ARLP - Earnings call transcript Q1 2021 | Alliance Resource Partners, L.P.

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Operator

Good day, and welcome to the Alliance Resource Partners L.P.

First Quarter 2021 Earnings Conference Call. All participants will be in a listen-only mode [Operator Instructions]. Please note that this event is being recorded. I would now like to turn the conference over to Brian Cantrell, Senior VP and Chief Financial Officer. ahead. go Please

Brian Cantrell

as and Partners Matt, operating Earlier morning, as this and and market Thank outlook. its welcome, first Resource well results these released now and perspective quarter Alliance on we'll conditions you, discuss everyone. our XXXX results, financial

remarks, the our your call questions. prepared Following to we'll open

from to with some are risks, of uncertainties Securities assumptions that reminder Before remarks Commission, also may variety beginning, that and a time include morning's reflected a today in time our and Exchange in filings contained our the press of forward-looking to statements, subject are release. and this

While actual or projected the information required more results law from information, these those In may publicly result these underlying or the revise materialize no as currently has one events risks based forward-looking these our future so. if providing or uncertainties of vary update or partnership materially by a us, forward-looking obligation statement, statements to of unless whether do or to any new or we are incorrect, expected. available prove remarks, on if to otherwise, assumptions

measures contained Finally, to the GAAP ARLP's non-GAAP SEC be discussing financial Definitions directly the furnished has our measures. reconciliations most press the at on been are the also which differences end these financial and release, non-GAAP financial measures of comparable between Form on website we'll and certain and of X-K. posted

for turn opening the I'll and of preliminaries the over Officer, the With Chairman, out comments. Craft, his way, President to call required Chief Executive Joe? Joe our

Joe Craft

posted We moment financial Among our assets results our a owned allows US vaccines that our organization. part expectations to our coal founded. the well of cash available. basin. mine minimal royalty the gas poised of subsidiaries, be performance the energy to first results the flow with everyone. morning addition to efforts to a and larger, will generate plans the of stability of subsidiaries, by adding report to coal to reserves to royalties requirements to business company CapEx combining certain income visibility mining group rather greater long provides ARLP’s and royalty from royalty limited of this and working oil royalties We our to our believe and form several with enhanced us income royalty Illinois the all in of activities unitholders from ARLP’s leased coal and Aggregating inform land total better royalties primarily analysts requirements results in XXXX our existing costs. the mentioned activity potential With expect and term coal as our was of operating royalty we operating of step free predictable, increased to explore expectation certainty segment total review activity. were the capital benefits. earlier advancing Alliance more value of and new and segment initiatives became we earnings and Coming and suggest royalty assets more Brian opportunities. detail value creating Thank on to in key economic solid good this in focused The will into with those new morning, we Brian we entered during global highlight you, benefit from improved took demand that our existing coal initiatives our and with across Alliance separately the value year, of embedded call the a the last were maximize unlock We

to various management realize by future expect activities. our combining royalty also We efficiencies the cost of

will two these growth the royalty In ability addition, to secure cost we from cash these flow sources lower our to future aggregating financing to improve believe support segments.

we By been total EBITDA, enterprise multiple. X.X well emphasizing XX in companies, current above value our as multiples of other at recognize to part range and that of royalty times X ARLP’s area, ARLP’s look continue true this to As the the a begin recent in of fully of are royalty this business. market have the value expand activities hopeful times will we we full our magnitude to

times, by uncertainties over been the clearly generated through the our free a ARLP million hand, and debt its leverage we initiative to the priorities. created unitholders disruptions stabilize managed our ARLP obligations have on returning quarter. flow very protecting total sheet the XXXX has continue make from cash cash also began year, [financed] the pandemic lease progress sequential and last that by clear focused lowered quarter. balance been the among was highest the $XX.X to We've our we to during X.X% on cash to total this during and As reduced and improvement once quarter situation on and X.XX Utilizing

of this and continuing setting of recent cash per more XX% strength Brian? we I'm for call year, flexibility with outlook anticipated cash capable the this our to above I'll for the value X improve, long distribution before flow of at now turn an provides believes the unit coverage by to for point. approximately annualized also we cash the performance back growth pursue providing level flow board investments management to and at reached term distribution the And with distribution look conservative maintaining sheet. the believe our On have XXXX free while very our projects With a ARLP for estimated that supported times declaring $X.XX Brian our sustainable ratio our balance the our And foreseeable pleased year's quarter. detailed opportunities, that a unitholders is unitholders view this for future. to results. distributable comfortably distribution

Brian Cantrell

in of morning, the million of $XXX.X of Joe. basic of revenues an to net XXXX diluted in $XX.X XXXX of income $X.XX continued the the at to for per million income quarter. cost. compared and coal $XX.X the revenues, that Lower than increase our XXXX $XX.X million largely $XXX quarter. $XXX.X more quarter XXXX offset drive net operating And noncash by expenses a partner prior charges limited initiatives for as quarter, the unit, Lower to reported excluding however, in decline doubled Thank contributed operations efficiency or impact we million shipments of million down quarter. million This ARLP compared in total net loss reduction you, were coal to the X.X% adjusted

segment As the EBITDA adjusted to decreased in a XXXX the quarter. quarter to result, million in compared $XXX.X only million slightly XXXX $XXX.X

the EBITDA weather coal and in have for sequential negatively Tunnel an expect disruptions these were line declining would causing our increased increased solid currently for with unplanned EBITDA delays both sequential higher quarter, taxes operations transportation impacting royalties lower coal but increased performance We and delayed with quarters. tons and to which the subsidence total approximately customer Mettiki $XX million. during cash our Unplanned related quarter approximately plant at inventories, the generally and While our shipments even results expectations, mine our ARLP’s for with been the for of better, outage XXXX cost ton sales by revenue XXXX costs XXX,XXX per Ridge flow severance adjusted will priced Taking these segments mentioned as led total due over sales shipments Compared XXXX expense X.X%, associated a delivered customers look at mine. segment quarter. performance legacy ARLP’s posted and the to of ARLP’s million lower metallurgical be EBITDA compared segment shipment to coal at expense expense balance XXXX XX.X% impacted delayed results ton to as primarily well compared quarter the increased price quarter. coal delays, of coal coal per to due ARLP Ongoing initiatives XXXX tons drove contracts, operations, the X.X ton of and lower closer total quarter realization higher the in the at to expiration the shipment previously year. the by also expense the $XX.XX quarter. all per XXXX to adjusted control XXXX the

the Our compared oil higher BOE segment and average and quarters, XX.X%, royalties prices by ARLP’s per gas pushing both price significantly from respectively. realizations XXXX sequential commodity higher XX.X% benefited and to

pricing compared Strong the quarter. drove than volumes XXXX oil the operator adjusted quarter year, for much sales royalties acreage during of million, expectations. of activity to anticipated $XX.X to segment greater our led our on reduced to production exceed Although completion and drilling dramatically and to an continue sequential the for last gas XX.X% impacts of increased and commodity activity production EBITDA increase reflect

For segment oil royalties close our combined coal more adjusted royalty EBITDA revenue an sold and $X.X to and $XX.X higher of than a EBITDA basis, ARLP’s with XX.X% royalties or adjusted XXXX guidance. sequential segment per X.X% total. and tons I'll of of million the approximately on in segment, million, update the X.X% coal an respectively. my leading quarter our royalties comments XXXX consolidated offset contributed increased and On to gas lower increase volumes, compared quarters,

utility full we the vortex a over strong natural the year start of On ARLP’s XXXX. also should stockpiles outlook guidance activity year the the increased additional With for XXXX. domestic sales year, we rest polar February, an favorable of to price increasing opportunities gas this expect markets market coal balance the fundamentals curve, our during burn the for international in performance strength year. and lower improved create Improving buying coal and of are in export coal

turn coal comments. approximately for the of royalties ARLP coal to coal the completion the XXXX The increased during are reported coal production XXXX I will volumes pace drilling, final quarter. continue EBITDA anticipating remainder and contribution also tons. result, exceeded segments With segment. With increasing I'll million segment end acreage XXXX, our our Joe oil ton. oil strength our now expectations XX% of sales the $X separately segment that and XXXX to adjusted our earlier back royalties XX% midpoint ranges. our range and a in that reflects our operations total are for initial year to now and increase mentioned by gas have its XX is for now this for for of coal production at note that intercompany XXXX will we we will royalties the per of royalties As call Joe? of the levels. anticipate near commodity above volumes current and trend EBITDA expense continued some that, full in cost permitting operating activity pricing, the This our production I gas we the top on from suggest increased be

Joe Craft

Thank you, Brian.

unitholders, our I term for is state achieve we committed As how intend clearly to ARLP look long to future, we want that and goal. creating to value to the

First, ARLP coal. thermal committed to remains

of coal suggest low cost our well away remain challenges and California experienced serve for that disruptions the and and desire and The occurs, there other transition success fuels, While economic a importance standard common quality and reality transition that resilient an we proudly to be communities emphasize the and being and life grid. sense in our efficient, is headlines allow the operations, and Texas may essential innovation from rhetoric power ARLP recent that deserve. coal and an to maintaining coal otherwise, fossil until to of science living will Until of of supporting with intends vitality, economic country. the reliable

technologies. and recognize energy embrace new we Secondly, ongoing and transition the toward power

that intend As we call, during do are our pursuing to to and earnings participate on I opportunities mentioned evaluating last in and focused so. transition

plan have optimize utilize people, sustainable our cash these flow the develop, growth As that attractive we term long of to activities of value and with continue the returns to pursue strength flows. generate we opportunities talent leverage to existing believe ARLP’s and and the assets to financial and cash potential our entrepreneurial spirit

a in have plans always we to manner. As execute done, we disciplined our intend on

be balanced priorities capital our simultaneously to providing designed the while protect return to unitholders flexibility capital. Our to balance strategic will with focused, and access opportunities, maintain pursue cash and ARLP to allocation sheet

optimistic exist, about and are While Alliance. we the future excited challenges for

delivering to call stakeholders. the I'll total define ARLP on to the focused long for all operator future, ask attractive That term our concludes prepared As for now comments, and questions. continue our strong our remains generating we performance returns and open

Operator

Instructions] come first with from will Global. Nathan question Seaport Our [Operator Martin

Nathan Martin

incremental you quarter. export tons I guess, may last Can us and the tons guys have first, where in market of priced? looks XXX,XXX additional million a you it sense an the priced about in like those give since market X domestic

Joe Craft

Al embedded we change ranges our in gave guidance that the pricing quarter, our of we did the this has quarter. from last which in not been

are for So we're right expectations year. on what target our the with

Nathan Martin

guidance. comments to year any mean, I you full $XX said, Joe, saw you your like Directionally, there? $XX maintained I

Joe Craft

I We're hesitate some right the of negotiations. price to in middle that. discuss

prefer I on you a comment defer more So basis, understand. if specific to that

Nathan Martin

those million tons? guidance, domestic X breakdown of left tons maybe then for maybe between expectations the to kind roughly And then to the have on to price and export us guys can midpoint give an get the of you you on idea committed your

Joe Craft

We've there's anywhere in XXX,XXX at we've XXX,XXX plan about numbers, the forecast. got that from provided right to in got, tons our we Well, XXX,XXX. these

export targeting. split show domestic So that and the you between that would we're

believe pricing tons another than we from more export of million that the anywhere could X.X sell However, in be attractive opportunities. million the we domestic X could to some market. That

So to whether tons export those to the that as place goes on to market. domestic them trying year market we're place evaluate as we're the in or in better the

we confident press position look presented are this that and we've volumes to but the at, guidance plenty what increasing our release. place opportunities to opportunities given will that XXXX pretty tonnage, as are open We beyond in we'll anticipating quarter's we at have of that not currently be in

Nathan Martin

you X.X year. the you believe the ratable cadence specific some build through made kind this QX? a about guys did guys see tons you about X Brian, you of you then said maybe And quarter. of on inventory, remarks, prepared I your what kind think, but million of of comments the us in I give shipment for rest idea maybe that's the Can throughout more QX in

Brian Cantrell

will very of plus year. and tons part first don't unusual by not it's example, believe export. had, quarter April. to the scheduled those be do I to obviously in I in just actually we see. the of balance build delivered believe tons XXX way recall I tons, clarify, I due those were correctly, the Nate, transit in to ratably, If seasonality. Well, said or million too, monetized some just just it's mean, that I expect over is delivered we early of And for minus, inventory the

we've due think terms be and will schedules end typical overall that the vacations seasonality of going to the Christmas, holiday it I normal in believe. cadence I cetera, quarter year around what historically, fairly Thanksgiving, for midyear the see forward, miners’ with you fourth in done et

Joe Craft

XXX instead think it's I of the quarter, million… XXX,XXX in

Brian Cantrell

XXX sorry, I'm million tons…

Nathan Martin

too. that, got I

Brian Cantrell

you Thank that. for correcting

Joe Craft

sources so had interruptions crews. just their able had also by fill Yes, interruptions then we being we transportation out by weather to and not

quarter. So we will roll would right hope that and second the of believe some into

Nathan Martin

was actually one going Joe. that other be And questions, to of my

touched You during and/or How months couple versus, a rail and transportation things. of is from looking pvortex kind infrastructure of standpoint? of barge today the obviously, on ago that maybe side both

Joe Craft

On the little having to to the we're But that barge, rail side, I a the it's continuing more with waters receding an that's focus. be think discussions. on bit seeing we're item becoming in have

the will we delivering it. that we be going want fact, we to that So as to believe we've when in consistent needs got the ready forward, volumes do, be customer and for deliver that coal when it

having So we're work. constructive. decide to hopeful We're They've go to back conversations. been will people

of that come we've because in people a challenge chamber there's think Kentucky see example, XXX,XXX I we're as jobs that everywhere open now the posted to that just throughout work. got right State are we to wanting Kentucky an not finding back

when and and and that it shake but we want but problem. we to it's are so to when like labor is got sure going challenge plan And that's railroads, a out, But job. operators, work. aluminum come we've that workers not that's is across operators, don't really talk unfortunately industries, a up we that the to job board, labor a opportunities not coal service the go tight step want or give they back real to it job’s great that or is a care generous or it's this take work, to tight. how seems about whether need are creates So of having people And to to benefits back

Operator

Arsht], [Operator will Investor. next [Alan question Instructions] Our Private from a come

Unidentified Analyst

to West up intermediate question Texas And it's pricing. has barrel mean your about around today. in the revenue I -- to royalty your I $XX crude relationship per relation to had a

How were think XXs at in I there X:X And less? relationship do or high you averaging the you a QX. wondered, is look that? for I something

Brian Cantrell

It relationship. equivalent. are of our is we X:X a that not oil When doing definitely barrel on a we're disclosing volumes,

is correlated gas. X:X volume price I natural into MMBTU oil, moving for from that's on it of includes the takes converted and which, also to liquids that barrel our again, oil. typically So not of account stream, to basis oil believe a

So for show within when that XX% our BOE of operating three price our press and and embedded little the results table analysis this over streams just not and about, volumes at we BOE, you stream. our past were volumes quarter, per our the in specifically look a release, again, all includes oil revenue oil

Joe Craft

the for we've So does quarter, I And stream, March, when oil month per of WTI since you for it believe us oil BOE so it record look the at space. was average reflecting been and gas at when actually, you that's correlate. this a our our look sales in the

Unidentified Analyst

strength guess, So for and, a NGL, the that trend I in nice natural gas with upward be prices should you?

Brian Cantrell

mean, three I Expectations year. products the the so that is as Yes. expectations of are today occur. volumes seeing our in by favorable. what And just currently would those that this we're about or the thought relative through remain definitely all on forward the exceeded that they'll curve we importantly, quarter XX% of first way balance to

products improved that we basins encouraging activity pricing So is those are operator in participating for the in. that

be and gas as updated middle forward next the as oil we're Hopefully, the to volume able in earnings we'll discussion. during our for report give that So curve incorporate more and some well of reserve adjusted stream our activities. details

Unidentified Analyst

unrelated question that had other Is one question, two. in royalties. acquisition possible about your I of the really One coal other plans?

Joe Craft

the ways land utilize we in that We royalty our could at business. are different talent looking

greater at cetera. with investments to battery solar et turbines, tie that other facilities. land-related other minerals could be technology, some be So that could participate will It level that to a to

terms provide that in think to royalty cash of segment would that at term stable looking are long deploying we flow. yes, So capital

Unidentified Analyst

natural big overriding but coal kind is form if companies have the off industry sold in subject, of well. interest the as financing. royalty slightly wondered I could some of of dry And I noticed a gas those happen this the as

Joe Craft

it's when -- mean, people they're selling selling that for like us. they're coal the Well, to on I side, not essentially, financing,

we doing So royalties coal on of could some we're essentially that's overriding the what side. and buy

on haven't fee you it much we shows On in we've also when reason we royalties, and the properties where guidance $X.XX as for release we a participated there's that And where third cost that. have X.XX, And the our revenues lessor. side, have a Speakers] back coal buy side, our had people override pay leases. our roughly at minerals to X.XX, we're own we of override where that one bought royalties, at our in dollar $X.XX, looked are our could, that's look these but to so the party ourselves leases royalty to fee expense some that of our other we And property to some of that [Multiple own lease. coal blend to the is charging that we've

other there would operators. coal coal at that's and/or So financing be opportunity primary our interested providing if for is reserves where is. low to then interest we would that, really And capacity cost acquisitions be looking it not in

Our non-fossil gas being energy circles in and is today. primary be that fuels new sector in the transition this vision or that in in that's at oil discussed new would political areas in transition interest to looking either would the participate

Unidentified Analyst

looked, didn't your was see recent details then them curious about And I of release. finally, I offering. in your bond the I

Brian Cantrell

X.X% I last to the The the Currently, which I 'XX. yield ago. issued is [pace] compared X.X%. They mature XX.X%, a in of about think, bonds of of trading trade were they're May is number roughly years saw,

Unidentified Analyst

I thought that… you refinanced had

Brian Cantrell

and credit in matures may March a it our be XXXX. redid We our in banks. of you with about revolving commercial that March, year Yes, ago thinking facilities

Operator

from with will question Lucas Riley. next Pipes Our come B.

Lucas Pipes

today the profits size. line mentioned value the trade. that relative your you Brian, you're prepared trading shifting see you between segment, And business into its comps where royalty royalty in and business and further specifically also is your royalty the are for where now Joe remarks, coal increasing

that. And businesses end example? this Is Would completely, these public on for a to game listing, so it the I your wonder ARP? close what's really thoughts appreciate separating

Joe Craft

royalties cash we Lucas, we're cash basically of think it's royalties in limited teams managing to sense operating we've flows. any understand production that an make oil you our land, stable Right now, that gas difference and got and coal, capital. limited limited people both they're ARP, between And that similar. don't capital, and sure are the gas from when a see or coal management trying oil flows with whether working it's expense, And

trying think mining that very felt when that cost that side together in able those the a to should we provide of as to try to some on let's know to next to about So manage gas coal are and acquisitions, to years do that for that to from the it go going we're say, coal we bring to cash plans these we XX would be we mine provided efficiencies, get this was plus our may bring it be that we we ability than company. we reasonable be to flows finance oil if try segment lower financing as the particular, be predictable

growth So ways well can coal of discriminated has ESG a against it's by finance and company. really like we company ours. financing run driven more our thinking needs our on

If charge to of the whatever call get and cost because being people way I lenders to in double to want potential flow want stigma to low financing would the issue. way borrow without that think provide to to growing coal in we having at coal address company that single low for stable a us against that be to But ESG to are find to mean allow show But is ability just justifiable. segment the need not us rates a that or discriminated one interim, to our I digits that borrow cash it. able of took digits. because name would we’re an you we off But we're company, they

do grow want the to that's grow primarily grow far to to strategy as I to but it. think So we're it grow of part it trying strength trying as Alliance. We

not of nine the do, transition world the industry thought and that to to in is I truth, practical. not people XXXX, is practically or utility of terms in should years, we that fast. not to American XX be not mean, most We We talk XXXX the administration XXXX. really speaking. And what five, believe are XXXX to transition. utility or can that think XX the misleading in in XX investors just The they're executives XXXX and telling transition the

that, with to may anyway. deal do it got reality, we've Now they said having

so got And to as redeploy think we flow flow we've take of XXXX, do by more. we've the cash as terms in in we today, so got hopefully it future have we even how much generated XXXX, that cash the have today and

got So is to we've to grow the going be. market where

mineral's I I Yes, of So and some I think best the EV’s think that's to But optimistic large of sector read as everything the effort case, be market, believes demand. very XX% target. reduce case penetrate that may going part a a the that. on most aggressive there's to transportation well

believe and provide we in investing for So term still that will three decades. gas oil returns good long for

we that where can still shareholders. around that a invest got our make to investments so term we for generate can where base attractive an that can that very long investments or returns And be area feeling we we've that's can solid we're where

Lucas Pipes

get when the this my Xs. about on but let's into not dollar think allocate creates it EV touched in but just maybe, You value anyway. shareholders, any to that for towards the One, an EBITDA sheet opinion, reduction debt now, balance in and you I

all? So, is be to there made to at argument this be leverage no Brian, business an running with

Brian Cantrell

conservative theory traditionally times as it a X have I think in and sense, suggest makes in the could you we achievable. certainly, level business rational seems don't running that. to mean, I be

good think your current high about yield investors. think banks. multiples, for who different to few should very We I And very purposes, I a point, we coal. deep pursue point, discussions capital have strengthen some wide value haven't line so red at concerns of a ago, past. do where variety believe, relationships remains is we that the conference necessarily available relationships that to to be in Joe's are above a continuing while months do reflect pool We be. cost investing around recently current that evaluate continues enterprise But there are ability with markets, there participated those and we Lucas, to a our To we have have, of the done certainly a opportunities look with pools coal, of refinance. strong thermal to capital to in had virtual that thermal put

I historically, focused to the company, remains have it value If and that to think our as the leverage unitholders pretty will on done But delever an and completely to of themselves makes absolutely we X:X, think driving grow I cash return near objective. growth. difficult clear. we will flows be achieve creditors then to our able to we're take the ability and care are

Joe Craft

from a centered continue fuel an publicly in talk next I evaluation. think through can the transition to the through how model participate this me definition I Lucas. I that's I is think pay And to to we of that have teams was mean, company to attention evolving company transition trying us one. this this message Let fossil trying add is business and traded transition energy a to that Every company. being what the again, that, think we to your last the coal question around started with we're quarter and

we're So business. in the energy

not everybody Coal particularly. to an in is Alliance wanted because have name was way we 'XXs in be Resource the to that lights states And talking plastics. factor, that contributing in chips still in disruption about. of saw of Alliance weeks It's And Our the shortage it two love of we that set believe their on. people investor Partners, a because worldwide electric created up generation is shortage energy, middle we Texas in

We've and And a our business the whatever in the got this them economy. me. country There's been energy energy and of lot our something the day world to understand a to in US back business. we've we're 'XXs, scale to So be reason can't business be we generation the choice from way customers, going means people relationships they in why what to this And going if they utility with this make. in want need been predated that to one, of the to to customers got supplier no there's we've in it We've capital. help transition else, relationships.

You're of $XX they to billions trillion. billion Biden sector. $X specifics, reading transportation Senator and dollars that about want has earmarked. Manchin infrastructure it with In of that channel billion They're $X the the talking into plan, the hundreds electric there's plus grid back

of So affected are there. or not money federal that's already of billion federal people And come invest that tax policies, money advantage areas $XX their going billion communities, who's coal to there's to going it's i.e., specifically. take to $XX credits by of if

unfortunate looking just be get essential flow XX cash producer look definition decades. fuel that for the labeled industry, to Am as just from company they to the years. I'm because that at to flow are, in than we in will that? start So And they how that coal the in to money wind next to that going I just participate it It's coal the the hopeful am our at can money can't industry, we're Are a that banks three have solar we in look EV that going going to cash lend in the at I new the over we're as going people that's they just conversations strength can to transition. beyond needed this the to industry, looking the transmission And if look technologies? at vein of can't participate next going they the low an cost and lend a industry? different solid with

these can't areas, the transferable your with we So we have we where live, we're unfortunately, overnight, but people, relationships to why say reason that be we areas that have cash flow we using is. the that, skilled are to track partner. with the to having And growth, borrowing And flow use the to we've capability of against we what we in targeting what see able our that we're build to target, doing, we utilities do And governments, transition where that's that our we're to cash period to state we that recognize we're federal done businesses are be we've been we've in skills whatever record like can unitholders. have show going it that are that ready to discriminated very to in businesses that's be do. can future than free build start for past, and to of with practices. got in governments, more a lending investing where but how in time XX% without one our financed to do define should that only areas we that pay generating We we our

on it. in [fortunately], two years, but to we've It got cash I decades can believe I businesses. we very benefit be of XX that all the in want got they one money communities few these encourage Fortunately, tax And do these to that that federal don't credits financial And coal focused may have can of we've engage flow enough fuels. know, transition we're resources that. from we're throw fossil to all that out the from areas and this this

looking uncertainty at we're something and to than conservative. context understand we're some confident a the we're more that it's and so that's that probably of lot sheet. these it how place So a very strategy great, I'm opportunities, And in be But people. to helps that's great the being able advantage of why balance of to that's got take our you hopefully,

Operator

come Capital]. Calavritinos next Our will from with [Arthur question ANC

Unidentified Analyst

a what's in and your particularly you export to lift with stuff. speak there? -- and one color a you I've the and A the being last on any term. great on sort of extra Anything short discussion being on very getting lot I'm couple of question. a Are Europe running of longer the questions, in that? been And can term on reports wondering any just short getting going market? couple -- cold on April,

Joe Craft

some the been So -- April, month dealing there's been with basically transportation we've for oil some driven high prices, diesel. of costs, by

Some driven by Suez the Canal some the by driven disruption. just capacity,

business some started things So that transportation are piece that of has provide show there's opportunity. happening we several the in believe that reduction the to could

pause, year the but Europe still to be got we really disruptive we when I targeted customers. to mine demand, with created still to to their right does now. can people sell a ago has know demand only testing some more there's the we're our it in And to it conversations affects definite how positive for us India India did but coal. that virus virus not believe operation. And products ability to it we're that's resurging bullish. that So we we're some mean, do because were but the Because what as affect

correct market we and issues are of So April remind and political bit resurgence Australia that a between slowed the China, they because that part, as We more and into exist potentially cost we'll do second backdrop, than and the million market said strengthen we take to export for that what probably in little planned in do the X to do -- to continue year. feel is had think for But our unpredictable. sales, from recent that, than tons Again, still and have will lower this that constructive. what's next also the was would I customers half I tied in that itself And was year, we X transportation. to current of that of inventories if the those we away forecast. large going just would million earlier, domestic believe our the

Unidentified Analyst

storage now increase Google, Amazon the a days, Again, by had thing, just XXXX. I like the term lot longer XX%. maybe and And seeing the I've people I'm use big these of electrons, of but off. questions. of color companies, to and then on of shut electricity but to like, for using being they is just steel their may then it. to, it green But then have never mean, appreciate off. unlike F-XXX any cloud, a old the like in going steel lot they off just it's countries stuff But it all technology can sheet that the are at a but electricity, tech electricity. the uses thoughts have And think a you getting XX of data research or never I'm have and when use picture you and I'd shuts seeing that, of what shuts like it I they reports, look companies on XX is, like next couple metal off. speak using tech is lot you guys amount a I supposed use report years. electricity And been just to that shuts they plant, are -- it's a have plant making a for

Joe Craft

Well, suggest The the focus that you there on could and a they're down they're of that be their then a to of and increased electric I in how to We'll because the demand. buildings more to usage. is. York EVs, see. when know tear you skyscrapers going discussions year going New increase again is start an had I for And efficient and these policymaker don't year is doing about that would there lot build enough, was live that buildings mean, some vehicles, efficiently. last works in I opportunity not mathematically. efficiency that that, add that But to offset

tremendous into Then be in So of the going include developed to China countries. of electricity, efficiency analysis the offset that, including fire suggest uses the coal India emerging continue of we there's there's get to generation. a some would that's and you in which could that countries, lot growth, that that

India in trump going we no are do fossil and China fuels plus. on to matter So what America, that

we've So about sure know really as but that if benefit a feel not I for good a through but that. Biden don't country, think that lot I know that's of people is that our administration got are there I a that. can listens to we making to speak the cost makes but to the difference. challenge it I'm

Unidentified Analyst

I've read On the skyscrapers, heard that. and

but very windows. there's small You can build them basically

product. nobody so that And wants

yes. So,

what I XX% that So two X% the or million math still fleet? any cars Does Like the they early hear the then XX% if electric do that cars. on What or on does electricity, the are of you. and needle that? One, coal like or or what for other permanently were is of And or I like like think the well, fleet anything we on thing, things. mean, or like electric? X% move XXX for stages? we got gas that in

Joe Craft

by that level. Again, they offset well think the the I at as are efficiency somewhat renewables as

years. be dealing gas. And then that mean yes, the don't greater to going than electricity five I that for going supply allow to start You've got plant to for down if these there's shut to to greater I going in I to you is shut mean with down be or it. states really coal I demand and are challenge am gas has I part natural that's replace seven years? it know, If of natural a that natural with and coal want run a plant, you years gas XX me plant that

dollars to in that risk when years. energy Well, we these all transmission, just their nine reports, shut we And and our basically saying So be challenges by out XX start down significant challenge deciding electric significant again, numbers real back in with? it raised cannot reinforced increased systems renewables that, and this that's all going are coal a done was penetration to transmission report that Again, to issued got want on that we've that know you And to MISO XXXX. what in rolling renewable XX% the more we replace February. plants the grid.

done that permitting quickly. get can't You

year exactly XXXX long with in sure so So it for doing that make about technologies would better to compete investors a how an it to country makes get truthful low I we we where there, And think XXXX the in talk to with be international served they're to investing confusing way cost right need really marketplace. our determine in can and to we is. commitments how transition this XXXX to then be about started if talking starting

Unidentified Analyst

about just hydrogen one, at utility hydrogen last coal. then they're Japan, an reading from experiment I in doing And hydrogen. mean with

I in new last of hydrogen? a money seems So hydrogen with the calls having must as some incoming guys technologies. last one the it great of on you guys in call. natural throw partner assume what of mentioned lot are a in administration's engineers for you guys kind doing energy then in got on just And do fit Are it just technologies, with some the Anything that the call, me JV or you guys thinking phrase a have a and some properties regard… this like And the coal -- or plan. what about do it want call, to do that of you newer that know guys. these you that It you era, and be alliance like new these or may you could

Joe Craft

of a have gas want eliminate all role, coal but the focused coal that is natural mining. can't but hydrogen’s that mean More we they on doesn't to

that that new are would some we're any So on that. carbon are technology utilize that worked things they want don't being evaluating. capture But there

what be does feed things saying. there you're into So can that done that and are

footprint, our, there where geographic be we where be are that I'm not some So other running we're then just at the that into and some candid. a do the allow businesses than we things hydrogen to have coal looking talent mining. where going to capital to footprints more are know on that It's can tied But know there's skills there we of And would to capture have possible. of customers going provide that's carbon our that flow. that something are, pursue, lot I folks have that but formula. only that are that. fit be focused people some don't

Operator

question next from will Our Fields Matthew of with come Bank America.

Matthew Fields

I about capital allocation wanted bit. to little talk a

your XX% X to leverage, no be X answer the term or that continue you're you before appreciate Do thought of end that you at a times your about that longer are think times cash of in you to to flow distribution going I of that I is kind kind of through managing target? mentioned question sort to you level. projects. the growth year trying Lucas’ think about towards

Joe Craft

difficult term debt we're be there And them. a and down mean, into getting possible. be we'll get paying very I them think make to use is because year both ability EBITDA just growing accretive investments. paying capital if that right, we The grow, your it two that I longer not therefore, debt. to this mean, down would of or ways, made I more you we It's target.

equipment are we our debt, for effectively down our we where Now bonds. our except right leases paid now, and

back that to EBITDA But to it buy bonds. times unless still if we be can is bat. I we off X from our get trying that investment the at get we find focus will we growth deal of times year the So X on now, the growth. the think our great some end hard to find And right right find that

Matthew Fields

Do got the still $XX $XX of your year? you end facility You and million that zero about down outstanding being paid revolver. see million, between the AR to your by close

Joe Craft

Our revolver?

Matthew Fields

got about… the between facility Well, revolver, AR you've and

Joe Craft

AR facility, the Yes, no.

But So capital the depends therefore AR intact. facility probably on to will deploy or we're hopeful grow the AR facility. cash free can not. flow we we the our and it stay Obviously, revolver can whether on maintain use that

Matthew Fields

think in revolver some that the we growing, of $XX leave or I then to of of your plan other on availability? month. are of there? $XX overall just shrinks And Do kind by kind May, are you it upsizing kind reduction facility or about next okay million, establishing you AR maybe that in credit with going facility Is -- just sort million facility

Brian Cantrell

us. where time. continues be And level revolver. to to to the stepping we down down under obviously, that have we are still on a have But We'll this and look at point year. go see news until facility don't take Yes, I would you a in upsize securitization that of us think AR out it over the at in we paid capacity it available meaningful capacity December necessarily

to of that expect those So absent you both those us to other for now. I touch could us or can one see leaving intact transactions think facilities, cause

Operator

Value. will Our Scott from next Ferguson come Pacific with question

Scott Ferguson

clear the I'm on distribution. So just so

of for this free cash year? So XX% flow distribution at is anticipated that $X.XX

Brian Cantrell

Roughly, yes.

Joe Craft

$X.XX annualized.

Brian Cantrell

$X.XX Yes, annualized.

Joe Craft

quarter. per $X.XX

Scott Ferguson

that levels, distribution your by creditors? constrained that And being is

Brian Cantrell

constraint projects all. wanting returning bumping execute our to not. right on that we're there on pursue But flexibility objectives unitholders, about. been that maintaining cash at of the the Not but we it's our No, that up against of appropriate now. make It's to facilities to talking is growth our no sure levels we've

unit room on $X.XX the per of plenty basis. have annualized We an with

Scott Ferguson

cash ever planning, are guys are, and they doing And discussion? you if they And when in buybacks are that flow your fall? prioritizing where do

Brian Cantrell

on the table. in so repurchased remains units the a that past have and tool it's we Obviously,

or our on I have flow to focus to distribution. or But million, think, units. buy is $X grow in of million again, cash unitholders return well deploying our $X our million to $X fact, we as cash authorization that as through still back

say I high So wouldn't at it's it's priority this possible stage. a but

Operator

our concludes closing to like the session. for over This conference I back question-and-answer remarks. turn Cantrell would Brian any to

Brian Cantrell

Alliance. Thank and you, time interest We your your appreciate everyone, support Good of for morning. conversations. continued in this

This you'll and discuss to our quarter your for today. and results late Our call join you. concludes again that support. to participation hope Thank expected in us is Thanks XXXX currently our that time. July call second at for occur next we

Operator

now is today’s concluded. you conference attending The Thank for presentation.

disconnect. may You now

Alliance Resource Partners (ARLP) 26 Apr 212021 Q1 Earnings call transcript