CEIX - Earnings call transcript Q4 2017 | Core Natural Resources, Inc.

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Operator

Good morning and welcome to the CCR Fourth Quarter 2017 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions]. Please note, this event is being recorded. I would now like to turn the conference over to Mitesh Thakkar, Director of Finance and Investor Relations. ahead. go Please

Mitesh Thakkar

Executive and of Resources Anita conference everyone. to McCaffrey, our Welcome With Financial our Thank and Marketing. Officer; quarter good and Coal Jim Chief Brock, Jimmy fourth today Vice earnings Dave full CONSOL Khani, me Chief President you, Senior are morning Officer; Coal year call. XXXX

will well. the and open up then will with Q&A where We session, and start as prepared Dave remarks join Jim McCaffrey floor by for us Jimmy the

As forward-looking subject make business our otherwise. or laid statement any undertake in a future risks, about obligations not you do or for any have forward-looking we for reminder, previous of comments future or statements We any SEC we expectations events in to are release out filings. press which updating

be discussing in financial GAAP non-GAAP the SEC X-K. certain to which on and to financial measures reconciled and are furnished will Form We also defined comparable the release, press measures,

web You www.ccrlp.com. can also site, find additional information on our

turn the our quarterly Before for speakers, forward. process going to communication framework call want the I the earnings highlight over to I

old CONSOL Energy our sponsor. As new asset the have partnership November team, The a coal sponsor management The and and now public companies CONSOL into significant is overlap. know, separated in XXXX. business it's public is and the company gas Energy you and business called coal two new new the same

both allowing cost a both call the for and opportunity for an take the believe Energy reduction in with starting CONSOL partnership, questions will this strategy investors analysts XQ hold So both both while companies. both investor and to XXXX for earnings will community results, and and the We and combined entities. Resources of from progress CONSOL sponsor understand follow a the for Inc. overlapping the Coal and we better provide

providing per guidance, we the by cost including and ton transparency revenue press Finally, are additional and release.

and we only call any taking will Energy I questions Resources CONSOL everyone, not CONSOL that related for call, Coal conference today's this to be remind is For Inc.

and the Energy, and over announcing have We our that, for have press can quarter issued year which a it on results CEO, CONSOL XXXX me Jimmy site, deck let release to. With fourth turn a refer full to Brock. also slide posted Energy's web you separate CONSOL

Jimmy Brock

flexibility take challenges corporate previous the members CONSOL sponsor current of team what Thank us now sponsor. our XXXX I of were better proud and continued the uncertainties. XXXX, XXXX, the also to achieved and XXXX process of and in and of many our has per has the part market XXXX. and of thank involved from in allowed faces of grow average for base revenue compared production even XXXX focus on by which you, revenue market and markets, despite XXXX, record I improving delivered morning in Good Mitesh. for year to XX.X% XXXX you volumes Pennsylvania into you several eventful touch The dynamics at offer, us continue the in expand in our Complex in into and that challenges the should started everyone account, more that optionality market. commendable, spite our asset for We of will shortly. that recovery the The joining fronts. today's perseverance ton, into a and is operational changing team multiple The total when upon on Mining very was of call. strategy that us domestic coal in mid operation through take am demand our advantage spin-off teams Energy export XXXX,

coal-focused we sponsor in aligned have for a store We now as are excited management the what has to an extremely and future us, team.

comfortable, to our equates on our that but our of the cash X.X and in Including the $XX.X under unit XX% which sheet, the unit quarter, coal industry-leading generated since will We unitholders times. coverage where marks ended maintain to XXth and of consecutive to a returned quarter in payout the our IPO, year general just is downturn distribution per the $X with distributions market a long ratio to the than unitholders. feel while adjusted of even per landscape, fourth note, announced EBITDA, distribution distribution two which this which times common in balance in MLP of managing this payout, our unitholders. we of price, a all more career. conservative expect IPO for through of is million I level of a the CCR we term. The partner, leverage $X.XX worst Directors more my For cash have Board

moves, Compared as XXX,XXX our to performing export find at about book operational by our our turn X.X The and X.X operational sales our second year tons. million avenues were mine, tons previous few some domestic of during disclosed year production our during million by issue consecutive quarter that good which year such public. line range challenges, the faster. year, longwall marks the guidance targeting performance Now, was XX% X.XX fourth operational X.X to with in Furthermore, the production to year the the and is let coal reflects production The Enlow previously permitting inconsistent the is when we news went longwall full tons, production compared expanding at coals. advance logistics quarter, for me primarily CCR the reviewing full growth Enlow driven issue to able produced month despite customers, Fork adjustments this levels, for growth, of mining XXXX million XXXX. Bailey, of XXXX rail now top impaired production industry. of of by conditions million decline ago XXXX December. We growing overall to unplanned our in announced achieved to our the the additional at the portfolio, tons the Fork quarter, fourth the and for

to offset through expect Fork plan As at challenges mine and previously continue geological first Enlow we disclosed, the of them. half the can, XXXX, best as we to

in we Harvey quarterly not see target do are volatility, basis. reached on Although manual our Bailey significantly mine well. geology impact run it continuing and to The production

For X% per fourth hour, productivity the Pennsylvania to Complex the third tons compared at at improved the XXXX. employee as Mining quarter, measured the quarter

As consistency improves normalizes, to expect our at productivity further. we improve MLX and geology even

related X% lower expected cash ton subsidence year to $XX.XX On was the in cost coal ago compared expense, quarter, average the by was utility at period. reduced and improved which cash The for our than cost front, came sold in per approximately driven of improvement the spending. costs power

average up coal sold compared was coal markets. period. let in with that, ago $XX.XX X% cost year-on-year. With impairment announced of provide was the overview the in to line The $XX.XX our guidance previously me For now increase of to cash XXXX, range of year X.X% of our an

contract and succeeded our very quarter, goal. pleased XXXX announce, derisking a was revenues. that also sales market, to XXXX booking I for a we focused Against capture some significant that successful export of our to backdrop, in am XXXX. only was the the not marketing strong fourth team to for export concluding goal on The export During is marketing in a and second through multiyear was in team start achieving but and our for ton. the upside already average coal. have newly is XX% remaining of sales this volumes collared. our than of collars Approximately XX% export forward per XXXX priced, that The XX% thermal XXXX average volume of coal cross-over first coal of an XX% approximately XXXX. the the is to quarter consist price quarter the volume contracted our metallurgical greater revenue of contracted piece The

So even are forced to our average if versus new market, above still the floor our will by be weighted pricing. contract portfolio XXXX prices the

current portfolio this assets. our prices afford meaningful going over us collars some ability tons upside, XXXX, basis, and on an coal spot for capture rate highlights market of duration [ph] business, they contracted also contract forward. addition market the recently, of million until have In now XXXX as a demonstrates are product. contracted we global approximately downside are a continue annual This opportunity our that conditions market high pricing selling providing has our production protection, Furthermore, the put to for XX% been quality XX% versatile contracted attractiveness XXXX, XX% for our to to focused. more and improve, X.XX export for if it above On assuming which to

increase We from Specifically of in quarter, X.X bringing touched earlier to from X.X mild which of I the XX% coal, in million tons. tons an challenges, second of consecutive logistical production XXXX for spite XXXX sold our XXXX we year sales million growth, and XXXX. our upon achieved this several volumes sales and marks peak year of This full X% previously. weather season and growth

per XXXX. revenue by compared average our We also increased in XXXX sold X% to ton

and in see continue export fourth markets during domestic to trends the We quarter. strengthening the both

the averaged an in domestic $X.XX hour, netback quarter quarter. contracts. the West per third average or XX% Driving On during fourth front, higher per during almost revenue than the under uptick our prices power PJM ton Day-Ahead megawatt

that were will spot markets, metallurgical million exercise coals. back fourth The coal Energy both on our down most January that XX by the latest stockpiles approximately some for at market, pricing Appalachia the during our XXXX. tons, less remained Northern particular. XXXX, of increase late levels. to in was have U.S. of cold power for report plants the More to and in and restrictions XXXX by coal the inventory burn number of strong top India, early continued importantly, managing in petcoke during rail in noteworthy, thermal which We January. at about the factors; the in November December opportunities. November inventories low in discipline In to in XX% plant demand the compared and or balanced This bring of App from than XX being perhaps to helped driven reported the Information coal customers shows of open more days a quarter, the inventory snap many markets of utilities which end Northern drive export levels up coal could end demand prior business these And Administration, domestic stockpiles an in strength believe

other Asia Europe pricing, as to the to bolster with month third coal the from traditional seaborne away X the averaging coal Atlantic Continued has for northern delivered API some during higher supply markets into quarter. in compared pricing fourth quarter prompt taken gains and well, index X% from for thermal Atlantic helped

for in good are shape. forward we out XXXX upside. a almost sold we Even meaningful to beyond, though Looking very and XXXX, for there is are potential

For for customers sold XXXX with to netback instance, XX% was contracts. our about of coal

are start With witnessed those winter the beginning contracts in expected well. January, to to of very we that the strong perform

call the our provide over to on and book With while for to portfolio I We now focus adding business. XXXX existing beyond, of update. will turn to that, financial David now the will optimizing

David Khani

morning. the Thank review will Jimmy, our a and you, I XXXX good provide guidance. of quarter and

commodities last so, I me update regarding to provide Before do quarter's our cycles. let an discussion

One duration key the and indicators the strength this shape the and of upcycle, recent of forward to trend the curve. of is

and when XX% by earlier. In during for percentage During forecast from the the most the in The From our remains backwardation X improving curve be prompt the curve front markets the the the in XX% found backend by growth, fourth fourth the too, an a upturn from end. to improved to essence, significant we coal of were global prompt the to XX% more approximately X visible early as prices increased month commodities noteworthy fourth compared current call. month than the commodity international were thermal API noted oil, economic to an discount XXXX, the What and tied approximately quarter, economic the of growth is global last February strip rallied API XXXX the such year copper earnings future dynamics generally the benchmark is quarter, for and for quarter of discount, key respectively. rallied coal XXXX XX% X to supportive. price. calendar Similar

While all becoming duration that in upcycle. moving more we the now up, market the happy are the suggests optimistic participants with are this of improvement end the front

to movement, demand, next coal. and this prices moves to global the step expanding relative into curve As expect curve incent to starting to would to be We response. contango, supplies challenge to production with market the now cost thermal coal, metallurgic above the that in the the this in seaborne we meet experienced XXXX see cost rise continue

the now is for XX the chose The help productive we brownfield is storage XXXX. the to current XXXX. out sheet nicely more the prices market pricing indicator good of inventory tons supply of estimates for setting is gas heavily to next CONSOL next as seen domestic something market, the are compared that market today years out balance natural and both The trend high markets system, our domestic it well was take gas and will XXXX, greenfield exports seven as These into stronger positioned million is to increase have in where While at pool and We during tons export are in natural several sharply capacity today running in well. the and react. it the approximately contracted up coal Extrapolating to levels, since in should in EIA more thermal market, capture the U.S. declining beyond, the participate setting curve. in export normal our nicely, The to end We to domestic position market to focused not market, us along near significant drive market. this both we XX the markets, the in up then than XXX% the a months. more that XXXX derisking to below pool with term, trend winter the these the challenge be are tighten first are were open domestic back open coal and which XXXX. spot on months. XX of half allow is improving sold of XXXX higher is will position A that in than previous XXXX, coal which being is Arguably, the than going market years. tons exports from levels, moving end domestic and the export levels stronger restocking should the of for help likely

quarter $XX.X of year million million financial This cash $XX.X and adjusted update. respectively. move with compares million and income, million, strong and $XX.X me million, the $XX.X let a we Now provide versus over flow morning, brief reported a financial EBITDA and CCR This during to net performance to $XX.X quarter, $XX.X distributable million ago.

XXXX, optimization of tons full guidance $X be our million, and million million. approximately $X of midpoint. in significantly million a This sales reported to targeted our CapEx volume $XX CapEx beyond. Total year $XX above began year the million midpoint quarter rationalizations that range $XX below below at million average of guidance For EBITDA improvement of were $XXX will and October of of of revenue Furthermore, spent XXXX coal reflects fourth full adjusted a $XX CapEx spent $XX.XX which million modestly million, $XX the We was an $XX guidance and per million came X.X $XX.X in in XXXX and to to million. million we with $XX.X timing million revenues range our $XX.X the million tied ton. to

year approximately partially million, ton in X.X was ago reduction Total to of sold revenues a coal per lower total sales total related The that fourth by the volume, sold, Our which $XX.X period higher cost, modestly driven ton same were ago. average $XX the quarter utility were of in production decline quarter, is costs per volume, subsidence power below by million reduced in $X.XX was than revenue. due expenses. coal million a coal year ton cost and offset or lower $X.XX

During by the due to payments incurred also extra driven certain demurrage on million logistical we challenges. of SG&A, $X.X quarter, export shipments, an largely

distributable ratio. were X.X calculating ships million, of increased, increasingly $X.X flow distribution expense waiting of at million, times coal fourth in demand at the exports reflecting for CapEx cash and load As to The maintenance cash Baltimore. $XX.X coverage a estimated quarter million, $X.X interest to came

during estimated use at average coverage $X.X our than lower Our expenditures our $X.X in calculation. capital term or quarter million in long million actual the cash came

sheet our is and liquidity balance Now strong.

our as we million mentioned, yearend $XXX Jimmy interloan XXXX, drawn As had of on million $XXX facility.

versus XX down lev to times year ratio times trailing months came X.XX Our X.X ago. versus a

provide me with XXXX. let for Now outlook you our

issues our per power average on we ton per estimate guidance The to a improve ton are million and average average that at to XXXX of Enlow range. are $XX.XX for expecting approximately Accordingly, $XX.XX revenue $X.XX This an high sales we volumes be on currently position average produce. are $XX.XX revenue $X.XX and prices, increase. contractual price providing to we back pricing, and our in less range reflects We the annual to ton. Fork. of set at in Based a would our comfortable every levels, can dollar hour, expecting megawatt per net per PJM X.XX by megawatt XXXX about hour run an we PJM to from increase up to absorb on rise power appears total X% sales portfolio of Bailey X.X based market or XXXX estimates all times million tons per

we in the $XX items over approximately manage well some per that our will of to $XX on be in debottlenecking sold EBITDA be to the $XX coal $XX million XXXX million to range ton. Based from XXXX. to underlying inflation, some with in currently expenditures of projects. We for several to the production range expect can we the as Now that time. million we cash our shifting our be highlighted, expect $XX.XX million of have capital offsets, XXXX, million range, to raise as the To of help our expect $XX.XX costs of projects above $XXX incorporating provide adjusted

and upside Our guidance annual incorporates and risk volatility. and is downside, wide, range potential weather including shipment for

power help our rising market, higher enabling over prices, sales ability our of book Furthermore, the the under realizations time. end coal increase now range. prices also improved achieve guidance overall the With to is could

and After range. make incented our on very costs execute as as turn quarter, cash to our our to core this some up Jimmy, free internal unit be values move flow goal well as that, our driving let me we targets. would improving over comments. are and With each safety down, of teams EBITDA it narrow compliance, As focused well as final to

Jimmy Brock

David. you, Thank

Q&A take to XXXX reflect this me some opportunity to and of perspective the around let we performance achievements our session, Before how of will some beyond. move in that help foundation on XXXX and the on provide

targets the On during hit to year. some the operating and Mines and expenditures. up maintain below faced at have costs that control the at optionality Enlow We side; longwall capital strong guidance this record, we Complex. flexibility cost we our This five record and highlights made came we operating Mining the on our production Fork in Harvey of with its for individual hit achieved complex. the production Bailey substantially and Pennsylvania challenges

We will as spend remain continue in perform invest our some well capitalized that in ensure of in capacity utilization. we XXXX, to that high levels of CapEx demands business to and

contract On to XX% the we exposure. is has and volumes. new marketing sales XXXX continue and export grow international allow accounted markets and our by XX% front; us The increased our business. new volume continue develop to our our XXXX, will expand international approximately international to develop Since of for

we With an us the the other response to in markets, giving around the access have export edge industry. international continue will to best the players over terminal,

X was of approximately marketing represents in tons of calendar During team sales our CCR, year and million This books. successful XXX% beyond. our XXXX, the annual placing coal for XXXX of for about

XXXX our XX% compared EBITDA On financial by we XXXX. front; in to the grew approximately

current guiding that will initial the maintain to to strategic guidance of number continue focused sponsor November continue of we to ability a our in While upon we and level, a XXXX, give ranges. a those distribution David to new variables, coal in levels improve solely XXXX. comfort On business. similar to more on some is is work in our XXXX, This have unitholders our as more there potential should for our we upside. highlighted are

back focused benefit members should which And want We out Energy team from to instructions. I also that, for CONSOL for strategic management forward. expect also the that that point are will further CCR this coal I over on of to management new having hand Mitesh will CCR better Inc's sponsor. unitholders the allow orientation call moving with team,

Mitesh Thakkar

you, Thank Jimmy.

please We you will the our to the Anita, to can section. now move callers. Q&A provide instruction

Operator

[Operator Instructions].

go Please question first The B. Lucas FBR. Pipes with from Riley ahead. today comes

Lucas Pipes

good a everybody congrats very and Hey, on strong morning quarter.

Jimmy Brock

Thank you. Lucas. Good morning

Lucas Pipes

is? I have I what long interesting, name, a the give dated more this a signed, Of the am with to you if of who and you a targeted if as for side, you if maybe that wondered looking little course, what the so, is this first on pricing particularly trader, contract, could few So region its counterparty Thank that that the was and but questions I kind not of is applicable? kind have was and color, export bit one a contract utility, you.

Jimmy Brock

Asia, it voice speak could that in part The the me with we area is number end term to that worked is a contract our more us other of in able to trusted more Let end long with a customer world. customers, of strategy, to parts of the than expand with primarily the have being which target but The say, user laser customer enables is of to terms a with our like deal traders. users past. different

the past, the what by in don't I want have We found We find published future, traders happen commensurate see certainly think marketplace. multiple in our with is, to using that will the coal and with in competes pricing, you itself. sometimes you the that

Lucas Pipes

right? refer component is specifically would to of that fixed that contract, that And the

Jimmy Brock

those collared, even are point on if as not that the if even to Yes. comments, prices second fixed, market said but it But prices. still our -- contract us in of XXXX is the force above is the average, the the of would we collar, the sink the year low and to

Lucas Pipes

does it it. contract, as the have a does just that And collar? is is portion on that that Got or open well, a collar position

Jimmy Brock

fixed. first The spot year would from entirely through March XX, allows and year. market, collared whole then sales, the year that, The is the contract second in be beyond entirely which is of the some for fiscal for XXXX to contract is

Lucas Pipes

change look side, $X.XX ton much. very per you pricing in Thank stay to to confirm, entire X.X to your when that to sensitivity the would of hour be $X.XX XXXX, Perfect. I in mentioned think on X.XX I $X just million apply the for And megawatt sales And David, guidance per at million you portfolio, prices. to that'd tons. so power West PJM

for have wouldn't making to worry in I going So etcetera. what's and export, adjustments about

Jimmy Brock

That's right.

I be a portfolio would hour megawatt we exactly we Lucas, have in upside comment, think as range, affect we would $X.XX expect and the predicted entire by to $X.XX covered $X the the per the as further downside to here, ton.

Lucas Pipes

helpful. with spot to very to the degree coming that I customers' in and you. to weather, of where question, just spot bought spot from sales a Thank more little of the the down, for finally another strategy, as or you purchasing that also into years comfortable for this give part you sales, That's the if hit Thank to after sales on going of side, been marketing Was then the to they you you due Jimmy, Could zero I strategy? is bit are something. inventories it that. here their color higher And there wondered speak so utilities say, causes have think that? quick mentioned domestic under market, and could your

David Khani

think I and deliver. mentioned. it Yeah, part to App Northern in Jimmy, supply first it's But created some There combination they add I things you has that? the App, market. Jimmy. take will been opportunities over tighter operational challenges has turn it those And some The the Northern to couldn't a can of in you those where and then

Jimmy Brock

it. there of think couple part is played reasons. weather a I in certainly a The

them with Northeast, quite we January were top honestly days the burn exceeded to very there with between those coal, didn't and fresh the XX On frozen have more They at for Florida further issues, than coal -- they coal X, December to and all railroads, were perform. for had from issues it that, of conditions make there burned forecast. utilities those their real weather railroads both the need all severe stockpiles, have and for anticipated. caused XX to think utility freezing have of the conditions I which difficult

bit because some So XX performance being day fell that that, made. their weren't shipments a of period, off little during and

created you opportunities. more you were of and if receiving a burning the tons, customer, less of So because spot the that tons and were weather, weather, because the

Lucas Pipes

it. everything. for good I Got you. here with Thank will leave luck Very it but now, helpful.

Jimmy Brock

Thanks Lucas.

Operator

The with go Research. Please next ahead. question comes Vertical Michael Dudas from

Michael Dudas

and congrats out morning spin being Good there. on and the

Jimmy Brock

Thank you.

Michael Dudas

All right.

surprising see and where the the for some to into and XXXX situation certainly in we the the optionality Given we move export and upset, most today? XXXX given changes seeing coal, tightness your certainly people the how many that we Northern then place you can remainder App, add you on And I in XXXX as strength, in guess as look you books, more obviously do where market forward? are look are Indian

Jimmy Brock

defined for Well are we the first it best need stand to to of today. all, upon we we optimize -- have we to XXXX, going do based do, whatever portfolio, where

intend to be met tons not are which the market. XX% our we For move domestic beyond, we XXXX that and basic into and will choose tons the the essential changing We strategy intend to whatever we arbitrage. crossover have remaining, discussed, is market, into we best that

job, admittedly, and been to I for highest into we some arbitrage That level was of that the XXXX. be quite were that's we XX% crossover, the export thermal, lot but this continue was as that as in in some time, met a at where long Now have market the been best have was. of

So of enabled export us the we customers, had market. a little beginning of pushback domestic into from the bit tons year move more the to at that

continue. from forward, market I to enable export. to to opportunities that quickly and think so another, strategic in domestic of have optimize logistics, us range be the the ability pivot based these that better one and our strength XX% But we upon and to we as will going will logistics of try XX% portfolio, our or still our parent's

Michael Dudas

is, well some see operational a are an you well run for of are selling, you maybe products in sheet from be that appreciate to have who of positioned running I isn't surprising meet sheet them your answer standpoint look guys as a that very could How standpoint, you advantage. and as a Jimmy, do you XXXX and what and a infrastructure the the mines, [ph] follow-up and as out competition balance your my labor XXXX? you've such you to or and uptick needs demand look you balance from

Jim McCaffrey

seeing out as in of look you think are of -- that Northern I that the out tightening has App, reasons the the issues you some some production across been there. is of supply because in

had have some of We them.

the have to we the some are peers upside. think to done just mines, ones had them participate invested their have the our able that, as of in that going in I like coal be of and well, Some have capital

close Some are of Northern positioned sold out really that we the pretty as we now, to by potential be earlier, them. we to where really tons we are certainly an well tons, others have think provided there, opportunity by in may for extra if XXXX, had not. get much we And those App do particularly are Jimmy or can't go competitors, have to whatever, I will -- but get weekends mentioned and the other running

David Khani

you deals, the in capitalize customers I'd market deals. -- just the one on and we continue multiyear of as that, to I And think think and is you the will market multiyear put I I saw and rise, lock here we market deliver, are think add to so can advantages understand that able capture we and see in

Michael Dudas

an that's point think David. I excellent

Jim McCaffrey

Thank you.

Jimmy Brock

Mike. Thanks

Operator

The with from go Paul Forward ahead. next Stifel. Please question comes

Paul Forward

morning. good and Thanks

Jimmy Brock

morning Good Paul.

Paul Forward

I wanted XXXX. cash to about the ask for guidance cost

midpoint, volumes, midpoint at were to operating going at the got the But that's quarter. you were a when the -- above quarter above costs $XX fourth in fourth ton, and you are have the the $XX.XX. rate cash look You you that be down a little

inflation levels between if there XXXX wondering bit just costs? could for anticipating is your what a guidance you drivers are as you So of the differences or on the quarter what about talk the and fourth little

David Khani

Yeah.

talk but have geology the our the for Enlow better spaces, Paul. it some a reasons. one to manage in think that plans, We those, are about in panels have Fork, rates that's in slower at One, up North the go, couple Let's of we we conditions End. we getting going as the

of lot expense. improved, as mentioned QX we that save able were to The of on was other we reason, because was before, a subsidence,

every methodology changed that. home of kind necessarily in don't undermine we that have we We now. the do We buyout how

that is because for seen prices it to pricing some inflation End, is in for that the you of some XXXX, commodity; of the geology to forward a as North look we of for bit know, as and rise in continue commodities, as have to in numbers. bit But into So inflation that's single XXXX. still commodities, think we going a to little we are there we low be is in be digits of for increase going what in and costs

Paul Forward

a Okay, David, place weekend logistical market, had potentially, volumes and follow-up, if shifts do think you some I costs can I demurrage mentioned, that the to quarter. think And the market then or other additional you challenges as strong, thanks just and you and mentioned stays you things the Jimmy. had fourth into had in

the market? the Just volumes the factor to a issues, what's into most do additional ship where wondering above it be your XXXX, Is ability to from terms market? put ability end you you in you rail be place be factor issues, of could additional would your see little mine going the into on it guidance to it the likely talk to of limiting top for bit maybe limiting ability about, if as would it going see the your would it tons, the to right be, terminal, now be

Jim McCaffrey

will that, Jim. the Jimmy then the part, this I Let part first second take take of me is let

terminal terms I downs. was parent the for little extreme expect team, they together logistics, I struggled to the owns. But balance in documented, the In well and due strong year, the and expect the railroads have a XXXX ups bit will for otherwise. of a CSX very both the railroads year. The have we reason well of that the no their course had weather, of to earlier logistics working have with the perform

assured go, meetings been and that both, they have them we with us in with comfortable to set are they and have We are them.

Our good is us. terminal position very for

So good are than probably think very better we have. from point we I a any of shape, logistics view, in competitor

Jimmy Brock

operations, And shape. production from I the mines in coal standpoint, are in a the really think good

those of out normal panel out the moves XL there. years we the get in Bailey, Once be we course, of our out next three will there permits the we have park, state longwall We for have for year.

good So should we be shape. in

we main in I X, shape. think aggressive on Enlow the in it run is just and going Bailey great is great forward. geology of can driver -- at how it's shape is Harvey depends the

Paul Forward

Jim. Thanks Jimmy. Thanks Great.

Jimmy Brock

Thank you.

Jim McCaffrey

You're welcome.

Operator

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

Mark Levin

much. Thank Great. very you

are? you think or and specific counteracted one just where above, are guys XXXX guys maybe this to in should pricing, How more realize about referenced XXXX I modeling you you some guys expectation, and of think I thinking don't When to below? end, similar XX% XXXX? give the question, price. to Is we around number you a guidance about the help. First but directional where

David Khani

based in I you of should to market, today still XX% in we are XXXX. our I not mean, contracts -- or Mark. about are going have think quite think are upon netback we at around that XXXX, XX%

call have So We like good drive it would good people weather weather. recently. to call recently Most bad. Good continue good had it like will we weather margins. we had help

deal a firm provides that have it done, risk us the new downside around have We upside and export collar protection. and we

be just numbers will see of today, bit will very on netbacks depends a perform. close the improvement really and to we market maybe, little anticipate I you how So XXXX. to the It

Mark Levin

you. that, thank Appreciate

Second that up? that close, what CONSOL? more to Northern and and Sammis, you and a serve, that a were lot to net If think I market around shaping see two believe Mansfield coal, impact has how question you do of would plans of taking the that certainly, how mean to would market, situation you related Sammis with Mansfield that don't guys but and do App question; general

Jimmy Brock

Energy coal Mansfield We and Sammis our There any But our were largest after sold do have not and time, was of Mansfield. changed. Corporation, those going that to mines a among Mark, we into Murray Sammis when customers.

not I'd to will it away? might As you happen, prefer speculate and far to what to might speculate what happen. go on up as I guys what happen, Sammis leave might if Mansfield

Mark Levin

but also, you you Got looking then seeing perspective? will and are am the it. and numbers, I I to from -- sulfur stay calculating a side. we from for Fair what so questions seeing question, When going and here, the from away limit am not a last specific on rate discount focus rail netbacks are export ranges enough. I CEIX And are would be perspective, them then fine. What

Jimmy Brock

the dropped the with bit little a or $X, has $X Well sulfur to discount X Mark, drop that also and know as API here expect recently, you it, will $X. $X we

admittedly, -- have around pricing that put I But is the deal to prop firm that $XX anticipate great, new a so to a not range. in are Europe fix Now on don't we But again, on. be demand modeling today. discount in that that can I $XX can't that you sulfur solid give we I

Mark Levin

Got and I dump. $XX the maybe And the in seen $XX including am mistaken, rates? think ranges, it. rail how about we are to on today, if I the Where they trending not that export of are numbers before, rates rail had how side? kind

David Khani

the I talking about the are think if you want rate, rail So the including you from the to to ship. mine dump? consider

-- that said I to $XX. to think $XX $XX, I would you $XX say

Mark Levin

trending And or it. up Got has that been down?

David Khani

a It's trending little up bit.

Mark Levin

Trending up gentlemen. much Appreciate little it. bit? Great. very Thanks a

David Khani

Mark. Welcome

Operator

ahead. Clarksons. [Operator Please Instructions]. The with next question go comes Jeremy Sussman from

Jeremy Sussman

solid my taking Hi. Thanks quarter. question. for Very

Jimmy Brock

Jeremy. Hi

Jim McCaffrey

Jeremy. Hey

David Khani

you. Thank

Jeremy Sussman

guys. Hey

would this discussions, of does direct large come of domestic kind position of the multiyear think? second, for of clearly, customer inventories point -- seen side. compare inventories guys you as what issue be now, I up? are with a to in And the does let's for the are years? some you as I guess, on there below sort as this does in sheet your an have I discussions then the where of mentioned, maybe balance guess, couple you but kind And especially of of a -- at first, domestic were -- good kind side So do Northern for there, begin customers. how compare the kind think, could bear to some your the stay days of how you your, App to competitors, XX I starting whole last

David Khani

Yeah, any balance not about we Jeremy. or our sheet have or questions credit, experienced interrogatories our

standalone. part, a most lot we our and let separated company customers deliver, and of that our seemed the ability the For them to from we are E&P haven't are that happy, faith have down. in we They

done, we we deals that a had spot have done deal domestic the haven't big domestic have we since any So but some issues doing deals. especially in spin, not

throughout quarter, even As far inventory certainly further. at they seen the entire and inventory we the I our declined in declining as inventory have some of that levels, best year, customers, have down, think levels are but levels fourth

in the will We that customers, have in until buy us two XXXX, they spot for both XXXX. they some any market told in and particular, not that coal coal are

gas burn based a the generated. prices So need that tells there weather me that is has and that this generated, higher have the upon that

domestic am inventories to are take time comfortable relatively and the export both rebuilt going get customers that I the So to and think I about level some these to markets, optimistic it's with. that

Jeremy Sussman

very That's was coming helpful. And I balance it out, good guys guess, balance you on the sheet, obviously a sheet. more, have

to relative have Just where of been trading able there lower strength to out course use there bonds much others, curious if are you are trading? CONSOL's that than that are where a as

David Khani

and benefit change position, our and about I seem to all. legacy position, that our financial as with and and -- customers, seen to always happy it's relatively Our a at our talked us our customers not have haven't we

Jimmy Brock

of defined and differently balance and years to And value us think was the deals. ago. say to Jeremy, I many I is today longer have part it plays two I when in to careful it try But us does year contracts, sheet allow no these longer term those, to because a term there add be than three is allowing doubt that some get

David Khani

million company. going during that I sold Jimmy and process think the his you if forward. selling look of remarks, how the spinning ultimately about through And we Jeremy, talked went tons X at time, XXXX. in we

us some that have in customer didn't some thought market though our and So even turmoil, there we ability looked at be see might may tons. to

the going years. and for So million forward forward CCR sold X tons marketed

Jeremy Sussman

to perhaps began to helpful. especially petcoke. be of QX to on India. that dynamics mean, And imports, back pick I questions, I'll the the seem it Indian international in up from super just of, arose kind in That's overreliance U.S. part call specifically, from on India's in biggest stories And of place the the switch one last, I if side. certainly maybe, taking the

the within trending and there, I out kind things guess, specifically questions playing this of like it in So India XXXX seems but of direction, right you lot maybe are all see do how in beyond? out

David Khani

to don't going know out. play Obviously, it's how

tax India benefit be us. XX% there's for We the import into that are modeling to going going that in, think that's to We going petcoke.

to that with Our India, to are we best to considerable going assumptions to. amounts able of place the move coal continue that's the move market to in it are be if

plenty questions, Indian plenty interrogatory, We activity have of with of of plenty customers.

So list. on our it's foremost

here in In traveling to fact, mid-February. will we India be

are we get to trying our that's So to end user, the goal.

Jeremy Sussman

color for Well Understood. and luck good the guys. thanks

Jimmy Brock

Jeremy Thanks

Operator

ahead. The Shen comes HITE. go Lin next from question Please with

Lin Shen

my morning. you Good question. for taking Thank

ask, for the First, much coal? met to how your XXXX are volume, I crossover want

Jimmy Brock

XX% -- were -- tons for coals met rate were put in it I crossover to XXX,XXX got The approximately CCR.

Lin Shen

Okay, got XXX,XXX. it.

Jimmy Brock

Probably closer to XXX,XXX or above that.

Lin Shen

or it. sold Got this exported? domestically of And are most

Jimmy Brock

sold them were in of XXXX. All export

we think As will and domestic market we crossover us move more that well. is improving, to sulfur and move our into position export met, enable forward, the as both

rally our the of today. markets and will those the at ton We But level. based in export XXXX, are we XXX,XXX-XXX,XXX markets, working quality on upon that in sulfur, only

Lin Shen

should their your or because Great. And XXXX quality percentage sulfur increase, -- expect improves? volume the you

Jimmy Brock

volumes and XX% will and by would in sulfur gets and vastly in be the increase I then to expect our better, able we those XXXX beyond, XXXX, in that expect improve to would I considerably years.

Lin Shen

have you is E&P wondering, a I'm their And just a given spinoff now. sponsor, Great. new from company also, which

and long-term any to I'm parent, entities? or long-term how should -- about MLP have parents, between the one coal our strategy MLP's core operation, we basically two entity. what the there with are C-corp sorry, also internal now use think So currency about we GP Is two strategy MLP discussion the

Jim McCaffrey

ability a we out do loan has the do given are CCR, today, now, I with to that have we intercompany that today. currently do the a question. that that. of if have tell will nothing to. changed you thought need distributions there. one have drop, latent the We It's to But of Good for really, industry we lot still as

continue hasn't will changed the But for really We strategy this CCR. point opportunities accretive at both. to look for for primarily,

Lin Shen

very you Really Thank much. it. Great. appreciate

Operator

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

Lucas Pipes

asked And follow-up. Lin, for Yes, thank taking two. just did my have I one you of but them,

domestic a -- in have the of difference past, So of about if market? domestically, earnings I as the between talk maybe noted rail in you course over for States. the season, ask, coal the Eastern we wanted on see have pricing river your you Thank just us some App, Northern where to the could thermal the United prices well market, both rail you. you give And had and refresher the peers, river peer's market. the as

Jimmy Brock

prices the you pretty accurate, that Well, today, think that I published see published the are Lucas. prices

that's the I I say, and will to from market So to market. mine I say going vice-versa river the rail that to ready guys am think us prices. the about $X for $X get to get all to is our cost us to to for river

I it So think. will just leave that I at

Lucas Pipes

your everybody to say are as quality And you and where well? remind they they coal would apply the you can published prices, would

Jimmy Brock

the I say in the are The for to range. are $XX $XX forward range. plus would $XX prices in prop the our prices coal

Lucas Pipes

Perfect. CapEx very lastly, helpful. And just wanted you. follow-up That's very side, the to on there. Thank

just little could XXXX points what maybe give may Thank lower looked it if I versus quick think you. caused And you couple of numbers. higher XXXX my in a on have little change? a in a and that data

Jim McCaffrey

just Yeah. It's primarily Lucas. timing

skew I what earlier, of where our spent we was area, little timing Some the the some we a moving is longwall is do, had and of of to in rebuilds about other refuse had be it bit. in some out that's forward. that will the weather, that coarse is, it then And just XXXX, talking

basically timing. it's So

David Khani

more there a million the of I -- $X was efficiency more remainder call, benefits, $X and was million think timing. then I would

Lucas Pipes

Got it.

Okay. much. Thank Appreciate it. so you

David Khani

Welcome.

Jim McCaffrey

Thank Lucas. you,

Operator

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

Mitesh Thakkar

able thank today. and call. to appreciate quarterly look time of earnings next most CCR. you your support interest questions to in everybody. Hopefully, forward Thank of We answer everyone's Thank were and you, Anita. you this We morning, our for your we

Operator

now Thank has conference for presentation. today's you concluded. This attending

may disconnect. You now

Core Natural Resources (CNR) 10 Feb 182017 Q4 Earnings call transcript