Alpha Metallurgical Resources, Inc. · NYSE:AMR
Alpha Metallurgical Resources — Contura Energy — Q3 2019 Earnings Presentation
23 slides from Alpha Metallurgical Resources's earnings presentation, Nov 14, 2019
Slide 1: Contura Energy: 3Q19 Earnings Presentation
Contura Energy: 3Q19 Earnings Presentation November 2019 1
Slide 2: Forward Looking Statements
Forward Looking Statements 2 This document includes forward - looking statements. These forward - looking statements are based on Contura's expectations and beli efs concerning future events and involve risks and uncertainties that may cause actual results to differ materially from current expectati
Slide 3: Highlights: Third Quarter 2019
3 Highlights: Third Quarter 2019 • Shipped 3.0 million tons of met coal in 3Q19; Total coal shipments of 5.8 million tons in 3Q19 • Reported net loss from continuing operation ($43.6) million • Reported Adjusted EBITDA (2) of $40 million in 3Q19 • Repurchased 1.03 million CTRA common shares for a to
Slide 4: Highlights: 2019 – Year of Transition
4 Highlights: 2019 – Year of Transition • 2019 has been a transition year with disappointing financial results and unexpected challenges • The company has faced multiple issues in 2019: • Blackjewel bankruptcy created uncertainty around the PRB permits, which now has been resolved with the recently
Slide 5: Contura Vision: Key Focus Areas
5 Contura Vision: Key Focus Areas • Reduce thermal footprint • Divest • Wind down methodically, minimizing ARO • Expand metallurgical coal reserves, operations and offerings • Continue to focus on safe operations • Increase operational efficiencies at: • Mines (feet/shift) • Prep plants (organic yie
Slide 6: Low Cost Metallurgical Projects
6 Low Cost Metallurgical Projects Overview of Metallurgical Projects Est. Production (mm tons / year) Initial Production Timing Run Rate Production Timing Quality Estimated Cost of Coal Sales/ton Reserve in tons (mm) Rail Road Fork 52 1.1 – 1.3 Q1 2020 Q4 2020 LV ~$70 20 CSX, NS Black Eagle 0.7 – 0.
Slide 7: Road Fork: Low Cost, Low Vol Mine in West Virginia
7 Road Fork 52 Low Cost, Low Vol Mine in West Virginia • Expected to begin operating in the first quarter 2020 with full production expected in 2021 • Estimated annual production up to 1.3 million tons of low vol met • Cost of coal sales anticipated around $70 per ton • Mine reserve life of ~18 year
Slide 8: Black Eagle: Cost Competitive, High Vol A Mine in West Virginia
8 Black Eagle Cost Competitive, High Vol A Mine in West Virginia • Began operating in the fourth quarter 2018 with full production expected in 2022 • Estimated annual production up to 0.8 million tons of high vol A met • Cost of coal sales anticipated at $70 per ton • Mine reserve life of ~25 years
Slide 9: Lynn Branch: Low Cost, High Vol B+ Mine in West Virginia
9 Lynn Branch Low Cost, High Vol B+ Mine in West Virginia • Expected to begin operating in the second quarter 2020 with full production expected in 2021 • Estimated annual production up to 1.2 million tons of high vol B+ met • Cost of coal sales anticipated in the mid - $60s per ton • Mine reserve l
Slide 10: Key Metrics: Third Quarter 2019
10 Key Metrics: Third Quarter 2019 Shipments in millions of tons 3Q19 CAPP - Met Shipments 3.0 CAPP – Thermal Shipments 1.1 NAPP Shipments 1.6 Coal Sales Realization per ton (1) CAPP - Met (includes T&L) $108.35 CAPP – Thermal $61.46 NAPP $41.33 Cost of Coal Sales per ton (1) CAPP Met (includes T&L)
Slide 11: Adjusted EBITDA Bridge: Third Quarter 2019
11 Adjusted EBITDA Bridge: Third Quarter 2019 Note: Numbers may not add due to rounding
Slide 12: 2019 Operating and Financial Guidance
12 2019 Operating and Financial Guidance (as of 11/14/19) Shipments (million tons) Low High CAPP – Metallurgical 12.4 13.0 CAPP – Thermal 4.3 4.7 NAPP 6.5 6.9 Total Shipments 23.2 24.6 Committed / Priced Volumes (1) % Committed (2) Average Price ($/ton) CAPP – Metallurgical 96% $117.65 CAPP – Therma
Slide 13: 2020 Operating and Financial Guidance
13 2020 Operating and Financial Guidance (as of 11/14/19) Shipments (million tons) Low High CAPP – Metallurgical 12.7 13.3 CAPP – Thermal 3.4 4.0 NAPP 6.0 6.8 Total Shipments 22.1 24.1 Committed / Priced Volumes (1) % Committed (2) Average Price ($/ton) CAPP – Metallurgical 32% $102.88 CAPP – Therma
Slide 14: CAPP – Met: Estimated 2020 Production and Export Mix
14 CAPP – Met: Estimated 2020 Production and Export Mix Domestic 31% Export 69% Balanced Export/Domestic Mix Approximately 2/3 of Contura’s CAPP – Met coal exported Estimated 2020 Met Export Mix (2) (1) Based on estimated captive production in 2020 14% CAPP - Met volumes are committed but unpriced.
Slide 15: Coal Market Commentary: Third Quarter 2019
15 Coal Market Commentary: Third Quarter 2019 • Metallurgical coal prices, which have showed significant weakness since the beginning of the third quarter, stabilized for a short period, before declining again in recent weeks to two - year lows • Global economies showed continued softness in the 3 r
Slide 16: Metallurgical Coal Prices Have Retreated since July
16 260 196 203 242 239 199 217 221 227 207 212 204 208 149 188 136 139 137 139 148 145 148 148 148 152 153 156 165 173 175 172 168 168 162 161 156 149 100 125 150 175 200 225 250 275 135 185 147 185 5/19 162 1/17 140 162 8/18 2/17 158 3/17 9/19 7/18 128 155 4/17 172 5/17 11/19 156 146 3/18 145 132 6
Slide 17: Summary
17 Summary: • 2019 has been a year of disappointing financial results and unexpected challenges • The management team is fully committed to improved performance going forward – FOCUS on Controllables • Reduce costs • Improve efficiencies • Improve overall performance • Reduce uncertainty • Positioni
Slide 18: Appendix
2 es eee ae. EE BAN / November 2019
Slide 19: Expected Tax Refunds and Restricted Cash Releases
19 Expected Tax Refunds and Restricted Cash Releases Meaningful Releases of Restricted Cash, Investments and Deposits Anticipated Significant Tax Benefits Expected (1) The refund of $68.8 million for 2018 tax year expected to be received in the first quarter 2020. 2019 - 2021 tax year AMT Credit M o
Slide 20: Overview of Select 2020 - 2023 Estimated Cash Obligations
20 Overview of Select 2020 - 2023 Estimated Cash Obligations as of 9/30/19 Note: Obligations presented represent long - term liabilities related to asset retirement obligations and obligations entered into as part of Contura’s formation and Alpha’s exit from bankruptcy which are not considered part
Slide 21: Reconciliation of Net Income to Adjusted EBITDA
21 Reconciliation of Net Income to Adjusted EBITDA In addition to U.S. GAAP financials, this presentation includes certain non - GAAP financial measures. These non - GAAP measures are in addition to, not a substitute for or superior to, measures of financial performance prepared in accordance with U
Slide 22: Reconciliation of Coal Revenues and Cost of Coal Sales
22 Reconciliation of Coal Revenues and Cost of Coal Sales In addition to U.S. GAAP financials, this presentation includes certain non - GAAP financial measures. These non - GAAP measures are in addition to, not a substitute for or superior to, measures of financial performance prepared in accordance
Slide 23: Reconciliation of Coal Revenues and Cost of Coal Sales
23 Reconciliation of Coal Revenues and Cost of Coal Sales In addition to U.S. GAAP financials, this presentation includes certain non - GAAP financial measures. These non - GAAP measures are in addition to, not a substitute for or superior to, measures of financial performance prepared in accordance