CEIX - Earnings call transcript Q1 2018 | Core Natural Resources, Inc.

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Operator

Good morning and welcome to the CONSOL Energy and CONSOL Coal Resources' First Quarter 2018 Earnings Conference Call and webcast. All participants will be in a 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. Mr. yours, is floor the sir. Thakkar,

Mitesh Thakkar

today and Thank our Khani, CONSOL Earnings our everyone. our Chief me to Chief Financial Jim Officer. morning, and you, Conference Executive CONSOL McCaffrey, Dave With Joint Commercial Mike, Energy XXXX Coal Welcome Quarter Brock, and good Resources Officer; Jimmy are Officer; Call. Chief First

the We open up then will Dave Q&A and session. and start with Jimmy prepared floor remarks for by the

posted to the websites on prepared are remarks, slides During call. our refer advance certain today's will of in that we

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

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

You additional information websites, our will also www.ccrlp.com. find www.consolenergy.com and on

also start, companies. both is this joint a we note that wanted for Before call to I

We are will With CONSOL turn included over additional provide Resources' Energy's as Coal not resource and to operations financial in CEO, that, financial results let about Jimmy Brock. operations appropriate. CONSOL and some me our that it information

Jimmy Brock

not our CONSOL buybacks the the some capital Mitesh. we distribution yield the started plan accelerate debt some some morning, previously outperform commenced industry-leading but further The very From able us financial reductions From and delivered an allowed distribution to and team CCR CEIX everyone on operational we performance. we only a board. returning debt objectives. a perspective, by perspective, to had coverage call. our Good CEIX that key you, today's process approved shareholders simultaneously. through a We under record equity delevering Thank first and also joining thank for of of on you were metrics, strong our quarter

investment both at that Complex and some to really improvement initiating also attractive the Mining companies. some are We beneficial projects efficiency be Pennsylvania should

these our differentiated marketing to was world-class All asset achieved our of due and strategies. financial base and

our key record in from Mine Bailey 'XX. the quarter Some production quarter first the of highlights quarterly include achieved

able our since quarterly the team first highest quarter XXXX. to coal achieve process for was of sales marketing Our

team to finance the CEIX able Pennsylvania approximately $XX Complex cash CCR. of by reduced Our leases Mining the was which and some restructure for $X.X band for million million operating XXXX

We July achieved since million, expect of these to quarterly $XX highest a adjusted XXXX. of CCR XXXX. the in [ph] savings RPO continue EBITDA through record it's

Bailey our The which tons, move rate an first performance review with geologic let production or achieved Enlow conditions of of from the long-on is X.X the quarter, production at tons in-line end benefited annualized at the me for quarter we Complex partially million guidance. XXXX. the by of at strong XX.X Fork Mine a Harvey run [ph] offset operational first our of sales Now, Pennsylvania strong At Mine, and Mining quarter adverse million Mine.

X.X X.X million XXXX. Our in set the surpassing high of of tons million previous quarter, produced first Bailey tons its Mine in mark record-setting quarter fourth the a

will by declined forward. some to going due compared contract in new These challenges January. challenges export Our quarterly approximately production expense weather-related resulted to XXX,XXX the logistical year-ago demerged quarter, early which our minimized tons in with be

annualized to of X.X million tons our share guidance previously million of produced in-line quarter, of the rate is also CCR X.X of million it's coal For announced run range X.X tons an tons. during PAMC, first with sales which X.X million

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

the most quarter XXXX since first the of XXXX. fourth Bailey First the and since productive for quarter for Mine 'XX the quarter was quarter PAMC of

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

the On taxes, year-ago in was to the process. This time over $XX.XX average to tied essentially $XX.XX increase compared coals which our are sales cash in this of roll quarter. production of was higher cost driven cost front, by high

cost management always our go welcome case, our increase With on the non-sales than This that, update result end marketing prefer to volume efforts. in had quarter, down, the a the continue markets sales a are overview prices our leader it we being win higher provide highlighted expenses me of now of success we of the At earlier. our of coal let of a fits we notable but performance team, cost the leader. an rather a and this sensitive work an our reductions achieving on to As in was components because cost in margin product. lease the with with for strategy that and and

the quarter In In favorable upside targeted on proof As discussed market from benefited strategy back previous optimize pricing process struggle. our to XXXX ways was in strategy the is through our to the previous last demand were calls, burn, through tailored three volume and capitalizing to In pivot year marketing the markets when value. years. the export first during three production on marketing first our recent drawing as in when 'XX, export strategy strategy able different unique the offered we works significant 'XX, domestic is the higher summary, as by in strategy turn, power domestic history to allowed in In to There XXXX, looking market we at ton net back regions to some registered improved better our broad quarter as capture as us to year-to-date priced from We milder earnings that of they quickly normal high-powered during kicking we price conditions. days by the in upon first well. the grow this normal our win in. was In quarter, consistency; is market tangible approximately greater our contracts. higher capture market XXXX, opportunities; we days overall compared and enabled and over reach market customers. In domestic improvement in per evident of down Based by annual 'XX, improvement. Northern industry through Heating our which into us on asset unique, to base. This more outcomes the winter the contracts quarter. and the X% to days return contrasts year-ago plants. West plants normal continues traditional demand upside first of at and well increase process. XX% Appalachia domestic to fixed revenue of We days estimates, were the dynamic than slightly from X% heating XX% degree burn key news temperatures day to based XX good megawatt again the degree than less once The our boosted preliminary were below rail data. create several average to winter during serve. power points our per declined serve various significant period, at our This hour. our translated and improved heating on inventories than internal power PJM $XX.XX process power a ahead customers' demand the The to an

of $X our our annual guidance. to improvement XXXX fourth over during indicated $XX.XX megawatt PJM process revenue you in XX% hour conference per West every XX% a that As we recall, in million hour power results per compared improvement call, to average quarter megawatt our per may ton

drove revenue in in a an approximate As in of improvement power average traffic our ton the ton This for this alone $X process this optionality per the improvement year. per continues remainder result, quarter.

need Energy power published markets. coal January is XXXX period. natural weather $XX.XX coal For It provided the $X greater The of including On coal impact lower compared for most period the $XX.XX a form XXXX energy of incremental six system did the XX% March fleet. important addition on fossil this quarter, fuel independent generation a traditional National of accomplished Technology report to December this the for sub needed the diverse market. resulting was forward key Clearly, Available in of up per once takeaways gas plants load was to average base and to Laboratory first year XX, winter PJM, a highlighting XX, wind in X, a that XX% again, typical in during generation in In demand role revenue the than in the generation the our the examining power ago XXXX, that and having its across ton meeting field generation the daily job during make of coal to their generation. note was importance day through event fossil were: fuel PJM. operators event. resilient resiliency a provided

$XX per the net API our tying to continues demand through economic broadening X on to XXXX. current market. overall Now, to the Based turning comfortably and Global to remains minds above coal debts accelerating prompt and forward export growth. process, ton improve,

our to the for coal sector to Prior and continue coal was in demand industrial India. XXXX, moving We India to going primarily our see improved into to industries. the cement brick

However, for able now input of increase its to up Northern it opens be news we suggest sources increase coal sector Turkey penetrate also close Other into sulfur world beginning are count to proving fire areas power powers. the Industry to well. their generation an expanding that as coal India's are is high up very a from specs, for the previously. quality coal, up App to whereby additional an as X.X% coal good X% is will This for to sub it accept opportunities. in

essential market low-cost are best-positioned high a United set to we a as industry, coal coal become structure, advantages. market the States given is and rather coal swing to U.S. than our quality supplier. global Also, an investment believe the seaborne the we serve Within we logistical given industry, believe of as incurring limited the piece incremental

shape. forward and of Looking very 'XX in we good to remainder are beyond, the

for contracted We and for 'XX XX% are greater than 'XX and are contracted and 'XX shipments XX% respectively. XX%

low this us export natural our during second export release pricing press well our will turn XXXX very strong quarter, export inventories new with kicks market, provide the to a the in and the business. that, optimize with over which David to coal and are provide we our to financial in disclosed call With as As contract prospects uplift through gas now I morning, contract our comfortable update. coal XXXX will position. With the as in

David Khani

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

perspectives markets. Before me current some let energy the provide I on do so,

us up we earnings growth pricing last on [indiscernible] the for and improvement sustainable is for with cycle call, setting the global reviews how pricing demand During coal. coupled coal discussed

Jimmy been the for other highlighted, for benchmark we commodities. important As the as has product our is of the as accelerating pricing This coal well as these just global against demand all demand commodities.

including easy we watch various XX, Slide benchmarks. On to rising several we thermal and key thermal natural also market L&G, prices of prices tie coal that used you world steel and net provide wildly to compare off prices. sources international to it's prices throughout other and gas, domestic While oil the energy the

As you can MMGX XX% see from per market. is App for basis, a versus the there an global Coal nearly arbitrage [ph] a dollar Northern L&G

rise, pressure be exported VQ our As The these have is that gap. more of to owned prices coal very terminal consumer and coal the this can the on close that in in commodities Baltimore. our majority high key export all we puts differentiator to wholly [ph]

very production well year. reaches back Investors investing similar supported continents raise We to of on production to market companies their us are around team of domestic creates the performance believe shipping past companies this has markets. been actions, overlaid the free trend There with forward. as last five return are trend free to shareholder-friendly This growth. include broad the gas the Our capital returns, cash the our outperforming saw the flow and year overall forcing also generate generate spot coal are of interesting management for cash XXXX. development going in we product outspend that been flows. to and to an steering in that global opportunities has most growth markets just as The oil cash companies coal space in flow instead upside

XX% an are reports with E&P nearly the expected export of XXX% of we've are and seen and provides analyst the domestic trend show XXXX discipline natural the trend prices. stay rising that companies While E&P between to towards on generating XXXX. within flow, This along focusing companies gas XX% with coal cash several for free supporting within in improving flow investment healthy daylight demand cash

record their to the to returns on years, spend Over generating as eight commodity continues whole capital has the energy falling prices. past inspite a growth had above space cost companies the of

calculates eye For the our the backdrop, trailing months, employee approach XX the we developed capital this discipline in corporate return to on allocation our returns. capital With with XX%. raising have an

back be will internal projects debt that We subject have opportunities, stock and buy a and focus external list marked to generated against limitations. of certain

existing We begun with full or rate projects highest production. [ph] have to deep our just optimized making return spend of oil

pricing. air candidates We have will of swaps. production capital Also, sustainable divestitures unless spend not are some we as these significant projects for internal to

am move me recap and an our over to now update performance financial give to guidance. quarter our the very on Let where I excited

million to and to reported cash will increased $XXX of income and We shareholders million. This CEIX morning flow in quarter. This per improved net a as $X.XX million, CCR. financial prices ton of a compared $X.XX adjusted $XX of million $XXX our $X.XX $XX or levels a review million, cost compares coal net first strong the organic year-ago free we quarter $XX and million to On to $XX with EBITDA basis, rose CEIX respectively year-ago to $XX.XX to margins $XX.XX. $XX.XX then

interesting fall to export prices bottom quarter which likely that new in contract. price domestic second change row, for a line. also realizations the of in high have with mostly quarter is the the With cost What now prices rising second outperformed a is a fixed, will percentage export

This quarter, us during generated which outstanding Now, $XX financing to and we down the opportunistically an $XXX capital million X.X%. of million expenditures. flow allowed average debt, from had of spent in operations cost cash million $XX in pay we

One of and to related road take shows bank on equity ratio to net highlighted XXXX. on Xx our the we've year-end standing down by was goals leverage debt

as back our three currently We XX,XXX outperformed brought shares as two is achieved have believe We quarters. the we have last well. target approximately and this early quarters undervalued that stock

our returns, raising corporate cost also we will lowering work our to on capital. we're While

well we took our as with access continues as of capital advantage in program interviews improve Our first to to and this leasing quarter. the

generated in $XX $XX cash over adjusted This financial $XX X.Xx This move net our reported which distributable is in the of to $XX and million. distribution a million during me highest compares flow million million, of CCR respectively We and million for company. $XX EBITDA a quarter. public of $XX CCR strong CCR. quarter The as million, most with to the coverage. income let morning, Now, the year-ago the important quarter metric coverage distribution history is of

During in CCR able net activities. generated million in distribution $XX approximately million ratio cash After debt. for million million operating from and X.Xx. $XX net we expenditures quarter, to were in payments, CCR's improved leverage in counting down capital the $XX $X pay just

on me provide Now our guidance. let you with update XXXX an

last stated to able our up the goal walk quarter, guidance be we as is progresses. to our As year

As team cash a and and safety values reminder, our management free is flow our compliance. compensated on generating of core

as complex, the For absorb [ph] to are appears normal. to restocking set maintaining are produce needed we volume with PAM our could below XXXX sales market mining all inventories well significant The we guidance.

on CCR cost EBITDA and CEIX previously-expected guidance the $XX using revenue, adjusted sales As better the guidance, based and are and marine increase again, that, me using cash income. of sales final higher PMC the comments. guidance to guidance royalty it we Based terminal than using some EBITDA midpoint. CEIX by to $X make and for The guidance our and the in new be expected increasing profitability million CONSOL margin million and guidance. With also improvement midpoint per adjusted of $X expansion, let midpoint respectively, XX% Jimmy can on reflects, ton turn back reflects $X.XX of also prices $X.XX in done decrease an cost

Jimmy Brock

Dave. you, Thank

on opportunity we out for key to me move take Before let us. this priorities session, lay some to the Q&A

very the more CEIX, front. have on We to are clear: balance but spend, good priorities opportunistically. this made our sheet. since do work the progress Grow very some For de-risk we

projects. higher rated return us Our helped capital identify process some small, allocation but has

We consist land, within asset an investment evaluating also team in-house of verticals of key a development is recently individuals and team which the company, from shareholder operations, returns. Improved business opportunities. The marketing, monetizations formed permitting number or finance. significant

we rate-of-return mentioned, David As be will driven.

will capital time, certain over limitations. against to our As projects internal are improve all our our which create repayments and debt lower for well will cost as times, as value repurchases rate of our subject shareholder tremendous shareholders. we compete we of At return

number holders. for is maintain our CCR, adequate distributions priority For an with coverage unit all attractive one to

sponsor opportunistically is second the Our FEAMC. some our of executes priority to from projects that

continue balance cyclicality withstand and the the delever will commodity and we Finally, to to prices. ourselves sheet position the

opportunities a have for While attractive front of great this was quarter several in we us. us,

First, in our new of export contract kicking is second XXXX pricing give during export our quarter which volumes. will the a on uplift us

cost. improving, control is geology Mine Fork better Enlow our us help the Second, should which

Third, coal 'XX, the with gas low levels, we our higher enable inventories 'XX to Fourth, and capture significantly continue coal expect sulfur 'XX see to for us expand certain domestic the our is which to of pricing. at XXXX. through further for expected prices content markets product improving contract should to and improve and

and again. we to be are have cost safety innovative for are highly team motivated and workforce to over I ways They to that and that, looking will back stand-alone a to adhering while a our be call compliance. of Finally, excited further hand instructions. to reduce new highly company the for management coal values Mitesh productive and With continue

Mitesh Thakkar

you, callers? to now provide Thank you Jimmy. please We'll move instruction session. Q&A can the to Mike, our the over

Operator

Yes, sir.

[Operator session. Global. We Levin will begin Please of go come first The the Seaport ahead. from will now Mark Instructions] question question-and-answer

Mark Levin

I very Thanks from one the Congratulations think quarter much. very maybe really Great. in a of can CONSOL. on time I long better -- best the quarters remember

that. on congrats So

$XXX QX. the by EBITDA, midpoint through you $X quarter? of I back just let's obviously guidance, function think QX Let to about $XXX QX? call number of impacting million, the me the that was if through QX questions. kind this QX, QX the fall take a of it through around ask your million there's adjusted we huge, should but in back of couple thinking contracts maybe a that With QX price regard How net Is seems off realized in like a of

David Khani

One, the strong They strong we careful obviously could because in important be the contracts Yes. quarter. QX first factor. weather is very want net are debt QX, with to be but weather in through very

we my export listen The second are hopefully time. contracts then the if we have pricing that takes thing say, guidance as third it and walk going our up as would to to I material you over is well; in the up commentary, kicking

well, we we outperform the numbers as should hopefully So you -- see should up.

QX thinking through we're be careful is to what QX You QX. -- about should about relative

Jim McCaffrey

Mark, this is Jim.

jump quarter, contracts. we target bit, Only $X.X little crossover. export. about first shipped me tons of export In in tons too. Let was the XXX,XXX We a net million of that

As for the the we to net look another we tons year, crossover first XXX,XXX to of shipped X.X premium to X.X tons. of balance at a $XX expect the we million what million ship

those we expect similar million as around levels would and side, sales X in expect than thermal be X of to thermal tons the quarter. first the $X we the On end year be to to to of showed we higher the million ship

We on expect solid some front. strength the export

the on seeing the will continued power great those is in in a time depreciation the results to to last back a April help to pricing. and The continue domestic we're see we first solid gave net that color point of solid at we've we us think look solid, some markets results take a promote of front, into saw the but we base contracts Now about volatility megawatt good hour. versus lot news net contracts, on $XX.XX back how a of quarter,

QX? not, performance expect we as will Perhaps be but as from quite solid contracts it still. those Now, strong

Mark Levin

is. David's EBITDA leads upside that me be could conclusion there that point, the to maybe some guidance to All where to last

priced you realized but on think out the stuff net is to might thinking the second 'XX. so year net speaking, anything color where about weather of be just do going versus what can backs give about we don't just us can you broadly from look that to the I are or going say how pricing the in think to like? 'XX XXXX, but -- point, is to just know in what and getting what now, On -- that terms it how a

David Khani

that we have X we the Well, export coal. there's need deal don't about and we think new to contract I any talked with secret

the I now. think that aware market is of

interest some strong economic the into look our not formation us activity. and the power for with we're and I'm in performance both expo upon periods, we the will those which 'XX pricing, last our winters, a some drove upon increased bottom have a retirements so both consistent all we at we're if home [ph], years, of and periods; winter you more anticipate there be the pricing. the of that the rest been the and new traveling with of had to. different we've you pricing if would that terms 'XX As 'XX we my some that weather price see volatility marketplace fact benefit And seeing of or stronger and in above seeing strong to going excited in the about coal and the strong, five pricing' -- I'm products. specially team quarter the me in anomaly to where world and at like back 'XX that 'XX 'XX cycle moving very but I resiliency suggest had four of areas net we've discussions based surprising that's anomaly been last our have look weather. in was was and anticipating pricing, to and net weak slightly say, pricing at some market export 'Hey, The still look big pricing. and I'm continue We even the based back eye-opening

Mark Levin

you That with have. of -- of regard opportunities to or maybe makes with one comments has David to do question one David's that definitely the with sense. Last

looking would higher whether What's mentioned internal highlight? there be obviously buy maybe you that opportunities, levered. under get opportunities. you mentioned, that return highest backs bottle-necking internal the have think of you the some opportunity for Xx the the the it you you I of and projects also some as return think I But stuff,

Jimmy Brock

under are things have that now. we Mark, those, currently way of Some

yield some also opportunistically. tuned we'll reduce is what our into automation. we Then shares some the increase things have underground those stay some automation of and that but projects and well. opportunities and prep to with plan peer using METCO under our of could we're We markets, we other some cost the we Some value look on to that BD that these all as that. our at may We're it to That's this team is you markets, have. of working have get [ph] have way of metallurgical on, just

have stay tuned So you to for those.

David Khani

Yes.

them Just note, into what they'll would it do kick year deploy probably is 'XX some or them it will this extremely they'll meaningfully different forecast. have in two are our because would rates have we 'XX down, op return things time say so just horizons high and we XX% One the later put and above I'll XX%. they production pushes when take They take place. are point these as cost improve. return. rates to could be our probably our in, margins could And

Mark Levin

talking quantify we two some million tons, the Any mean? stuff like to are of David, tons? what way a million might

David Khani

Yes. more million say I than tons a than five. less and would

Mark Levin

very much. Thank it. Got Perfect. you

Operator

Lucas [Operator B. ahead, with FBR. Please Riley Next, we sir. have go Pipes Instructions].

Unidentified Analyst

Ted Pipes. here Lucas [ph] for

job First the quarter. thing, good on

Jimmy Brock

you. Thank

Unidentified Analyst

off any power the you the to right would is when and on general that's domestic hit? given My the see spots if volume XX now, for plants potential inventories of burn below upside you do days so, expect these first with NAPP and sales incremental question demands

Jimmy Brock

demand, storage, that upon see gas based different we gas upon of a pretty that cost be looking I based that that going for natural natural NAPP to inventory the think for PJM, think pricing desire in it based come scarce. out levels the it based year. factors, the most upon find is second number upon there I also upon customers it's half that of

room think Mark be net to as continue pricing domestic in for coal well. pricing, I there's tight as there well. pricing very the and 'XX is think that improvement back export think to about I going but traditional tightness quarter talked NAPP I XXs was into upper and and for the could I

Unidentified Analyst

got interest now by change do How in Great. years? and will is export of new forward Okay, Would the the And contracts you. coming think exports. the that you be to mostly shifting exports coming where guys thermal breakdown geography India? And going from today? from

Jimmy Brock

XXXX, export that shipped rest went in America. of Europe. X.X of Asia went it coal to XX% and we million XX% tons to to -- of went India Well, and South The

first quarter is numbers our I at look and first quarter, little our a think imbalanced. we As

of that we go We South America. the and to Asia XX% Europe and have shipped into XX% our again, tons balance to India and going

there, February. we be this of was visited you're get the astonishing. I XX pretty and you I sort in see was continued to for is in level improve I XX over burning in think but said, different that everybody Northern like a goes reduce to the that sure concerned strong demand I of it's the in big to expect but When some in balance or year Nobody pet happen, like customers taking We amount people of as very are saw up the India. the is way. about on, continuing steps would demand some going India feeling spent most the to Coals. Supreme India going for States. days knows that think coke that any And App India and I counteract United pet will of match coke advantage all thing, for limits Court on to

Unidentified Analyst

a good bit That's at quarter? news. perhaps could on color? maybe you. the little in a lastly, the first Just That offer little geology issues Enlow Got will more Fork And just all. you farther be detail then

Jimmy Brock

had a We've dealt this We've it's management previously, or that, on but been nothing fast-drawn our the of well. Fork, with for more on predominant It so. been one has new. some the Yes. is team at had it intrusions last than long haul management the panels Enlow very year little

less through be managing now and that then it's to mid-'XX, about and it of and [ph] something are they We it problem the that safely going as and of new is moving be moving we'll now, reserves. are than improving But is can it we continue. into it's where out is severe there end continually better and Fork we're only was the get moving north we'll it's Enlow partly

Unidentified Analyst

Thanks. so All thanks quarter right. again. the guys, job Well, on and much, great

Jimmy Brock

Thank you.

Operator

with of Next Stifel. [ph] Dromasic Nick

Unidentified Analyst

Hi, good front. morning. Nick sulfur regarding the of content be you thermal there? the finalization Charmer the you When whole Question there do [ph] regulatory from a Stifel. on turkey to expect for

Jimmy Brock

talk know weeks.' happen. that's It's Nick, a great more weeks', more 'two I going Everybody You saying 'two keeps question. to to

is I an Turkey has think limits. sulfur input the today that issue simply this,

coal their have scrub input level plant individual That They're is into limit the is the what level is visiting delaying and process. bring burns the is individual in has going affluent going and plants, going that upon the They're they're that's start X.X%. going at emission Turkey think input that ability stations, what's I You looking going to can't that think to than to time. they'll at based definitely eliminated what's be at country on sulfur different limits, limits every all looking forward limit coal be and and any of I higher limits, to but emission eliminated. taken extra

Unidentified Analyst

What think there opportunity market the do you is?

Jimmy Brock

want Again, grow I term X term, I burners, to in think market million blend depends individual million the Xx long the perhaps. think they it it upon in coals. the opportunities, that the to how tons, can very short X to

customers high over low we converting term, get a sulfur us think long combustion App of You They need burn expanded. limited our terms that's plants help coal I a will had have term, have coal have some there I experts the burning it's of benefited the sulfur in team team, more always coals some time. say can been number, have for a in short but it the helping and we've and in quite bunch in power why a we terms that our of of that Northern

Unidentified Analyst

Okay. there's on you It in and But from you're RFP then the earlier slightly XX% And the contract was change been there question in seeing book. about your competitive the quarter? if consolidation you in looks since some market. Coming active in the what first XX%. to like talk environments were environment can any

David Khani

I do is really out as spot customers market will but for Like in I 'XX later coal term as to that opportunity is I'm 'XX. coming to our take business. look that be dry I year. be for the one there a the some tight to Mark, we into we 'XX, some Right now, there about mentioned I'm into forward roll confident I'm my able some being like to in out going But really deals said. powder to [indiscernible]. think convinced No keeping are show

Jimmy Brock

year. of We're this our percentage ahead time normal of Yes. at actually the contracted

David Khani

stay So on that tuned one.

Unidentified Analyst

I Okay. you. It's Thank all had.

Jimmy Brock

Welcome.

Operator

Levine [Operator a have Instructions] from Global. we Seaport Next, follow-up Mark of

Mark Levin

hopes our we that on me. CSX, has directly to incentivize NAPP we question thoughts their and rate realize this any structure other occurred you to to with an you could would think out. verbalizing CSX. about? something just get help utilities Yes, what to have this is if burn shouldn't that's expect the preliminary might about or more curious what or to CSX too coal issue see expect you Thanks. that But negotiate that see just talked up one Do that there I NAPP much try burn there? I'm utility

Jimmy Brock

burn. to it's just benefit think talking about about about soon say optimistic a that but they're too that will don't detail just little I have it enough to that intelligently say CSX, I Mark, NAPCO yet. talk that. I'd I'm

Mark Levin

it. the you amount are well, guys last around you years? know Got the a think of given gotten appetite have couple on met the I stuff. reserves met in of better some low reserves met vol thoughts my second some of as coal I those question, higher then has and whipped What some earned options obviously market quality reserves, the lot side. the coal And significant you

Jimmy Brock

Mark. a it in is ways, we diversity so of capital some different at portfolio, had we it in like One look to And our We that of every definitely competes. pleased spend dollar obviously couple that, it.

the So we quality high market. those We're a reserves those. met do evaluating some have ourself. we currently coal one, of could things: made very We do in mine couple

and be long an as it will market has now, it opportunity right be may the markets is it. a could to so monetize the it's set pretty out opportunity and to is then someone well a That we has continuous nice not outright other would to in who there JV probably well-mined, be miners are. than who these want are we that continuous of One expertise better mine-to-mine with

All of those things are being evaluated.

David Khani

we're to capital And either lot contracted in going so enough a or put and without commodity we not something. a take lot that having of won't risk of position

do as low called we'll on it enough So capital intensive way.

Mark Levin

makes whether does internals? things It going been the the now? be that you've of that M&A? look talking about some? right bottle-necking of M&A projects, And Does out and terms some to sense. how not other does it M&A selling, you about, the Where just rank actually but How in buying

Jimmy Brock

at is there. which cost we see house-rated important to we're would to open the the evaluation but I returns those. everything, diligence do think capital. capital, We at to would Obviously, the due project look and continue look an metric

David Khani

the of opposed And ever understand again, doing that be understand might well the acquisitions. it It to For corporation. and before to we'd stuff it any be mines that presents. have as take risk change would we

Jimmy Brock

be do you M&A, Yes. that getting. certain make get significant you of have capital when we're got go due you lot invest And thing pick times through to you a acquiring. It could to know the diligence, a mine. and up numbers the you to you -- seeing anticipated something one what But you an you're

how we look So years, we've front due to seen of down be that fore come we at for lot it hasn't invested the capital so been will think can valuation last and diligence coal them. six us. or over mines, attractive to there again, a in would start But to when the be at that return five

Mark Levin

it. Appreciate sense. perfect Thanks very makes It much.

Jimmy Brock

Thank you.

Operator

questions. to call time, like and our showing conference the will Thakkar question-and-answer ahead We'll closing over turn for Sir? now I back remarks. this conclude further no Mitesh Mr. any we're go to session. At

Mitesh Thakkar

this Thank Hopefully and were morning and We your we to appreciate of your everyone's you, time Mike. CCR. most able answer on thank and support questions for interest today. you CEIX

forward any call. answer next may you, everybody. Thank quarterly to earnings follow-up question you our We to available have look are today. We

Operator

your to sir great today. everyone. a Thank conference disconnect concluded. and you this day. you, care your for the time rest you now again, The of call and have At may Take management lines. team, has time, Thank also

Jimmy Brock

you. Thank

Core Natural Resources (CNR) 3 May 182018 Q1 Earnings call transcript