Alpha Metallurgical Resources, Inc. · NYSE:AMR
Alpha Metallurgical Resources — Contura Energy — Q3 2019 Earnings Presentation
23 slides from Alpha Metallurgical Resources's earnings presentation, November 2019
Slide 1: Contura Energy: 3Q19 Earnings Presentation
Contura Energy: 3Q19 Earnings Presentation November 2019 1
Slide 2: Forward Looking Statements
Forward Looking Statements This document includes forward-looking statements. These forward-looking statements are based on Contura's expectations and beliefs concerning future events and involve risks and uncertainties that may cause actual results to differ materially from current expectations. Th
Slide 3: Highlights: Third Quarter 2019
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 total
Slide 4: Highlights: 2019 – Year of Transition
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 cl
Slide 5: Contura Vision: Key Focus Areas
Contura Vision: Key Focus Areas • Reduce thermal footprint • Divest Strategic • Wind down methodically, minimizing ARO • Expand metallurgical coal reserves, operations and offerings • Continue to focus on safe operations Operational • Increase operational efficiencies at: • Mines (feet/shift) • Prep
Slide 6: Low Cost Metallurgical Projects
Low Cost Metallurgical Projects Overview of Metallurgical Projects • Significant progress on multiple metallurgical coal projects with direct mining costs at or below $70 per ton: • Contributes to driving average CAPP – Met cost of coal sales below $80 per ton in 2020 and beyond • Reserve bases with
Slide 7: Road Fork 52
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 years
Slide 8: Black Eagle
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
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-$60s per ton • Mine reserve life
Slide 10: Key Metrics: Third Quarter 2019
Key Metrics: Third Quarter 2019 Shipments in millions of tons 3Q19 Shipments in millions of tons 2Q19 CAPP - Met Shipments 3.0 CAPP - Met Shipments 3.4 CAPP – Thermal Shipments 1.1 CAPP – Thermal Shipments 1.2 NAPP Shipments 1.6 NAPP Shipments 1.7 Coal Sales Realization per ton(1) Coal Sales Realiza
Slide 11: Adjusted EBITDA Bridge: Third Quarter 2019
Adjusted EBITDA Bridge: Third Quarter 2019 11 Note: Numbers may not add due to rounding
Slide 12: 2019 Operating and Financial Guidance (as of 11/14/19)
2019 Operating and Financial Guidance (as of 11/14/19) Shipments (million tons) Low High CAPP – Metallurgical 12.4 13.0 CAPP – Thermal 4.3 4.7 NAPP 6.5 6.9 Total Shipments 23.2 24.6 Committed / Priced Volumes(1) % Committed(2) Average Price ($/ton) CAPP – Metallurgical 96% $117.65 CAPP – Thermal 100
Slide 13: 2020 Operating and Financial Guidance (as of 11/14/19)
2020 Operating and Financial Guidance (as of 11/14/19) Shipments (million tons) Low High CAPP – Metallurgical 12.7 13.3 CAPP – Thermal 3.4 4.0 NAPP 6.0 6.8 Total Shipments 22.1 24.1 Committed / Priced Volumes(1) % Committed(2) Average Price ($/ton) CAPP – Metallurgical 32% $102.88 CAPP – Thermal 92%
Slide 14: CAPP – Met: Estimated 2020 Production and Export Mix
CAPP – Met: Estimated 2020 Production and Export Mix Broad, High Quality Product Portfolio Balanced Export/Domestic Mix Estimated 2020 Met Production Mix (1) Estimated 2020 Met Export Mix(2) LV 8% Domestic MV HVA 31% 21% 42% Export 69% HVB 29% More than 70% of Contura’s production Approximately 2/3
Slide 15: Coal Market Commentary: Third Quarter 2019
Coal Market Commentary: Third Quarter 2019 • Metallurgical coal prices, which have showed significant weakness since the beginning of the third quarter, stabilized for a short period, before declining again in recent weeks to two-year lows • Global economies showed continued softness in the 3rd quar
Slide 16: Metallurgical Coal Prices Have Retreated since July
Metallurgical Q4 Coal Prices 2018 Metallurgical Have Sales Retreated since July Comment Aussie Premium LV ($/tonne) Platts US HVA ($/tonne) Platts US LV ($/tonne) Platts US HVB ($/tonne) 275 260 250 242 239 229 227 225 221 217 217 212 207 208 203 204 196 199 199 199 197 200 192 185 188 188 185 182 1
Slide 17: Summary
Summary: • 2019 has been a year of disappointing financial results and unexpected challenges • The management team is fully committed to improved performance going forward – FOCUS on Controllables • Reduce costs • Improve efficiencies • Improve overall performance • Reduce uncertainty • Positioning
Slide 18: Appendix
7” ee ee ae OE =e BAX Jf November 2019
Slide 19: Expected Tax Refunds and Restricted Cash Releases
Expected Tax Refunds and Restricted Cash Releases Significant Tax Benefits Expected 2020 2021 2022 2023 (US$ Millions) AMT Credit Monetization(1) $68.8 $34.4 $17.2 $17.2 172(f) 10 Year NOL Carryback(2) - 43.8 - - Total Expected Cash Refunds $68.8 $78.2 $17.2 $17.2 Gross Federal NOL Available $146.3
Slide 20: Overview of Select 2020-2023 Estimated Cash Obligations as of 9/30/19
Overview of Select 2020-2023 Estimated Cash Obligations as of 9/30/19 Payments to decline significantly over the next several years once payments for Contingent Revenue and LCC Obligations conclude in 2023 2020 2021 2022 2023 (US$ Millions) Acquisition Related Obligations $20.8 $7.9 $4.2 $ -- Contin
Slide 21: Reconciliation of Net Income to Adjusted EBITDA
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.S. GA
Slide 22: Reconciliation of Coal Revenues and Cost of Coal Sales
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 with
Slide 23: Reconciliation of Coal Revenues and Cost of Coal Sales
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 with