HCC - Earnings call transcript Q4 2017

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon, everyone. My name is Jamie, and I will be your conference operator today. At this time, I would like to welcome everyone to the Warrior Met Coal Fourth Quarter and Full Year 2017 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. you. Thank Instructions] [Operator

I've forward-looking to may statements discussed. from begin, discussion differ that may those contain and been we note asked today's materially Before actual results

Investors company's forward-looking been call also to in of during the the note section has accompanying refer For non-GAAP filings. company asked statements, company's the the located reconciliations information and SEC tables website regarding to more on company's earnings this the at posted press that financial release I've discussed the please the release, of measures www.warriormetcoal.com.

release, to the section company addition www.warriormetcoal.com. brief In a website supplemental its presentation earnings Investors the the has to posted at slide on

Here begin Executive Financial Boyles, to Walt Chief the Warrior your Mr. Mr. Mr. are Scheller, Officer you Scheller, remarks. Dale today Officer. Chief may company's Met discuss results of Coal; and

Walter Scheller

and XXXX may join to quarter Thanks, additional the ask you'll have you operator. you us and any After opportunity our review to and Hello, then results results. full will my discuss today everyone, the for Dale our fourth questions taking time have. year detail, thank to in remarks,

higher The full let X.X fourth even key our short fourth quarter XXXX. various achievements the was million metrics. the results results, quarter than quarter First, XX% sales year same our tons, Production for guidance the production in me in better-than-expected, quarter XXXX. year and of then exceeding I'll were full which for fourth and address summarize company's our was volume

expected. way. and we number timely longwalls than That less was challenges moving overcame X operating all in volumes with the and Our along of of easy work success sales of on was and the a successful said, the completion back-to-back not grounded impact our production

to understand I think challenges. those worth a it's moment

clean rate rebuilt tons are be in at the equipment more challenging, nearing most Moving itself decreasing operation end mining panel. a because challenging by the is of mining difficult That's conditions and of is conditions per as production foot. one longwall can

which reduced longwalls employees to volumes have more. could much been could for equipment back back X have overwhelming production our Moving fleet, and underground

expert However, preparation, that We just longwall a these result of completed good planning, is things. our injury, factors of again recognize out Warrior. into buzzword I moves demonstrates in X of together. of and has quarter more a more will rates do of safety, spread a unusual, according late The XXXX primarily the by out somewhat quarter achieved is success and X XXXX. was operational of is a to at long moves in longwalls in moves and launch as and base efforts successful mine. and the The than each the geology way paid involved our particular, mine outstanding different at worked the longwall timing nameplate completion the for restarted attention advance fourth X near to result our be to want longwall to without the plans. capacity. lengths the of these were normally our forward, which for work that the going strengthened are quite in levels the we also moves are because strive production moves hours they've safety other of serious panels different in employees. all highly the goals timing everyone point In the new communication longwall we having and the want It's we I

ash us of of impacted market. caused in delays. Australia, bottlenecks producers In that believe are strong terminal in to consumption and originally coastal and coal production tightness a met very will industry plants issues shutdowns, met to XXXX. due due on by in imports met demand the that of view steel were met rail have and to new high-quality still including supply recoup that exports short remained due ports. into conditions coal that the just China. global to lower the We from of increased steel These support tightness well strength coal Australia to we has to as had company exports during been our pricing. end quality. to coking anticipated grow global imports and XXX,XXX ensure sulfur for Moreover, to that fourth Chinese There's dramatic which which at Chinese the contributing robust attributed offset an shipments demand hampered also met tons sources over pressure market margins. early core which supply a environment host higher high resulting because terminal take steel the coking at there's to U.S. met furnace environmental in demand All lengthy the case inventory I of have XX-day met the and ports. coal weather queues in domestic restrictions were losses have imports and so demand caused resilient market XXX,XXX strong, exports, the industry less logistical past for induction coal, of as last in coal, Australian factor. contents delays saw Also China capacity still suppliers, coal fourth XXXX end of vessel factors. the of to more Taking sulfur there's shipments production. the year, XX delay severe coals. reduction advantage rail large higher of maintenance legal continue several lower outages, the quarter Chinese from rose coal a from met queues to than to of reforms Australia lower months, enough third out mentioned; to from of and resulted volatility Australian were with of trying ease constrained factors coal high were tons China, supply-side the at major on coke our to we've a had need Overall, shutdowns of in allowed and Australian range outside Met is blast Chinese can exports coal furnaces, early supply short will wide to maintenance addition, despite It tightness and low-quality CSR understanding which coke In favorable the that steel on A the which pricing coking demand a things: some continued seaborne in that be in price Coal China enough good not in a supply and were accelerating following low The now trend to met respect networks coal of the rail flow in bad quarter. steel said, production and quarter, Debbie that reforms leading experienced Cyclone issues

which However, predict, in we there's our significant of relatively-concentrated has met increase to in also new supply future difficult exposed strengths. material and in to partially we're been believe chain. capital while supply wide the existing the result industry which volatility, Notably, is And plays the a both the fragility coal. investment for not continued this is prepared underinvestment of the

and million selling net conditions environment the high-quality with variable to continued and behind drivers for and be key areas in strong shareholders. to The generate provide take by loyalties clean a of low cost movements allows well our cash opportunistically. in cost is plan, to us operational positioned quarter and Warrior million. Australian variable a its income flow for Our sheet. price the structure, the robust agile unique to very labor, low-vol structure fourth strong strengths $XX flows structure of capitalize of a $XX to contributed on take in highly of performance this product variable all index the flexible environment price hard This advantage of to EBITDA a conversion, mine highly adjusted and a and have in coking continues cash an cost balance which premium free like coal response advantage logistics, market

quarter X.X for million tons, fourth volume than the fourth last higher sales Our short year's was quarter. XX%

We markets. across primary premium continued demand customer our high-quality hard to global our see for strong coking coal

XX% XXXX, geographic in For XX% the Asia. our full sales South Europe, XX% and customer America was of mix year

price premium the low-vol for was the standard gross company's quarter We set price we because achievement of the reflecting low-vol price, on quarterly index to products. realization index and fourth our coal price gross coking quality for and rising XXX% price the high Comparing this premiums of the mid-vol in coal. average both our on fourth blended throughout hard quarter. a Australian Our coals premium low-vol achieved realizations of price low-vol mid-vol environment a

set weighed prices trading the is price was the realization the quarter. at quarter of where down year price XXXX, at benchmark of QX began $XXX for which year of lower the gross spot when XX%, entire was the ton end the beginning per first Our the almost by

up ramp-up make added miner the We in production nameplate We and during ramp assets, met one continued its progress section to of of XXXX. is approximately of short to quarter, X mining million the the which capacity operations in our coal. toward expect tons fourth continuous

continued investment sustaining cash for spending operations by discretionary our $XX fourth capital quarter We of the expenditures. into million the and in

rebuilt new and requirement million. our average we annual This spending significantly reflected above outstanding efficiency portal of $XX spent cash new strength, and performance. our base $XX start operational for and million incremental reliability. capital Warrior, been financial on year construction operations and equipment has the enhance an of Overall, for a Mine our and strong the year, on on as For X expenditures, solidifies will in really capital our well sustaining XXXX of

both a the sales set in in company capital. operations ramped up newly-created with overall record people highs Warrior volumes new production company and XXXX XXXX, As and as we in

Let me achievements. highlight those

stock the York XX First, the HCC. on our days, It's than successful believe to we anniversary under of less as public ticker in and we initial completed common Exchange listing company. X-year hard Stock celebrate symbol offering a will a public New

$XXX pleased and receive share formal delivered We regular on of obtaining to described AMT tax adopted $X IRS in of unlimited price successful to significant deferred a from rate cash tax back XXXX, XX% the XXXX a of private of We credits I through dividend those The production letter initiative a successes primarily we of our shareholders which a billion lastly, tax appreciation. the approximately returns that December IRS and of NOLs. X and in operational strong are value XX%. We increasing milestones that - ruling the the tax look the reform company's the we volumes. allocation quarter earlier. share. to longwall cash a created during initiation base $XX from back-to-back those XXXX extremely dividends moves as XXXX sales provide heading policy completed savings capital corporate the result of both fourth maximize the $X.XX financial On of by we will in with per enacted nearly of as reduced million refundable to achieved savings, our favorable million asset, in the of of top of we XXXX also use into and NOLs, a quarterly the completion continue And

flows company's legacy the tax-advantageous in detail. to I'll ask accordance year dividend. with we to We fourth minimal full We to that highly and excess above allocation Dale return with cash and When strong can sheet, a business policy, our address in balance normal to in is in XXXX our shareholders our achieve greater believe expect quarterly and quarter position. that clean objectives spending liabilities now intend capital and results our cash we sustaining some investigate levels. with above capital our financial also generate appropriate, those

Dale Boyles

and which Thanks, exceed year Walt. operational were to full XXXX. the coal combined environment, the The guidance with during successes a sales the for Walt fourth fourth earlier, full company drove quarter production noted year quarter key and and for on sales pricing met financial production, its allowed in results strong favorable the of Warrior's metrics. as better-than-expected, performance

as share of diluted For of share $XX the per million million adjusted was in fourth per of diluted EBITDA or was quarter quarter to of income $XX net income fourth to $X.XX EBITDA the quarter million $XX net XXXX. $XX compared Adjusted XXXX. or million fourth of fourth XXXX, $X.XX in in quarter compared the the

quarter million, Total of which EBITDA XXXX, increase full total calculate adjusted we company's $XXX XX% the of quarter Total net of exceeded fourth average For the a per realized the were which million EBITDA short in and X.X adjusted the totaled of EBITDA increase as fourth divided we quarter and prices. XXXX short industry, XXXX revenues in and fourth are respectively. The million some for adjusted million. volumes at were tons XX% the included sales year highest XXXX, $XXX $XXX met by price revenues of for full margins, which the in of in $XX average revenues, believe the ton. coal net on of XX% sales selling by an XX% and selling a quarter year

was Our ton of index hard on price quarterly the quarter XXX% fourth per price coking of quarter premium coal short gross realization our shipments. low-vol $XXX fourth Australian

Argus when coal is coal, our demonstrates price Our the indices you price gross gross tons premium our low- of average price price. coking charges, the that characteristics blended sales, low-vol the index the for premium a gross and is one-month mid-vol is high-quality the of quarterly of impressive Remember, result realization sold on lag other the price consider percentage Australian Australian represents low-vol coal sales. and Platts, index by a as demurrage realization The mid-vol hard low-vol is and a coking of our coal low- excluding products. and coal price a basis. hard This hard divided coking XXX% TSI index and premium

stock of depletion revenues $XX $X quarter year The company in compared to the the expenses legal related incremental expenses to production XXXX. the other over in XXXX million expenses million and in of was year period $XX expenses of XXXX for consisted offering XXXX. attributable million were totaled of public of no their cost per continuous to ton higher realization the Depreciation Mining net was to wages, of reduced note depletion and per in Australian of the grants $X fourth amortized expenses $XXX and only X and of third for the publicly-traded sales of ton quarter costs the million higher average our of of with most the price quarter quarter totaled to X of a the We the million move full quarter from in revenues P&L lower In next XXXX. due $XXX and period and panels initial XXXX, million the Cash quarter, miner with production vesting fourth longwall the realization XXXX. quarter for senior year $X quarter X compared X million Port, fourth our $XX of $XXX fourth same of during the the the $XXX and net ran per of the or volumes the expenses longwall nonrecurring XXXX ramp-up from ton the X full represented expenses fourth gross or included and will the over secured in in selling in charges of longwall next Also, mine. and $XX X XXXX attributed included price fourth was and the expense full the ton sales moves. stock and SG&A the equity will Full to notes to quarter coal million fourth auditor increases of operations price in $XX being being fourth to in fourth mining SG&A $XX a compared XXXX, in October miner in net components primarily for XXXX. year professional sales the to cost ran XXXX of of sales with and XXXX. The full and fourth the to compared X% and units. quarter. incremental the price million operating at full short and million were compared amortization in promissory the prices. year. price-sensitive XX% FOB to balance driven Demurrage of our were compensation interest to fourth $XX was in primarily Interest depreciation the senior by quarter on transportation restarted the short Mine XXXX relating $XX the revenues XXXX primarily were notes or fees had short years. other to to SG&A expenses. XXXX, previously-issued quarter, of entire debt the quarter low-vol the our were in longwall increase XXXX was higher a per portion coking notes, because and $X quarter, fourth the ABL about in operations and the ton. in with average short ran continuous expenses, XXXX equipment quarter quarter. sheet million approximately total These our the fourth and units same cost be was fourth expenses the of of of or offering compensation in plus hard the second total for the quarter of of of of issuance fees April. ton, XXXX, primarily employees. the of along associated associated fourth expenses ramp-up and in on notes. the secured of million insurance primarily expenses All year in expenses, operations the gross expenses costs Our than volumes per independent XX% senior index sales higher the premium royalty in reflecting There selling higher on the These $XXX was higher of secured our facility the values D&O X.X% per primarily X expenses transaction significantly

$X in interest more interest totaled of expense I'll guidance. in the increase of discuss issuance later senior XXXX which over company's full Beginning specifically year in For expense million. notes XXXX, the of will because November, XXXX, secured XXXX our the

income believe of state until As net an This will cash taxes, company The share one used cash flow the for next carryforwards, will resulted reduce in our utilized free X several strengths NOL savings federal to or with which cash allowed Those estimated losses or $X.XX dividends and tax NOLs this of are the drive diluted NOLs the we million savings to this the special per significant operating key the is the and of income significant liability and alone. our and over assets long-term conversion fund or in value effectively partially especially in this year tax investments year, make approximately years. conversion, $XXX company business and year. expired. the

that private for of income. a the use impacted believed we of our purposes. NOLs opportunity to was ruling $XX letter that these We For federal to invest state began our the amounts In Service. late certain to tax AMT capital $XX than allowed analysis the our more reduce with NOLs that RAF limited NOLs average an that were ability a accelerate for the expenditures Internal million our year sustaining can taxable income to $X to issued example, basis savings by value used POR annual and September, billion the credits an XXXX. federal seeking favorably on approximately that we At time, of reported company the of Revenue there million and from the be

impact until Jobs now or our federal Tax a XXXX state POR, XXX be subject as tax and significantly of the annual will the fully favorably and NOLs the will to reduce of NOLs we income Act Section result utilized of believe us expired. limit that are As amount liabilities well. Cuts now and will The of the

AMT XX% XX% the impact tax company the impacts statements Warrior so. $XX to effective the interest impacts medium-term fourth XXXX, end, expenditures, million are To adjusted XXX XX%, expense million provisions from $XX recognize significant X, is filed after changes $XX tax corporate primarily this which financial elimination are approximately The rates the result XXX% to of positive the of the of income, their the new positive reduction The receivable quarter XXXX XXXX, limited offset income by of we of to in benefit in of of required of for available of credits existing January certain benefit were the Section Other become to in the the net the the most full of credits the December limitations of in companies the regime. the the expects and X.X% While expected expected total in the an each net deduction, law sequestration, $XX effect of years. tax a certain year. million, was compensation. or and net tax of deductions of through law recognize deduction of refunds negative returns and did AMT XXXX, to of significant approximately AMT capital million expensing corporate manufacturing benefit certain refund of income tax approximately a tax tax XXXX tax executive company less those receive elimination in to for

cash our be in to regime. $X along to XXXX in future relating with is AMT amount the refunded, to expect approximately years. AMT We other credits, expected be the million, This tax taxes

tax in new offset valuation $X.X federal assets were and by for to the the the tax associated adjusted were change of XXXX, NOLs deferred XX% As deferred a December allowance approximately tax assets. downward rate, billion XX, federal

Turning to cash flow.

share. of the a construction at of year. year to in of fourth XXXX. the million capital be non-cash in the another the million, $XXX XXXX Mine only Full cash from $XX in full and cash of quarter $X capital by the net newly $XX flows compared cash XXXX and year of $XX free of Total notes of activities result million flow year fourth requesting the catch and X, provided company reliability up capital deferred equipment. generated program of lower capital flows in been include flow the senior million quarter used million $XX expenditure dividend we operating leases $XX.XX dividend all million of special quarter new offering, resulting start $XX During the $XXX million cash per thus includes in in the to in coal Cash million all production from full million, operating portal for price cash free complete cash prior dividends, million, is accruals XXXX. had in totaling activities the of $XX we million, key million flows free cash $XX approximately per of plus of of exclude operations, of million discretionary sustaining investment payment November. improve capital capital for efficiency used the to amounts XXXX. secured $XXX proceeds which a and a expenditures XXXX capital, cash million of capital to proceeds flows of and spent years environments. We cash The million upgrade activities share $XXX These $XXX mining was used expenditure The million net approximately approximately quarter, activities were the in million $XX of XXXX, from significant which notes underway for which and cash used offering in instituted order special $XXX other full flow, in quarterly capital spent were fourth met capital a for have $X.XX the further financing In regular financing due $XX of expenditures. fourth in $XX to were

as at the and the higher production be to $X end restart and from higher enacted slightly capital, by attributable to refunded inventories receivable, expenses. XXXX. increased a income of payable of the short increase with to longwall company's credits, X attributable full offset and the by short the successfully receivable resulting tax quarter from year Cuts the decreased partially other in XXXX of fourth longwall company of higher expenses, $XX to tax higher increase receivables, expected full moves expected. The and the $XX the increase Hold working that sales of ramp-up million million to the and XXXX. increased impact December primarily net income This is excluding million in of tons the and third less over of prepaid quarter mostly due of for the the of is of The X XXXX a and year operations in tons volumes we in accounts inventories accrued are accounts result on AMT Jobs completing quarter recognition XXXX. XXX,XXX Tax were at to production XXX,XXX Act than third end quarter, inventory in Our

Our XXXX, XXXX-ending of short the end which XXX,XXX XXX,XXX short than was higher tons. tons inventory was

We available December was borrowings cash total facility. million Our $XX our liquidity ABL under of do currently $XXX of million and as consisting of equivalents not XX, facility. have cash XXXX, $XXX ABL available million, and any outstanding under the

shareholders of the pay XXXX. offering the private proceeds quarter. were of to $XX.XX secured per offering a XXXX, all due The fourth million hand share X% of to of senior the a $XXX dividend during $XXX million approximately X, plus November of or used million million notes, company $XXX approximately on of in disclosed previously completed $XXX As approximately special cash net

and to XXXX coking million; per hard of coal which in million; as of X.X and $XX of to ton; may outlook, tons; release. before cash cash million In Now and expenditures both guidance tax in cost outlook number and outlined of a $XXX of between short A in light of for the number progress change the index tons; and QX interest $XX year is the coal million are low-vol commodity SG&A of in production including Australian $XX our million the of to X X.X over X for planned $XX to longwall X.X panels turning $XX volatility the of for $XXX we successful planned rate million short of premium move million short capital affect $XX million X.X as longwall company's XXXX moves few we of a full subject are establishing sales coal of those Warrior XXXX expected X%. guidance NOL the press QX, to million of to of expenses in and The the moves given expense sales XXXX the our market prices our follows: next XXXX, carryforwards pricing, conditions performance, as its million months. through move factors to quarters. timing existing moves timing of which longwall and

in As as the among business other noted XXXX made the capital expenditure have the XXXX, that significant noted to conditions earlier. I factors to expect investments we earlier, continue I company in approach in and subject market

expect approximately XXXX $XX $XXX regulatory spending consisting Walt including million to of capital capital million. back and to discretionary $XX his it to $XX that million, $XX our $XXX spending now comments. million, for requirements, final I'll turn range gas from We million to of to spending and capital a million

Walter Scheller

Dale. Thanks,

I'd and how Before of we like address guidance Q&A, to successes we our moment. move the Considering XXXX the looking are on in to for at marketplace our at targets XXXX increasing our moves customer both advantage of well production after the product take current demand strong prices X longwall offering. positioned and to premium QX sales company and hard for volumes, is in

tons short volumes our continue nameplate million by ramping progress capacity to We in of making to X up XXXX. those expect

X moving depend only us have on the year. plans which will XXXX, progress longwalls our current Our during in

run we it changes and environment operations market and as downturn the calls, adjust just said with corner, to pricing issues if the to However, on the around flexible throughout previous as conservative as year. target I've business the the are next geological

and to on XXXX, other beyond. XXXX, sustaining environment above the of advantage of XXXX, combined in portal production. $XX high-quality current price costs our and and expect investments These on a situation a with on longwall started realize new our to loan in mine company leverage of include and in spending Our of construction our make we increase normal allow lead tax and significant million position long finishing was efficiencies a should to efficiencies, approximately of the spend our improve spending capital again projects. once expectations benefits XXXX, production lower the in discretionary a levels. sales volumes, these our cost. developing for the These XXXX $XX times of will lower payment set increase projects this and Due projects X strengthen company expect to investments increase down shield majority our million we additional that the to in to In current further guidance robust and new the to

Our our in strong coking customer contributing our business coal the production premium economic continues natural from are where high-quality markets, and see steel demand to factors. growth

implemented dependent We the global a expect largely combination from higher season. demand pricing Chinese economic XXXX policies such been Australia, winter more steel be supply a upon exports near-term to as growth, many steel Chinese for and disruptions in during lower of factors supply-side global

will to these this supply change coal disruptions and potential seen most rail during weather of relatively impact be issues, Australia sought queues had more smaller established and impact coal if of bad predict. appears out limits, demand of this It and tightness the a approach impact China each few have there the the coal to met will actual impacting issues factors maintenance enforcement is infrastructure and a improved, While hardcore on to global of hard keeping on low-vol with limits of port enforcement and difficult on X+XX what coal its coking to have The pricing. China's cyclone high. price on the recently issue season. a met outages steel system have are for lower-than-expected policy remains demand production

pleased heading strong to to believe full year fourth we'd the call prices current for in our our is questions. demand on customer capitalize for strength like coal. and XXXX, the However, and a Operator? hot With our the in into approaches the met the with high-quality of that, XXXX. In closing, open company premium results for quarter position we're

Operator

Clarksons. first ahead go from from question. question comes today your Jeremy Sussman Please Our with Instructions] [Operator

Jeremy Sussman

very for Thanks taking Hi. question. much

Walter Scheller

Good afternoon.

Dale Boyles

Hey, Jeremy.

Jeremy Sussman

afternoon. Good

first guess, volumes? And to Just, get what Is I blips to get Walt. still if to is kind so, the plan there? X pass of to sales of million tons of kind

Walter Scheller

out another hit in plan mid-year, just to that's X million continue my year. plan. to That'll year, rate add added run need aggressively still and we said push We skis. We that Yes. - being we're not a far year. conservative. rate over is out we're get comments, tons too that that to That's We're And sure I million. run we'll would a said still X million our making to be section as getting of our our this toward this X of and

Jeremy Sussman

Okay.

switch guys minimal sheet And mean, How range about at the second. think this? comfortable of to how to balance that's levels, be I much for kind a you are just but a that that I of sort there looking should sitting carrying? there on maybe just you're the if we for at Now Is sheet? too of sense. a looking same balance time makes number I'm cash is the a obviously,

Dale Boyles

look combination taxes. of paying We of cost cash of Dale. any being gives don't the from flexibility. ABL very sheet. the is least lot minimum and we so and structure at of cash kind availability, flexible $XXX stockpile cash low the We're pricing, of million It at not with this combined. a total Jeremy, to with our large us And balance need a liquidity, amounts

note pay. have post-retirement don't the pension the also - We to and benefit liabilities

to us So as flexibility balance on low the as sheet that cash the gives tremendous keep possible.

Jeremy Sussman

it. Appreciate Thanks, Okay. good guys. And luck.

Walter Scheller

you. Thank

Operator

question Riley ahead next from with Lucas go Pipes Our question. B. from FBR. Please your comes

Lucas Pipes

December index number would've X so. or some, been everybody. us I the ending of Hey. you you around that in realization the they to some just the your And would basket few one like month you the Dale, be, typically how a would your side. disclose and - week of indexes, first the industry, and X could Good on Platts afternoon, it's QX, for realization calculate peers in in think, It rolling pricing use that use I remind ask percent quarters the questions of the benchmark? months versus sounded of they a first wanted a different

color I would So can also that. just forward, And going apples-to-apples, we utilization. appreciate - your then can correct I your you. Thank to discount on a assign

Dale Boyles

we're I not benchmark quarterly what to Yes, on - index. used benchmark Platts. be quarterly the is the using that calculate just is And quarterly the what

positive that, you'll the And benefit. not is of in fall you quarterly. indices cycle, that's the - that see X If average Platts X of the

are disclose what is that we we using So that. when

of is a realization XXX% index premiums obviously, sell make obviously, price gross blend, or we're the is a coal for industry that achieve some those at And times. price because low-vol if XXX% our or we doing realization, - above mid-vol, low- and coal. benchmark at indices on Our so we're the selling

our is to price So net And volumes. obviously, down over are, have things that, then, in the really end. merge gross just and where sales our gross that the like you less

that every is which comparing to just we're our benchmark published gross So quarter. price

is. it all that's So

Walter Scheller

this other is I - the Lucas, Walt. thing

Coast The coal remember would've is, are X. thing to we those a we price I East don't Platts low-vol always, is that the And there's Australian could higher. mentioned The price other benchmark, I $XX there not hard between significant comparing $XX sure publishes. say the make that coking or low-vol coal, know, the to difference coking Australian you

Lucas Pipes

Got of But my appreciate using think kind benchmark. it. at Teck been all Got comes December, the early to I'll a it. they what from color. resources the I and out, is they put where the as that's be Yes, of price what I benchmark look the confusion and release press typically that take that stating I've believed

are selling Obviously, premium in Just market. the you same along product a lines. the

so quality, when off has compares is it pricing of And how - the are Mine right realizations Coast. How now product mentioned How Mine is sold just market Australian X? the tracking coal X The at East No. the been both than No. quality it faring? has the the anything product to volatile. of been You pretty more are sense a to there differences you now? how also, in how right scene. have and your Do comes

Walter Scheller

X.X very there, X remind The about that the the last best Sarajis with it again, in X, of coals we'll coal Downs, a with world, and and X so. of years at has hard another both vol, been is for and Peak It's Mine really for ago, coking X we the right quality a it area has to mine quality Mine to Australia quality moved And want is the other - them. comparable out mine, or strong, and XX down than I more up is the much and The in that right better. where low-vol area, there the comparable X next index. the is year. X always of been everybody, any it's the around it to years it's

index it about, Dale not doing, that how discount one-month at discount, So talked to sell of a our base that pricing huge we're a that. customers at some with the but When lag. may slight look we the off

XXX% at you after, We utilize kind doing - can customer. very feel maybe before from customers days But and or our it as days the the XXX%. quarter fourth of with before by before XX products two index anywhere average pretty of results varies one days XX we to of days that's well. at with discount. our the think XX been And we're a loading XX see slight just Some again, a customer

we - So pretty well. we're doing think we're

Lucas Pipes

I Well, week you. luck. Thank you seeing good to looking great. both am That's forward next and

Walter Scheller

you. Thank

Dale Boyles

you. Thank

Operator

comes your Matthew with Please ahead from question from question. [Operator Instructions] next Our Fields America Lynch. go Bank of Merrill

Matthew Fields

high-level the just right. to wanted all if about questions Hey, more sort market, of everyone. I ask that's

of market million bit a X think, reading the sort Here little of there, market? of your sort only maybe export more from operator any scaring a sort you of the hearing tons, Aurizon, in due recently, fear that rail into I prices nonetheless. to just dispute been a Australia, about, in of supporting customers of but some Have shortage,

Walter Scheller

number were them I the was think, if that marketplace it the that closer result I if right that greater how is level of that And turn they heard concern. this I too now, back ton of But yet. the discussing. haven't we will number But now know fear all. in right don't at I how we've but saw could would don't this if out. knows, remained in on know heard causing some I - they turn think, who back But on going it were saying of XX at million much what pull customers, maintenance, to real any actually If will impact bit impact is we've our yet the this hearing that of out. been their the potential out pull throughput to it's is and a

Matthew Fields

the to What All for asked someone on developing to or right. assets think call Quintette coal think picture. about mine. potential Teck do We're on the to and close maybe you up $XXX-ish about idled this just sitting reopening of scene? people And Creek Blue then, resources sort you back the bigger here personally start their benchmark for opening morning is more

Walter Scheller

continue of ton prices market $XXX will Well, cautious, we a the doing June. that that cost people the think as lot I we've of bit operations have price year. even low in that had Remember, the tires - to on on that in high that. where of had kind different in like employees volatility level kicking per now as been a And keep the are though dipped it a those and of require remote of relatively areas over lot and very they're them operations little a structures, relocating some robust things last have also

unless expectation. robust make price to a that's So a decision big real, long-term have you

that incremental that For can and us, by business just we all low those continuing the the cost, to that into to million, we our are ramp doing are the looking doing way we're it. do achieve things we us up to - changes X this that year

when think that's As other we're pushing hard be we future. Energy, immediate the look in to we're but too at Creek I a project great our don't which right, that, something reviewing that project, Blue but going be the time's will

Matthew Fields

market? for given of nothing remains on the So sort horizon XXXX, but that's the

Walter Scheller

Yes. get to maximize their We're of and on can million and can these X squeeze focus what out see everything going we to we and operations up two value. them that do to them

Matthew Fields

All right. very much. Thanks

Walter Scheller

you. Thank

Operator

Gagliano go ahead Capital your Please with from BMO Our from next question. question David Markets. comes

David Gagliano

questions. my taking for Thanks

the in price-sensitive assumption? that the high? from of And cash of range there. you missed the what's the $XX and cost prepared that? to some the there's price ton. Two what's - have but assuming guidance on Just the range XXXX. price may definition low a remarks, are know cost for the $XX I What I for questions,

Dale Boyles

I we David, going to everybody think, own is mean, have their I about assumptions, - Well, price. can

achieve out price add year depends with There'll better We cost price. production everybody the higher we're where bit to to assumption, and of we of kind meet leave disclosed the figure sensitivities the obviously, we But added with to in $X royalties, just little it need we this the be on transportation, but in that range. low we that 'XX. get that end didn't the there. little of then, that's a this we've in sales the their And did depending that So own the that. kind going the a people past. $XX, range And given high on to add for additional a could all especially, continuous of miner because vary additional the pricing,

David Gagliano

meaningfully, I'm is, down for price - Dale, come those asking guidance meaningfully of were decline and/or costs? if Does reason, because Okay. what reflective current cost is pricing with costs. I environment prices the to, guess of this ever sensitive is whatever the this range

Walter Scheller

If does drop absolutely. really from where are. Sure, a we down, continues or come take yes. pricing would It

sustainable we You the $XXXs it's to the full planned guidance it did year. don't is down we near about move in know, believe And number, it today, low $XXX, anywhere for just haven't $XXX. obviously, because where that from that

David Gagliano

Sorry. on one just that. I've question last

and price basically? or $XX So that's in-line current $XX the assumes current, with a lower than

Dale Boyles

yes. No. Much It's current, than current. much lower lower than

David Gagliano

Thanks right. very All much. Okay.

Walter Scheller

you. Thank

Operator

question. Our from next ahead question your Morgan Stanley. Please comes Piyush go Sood from with

Piyush Sood

on question a have also I guys. afternoon, Good coal quality.

both from quality coal number X revised recently and X. Platts number So

but the I some went both changes mines, content. think volatile to out CSRs for

your realizations? So affect Thanks. how that does

Walter Scheller

- the CSR where if for they're right. there both to with And all in of is if coals the again, the have are at and the put Downs in them strong, - very, highest-quality be Peak continue X past. you right look of - still the up the And think been with you a the and right they Sarajis. have spot sweet been. they world, in very think I it's both - right They the our loose products. The I relatively Platts grid together, looking [indiscernible] is

in is, know, - you seen so what no the And expect in degradation we we've any pricing.

remain We strong. expect it to very

Operator

question. Mark Global. comes your question next go with from from Seaport ahead Please Our Levin

Mark Levin

gentlemen. Hey,

at my I'll throw of most think you. I answered, one this been questions but have

Alabama Is that ton capacity asset know I high I'll cash that you some in getting - quality Mine X look capacity of ask even would X opportunities to are of region, some think down up there I that I still answer, are acquisition laser-focused - at on level? excess the Alabama and kind assets you your Although flow? something that with you ones net nameplate the Would anyway. some X million and are XXX% area. the know Or consider? are Mine

Walter Scheller

best We are would presented be if would the that to X here. nameplate really well mines an portfolio, in and if that we with an on portfolio fit was fit the that asset would getting Mine at we that Mine opportunity world that we coal good of capacity. truly have a And XXX% there right in would up focused thought consider itself said, and opportunity, immediately, X, and we But that do X well truly look it. our within thought

Mark Levin

in And then, one specific they rail in XXXX pricing? more your sense. were then how embedded XXXX? where About And what's on question. makes rates That based Okay. maybe guidance about for kind think maybe of to

Walter Scheller

that year, past most that ceiling. in - last the the any there's additional And we ceiling said that a the not of There times were time. band, were in we're ceiling. there's a about top give below, that the But and all where that very area up in - market time now much end as floor think too is of the a right around careful pretty to towards much the of a information few at Yeah, I is well. And but railroad. operating we've

I - we are, means really rates frankly, rail pricing's rail rates strong. expect mean, because that they stay we So where about hope

Mark Levin

right. That makes Right, perfect sense.

your guys Thanks, I well, and quarter. you talk appreciate to next time. Okay,

Walter Scheller

Thank you.

Operator

Our Riley up. next from ahead from Pipes your follow-up FBR. go with follow question is Please Lucas a B.

Lucas Pipes

back X maybe ton half, to versus the production just you the would half question. when Obviously, in imply good little the follow second I beginning of wondered bit year with give again. bit afternoon just a exactly of I toward we little million we here up ramp getting if wanted year. can in Hey, X million my lower more the color Thanks for half in in that XXXX. to be to taking hone first targeting slightly you rate? run cadence And around a on and expect of might the what should production

Walter Scheller

took I if We that's in not all I've what moved X - really that's - That's longwalls what from you what I've the said. said, quarter. if fourth

expectations. unit early point fourth again, and standpoint, getting which, My and X little of needs be are So that very the training we it we started off each panels, - in we was bit the year a rebuilt we we quarter, to that productivity added these miner from as from in time. up in of have that especially, equipment, a takes to where standpoint continuous high a

year. year as be fully X we this on. the expect We'll the So add goes unit them to more year productive during

annualize in And units. XXX-ish those miner per continuous of past the tons XXX,XXX unit, we've per if you think, out production units, X said that's over I unit. the and So it's

fact before move. and QX, and things bit just the X down remember to brings just a after second the one that year, annualize the that, in when got up what move you slows that in the during and So one we we've moves tons XXX,XXX we and QX before numbers. year the half a move, about of those have the of couple But in have those talked impact a is, moves. the the longwall of We

how So quarter how people expectation showing we but what be will be or have can do rate, to very to - strong expectations. run it. quarters that to I can't tell that our is you we many exactly at

Lucas Pipes

again. Great, good color. And Thank That's great. thanks you.

Walter Scheller

Thank you.

Operator

a go is follow-up Sussman with Please Jeremy question also next Our from from ahead Clarksons. up. follow your

Jeremy Sussman

very much. Thanks Hi.

your quarterly Just of open trying is follow Obviously, how year? wanted sort of much committed much know I of your And book a is and on of basis. you to is spot? committed? priced volume How sense a up for this to get how much

Dale Boyles

committed, probably tons, and we're to say I'd - committed XX with. unpriced little a plus we're the other opportunistic the more the percent at that's Jeremy, XX%,

Jeremy Sussman

Perfect. much. Thanks very

Walter Scheller

Thank you.

Operator

comments. I'm to And further questions. the over Scheller at conference time, I'd Mr. like and for no gentlemen, turn closing showing ladies this any call to back

Walter Scheller

Met Thank afternoon. for us interest We you, concludes appreciate your our joining again, Warrior you. this Coal. That call today. Thank in

Operator

thank We for conference. participating. today's concludes that And you. you Thank all

now disconnect lines. your may You

Warrior Met Coal (HCC) 14 Feb 182017 Q4 Earnings call transcript