 2016 Advanced Emissions Solutions, Inc. All rights reserved. Confidential and Proprietary. -16- RC Cash Flow Significant Today with Strong Growth Potential Renewals in-line with expectations Tax-equity investor returns remain consistent with prior performance CCS (ADES 42.5%) expected paymen
Slide 17: Emissions Control Update
© 2016 Advanced Emissions Solutions, Inc. All rights reserved. Confidential and Proprietary. -17- Emissions Control Update ACI & DSI Systems drove revenues in 2015 Post MATS, opportunities still exist but equipment will be lower Will continue to deliver on our commitments to customers which wi
Slide 18: 2016 Priorities & Expectations
© 2016 Advanced Emissions Solutions, Inc. All rights reserved. Confidential and Proprietary. -18- 2016 Priorities & Expectations NASDAQ Relisting & SEC Compliance with financial filings Drive New RC Closings & Incremental Cash Flows Each new tax-equity investor, above the current, drives $3-6
Slide 19: Appendix A – Non-GAAP Disclosure
© 2016 Advanced Emissions Solutions, Inc. All rights reserved. Confidential and Proprietary. -19- Appendix A – Non-GAAP Disclosure ADES Significant Cash and Non-Cash Components of 2015 Net Loss Ref. Amount Footnotes : Net Loss (1) (30,141)$ (1) Agrees to ADES Consolidated Statement of Operations in
Slide 20: Appendix B – Non-GAAP Disclosure: Clean Coal Solutions, LLC
© 2016 Advanced Emissions Solutions, Inc. All rights reserved. Confidential and Proprietary. -20- Appendix B – Non-GAAP Disclosure: Clean Coal Solutions, LLC Reconciliation of 2015 Net Income Available to Class A Members to 2015 Distributions Ref. Amount ADES Share ADA % 2015 Net Income Available to
Slide 21: Appendix B – Cont.
© 2016 Advanced Emissions Solutions, Inc. All rights reserved. Confidential and Proprietary. -21- Appendix B – Cont. ADES Footnotes : (1) Agrees to ADES Footnote 7 in the 2015 Form 10-K filing (2) Agrees to ADES "Business" in Item 1 in the 2015 Form 10-K filing CCS Footnotes : (3) Agrees to CCS Cons
Slide 22: Appendix C – Non-GAAP Disclosure
© 2016 Advanced Emissions Solutions, Inc. All rights reserved. Confidential and Proprietary. -22- Appendix C – Non-GAAP Disclosure ADES Significant Components of 2015 and 2014 segment earnings and operating income Ref. 2015 Ref. 2014 Footnotes : (1) Agrees to ADES Footnote 7 in the 2015 Form 10-K fi