HCC - Earnings call 4 2023 | Warrior Met Coal, Inc.

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Operator

Good afternoon, and welcome to the Warrior Fourth Quarter and Full Year 2023 Financial Results Conference Call. [Operator Instructions] This call is being recorded and will be available for replay on the company's website.

Before we begin, today's discussion may contain forward-looking statements, and actual results may differ materially from those discussed.

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

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

Chief results to Financial Chief Mr. the today and company's Here Walt Dale discuss Officer. Scheller, Executive Boyles, Officer; Mr. are

like the would go to Please conference Mr. now I over Scheller. ahead. to turn

Walter Scheller

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

value, a Our Warrior met strong rates we increase XX% to volume pleased are culmination the volumes. where fourth sales targets of a and were sales our These year the the both increase meaningful end volumes production for exceeded on XX% XXXX. year, made and seen a since stockholder year on recording progress productive production build and quarter we in note. to for reflect or strategic very a in not results priorities We highly run sustainable significant

production We short also million X tons. annual of achieved X.X Mine at record high

operating fund We of from exceptionally generation cash retirement debt. balance early high of strengthened us capital to sheet was Our our allowing a expenditures strong further and activities development. amount record mine with the

is X put the equaling lead MSAP volumes, We fourth million $XX of ] been terminal These aside, X/X production quarter differences. emphasis sales shipment customers' approximately can know ] there on the by it the [ quick [ EBITDA adjusted XXX,XXX at amount made our that to which as expectation by on investors some better have As significant short scheduled. lowered quarter. our that vessels a could contracted metric, a total time to tons sales volume last data delays for

to our and understand strategic of timing the So it's focus. important impact differences here

quite volumes well. is Our working purchase spot

call, earnings strategic our spot third the to As selling in indicated we quarter volumes approach more took we on a quarter. fourth

high-quality our for maximizing logistical and operations inventories Our build for prepared we brands, margins cash our XXXX. goal leverage is optimal to as

increased margin XX% from the $XXX fourth by result, in quarter. $XX per our short the a to quarter As we third in ton

this XXXX to In we as leveraging higher our be to of with that margins I'll anticipate us XXXX expect steelmaking outlook strategic will our little a lower approach our addition, share maximizing later. in high-quality benefit volume spot we contracted about cash in our more volumes. coal

coal discuss let's and the the quarter. steel First, fourth steelmaking markets during

during output into some of to way quarter, impacting than from but down steel China from from the domestic country prices. pressure geographies, the different net continued additional on China the slow customers steel usual. their exports expected, found higher As The volumes putting markets and remain

India in customers strong, was India indicate relationships Warrior. U.S.-based producers like an developing in and interest from Demand with to continued

remained Although and overall traditional very to spot see where little we demand spot Asia China demand India, Southeast our was stable from in compared continue to our markets more contracted activity active. customers,

of combination rates a experienced Basin logistical geopolitical higher-than-normal market, for our the into due freight Pacific We deliveries also and to factors.

remains relativity X like coals like A lower second-tier of ] This high our of previous [ price availability the X to low-vol to both our years. vol premium evidenced between steelmaking compared qualities, tight availability compared Mine was coals quarter the steelmaking the remained by The Line during product product. which

price to mid-XXs, steelmaking the in at example, XXXX, relativities mid-XXs. to price traded the For relativities were coals low XXXX second-tier whereas in closer

Southeast to having the and remained U.S. for Asia. in growth China coals India more into highs secured Basin strong, China Pacific continues for showed signs India exports the as have coal imported at making of no steelmaking its historic protocol and source Likewise, largest of and coal target slowing to steel Russian and increase in down. the as the Mongolia suppliers spot country. markets exports of remained

record that expect as for as into exports Vietnam. U.S. exports well XXXX into India a year for will be We Indonesia, Malaysia,

Although in historical the during U.S. imports, of strong averages. are coal remain with fourth in compared Australian quarter upward indices exception to of than fairly exports the XXXX throughout they lower ban highs The China were observed volatility into major the some stable October.

short the was which October the X at Australia value. its Our ended index, quarter primary FOB lower ton than PLV fourth $X $XXX per

ton the $XXX averaged ] contrast, for [ the China per price the during that during $XXX which the price East out our $XX to used quarter A fourth High-Vol the is at worthwhile closing high-vol primary sharp ton the In product. quarter, period, CFR A by increased pointing same indices of short short per fourth short Coast PLD per price a It's of one mine ton.

in was According year the full The by for grew World in to XXXX global X.X% mainly although the by India report, steel monthly by XXXX. Association period. for to impressive of production compared production, iron increased X.X% compared to growth approximately increasing Steel Chinese pig by to the driven year. lower rates, same continued production, terms at higher which X.X% prior grow the positive as absolute China steel

other Most declines of the large experienced producing compared XXXX. world to regions steel production

Now to turning back our results.

than the volumes performance million additional year. product the last labor and of to tons driven primarily which production us X.X of partners quarter the The to our volume due sales McDuffie quarter more by was comparable Terminal, end export the was last year. higher enabled transportation short the fourth increase strike, the by Our X% improved

South into markets. sales the quarter X% U.S. XX% and XX% XX% by the follows: into in as geography Our breaks fourth Asia into down Europe, into America,

growing Asian year, total noted, year of to markets sales this the in full agent XX% been previously up X% from year-over-year demand have resulting sales. spot we've As

to sales, markets. European While down XX% due sales XX% year-over-year weak are to spot primarily total of

into margins. our XX% spot XX% volumes, third our to the products the quarter the spot to fourth we more than premium much was maximize which a lower approach Our took in strategic as markets quarter, in selling

XXXX, As the the of primarily the mine high-vol a quality the we half higher end volume resulting year. force previously to volume to second in A of incremental a the mid-vol to the in was year last earlier labor from from change strike indicated, due our product the lesser in spot and, extent,

was the buyer in quarter. on the common which the the With our whenever and Australia Pacific PLV markets. dynamics it case it's mind, has understand spot are our in priced markets depending which in markets on supplier markets traditional the more CFR basis, from important differs differential to market how Typically, Pacific FOB pricing in a was by CFR a than the these on based freight The fourth the basis basis traditional leverage, borne market is rather conditions.

million tons to the fourth tons other compared short fourth now on X.X million was expected totaled Production to short Turning better performance. details quarter our volume and quarter nearly X in than contributed in quarter the since and The of output XXXX production year X. the a a XXXX. for same XX% quarter This representing first Mine quarterly record-setting highest increase. the to was

this year-over-year. XX months operated year the of higher result returning capacity for a quarter in production from employees the and at labor levels additional as volumes XX% increasing the strike,

from tons coal head higher end short prior in compared was fourth this drove volume tons inventory year end our to up over The production at short of Our at the the of the XXX,XXX the XXX,XXX XX% sales year. third to quarter the count higher quarter.

products environment. create for our to heading value positioned the XXXX global from in demand incremental the premium high well We're current price into

Blue quarter, on $XXX and Mine which fourth the moment. on CapEx includes Creek CapEx I'll Creek During a was $X spent during was the $XXX fourth in spending on we quarter. spending development project $XXX almost development. which million more million mine the million million, Blue discuss project

of development project. world-class the to a Creek growth on Moving Blue

During within we pleased the previously share the the cost on estimates continued excellent outlined quarter, last and that project, year. and make to work fourth our progress schedule remains we to on I'm

quarter, which in slope, shaft, fourth the continued to During make the second on start XXXX to of connected the allow progress development. will continuous half to shaft, be we ventilation miners service production fully

during the continue quarter. for beginning of addition, Blue the warehouse the of preparation Blue the In on $XXX good fourth the developing first the million we on of structure, $XXX the development $XXX and expenditures load the for year. out spent sites million mine were since plant, Creek and belt the progress development house, make rail Bath of Capital construction the the barge full and million to the project. for Creek quarter We've the

development quarter producing begin year. the Blue continuous We from asset third for Creek's the first the and We're this tons new excited coal in scheduled units this in the extremely the remain quarter to start of longwall on to of XXXX. journey track later monitor of XXXX from up second

continuous short expect of We coal units A from high-vol production monitoring of the steelmaking approximately in XXXX. XXX,XXX tons

transport any selling I'll preparation sometime until of to plant washed. cost greater XXXX not the not tons now middle be Since our anticipate Dale results until of to do the operational preparation address XXXX, to will the those another new incremental to detail. fourth ask in quarter in due we to the tons be plant

Dale Boyles

Walt. Thanks,

of or over diluted per $XXX increase For same of million $X.XX a $X.XX the of share quarter representing diluted per company the recorded the of quarter income in GAAP the income basis $XXX XXXX. fourth net a on million XX% XXXX, share, net or

average X% net the net volumes share same price, selling net income and which per diluted other our per and offset primarily quarter, quarter higher income X% for results by This adjusted interruption $X.XX by of partially XXXX. were These adjusted was lower business of compares in a increases nonrecurring businesses. expenses, gas higher Non-GAAP to fourth the quarter-over-quarter $X.XX from the share. excluding driven sales diluted were

to in the $XXX million compared of We EBITDA the of reported of million fourth same $XXX XXXX quarter adjusted quarter in XXXX.

EBITDA gas the offset of previously to average XX% were compared fourth in and primarily higher same higher quarter the partially businesses. volumes sales Our by the selling driven margin increases by XXXX XXXX. adjusted quarter was the results net our from mentioned prices, lower These of in XX%

to fourth fourth were prices $XXX demurrage to compared $XXX charges was million in due the quarter increase and volume The XXXX's plus XXXX. lower were $X X% selling and in other and revenues of sales to fourth Total million This million quarter. increase lower average primarily in merge a net the quarter in the charges. increase X% other compared

average same As other net of XX% higher XXXX compared of in gas the reduced and our to loadings per a between fourth XXXX. Other temporary in decrease natural demurrage due XXXX, primarily severe our of the and charges short Emerge delays port quarter revenues lower in remember, XX% you were of periods. in from $XXX per businesses the $XXX vessel primarily the ton of charges prices fourth to in fourth to and gas XXXX other short the due the quarter quarter ton price the selling result were may in weather congestion. to quarter

averaged premium price $XXX the Platts volumes. premium short low-vol We the XX% ton much target for was relatively FOB per average, ton same Australian quarter index the for per our on was our index product which of $XX Mine which stable to quarter. X represents index, price quarter pricing about XXXX. this fourth compared of from of fourth short primarily higher The

volumes, product, our East price While traditional using high-vol of is Mine our we XX% X high-vol primarily for target which index A about A the markets. Coast

from second mid the in we XXXX. Mine As X product a we ball a mentioned, to half transitioned of high-vol A

price different Australia, As A a Index, indices this Cambian the X these Index used and India between high-vol Index. China the between basins upon of result or have Price the we indices FOB such significantly relativities product as and demand have low-vol HCC the our and market year, at conditions. to past been the CFR balances times PLV depending Atlantic CFR Pacific other Mine

quarter offset revenues of the due to million mining transportation fourth of million as prices. XXXX. our freight $XXX partially or the lowers timing. quarter cost cover to average producer Of XX% the addition, noted of XX% in these costs net $X cost of X% $X $XX was which in cash usually was or selling XXXX the In million million million sales Cash by compared increase the $XXX mining the to revenues earlier, markets Basin Pacific cost sales require of to of to net in of volumes due the lower markets, fourth sales, increase in

the head quarter slightly to year ton, at FOB were in the and the compared $XXX labor year, short was last in who per lower due during the Our of $XXX this the to sales higher cost the approximately same quarter royalty the of in fourth as fourth strike Cash to of count Transportation workers second of compared return XXXX the XX% quarter the end and port, quarter to fourth strike XXXX. addition was in XXXX. a of XXXX. quarter costs of from focus compared hiring labor on employees

higher in X.X%, compared of the increase quarter outstanding primarily earned exceed cost of primarily headcount. about of fourth due income employee-related XX% during Our the cash the or quarter fourth the fourth ton the despite the an revenues XXXX's on $XX of from expense short cost quarter quarter of expense cash senior third will the on total interest secured in incremental equipment quarter the retirement XXXX, slightly with lower million fourth leases were interest XXXX, and SG&A were than the and XX% expenses. to per quarter same associated nearly higher to The as of investments debt due interest early our of XXXX. to notes in slightly XXXX expenses was in production higher of X.X%

an expense expense benefit tax Our expense income. income includes foreign-derived fourth quarter and tax intangible and on pretax depletion income for income reflects

Turning cash flow. to

quarter million, by million, this During a of was expenditures generated the operating flow $XXX capital $XXX cash result fourth for $XX used of free flows and activities less of cash of million. mine was development cash XXXX,

$XX working was in capital positively Creek spending. CapEx capital net volumes, accrued net Free Free than cash primarily cash decrease due receivable in was lower by quarter a decrease a accounts million quarter. quarter, XXXX lower higher XXXX's The primarily partially inventories payable decrease from flow the the due by in in and impacted sales higher accounts offset to third and expenses. on working fourth fourth $XX to of was Blue flow million net lower

last associated cash of dividend Despite which spending free last form Blue has earlier the which the with of been dividends to on capital generate Creek year stockholders $XX a this we full flow year, of XX% the growth $XXX regular year quarterly million, in special top project, increased returned the higher of year. million

of was of third equivalents an cash million quarter total end XXXX under and ABL quarter of $XXX available of at $XX facility. available cash million, the $XXX and liquidity of Our the representing increase fourth consisted the over million million $XXX and our

of off products led XXXX premium stockholder not pricing to was of quarter our volumes another returned capital It cash to the for The as seen an expenditures mine all-time debt. over record flow generation of to retire early year amount of building million $XXX our fourth a and us $XXX development XXXX from kept XX% business. combination million also us high. or high full $XXX that of strong levels market year robust enabled for year fund and million to value of of of allowed future secured growth nearly operations our since This senior

demonstrate to we results existing near future mine. of our the tremendously generation of operations our flow cash the addition expect Blue new the in significant grow that These Creek with

outlook year and the full let's Now to our guidance turn XXXX. for

the We to markets contracted in expect we our continue remain traditional Basin Atlantic. to while compared the demand to to from demand stable, expect be customers in the Pacific spot stronger our also

successful will believe current spot coals Mine on some in of customers premium the second the should contracted tier coals. to relative strategy support persist activity. the our continue time, supply low-vol pricing will for steelmaking We focusing of higher We to with pursue to value-add which X tightness like our

Our volumes. primarily outlook and this XXXX operational higher year we full should by be year landscape, Warrior another driven encompasses for strong believe favorable

in midpoint last better XX% the This XX% of spot. the pricing contract production advantage up hand. to about in to compares and volume volumes contract and inventories in our contract at will short using XX% expect as than XXXX. to higher We spot market spot volumes take be anticipate year exceed ratio and XXXX We of XXXX sales the on by X.X million may tons we ranges XX%

in XXX ramp Creek this to our fill to Blue and we In hiring in up in existing gaps employees addition, hire expect approximately new the mine XXXX year. mines the later for

expected our Inflationary in continues costs additional targeted and per up in purchases. our cost ton. cost persist short sector as and cost supplies, drive per ton the These to XXXX labor, in equipment are cash for materials cost short outlined mining for range pressure structures to

outlook and decided quarterly XXXX, by we the liquidity favorable Board Directors increase after announced recently that dividend for regular our the has Lastly, total to of our considering XX%.

the its We its This consecutive developing dividend expect company dividend the February XX. Creek has marks raised quarterly distribute the on world-class to reserves. year while third Blue

recently to driving announced business. of of the In plans long-term stockholders our returning March, continued addition, we cash commitment cash a distribute to in dividend special per while share growth demonstrating $X.XX our to excess

for Walt comments. to back it turn final now his I'll

Walter Scheller

Thanks, Dale.

we Before to comments. I'd final on move like to Q&A, some make

traditional for XXXX demand Southeast first online. and our like we for with India demand As stable of coals we projects have suggest while experience in outlook favorable customers least half noted, increasing Dale for an orders markets expect continue just the year, to from the as coming a new Asia at to markets our

We're posed the Panama as in tensions the as in levels the closely geopolitical monitoring by the challenges Red Canal dual logistical Sea. well system low water

the impact above now, especially customers transit been continue of historic has our longer impact of Asian markets, For some be the Warrior freight for been in while higher has which times. the to costs, averages,

bifurcated It's quarters. will predict steelmaking coal difficult of believe the will tighter as second-tier next the than availability remain steelmaking steelmaking pricing coal stay it's low-vol few to premium that coals. should deteriorate availability or improve the of during We this

the believe of near the depend price also spot second-tier steelmaking coals of and lower the geography will upon As such, we future for relativities the continue volumes.

prepared reserves. development are laser-focused world-class variety address also extremely Creek to disciplined our of on a While Blue we excited conditions, are of and well market we the

balance funded out We which XXXX. capital from ranging market unfavorable in of should year $XXX on project cash million expect if the be spending million $XXX of our on the sheet turn high can another to

in excellent developing we Creek. As I earlier, continue to Blue mentioned progress make

tons of first continuous units XXXX, with of track start the longwall the on in the in quarter the development from to are quarter miner up for We third XXXX. the second scheduled

XXX,XXX short production expect our been from years in in of XXXX. tons This included coal raw product guidance. high-vol production of A has We approximately production miner continuous the

year full our expected sales. and production Operator? driven conclusion, like year deployment, see XXXX the In to we'd and growth and capital call we steelmaking landscape, that, coal higher another open success questions. encompasses favorable by a outlook for representing With operational strong of

Operator

question Securities. And Instructions] Pipes our Riley first [Operator from of comes Lucas B.

Lucas Pipes

port, the of sales Dale, on provide wondered A FOB rough first proportional vol higher on of port could A, and we a CFR high-vol sales kind also anticipated PLV China My question, so high get FOB sense breakdown a freight I realizations? XXXX. percentage costs then and Walt kind FOB of mix for how can of if a impact better maybe is you basis, these

Walter Scheller

will be markets the start issue -- And our X, contracted, with going our to those up customers remaining generally, The Asia. spot traditional Well, some XX% XX% is of all probably end port. those go and could tons. Mine where into going XX% into or have I'll markets XX% we will the sold to those CFR into either with to the FOB be we're expectation

XX% going X were, you're think, say about X, least I it for to year markets. I of into look Mine, sales. at would CFR For probably of XX% that this going coal But into some contracted traditional Mine

I total, probably Mine that you're hope think If answered I X, -- your X question, Mine I've tons. XX% in so. XX% all

Lucas Pipes

Mine index And FOB may similar circle of, the of high-vol to bits that a of it. Mine helpful product for today? the all on in does -- description kind or some there, approximation sounds on up back #X? it, -- pit cover best does as we want #X. it think of should follow call There pricing Kind a today, that Mine of like for But #X I of output cover lot A Platts I were a of

Dale Boyles

second volume, Yes. for target a East of think Luke, our I and this much high-vol Dale. traditional typically Yes, the pretty XX% product it's the and is our we index vol A that now. transitioned about is And markets. in A Coast high it half.

it different going, those you just a which spot into the outlined geography-wide combination on these of could when it's days. it in be indices where Now March, go depends is markets, --

months, future have to changed the coming as at of to continue we So the lot a of see the really markets lot time that of last is over with demand basins where Pacific and come. X demand going a this is kind

XX% 'XX in about of markets, into our the our So XX% we're volume probably looking just Atlantic Pacific into in Basin going at and traditional total. about

Lucas Pipes

very helpful. on one the I'll Very, in here squeeze sales side.

more cadence of QX. come like the bit through delayed of the tons I'd a you could in color. shipments up. a the some would bit is of or frame at production that they terms I could a In sold. here XXXX, maybe if appreciate of end stronger high in assume at you sounded But It we you think output shipment tons in versus when little quarter. a had -- QX so QX, QX And of when level about think provide

Is markets? in other Or there a your those of that were tons? complications traditional any reflection moving weakness

Walter Scheller

we did, All strategic tons customers expected. spot we What the moved decided contracted the said, fourth little and in a the those in and more quarter, more third to margins. market, into the take maximize we quarter approach we as as moved to

would off we we that. on held that felt business So hinder that any

there. So that's up ended we how

sales, for tons. week the cadence something happen is, of with adjust given the at quarter any problem in that in downward the as have of by terms you end that In that can as Lucas, can X XXX,XXX quarter, much

tell which try I best -- give reduction you production match we to that's give look will inventories and kind you we any but more of -- quarter than you the come can't And year, we think if the in. much -- what that. for sales, year, you in but I about the for guidance the can't think I

Dale Boyles

targets. is and than what and that's complications year manage to important because quarter focused, results. the really We We arrive port as just everything, us and weather just we're manage really to the term. the kind to We're Yes. long of the just our quarters with -- ships don't Lucas, less arise full fall on year bad

Lucas Pipes

No, that's Understood. helpful. Understood.

a the just put to to help differently maybe me So it little modeling. with

longwall move have QX. You X in

fair And production that currently you to match assume you you're matched? occurred production. with of for then Has to Are touch kind than in sales lighter So that QX. may looking QX? mentioned be

Walter Scheller

where on we wanted to right be We're target year-to-date. for

Lucas Pipes

And makes with QX production sense? and than less the longwall slightly of kind move

Walter Scheller

sense. make does It

Operator

Our comes next the with Martin Nathan from question Company. Benchmark

Apologies, from Jancic our Markets. next question comes Katja Capital with BMO

Katja Jancic

First, million The the CapEx. cost gets million. adding Blue about to the $XXX And million. you starting on original Creek $XXX to is project scope $XXX then

Now of top on that, there is inflationary pressure.

So calculations I $X Are get about up to billion. my correct?

Dale Boyles

That's that the in change had updates been general or really no there's trend. those update to the And back we initial summer.

So yes, inflation. target

We haven't much inflation in equipment seen reduction any is that in sector. materials, supplies, pretty stuck this labor, purchases,

item, particular what on to XX%. range a depends of XX% It but

So if million $XXX around just take right midpoint, billion. million you're scope plus the change, on XX% $XXX you $X your

Katja Jancic

guide? I included Dale, think, cost Is hiring to Creek. said already be the you're Okay. more your you And in in going for miners Blue that later year

Dale Boyles

Yes.

Katja Jancic

this you how miners add do to And have many year?

Dale Boyles

around in XXX-ish Blue XXX of company adding that. We're total Creek somewhere to for the and

Operator

And Martin with our Company. next Nathan question The Benchmark comes from

Nathan Martin

you I What Dale, in trying guys the were quarter, Lucas' there. vessels think X late you around fourth talking obviously, affecting questions is, pointed to to the logistics and was out again shipments I say

You Sea the Panama water Canal, issues. I mentioned, in low think, Red

now. lock We also the right Demopolis outage have

guys working are of to great issues? be around how it some elevated, it through like how So you I not are guess would these sounds transportation affecting Obviously, are but Warrior. these costs hear

Walter Scheller

hope rail have rail. has Demopolis our issues coal us. been other service has very date, if get run we The with we market strong. continues. not And To the to that impacted -- to start issue the into very, we have to We options around

down problem, they're our not, has freight have just the know estimating I and to now, options at core the just the considerably. reasonable making costs start that right been it's of Red It's of has expectation -- Our that's transportation to caused it's with we Demopolis Demopolis. looked engineers with may the Sea, issues the in but distances potential don't we're in sure travel, the up up get to there, if up coal coal. costs also go are additional or

Nathan Martin

for the additional you some that, with of that $XXX maybe to second. sticking cost And Appreciate labor. Walt. a $XXX for mentioned, include the the Again, then per guidance obviously, that ton cost year, just

there guidance guys price is are or price that curious, range? net assuming in full cost net that a Just range you year

Dale Boyles

XXX PLV Yes. between We're index. around XXX, gross index.

Nathan Martin

of I appreciate more And that. back and of Also had did talked rate, explaining great level one just the the the at XX%. shifts a kind the going back coal you of maybe year A Mine contract spot Dale. higher good a this kind to to you've helpful, then versus maybe a [indiscernible] high-vol capture Very obviously normal seen job to contract guys shift idea. guys the X. about

quarters, it rate below lagged sales Basin guys As last But going call should the has in Pacific with capture your typical the of level, XX% it, minus? been and plus out few increase called you versus historical Atlantic your how let's markets, about kind forward? we or think

Dale Boyles

Yes.

It's think, you the obviously, XX% PLV we're things little are do than all that the something these different given with targeting price it's get Nathan, a X hard to indices and to index. because, other it, simple to PLV just is, call Mine off pricing what a XX% the I of predict different But anymore. result happening. it all doesn't

they and now XXs exacerbated more relativities past price year. -- earlier where this closer were like we they were that talked to by been in the XXs, the that's about those So mid-XXs,

in XX those we XX come where to will did of just we the the to margin So XX% when try time. maximize some issues. it a some been has we we demand back, imbalances, our take our think from might it But that like supply the But relativities as little margins fourth of increased quarter QX. think of

Operator

next comes Jefferies. question LaFemina with from Chris Our

Christopher LaFemina

Mine So about first, ask wanted But profile. the I CapEx to #X. on

$X of your this that roughly budget sustaining kind million total have more XXXX addition guidance $XXX on in $XXX million? than Blue more that at billion XXXX? the CapEx by year, little have Is CapEx And looking then million. we end based between of of Creek, mean $XXX Does to CapEx, of if XXXX So $XXX for correct? you'll million and spent a general in a

Walter Scheller

That's aggressive probably in a little 'XX.

completion have or play project. over out finishing in 'XX up that in be in so $XXX I -- million 'XX. some year-end north the and you're you'll $XXX of by spending think up million of next year probably of and will right, But we'll that's

Christopher LaFemina

you adjusted are you might that? formally is you XX% changed inflation, actually yet? Blue for formally And other not haven't you that the CapEx on guidance reasons Are You've why there number the talked Creek? reason around numbers. why but about contracts Or there have a explicitly the changed specific haven't working

Dale Boyles

the Chris. is pretty that Well, number much,

math. the grading kinds are different signed we're work thing. contracts to only things. But this barely of be -- are that of that's years mean just all gosh, X.X and yet finish I there mean into just So dozens to

to thing. So we've go, there's of way and got this a long on hundreds contracts

we're -- the now, right headed. just trend, that's and that's where So we're

Walter Scheller

don't a the a And And because will expectation can't the one in I inflationary is based determine we I exactly on haven't reasons think we terms current pressures what -- given of update we that's of real inflation. think be.

right direction that, that. of either recognize . now. left change So we've that in kind could We

Christopher LaFemina

Understood.

So my question #X. on Mine

possible volumes life frame? Or and of start potentially X to it kind see of reserves production what at more depletion more extend it volume where to of cost Is is of result or lower You does what, have, even a to your time pressures impact point unit there production beyond you and So the as decade, X costs? that this years depletion? there? there later start the

Walter Scheller

Yes.

is, years, the mine. life, right Our for what then look to can have that beyond we reserves, just and what goes at in we're XX at to And we continue now it we total I resources we probably continue reserve what that. is actually, and believe get have coal

Operator

[Operator Instructions] B. Pipes question Our Riley from comes next Lucas with Securities.

Lucas Pipes

I wanted the Why of to would specialty, bit think do maybe returns not you how ask of and capital that? think interested little be kind kind you about buyback how on versus do side a about on that.

Dale Boyles

Again, I don't Look, see up running in nothing we'll extent million is of that last years all Yes. we earliest. to NOLs changing apply manner have NOLs, about $XXX to and rules significant about the changed Blue to the less. Creek for have is the do those to cash, NOLs it the And has state and priority still really we that the and have. Blue rules allocation there. have talked until state we and the restrictions we I've at state Capital X continue Creek. excess it's

NOLs So utilize we these them. a on of still to got some runway clearly

So the Creek cash, have that. spend we extent again, extra we'll to the right little a now, focus Blue is

Blue So most -- until Creek. in will be along get more we further like it a with and likely specials

Lucas Pipes

just And you make very sure Dale, That's I understood helpful. right. to

at have $XXX last? state the expect million of about of NOLs to you called those level current And You How NOLs. of kind QX. would long profitability,

Dale Boyles

what there, depends and question several next $XX,XXX years. over on Lucas, the the that's Well, prices are profitability

go like out those they mean that, XXXX, until NOLs So something like start expiring. it's when

Blue really a Creek So they we if have more But years, through like burn up last fast with long have years profitable on potentially now. life them running. we'll and the X right them

Lucas Pipes

you. Got

terms call in like, And impact of think NOL. when I XXXX it, the from flow cash about, so

effective rate? is this of versus impact So tax the benefit cash having your how much like them? on are you Like from not the NOLs XXXX what net seeing year, kind

Dale Boyles

what benefit is basically X%, your I is state the X%. Well, tax rate mean

the So that's your on side. state benefit

Lucas Pipes

helpful. Creek Got maybe it. the it. CapEx Got quick then front. on one Blue That's very just And follow-up

to things earlier of You kind of are that be lot mentioned finalized. still

contractors confidence You still appreciate the finalize XX%. would to you have in out to additional you and that of given range color. What that number that XX% gives such, the have

Dale Boyles

Yes.

you'll well, I the much materials if out been the to Journal in to of sector. say, supplies Street you X.X%. to and Wall and and see there any with down it's go labor labor come mining It's in And sector easy nothing materials. stuck supply averaging that. index, has there's Well, that do pretty increase that's been that and what's construction the at a think tremendous read look the where

quarter inflation we've of And sector. the last in this quarter years, after [ just over XX -- talked about the it just ]

less possible runway at barely, see of We inflation through where we a into point. don't go. got only So this little halfway a go changing. little lot there's more. can't a that and or a just predict to we still there's it's We this And that period same it

there way just they contracts to is I'm This not of No higher, say, contracts. then a do he's that. and fix wildly not to sit "Well, my prices these contractors are going the fixed That's and just at handful and price developed. steel to going x" are go going not

project So going to this them here manage there's things with on you a size. a just of have and those but lot pass-throughs. And those we try work to contracts, of limit whole on that

go it's quite be to us of of little fool. well, [ unwise it would XXX,XXX,XXX be -- a then mean that, if can you're it's and And kind bit say, I predict as to going ]. anybody a of frankly,

X the got we look, That's this update, And people you've what extent the no reasonable can that is going update. and over as think I X.X, there there's continues. to yes, changes. we'll some years. But So an next there update be is to to at point. that trend be the But know an said, give happen trend,

Lucas Pipes

put appreciate that. you XX% range? just XX% to right And that, maybe feel on I With noted. to the a Well bow of all is . it.

Dale Boyles

yes. now, For

Operator

At this call are over for questions. Scheller turn closing any back Mr. comments. like to I the there time, would to further no

Walter Scheller

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

Operator

participating. you. Thank Thank all for you

now You may disconnect.

Warrior Met Coal (HCC) 14 Feb 242023 Q4 Earnings call transcript