Arq, Inc. · NASDAQ:ARQ

Arq — Advanced Emissions Solutions — Q4 2016 Earnings Presentation

29 slides from Arq's earnings presentation, Mar 13, 2017

  1. Slide 1: Q4'16 Earnings Call

    EVENT TITLE Q416 Earnings Call © 2017 Advanced Emissions Solutions, Inc. All rights reserved. Confidential and Proprietary. March 14, 2017

  2. Slide 2: Safe Harbor

    © 2017 Advanced Emissions Solutions, Inc. All rights reserved. Confidential and Proprietary. 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 circu

  3. Slide 3: 2016 Strategic Priorities

    © 2017 Advanced Emissions Solutions, Inc. All rights reserved. Confidential and Proprietary. -3- 2016 Strategic Priorities ▪ Made very strong progress against nearly all of our strategic priorities that we outlined on the 2015 10-K conference call ▪ Looking ahead, we will continue to focus on obtain

  4. Slide 4: 2016 Highlights

    © 2017 Advanced Emissions Solutions, Inc. All rights reserved. Confidential and Proprietary. -4- 2016 Highlights ▪ Distributions from the Refined Coal (“RC”) business exceeded our initial expectations, as Q4’16 was third highest in our history ▪ Tinuum completed leasing 3 RC facilities and selling o

  5. Slide 5: Financial Review

    © 2017 Advanced Emissions Solutions, Inc. All rights reserved. Confidential and Proprietary. Financial data highlights: (in thousands) Years ended December 31, 2016 2015 2014 Revenues $ 50,622 $ 62,739 $ 16,923 Cost of revenues, exclusive of depreciation and amortization $ 39,817 $ 47,552 $ 11,620 O

  6. Slide 6: Quarterly Financial Review - 2015 and 2016

    © 2017 Advanced Emissions Solutions, Inc. All rights reserved. Confidential and Proprietary. Financial data highlights: (in thousands) For the Quarter Ended December 31, 2016 September 30, 2016 June 30, 2016 March 31, 2016 Revenues $ 3,604 $ 15,710 $ 8,951 $ 22,357 Cost of revenues, exclusive of ope

  7. Slide 7: Select Components of Net Income (Loss)

    © 2017 Advanced Emissions Solutions, Inc. All rights reserved. Confidential and Proprietary. -7- Select Components of Net Income (Loss) Select Components of Net Income (Loss) (In thousands) Years ended December 31, 2016 2015 2014 Consolidated Net Income (Loss) $ 97,678 $ (30,141) $ 1,387 RC Segment

  8. Slide 8: Refined Coal

    Refined Coal

  9. Slide 9: RC Facilities Today and Tomorrow

    © 2017 Advanced Emissions Solutions, Inc. All rights reserved. Confidential and Proprietary. -9- RC Facilities Today and Tomorrow POTENTIAL 28 RC facilities (~100 MT/year) 8 RC facilities - installed (29.6 MT/year) 2017 2021RC Facility information as of December 31, 2016 13 RC facilities leased/sold

  10. Slide 10: Refined Coal: Components of Earnings

    © 2017 Advanced Emissions Solutions, Inc. All rights reserved. Confidential and Proprietary. -10- Refined Coal: Components of Earnings Components of RC Segment Earnings (In thousands) Years ended December 31, 2016 2015 2014 RC Segment Revenues Tinuum Group $ 41,650 $ 8,651 $ 43,584 Tinuum Services 4

  11. Slide 11: Operating Tons: Invested vs. Retained

    © 2017 Advanced Emissions Solutions, Inc. All rights reserved. Confidential and Proprietary. -11- Operating Tons: Invested vs. Retained Note: Numbers within bar graph and the "Count" row within the tables represent the number of facilities per category as of the end of each quarter presented. (1) To

  12. Slide 12: Operating Tons: Royalty vs. Non-Royalty

    © 2017 Advanced Emissions Solutions, Inc. All rights reserved. Confidential and Proprietary. -12- Operating Tons: Royalty vs. Non-Royalty Note: Numbers within bar graph and the "Count" row represent the number of facilities per category that operated during each period presented. (1) Tonnage informa

  13. Slide 13: Future Rent Payments – Tinuum Group Invested Facilities

    © 2017 Advanced Emissions Solutions, Inc. All rights reserved. Confidential and Proprietary. -13- Future Rent Payments – Tinuum Group Invested Facilities ▪ As of December 31, 2016, remaining payments to all Tinuum Group members from Tinuum Group’s current RC facilities leased or sold to tax equity i

  14. Slide 14: Non-Operating Tons: Potential Future Tonnage to Tinuum Group

    © 2017 Advanced Emissions Solutions, Inc. All rights reserved. Confidential and Proprietary. -14- Non-Operating Tons(4): Potential Future Tonnage to Tinuum Group Note: Numbers within bar graph represent the number of facilities per category as of the end of each quarter presented. (1) Based on actua

  15. Slide 15: Emissions Control

    Emissions Control

  16. Slide 16: Emissions Control: Transformation

    © 2017 Advanced Emissions Solutions, Inc. All rights reserved. Confidential and Proprietary. -16- Emissions Control: Transformation ▪ Narrowed focus on recurring, repeatable business backed by strong technology and know-how Prior Focus: Broad & Bulky Large Equipment Sales One-Time Purchases Capital

  17. Slide 17: Emissions Control: Chemicals Opportunity

    © 2017 Advanced Emissions Solutions, Inc. All rights reserved. Confidential and Proprietary. -17- Emissions Control: Chemicals Opportunity ▪ U.S. coal fired power utilities continue to pursue low cost mercury control solutions to ensure long- term viability ▪ Patented chemical technologies provide a

  18. Slide 18: Emissions Control: Future Focus

    © 2017 Advanced Emissions Solutions, Inc. All rights reserved. Confidential and Proprietary. -18- Emissions Control: Future Focus ▪ We also plan to perform assessments requiring minimal capital related to technology and commercial feasibility related to multiple potential complimentary products to o

  19. Slide 19: Emissions Control: Components of Earnings

    © 2017 Advanced Emissions Solutions, Inc. All rights reserved. Confidential and Proprietary. -19- Emissions Control: Components of Earnings Components of EC Segment Earnings (In thousands) Years ended December 31, 2016 2015 2014 EC Segment Revenues Equipment sales $ 46,949 $ 60,099 $ 12,044 Chemical

  20. Slide 20: Corporate and Other: Summary

    © 2017 Advanced Emissions Solutions, Inc. All rights reserved. Confidential and Proprietary. -20- Corporate and Other: Summary Adjustments to reconcile to net loss attributable to ADES (In thousands) Years ended December 31, 2016 2015 2014 RC segment operating income $ 51,264 $ 12,131 $ 42,094 EC se

  21. Slide 21: Corporate and EC Expected Cost Basis

    © 2017 Advanced Emissions Solutions, Inc. All rights reserved. Confidential and Proprietary. -21- Corporate and EC Expected Cost Basis (In thousands) Years ended December 31, 2014 2015 2016 Estimated 2017 Low End of Range (1) Estimated 2017 High End of Range (1) Payroll and benefits $ 20,767 $ 23,58

  22. Slide 22: Tinuum Group and ADES: Cash Flow

    © 2017 Advanced Emissions Solutions, Inc. All rights reserved. Confidential and Proprietary. -22- Tinuum Group and ADES: Cash Flow Cash Flow Update (In thousands) Years ended December 31, 2016 2015 2014 Tinuum Group Tinuum Group cash, beginning of year $ 6,183 $ 3,870 $ 11,663 Cash provided by (used

  23. Slide 23: 2017 Priorities

    © 2017 Advanced Emissions Solutions, Inc. All rights reserved. Confidential and Proprietary. -23- 2017 Priorities ▪ Increase number of RC facilities with tax equity investors ▪ Complete remaining EC equipment businesses using more asset light business model, on time and on schedule ▪ Capture increas

  24. Slide 24: Appendix

    7 Appendix’ 7 4 »)

  25. Slide 25: Appendix A: Supplemental Disclosure

    © 2017 Advanced Emissions Solutions, Inc. All rights reserved. Confidential and Proprietary. -25- Appendix A: Supplemental Disclosure ADES Select Cash and Non-cash Components of the years ended December 31, 2016, 2015 and 2014 Net Income (Loss) (in thousands) Years Ended December 31, Ref. 2016 Ref.

  26. Slide 26: Appendix B: 10-K Balance Sheet

    © 2017 Advanced Emissions Solutions, Inc. All rights reserved. Confidential and Proprietary. -26- Appendix B: 10-K Balance Sheet(1) (1) See complete, Consolidated Financial Statements and Notes related thereto within the Annual Report on Form 10-K for the year ended December 31, 2016. As of December

  27. Slide 27: Appendix C: 10-K Income Statement

    © 2017 Advanced Emissions Solutions, Inc. All rights reserved. Confidential and Proprietary. -27- Appendix C: 10-K Income Statement(1) (1) See complete, Consolidated Financial Statements and Notes related thereto within the Annual Report on Form 10-K for the year ended December 31, 2016. Years Ended

  28. Slide 28: Appendix D: 10-K Cash Flow

    © 2017 Advanced Emissions Solutions, Inc. All rights reserved. Confidential and Proprietary. -28- Appendix D: 10-K Cash Flow(1) (1) See complete, Consolidated Financial Statements and Notes related thereto within the Annual Report on Form 10-K for the year ended December 31, 2016. Years Ended Decemb

  29. Slide 29: Appendix D: 10-K Cash Flow

    © 2017 Advanced Emissions Solutions, Inc. All rights reserved. Confidential and Proprietary. -29- Appendix D: 10-K Cash Flow(1) (1) See complete, Consolidated Financial Statements and Notes related thereto within the Annual Report on Form 10-K for the year ended December 31, 2016. Years Ended Years

Advanced Emissions Solutions — Q4 2016 Earnings Presentation on 6ix