Arq, Inc. · NASDAQ:ARQ

Arq — Advanced Emissions Solutions — Investor Presentation (September 2013)

35 slides from Arq's investor presentation, Sep 11, 2013

  1. Slide 1: Investor Presentation September 2013

    Investor Presentation September 2013 www.advancedemissionssolutions.com © 2012-2013 Advanced Emissions Solutions, Inc. Exhibit 99.1

  2. Slide 2: This page intentionally left blank

    © 2012-2013 Advanced Emissions Solutions, Inc. -2- This page intentionally left blank

  3. Slide 3: Forward-looking statements

    © 2012-2013 Advanced Emissions Solutions, Inc. -3- 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 circumstances. The forward-looking statements include state

  4. Slide 4: Corporate Structure (effective July 1, 2013)

    © 2012-2013 Advanced Emissions Solutions, Inc. -4- ADA-ES, Inc. 100% owned ADES BCSI, LLC 100% owned ADES Clean Coal Solutions, LLC 42.5% owned ADA-ES, Inc. Operating Companies C ORPORATE S TRUCTURE ( EFFECTIVE J ULY 1, 2013)

  5. Slide 5: Family of companies providing emission control solutions for over 30 years

    © 2012-2013 Advanced Emissions Solutions, Inc. -5- A family of companies that has been providing emission control solutions to the power industry for more than 30 years ADVANCED EMISSION SOLUTIONS Portfolio of proprietary, low CAPEX technologies to meet pollution control mandates. 19 patents issued

  6. Slide 6: Near-term growth opportunities

    © 2012-2013 Advanced Emissions Solutions, Inc. -6- Near-term growth opportunities Refined Coal Creates $1B equipment market ADA leading provider of equipment to meet MATS Activated Carbon Injection Systems Dry Sorbent Injection Systems Equipment backlog buildup MATS to create annual market of $1-$2B

  7. Slide 7: Portfolio of Emissions Control Solutions

    -7- © 2012-2013 Advanced Emissions Solutions, Inc. Refined Coal- $0 cost to utility M-Prove TM Technology ~$100k capex, $1-$4/ton reduced compliance cost ACI/DSI- $1-$3M in capex Scrubber, SCR- $100M+ in capex Large E&C firms ACI System DSI System P ORTFOLIO OF E MISSIONS C ONTROL S OLUTIONS

  8. Slide 8: Expected Revenue Mix Trajectory

    -8- © 2012-2013 Advanced Emissions Solutions, Inc. TM E XPECTED R EVENUE M IX T RAJECTORY

  9. Slide 9: Refined Coal: Clean Coal Solutions, LLC (CCS)

    -9- © 2012-2013 Advanced Emissions Solutions, Inc. Owns 28 facilities eligible for Section 45 Tax Credits of $6.59/ton (escalating) through 2021 To qualify for Section 45, the RC facility must reduce mercury by 40% and NOx by 20% and have been “placed in service” on or prior to December 31, 2011 C L

  10. Slide 10: Refined Coal: Monetization Dynamics

    -10- © 2012-2013 Advanced Emissions Solutions, Inc. RC investor CCS LEASES THE RC FACILITY TO A THIRD-PARTY INVESTOR Pays ~$2-$2.50/ton for chemicals and labor CCS receives ~$7.50/ton in tax benefits RC Investor receives more than $8.00/ton in tax benefits (assuming a 35% tax rate) Utility gets free

  11. Slide 11: CCS may operate an RC facility prior to finalizing contracts

    © 2012-2013 Advanced Emissions Solutions, Inc. -11- CCS may operate an RC facility prior to finalizing contracts with an RC investor • Faster way to initiate long-term operations with the host power plant • Provides operating assurance to potential rd party RC investors • Very attractive returns to

  12. Slide 12: Update on Refined Coal Facilities

    ~22MT/yr © 2012-2013 Advanced Emissions Solutions, Inc. -12- UPDATE ON 28 REFINED COAL FACILITIES facilities generating $75M + in annual revenues to CCS Operating RC Facilities facilities retained by CCS ~7MT/yr ~55MT/yr 3 facilities using CyClean TM technology likely to close in 2014 11 facilities

  13. Slide 13: Emissions Control - Equipment

    -13- © 2012-2013 Advanced Emissions Solutions, Inc. EMISSIONS CONTROL - EQUIPMENT Installed/installing ACI systems on over 60 boilers at coal-fired power plants Sold through our BCSI subsidiary A CTIVATED C ARBON I NJECTION SYSTEMS D RY S ORBENT I NJECTION SYSTEMS

  14. Slide 14: Emission Control Equipment ($ in millions)

    © 2012-2013 Advanced Emissions Solutions, Inc. -14- EMISSION CONTROL EQUIPMENT ($ IN MILLIONS) MATS market developing as expected $1-$2B market for consumables to control mercury starting in 2016 ADA is prepared for the equipment market Supply agreements already in place, engineering capabilities ex

  15. Slide 15: M-Prove technology for Western and lignite coals

    © 2012-2013 Advanced Emissions Solutions, Inc. -15- Patented technology designed to enable Western and lignite coals to burn with lower mercury emissions U.S. burns up to 600M tons of Western Coal per year $1.00-$4.00/ton in benefits to customer Technology has been licensed to Arch Coal to apply to

  16. Slide 16: Developing proprietary solid sorbent CO2 capture technology

    © 2012-2013 Advanced Emissions Solutions, Inc. -16- Developing proprietary solid sorbent capture technology to capture CO from flue gas in conventional coal-fired boilers DOE and industry funding: Phase I - $3.8 M, R&D at 1 KWe scale, Completed in 2011 Phase II - $20.5 M, 51-month contract to valida

  17. Slide 17: Key Takeaways

    © 2012-2013 Advanced Emissions Solutions, Inc. -17- RC opportunities expected to provide substantial growth in revenues, profits and cash flows in 2013, and consistent revenue streams through 2021 MATS compliance requirements are driving significant near-term market for equipment M-ProveTM technolog

  18. Slide 18: Appendix

    © 2012-2013 Advanced Emissions Solutions, Inc. -18- APPENDIX

  19. Slide 19: Coal Energy

    © 2012-2013 Advanced Emissions Solutions, Inc. -19- Source: U.S. EIA, March 2012 Coal expected to provide ~ 40% of America’s electricity in 2035 according to Department of Energy 1,200 existing coal-fired power plants in the US generate the majority of the nation’s electricity, and consume ~ 900M to

  20. Slide 20: Coal and US Electricity Generation

    © 2012-2013 Advanced Emissions Solutions, Inc. -20- COAL AND US ELECTRICITY GENERATION Source: EIA 2012: lowest power demand since 1987, natural gas prices reach a low of $1.91/MM/btu- 2012 average of $2.77/MMbtu

  21. Slide 21: Mercury Control - Years in the Making

    © 2012-2013 Advanced Emissions Solutions, Inc. -21- MERCURY CONTROL- 15 YEARS IN THE MAKING EPA determines it necessary to regulate mercury 2000 2009 2005 2008 EPA issues Clean Air Mercury Rule D.C. Circuit Court vacates the Clean Air Mercury Rule EPA proposes new rule to replace the vacated CAMR Me

  22. Slide 22: Balance Sheet Highlights

    $s in Millions © 2012-2013 Advanced Emissions Solutions, Inc. -22- * Does not include the impact of more than $14 million in RC lease prepayments received by CCS in late July 2013 ** Included in working capital at 6/30/13 are current liabilities of $7.2 million in deposits and $23.4 million in defer

  23. Slide 23: Advanced Emissions Solutions, Inc.

    Advanced Emissions Solutions, Inc. NASDAQ: ADES

  24. Slide 24: Revenues

    © 2012-2013 Advanced Emissions Solutions, Inc. -23- $(000) 2013 2012 Revenues $58,930 $52,511 $68,314 *Revenues excluding coal sales $27,161 $14,772 $23,354 Gross Margin Before Depreciation and Amortization $10,594 $7,434 $9,388 General and administrative 8,109 4,040 7,313 Research and development D

  25. Slide 25: Refined Coal Results

    © 2012-2013 Advanced Emissions Solutions, Inc. -24- REFINED COAL RESULTS The operation of these units included $32M in pass-through coal purchases/sales In 2Q13 the four RC facilities operated by Clean Coal incurred operating expenses of $4.4M but generated $7.7M in tax credits For the Three Months

  26. Slide 26: Advanced Emissions Solutions, Inc.

    Advanced Emissions Solutions, Inc. NASDAQ: ADES

  27. Slide 27: Emission Control

    © 2012-2013 Advanced Emissions Solutions, Inc. -25- MATS rule finalized in March 2012- compliance by 2015/2016 2Q13 Revenues up 200% year-over-year, driven by MATS demand for ACI and DSI systems Backlog at 6/30/13 stands at $33.2M Currently working on bids or discussing potential projects for ACI an

  28. Slide 28: Advanced Emissions Solutions, Inc.

    Advanced Emissions Solutions, Inc. NASDAQ: ADES Man-door with PRV Bin Vent Filter ss *] ie Level Transmitters“ : PAC Storage pa Module ——— Feeder Room Process Equipment Fill Pipe Module Blower Room © 2012-2013 Advanced Emissions Schations, Inc,

  29. Slide 29: ACI Market Share

    ADA Norit Clyde Bergemann- EEC © 2012-2013 Advanced Emissions Solutions, Inc. -27- ACI MARKET SHARE Boilers treated by ACI systems Source: ICAC

  30. Slide 30: Refined Coal: Introduction & Overview

    © 2012-2013 Advanced Emissions Solutions, Inc. -28- REFINED COAL: INTRODUCTION & OVERVIEW The CyClean TM , M-45 TM and M-45-PC TM technologies provide on-site, proprietary pre-treatment to Powder River Basin (PRB) and Lignite coals for use in cyclone boilers, circulating fluid bed boilers and pulver

  31. Slide 31: Refined Coal Photographs

    © 2012-2013 Advanced Emissions Solutions, Inc. -29- REFINED COAL PHOTOGRAPHS

  32. Slide 32: Advanced Emissions Solutions, Inc.

    Advanced Emissions Solutions, Inc. NASDAQ: ADES

  33. Slide 33: Refined Coal: CCS Self Monetization vs Third Party RC Investor

    © 2012-2013 Advanced Emissions Solutions, Inc. -31- REFINED COAL : CCS Self Monetization rd Party RC Investor CCS Consolidated financial example for a 3 MT/yr facility F INANCIAL I MPACT OF C ONVERTING AN RC F ACILITY F ROM CCS O PERATION TO 3 P ARTY RC I NVESTOR RD

  34. Slide 34: For the

    © 2012-2013 Advanced Emissions Solutions, Inc. -32- For the For the For the Three Months Ended Three Months Ended Three Months Ended $(000) June 30, 2013 June 30, 2012 March 31, 2013 Coal sales 31,769 $ 37,739 $ 44,960 $ Cost of coal sales 31,769 $ 37,739 $ 44,960 $ Operating costs of retained tonna

  35. Slide 35: Contacts

    © 2012-2013 Advanced Emissions Solutions, Inc. -33- Graham Mattison Vice President, Investor Relations (646)-319-1417 graham.mattison@adaes.com Michael D. Durham, Ph.D., MBA President & CEO Mark H. McKinnies SVP & CFO C ONTACTS

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