CEIX - Earnings call transcript Q1 2020 | Core Natural Resources, Inc.

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Operator

Good day ladies and gentlemen and welcome to the CEIX and CCR First Quarter 2020 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions]After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, today's event is being recorded.

I would now like to turn the conference over to Nathan Tucker, Manager of Finance and Investor Relations. ahead. go Please

Nathan Tucker

and and Eric, conference everyone. to Welcome Thank Coal good Resources Energy CONSOL earnings first CONSOL you, morning, quarter call. XXXX

expectations considered risks, of Act statements make or in Section in forward-looking comments XXE filings are the within releases future subject of and the SEC are of Any our press Exchange to statements XXXX. we which or some our have forward-looking outlined Securities about we meaning

statements any obligations events of We for do forward-looking future otherwise. any not undertake or updating

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

on website, additional can www.ccrlp.com. find You www.consolenergy.com our also information and

our Officer; Thakkar, Interim Chief Executive On Jim with and the Commercial call Officer; Chief our Brock, me Officer. Financial our Jimmy today Chief McCaffrey, Mitesh are,

Jimmy pandemic. reduction recap XXXX, and In provide outlook financial COVID-XX the specific his cost then liability results, on management our for on program, and our our during our marketing insights will prepared and operations, provide an guidance. Mitesh key to achievements XXXX update efforts, remarks, a will response of

today's remarks, on session remarks, During that After posted to advance all will three our which in there prepared call. of website participate. certain we were the will be in Q&A slides refer the prepared a will executives

CEO, to that, Brock. Jimmy With over me our turn let it

Jimmy Brock

Nate you, morning, good and Thank everyone.

through. and has Thus As we the XXXX navigating our are all far, we're these very times world. challenging know, been unprecedented for industry

winter brought the recently, to energy pandemic. have than due demand a faced most and many have due normal first, We to slowdown COVID-XX significant on declines uncertainties; warmer the economic by in seen and

abroad, on resulted of domestically shutdown electricity has to businesses our weighed government-imposed which reduced burn both in coal. ability widespread The has demand, customers' and

and few and significantly let world us clear, all the be last have to is loved of and health, well-being this further, the months new our in go The has I ensuring changed safety, adapt their to any employees ones Before me paramount. of reality.

and team way this I pandemic. am responded to the they CONSOL of proud the

know that pride. business an essential with of also We as a being responsibility lot classified and comes

employees, challenge. need, that an during ensures the the of embrace this supply who frontline time Our uninterrupted mined coal power

We have our at our shifts operations distancing sanitizing implemented and social enhance adopted, measures at and minefabs. staggered

corporate to coordinating effective, of our efforts to to collaborating the government continue Our employees spread support operations while very support and the restrict remotely disease.

to very thankful continue the excel entire times. as am I these CONSOL to challenging team they in

necessary additional risks to continue we that by the deem our safe. employees, posed their and families steps we'll COVID-XX will to monitor take We the keep community any pandemic, and the

recap marketing the I achieve several Before me the first provide significant dive quarter. important operation the Despite into a now demand brief decline, of let during and we details, goals quarter.

safety Bailey very having incident zero performance delivered strong safety plant, Itmann Marine On and Terminal, a preparation recordable our we mine, Harvey the CONSOL front, with project, each

the tremendous situation. On impacts customers, and flexibility extremely have headwinds We declining and continued drew while the customers to partnerships of we strong our our operational we demand these market this our creative upon reduce navigate face contracting soften solutions and operations marketing and Even to position the from conditions. challenging help fronts. identify with several

reduced more flexibility. Mitesh front, of detail financial discuss during our a liquidity, we transactions the debt, in which financial the completed shortly. On improve enhanced number quarter, outstanding and will our these

in a customer the demand. tons as Pennsylvania operation to The demand reduction the with to at operating production to of review QX reduction corresponding Coal Complex performance. aforementioned days, decline Now, was year in match due the million we million Mining X in production XXXX, X.X quarter mainly quarter. ago first let to our me sought compared decreased in and tons

QX CCR to of produced of the For Pennsylvania X.X tons share year ago coal million Complex, during Mining XXXX quarter. million compared of its the X.X in tons

of cash to subsidence-related On was driven average front, sold cost XXXX. by production per QX and in in $XX.XX cost ton at was ton the volumes our Fork the $XX.XX cost compared decline costs The our in higher largely per XXXX Enlow of increase the QX of mine.

Marine a CONSOL million volume year-ago throughput of quarter the The X.X Terminal compared the period. million tons tons to X had during in

despite compared million quarter at Given the the our the were year in for at terminal ago the only of decline million, in terms modestly take-or-pay a revenues to contract $XX.X terminal, our shipments, impaired quarter. and $XX.X

costs project announce improved period. to our I $X.X at conditions it’s And market This versus gives ago product processor us early the excited our discretion in in year we've level cut been operating coal April. the slightly up and future up the We cash were party first down to remained about However, shipped we've Itmann slowed mined that development even the at project, pleased a am this controlled ramp expenditures. very the million $X.X project. weren't. proceeding though with of a million mining in when successful back in of pace, at to net flexibility third

impacted overview and the impacted our winter accomplishments. a challenging a the least. to was was and and then markets Let This Coal gas say quarter non-essential the a as government-imposed it to low for result provide mild markets, of an performance me coal prices sales demand shutdowns and was natural of now due coal on of an businesses. first update

severity more XX% in QX power front, XXXX West decline. power to helps of were the lower which compared average and the the QX QX XXXX, illustrate XXXX price levels, On XX% below PJM of prices than day-ahead the of to

our For power the their part, at price contractual realizations floors. yielding were linked contracts most

MMBtu decline which increased $X.XX natural XX% compared low per in was significant QX gas switching our XXXX. of Hub overall These Henry the down customers. led to prices prices a coal during resulted inventories turn quarter coal-to-gas averaged amid the substantial in natural gas U.S. to in for which demand

negotiations our to as complete contract of several $XX.X customers quarter miscellaneous the buyouts XXXX in during their led certain in contract to This and exchange to manage These early quarter the contributed inventory our us levels. help several of all into fees of customer involve sought the other for demand reduced which coal terminations first to of contracts for translated buyouts us our income. payment we million

prices decline On prices thermal due now the related start XXXX coal pullback since the and LNG been export the due COVID-XX front, in global of global have international shutdowns. to a in to

rationalization demand the However, low of forced as that unprecedented we prices, upon in a this supply industry. be global the result believe will decline

majority seaborne website see that XX% supplemented slide X morning, supply Wood the deck to we As Slide as with at coal production XXX to of The coal tons move curtailment. of this estimates this of the you market million globally. is high-risk can believe thermal posted is tighten on spot forward. prices our we help at of this We could Mackenzie estimates of that high-risk current of

customer Republic. find customer a continue morning the announced XXX% a continue to in of From plant grow existing recently Exco to contract our base to perspective, tons markets. to share coal and million maintain supply to We power Catalina that and export the selectively Punta capture market opportunities this won Dominican our we marketing of in the X.X

contracted contract of fulfill a be export To with now tons for volume under XXXX. to we XX-plus contract the are tons Exco us. million in supply that In aggregate, increased acquired

a user new current While, we market, our we end tons margins in the hopefully that coal. these gain will will not like on generate and long-term do prices seeing the for cash we're

given unpredictable mostly do While, economic to the work some XXXX, slowdown. we face position we our beyond. uncertainties COVID-XX in contracting volumes are our and nature for and significant do have we resulting Despite, more XXXX contracted for the pandemic of strong the

work will with help we obligations together customers both that always, As we manage the to contractual them our have.

update. to I the turn now over With financial the to that will Mitesh call provide

Mitesh Thakkar

morning Thank everyone. and good Jimmy you

XQ, start our on context our efforts XXXX management XXXX will our capital in efforts financial an review allocation with results me strategy. update and Let upon touch and management then liability cost our outlook. I of the for

on value outstanding we heading for balance shareholders laser-focused was into improving remain last the our our and risk by CCR CEIX As priority to earnings unitholders. reducing of debt stated XXXX and profile our sheet on our creating long-term our call, top

inform good in I'm we believe a pleased start to to XXXX. we that off have gotten you XQ

in retired $XX million at Most of million continued meaningfully, of par to our than spent debt discount $XX approximately as $XX lien second trade quarter repurchase a CEIX its less fourth to of to million we worth XXXX. For our it outstanding we significant the debt, value.

second put accretive to in XXXX. approximately and lien our To repurchased $XX provided of year These number repurchases in a of equityholders. lien we million that high second perspective, extremely discounted the were our return of entire debt rate

first the Term and a Loan As to the significantly our towards this that we past, stated have quarter goal. our step debt lower was is before goal matures, B XXXX reduction have debt another big level during of absolute in

volatile. time and to financial we And over very a as take of dollar-cost spread our that averaging. recognize advantage We securities result, out our are purchases intend

recognize important significant quarter. in also the of ended that is spite with that buying cash deploying uncertain line of We times. with the balance and liquidity a In we first amount still these the our during liquidity back quarter of debt, the very capital beginning a were

multiple versus additional financial period. improve decline completed in despite to the To low flexibility, free year cash sources achieve cost during prior provide the quarter flow to this, capital organic transactions and we a of

interest net shields, cash a approximately of $XX.X proceeds First, X.X%. lease rate transaction at set which we of on closed million the an finance longwall provided of

Second, provide additional needs. an we secured commitment financing $XX million equipment future a to for

securitization successfully amended the XXXX from maturity for unchanged. the to while and August receivable term program, XXXX, extended accounts the keeping march Finally, size facility of the we extending

improving was we XXXX. net priorities our that also quarter, of outstanding accounts for our Last indicated receivable one

as success During some the on had quarter, we well. front that first

Our from XX, of declined XX, million receivable of December $XXX XXXX. March XXXX, at at trade million the have close to $XXX the close accounts

cycle. make steady towards market this a current acting headwind receivable and conditions believe as in continue our accounts to process, slow normalizing While we are conversion will we progress

of Let all CCR. XX, CCR Board to On me announced to discuss April distribution cash that Directors temporarily its made has the its unitholders. decision suspend now

a reasons. believe necessary step we this for painful, several While was

resulted created earnings related decline First the CCR. demand uncertainty for by COVID-XX pandemic decline significant the in

possible. it ensure We flexibility first ratios our potentially expect we started financial the cash continue quarter we flows, manage to and in to the leverage believe it through maximum of and to the prudent is quarter liquidity least second seeing year. the and the at Accordingly, rest it

cash distribution $XX of CCR suspension million helps conserve quarter. This every approximately

On $XX in similar the trade at million the to like receivables had compared quarter. the of beginning CEIX, $XX success and the receivables quarter ended trade front, CCR, million with

free CCR. me compared recap income cash $XX.X share first $X.XX XXXX in that, then million With results. of which adjusted We'll $X.XX the review per to of $XX now reported per CEIX and respectively million first, million $XX.X reported $X.X or CEIX XQ quarter organic to million, diluted flow million quarter XQ let XXXX CEIX share, $XXX.X or in million quarter. shareholders of CEIX XXXX also and to EBITDA ago attributable $XX.X our compared in net first year XXXX. diluted

The metrics, spent the $XX.X and PJM reduction decline volumes to in in million our XXXX, year capital coal XQ, expenditures. and of discussed. million mostly earnings period, ago the prices is previously we cash power result In $XX.X Jimmy prices flow of export from lower in and that the generated compared operations

a in cash $XX.X organic As CEIX result, generated million flow. free

from cash improvement capital million. modest flow operations working of included Our a $X.X

morning, to for adjusted million $XX.X $XX.X distributable $X.X Now year million quarter. on compares respectively This of quarter. me and $XX.X in reported let $XX.X $X.X CCR million, ago of the you This and million income million first the net flow CCR. million, cash of EBITDA update

million in $X.X the XXXX, for able accounting which XQ $XX.X payments includes generated million debt in to intercompany lease trailing in to million distribution year-end net CCR ratio and In X.X quarter the with XX-month financing CCR $XX.X a flat hold to proceeds Nonetheless, capital. in reduction times. working activities, on capital due CEIX operating were finished outstanding our leverage of cash the loan from improvement Shield with EBITDA, the the net from XXXX. expenditures in After million we $X.X compared transactions,

the for our move sales, me color and some typically guidance expect around EBITDA what let revenue, to We Now of quantitative on provide XXXX. remainder cost you expectations. with providing on we

economic However, forecasting guidance in the slowdown demand quarter. resulting the our decline, given the XXXX the of the suspended and and duration for uncertainty COVID-XX remain energy difficulty pandemic and

we around we to resume As quantitative more recovery, visibility guidance. demand gain some expect

color provide and analysts In the a could me investors modeling some let from help standpoint. meantime, that

volumes. run, This the the to will though side, driven. production remain production contract dictate and are the XX-plus will we us. On the buyouts ready have sales is mines for ultimate sales and million timing contracted shipments the but tons for we very of of magnitude Even XXXX, painful

we our them to are that and are support other. However, we with customers working ensure recognize as well each suffering we

and payment out adding involve terms. compromise side, some From customer in From extending volumes our side, the contracts future. buying can deferring could volumes or the the mean it some additional

landscape, As cost to The our constantly management this of our structure demand to reduce some in steps order COVID-XX changes the by took of quarter we a result on have idle recent of frequent second evolving longwalls operating brought overall also expect decline help team currently business the significant schedule. offset the the and pandemic. to

First, Fork adjusted with mid-April cost, hire the to our customer output making reduce including align operating production our idle we decision schedule to demand to Enlow in our better Mine. temporarily

one, in number suspended, XXXX in $X us and aggregate to embarked cash canceling to could hiring, compensation. approximately incentive SG&A we $XX savings million help These in preservation in million million XXXX. $XXX merit cost by Second, planned initiatives include annual increases cash compared cash on achieve reduction several that

$XX in million savings in at capital two, $XX to capital $XX expenditure interest due million three, expenditure maintenance extinguishment. cash to mostly Number Number debt in CEIX million mining to million complex. $X due to the reductions, expense Pennsylvania reduction at

million to due million reduced income payroll and tax taxes $XX savings cash to deferrals. four, Number $XX

place. the on million decline outstanding will $XX.X Number every flexibility of quarter, stays the five, advantage of take debt. suspension the million $X.X the These to at level; provide level our the in in a consolidated with distribution public us initiatives preservation prices opportunistically cash and CCR

to compensation support cash to temporarily members Board the efforts preservation CEIX defer agreed of of the cash have also the company. Finally,

the global energy beginning COVID-XX-driven already Lastly, slowdown from although we demand, see supply market significantly economic perspective, a has reduced are to responses.

a barrels deal, would in arising associated million is from First, may reductions from now with million in day, Basin. new Wood also the the the decline Permian production. gas per as supply OPEC+ X much come oil because pricing important the the significant particularly in a Permian as U.S., oil of X means and by estimating supply reduction which significant total Continental Mackenzie That's supply reduction non-OPEC

now expenditures Furthermore, lower of observers of in affecting as a and oil capital decline as negatively reduction Industry XX% to forcing XXXX. by and are natural estimating budgets. XX% their are financials much companies gas that the capital the will prices size in E&P E&P

believe gas coal our XXXX, in prices industry rise As experts are a plant power projecting result will per investment reduced about make now to more customers. of $X base, this to MMBtu natural attractive which we

tonnes fact, XXXX. due market return to In coal XXXX. gas prices in now consumption switching expects coal gas into driving IHS that increase could XXX to translates This U.S. to demand recovery XXXX million in in an approximately in natural levels

supply in well of XX% contract for coming industry, and book the to it curtailments In the sequence at accelerate XXXX that current bode in risk very out was XXXX. we rationalization begin in the filling Putting remainder levels. global of these pricing could us happening all coal our developments together, as as months. XXXX expect supply actually already Jimmy mentioned, domestic Internationally, is of at we

Jimmy me to With comments. it final let turn make to that, some back

Jimmy Brock

you, Mitesh. Thank

the out Before and priorities take of me we of address we climate. the the move economic Q&A on remainder session, this of some lay uncertainty to XXXX our are opportunity for current in facing the let to some

times. commend these First dedication, to and willingness for foremost, want their our hard unprecedented and work, adapt to in employees I

exposure protocols safe keep the in and any procedures everyone adjusted have and to We order prevent unnecessary to coronavirus.

and entrance reduced checks and and implemented We've practices all mines, social the additional mandatory on enhanced elevator also capacities, temperature disinfecting the at locations. distancing shifts, We've measures, mine cleaning staggered both at surface underground.

well and willingness working their I these hesitation. be safety embrace proud without month staff of all over I thank remotely adjustments to employees a now. corporate to want continuing else. been our for couldn't Our them to for has above play

delever, interest the of For the dislocations take pandemic, uncertainty we in navigate the strategy seek our prioritizing the remain this strong we while XXXX, to reduce continue of ever-changing will process balance to a advantage of to securities. debt our due landscape, and COVID-XX as our surrounding expense, main sheet

consistency. The effective allocation has capital strategy its reason so is been our

any as By project always this to Itmann to on We in prioritize targeting willingness repurchases. commodity highest of with growth reevaluating associated constant we're the pivot Our a to new second fluctuations the world around delay priorities despite return and returns markets. projects, direction changes. proved us rate high willing remain our in with the guaranteed our lien of our consistently rate

overall continue cost on shipments and inventory and them team his McCaffrey bolstering with flexibility financial margins. will and their continue customers liquidity, demand manage and our reducing and team best Mitesh to to preserve and Jim schedules will team work remain levels. with continue our laser-focused will structure his to operating debt. closely And to align their Eric his manage and to improving

in pulling cash economic flow we downturn. levers multiple Additionally, preserve to are this

able We to our mines strong keep requirements reduce thanks spending our to capital to have well-capitalized been markets. in XXXX, in our willingness

on cost according our spending are our We to discretionary and structure and through working delay schedules reducing demand. at the operating adjusting mines operating

also have We the cost-saving corporate at implemented significant well. measures as level

Finally, lot guaranteed rate. run and marketplace XXXX, the although nothing million-ton a is we is of a currently XX% assuming are contracted XX in uncertainty there for

more increased We tons contracted have XX supply under us. after its Xcoal the Xcoal volume tons to contract also XXXX with million acquired be in of than

to improve nature ensure three, at navigate the bolster our to to our and storm the and long-term the and key to continue coal high-quality our the to for amidst we balance COVID-XX operate of we our with sheet possible which the our and that their produce safely summary, relationships cost; remainder as priorities safety ensure this in workforce, lowest In health ongoing liquidity. XXXX of our two, communities, work the continue customers compliantly continue of fourth, one, are; to pandemic; and to family together;

to I one point. the on turn want touch I last call Before over,

seen, bankruptcy. you to As may are work through Energy complicated the complex Murray have we very continuing and

the our which As stated we before, stakeholders live these and vigorously work proceedings. our rights, employees, defend in in we have our communities we will and

we on and the topic be However, associated proceedings comment cannot not today. ongoing we on will litigation these questions with matters fielding any any

With that, back I over hand for will instructions. the further Nate call to

Nathan Tucker

Jimmy. Thank you,

the We will our please you to Eric, callers. the our can Q&A of to provide call. session now move instruction

Operator

Thank you.

first question. now from will with session. Levin Instructions] Company. with the today question-and-answer We Mark come proceed Our will [Operator The Benchmark begin Please question your

Mark Levin

all appreciate in off much first you and that Thanks our to we terms Mitesh. very reduction. numbers of the relative those or all are to how guidance? Is model benchmark suspended guess, for the relative for SG&A those trying color. I is Mitesh and much, of the actually actual adjust to rolling question your should savings numbers. XXXX Just CapEx now

Mitesh Thakkar

Mark. Thank Sure. you,

think XXXX actuals. are relative I to all those

Mark Levin

Okay. Fair then export relates enough. the to business. Very second question helpful. And

a guess the So, or shooting under to I sell more are guys And to about XX what's guys the is tons specifically you that in risk ship that of would I maybe XX the risk like to you can you with how tons lot lockdown India present? environment million of contract. a tons talk guess, much then maybe number? million India, have about and if what

Jim McCaffrey

are Hi, Mark Jim. it's How you?

Mark Levin

you, doing am Thank Jim. well. I

Jim McCaffrey

is please we're answer I'm going clear and questions, to that mind visibility to do your keep not my in constantly. re-forecasting best very but

XX. in to supposed again. to know their their go they So lockdown to by be as working the India areas The you home left lockdown. bases had totally May a A lifted lot is – of people but

was going as large million Coast with full to in get taken are gear. look up to lot strong sales we about that's of XX our India first to three which previous all demand We very approximately West million total and at businesses XX% relatively demand expect destruction tons. of has terminals And and shipped we still about India. quarter years. the India back from a our When be But X.X tons expect well. We had place in

some moving the up some, we monsoon to exit ends expect see as season, continue demand. So volume. return so But sales are into expect we're our and we shutdown monsoon, to in we as

Mark Levin

XX-some contracts And what odd contracted maybe anticipate XXXX mentioned normal XXXX, tons would I now from can what's as guys XXXX maybe XXXX. price change XXXX you've think things got one things. right next I change you Jim shifting But reduction weather? a percent year kind think contracted in and to realized and ton XXXX netback could look we mean, modest like per then the it of can Okay. assuming I should stands at look flat? how how about a book for just one would big approximating you

Jim McCaffrey

XXXX we're Mark negotiations for now. in business Well, for right

I to low think and discuss too way unsustainable. much. don't too I are general, price public forwards So in the But want

today, the You to we course about see think can level We be our will think or gas we big where I would a tons, could changing. improve. I we're improve. that talked think or at maintain netback situation Mitesh hold so the benefit

Mitesh Thakkar

starts price on back factor end as as Mark that help if And as have that's need up that natural $X do because to many lot north businesses should how big uncertainty and one right will gas Mmbtu will be, increase there's work some these open of quick there's And inventories get the to and of far demand price. all prices to a that are now. But as the we well. in what predicting

the future. see how of goes in have that we'll all So to

Mark Levin

sense. makes question. that last And Yeah my

level? maintaining of how of debt. trying in terms been minimum liquidity sort you and what down maintaining to debt a you have certain you've active to calibrate -- a about you think was think this amount liquidity, -- pay there balance? maybe a about As liquidity how Mitesh, you kind target out a amount comfortable is if in that you're repurchasing of that I deter of Obviously, minimum for do Is just liquidity. versus But figure with of

Mitesh Thakkar

that think it's why out, that's the going super in to are right? anything. pointed aggressive Mark we a on you Sure. we And balance, earlier as be not I call mentioned

of sure liquidity. adequate make going to the are have We at amount that all we times

sits think where I'm comfortable I today. liquidity our

think I and But all think, have improve more at could to deploy up, we have cash. some open Now, times we we'll sure seeing I that start potentially businesses of significant the we amount a market make liquidities. if conditions

also in of sources We other first at the of looking we have which are executed financing, quarter. one

if We'll where retiring and dislocations look those market and there opportunities well. like borrowing are at advantage low-cost opportunities cost taking high So are you essentially that, capital of capital. as

The the think, free thing flow cash amount business that can is generation. as some advantage cash generates flow. market free as So, of good And deploy we cash, long I of dislocations. taking continues,

Mark Levin

Fantastic. this Thanks time Great. for morning. the

Mitesh Thakkar

Mark. Thanks

Jimmy Brock

Mark. Thanks

Operator

Pipes Please Our of next from with question comes proceed B. Riley Lucas FBR. your question.

Lucas Pipes

Hey, good kind morning, everyone and doing little staying safe. to I hope question follow-up from a well of on you're and last all bit that I Mark. wanted

the the of worse. terms In potential get things to

Just I and prices it improving. understand that, look, are gas to be up such. seems Natural

course, But within coal markets, inventory. of lot are of like the there a

if should six from an a perspective? months liquidity as both three, terms back able we stays and to well from as expect environment, don't nine So, and market Thank in operational what over next of months, kind market this come respond kind here you. of from you the the oversupplied, things cash being of to

Jimmy Brock

Well, operational doing we that from market that's to always the we're what said today. an currently will and run standpoint, Lucas, we've

used weekly to it a be So thing.

thing forecasts suits it's for are will actually dependent we then for be market. have we we That's the what longwall and with we the is, at with upon Complex but and Mining optionality one it what can the can one week that or complex to run Now whereas five run Pennsylvania the longwalls, set the a daily strong the our accordingly. of adjust day, our we look down

as we for work railroads out. then X to don't a that lot have storage, Good communication move stay inventory with long we us is, news we don't ground we as so through. Tier can And coal our of have in

do a what's longwall determine and matter shipments the to we much it's what that So quality, of need that pretty for which week, will have coal we run.

cost cost. about running it's managing And the can. all lowest then cash operation you and about It's

operations out an look the to for cost. that from to then, market are continue to day. week or that at And standpoint, So whatever take we'll we'll requirements run ways

Mitesh Thakkar

The I is, to financial was our would remain the question, Lucas, talking was Mark's we like I I On year. last -- thing refinanced like flexibility. think, Mark's side, debt to answering we good

immediate So we don't any maturities. have

an attractive we've here. think I got interest rate

So can authorization is about compromising it of will opportunistic supportive be And in as liquidity long without the allow the our us the would transactions. they you see think as the I in some to of out to approved we strategy are marketplace. as an way carry as Board well able is increase as

Jim McCaffrey

And some into then of of our those their we Lucas, can't flexibility at fully build side most their market have all tons on allowed. move some expect that customers that contract But to their the use they point into they're and flexibility will XXXX.

have they So of to out they the us burn to have or buy take in tons XXXX in tons.

tons quarter million And stated that million -- we tons. in buyouts the we which XX.X first already had of have $XX.X of buyouts represents XXX,XXX about

just to does continue would prefer the buyout. burn tons we it give get ability a bring into cash those the and to to But than much mine, So we ship would business. us

Lucas Pipes

Great cash and the Board repurchase color helpful. just the from debt authorization could Yes. kind to increased doing? you management That's great if cadence management. balance to the follow-up I wondered here appreciate given maybe on there. potential I very buybacks additional on to of A that see way of the And Thank obviously the what a sheet balance the side. you. speak sheet market delever is

Mitesh Thakkar

and exact like it said, the going depends is on market we mean cash door, on brings liquidity sure McCaffrey hard door. see the if coming market more is make cash in we'll compromise don't Lucas it how we you like in is I execute that. how you the I this in to think in the to Again will in where give numbers that this are market. Jim much pace that And I increase.

the to week, said, added authorization, us But be. it's knowing what faster we cadence we for has accurate two next next I month. you that if give for that, seen is think authorization an sits additional are today, as past years. it as I Board years, But if in-store it market executing two like have to need the hard the a without in have So very you

Jim McCaffrey

Yes allocation I our Lucas with put, stay simply think that. We'll capital process. it's

flexibility pay the repurchase rate of on be and have it shares will return. debt We or highest back always to the

Lucas Pipes

do the I helpful. That’s color. appreciate

Operator

the [Operator comes from question Michael Instructions] Please Our Partners. vertical of with Research your Dudas next question. proceed

Michael Dudas

Good morning gentlemen.

Jim McCaffrey

Good morning.

Michael Dudas

this Republic, going How or First in is Is on X.X to guys? clarification ton that is question through? announcement relative spread out? the Exco And tonnage you annual the all that does basis million be that sourced just an for by that Dominican to work year?

Jimmy Brock

million that. be is will expect really million clear done weren't X.X The And four totally on us. it trimesters sourced May. will three, month We in from in starting we Mike be X.X metric,

So year a May. really it's starting in for

Michael Dudas

helpful. That's Terrific. Okay.

your load pace that – the of buyouts buyouts Secondly, the because things quarter, you you to end improve, lockdown think start that get will of customer the recover saw normal? maybe how and existing a and customer we just you do going factors are trough of to back you sense see lockdown? to subside of as lockdowns things do sense will to Or base amount in do keep buyout as that start get the

price where And from know price Any nominations. Any might and as be? you're that daily talking or them? you're of I to sense looking insight of customers your where flows gas respective your weekly power on

Jimmy Brock

second As far have of in buyouts will Mike, the pace some peak. We certainly the hope buyouts we the as that's quarter.

As I customers' said to not have earlier, our buyout. our intent is

the product intent burned. to is deliver Our and have

looks through to now, of that their out gas, just curves and for for gas year the as of loss fact stronger more XXXX. and reports like of come about gas auxiliary and are the end more way customers it the that the feel are think In getting terms our I the starting

had talking can't that. on customers say some. We're a had we're So lot on we more for dialogue a basis, things something working very on sometimes We've hard to It's now. weekly right our we've working of often that XXXX. I and on that are

Michael Dudas

some you appreciate as final looking my question this I I would domestic environment, financial further, competitive positions. are ones topic coal moving that. large know mean, some at producers, in be difficult Jim on this

going probably be the when to up for customers as could can of your how and coal the certainly share be of and for XXXX beyond? response and in you. layers demand about there certainly that? time in coal concerned eastern potential seems you think there get layers Thank pretty periodic into sense that Do significant you gas gains? kind and production ahead fields a Our your you is export help do And certainly picks more

Jimmy Brock

Well, sacrificed some ramp Mike, ready on up speed, in said for our in be Mitesh developed. cash special to do may go. whereas sacrifice there anything spending don't mean fully or remarks, to in be work production, To really to I his may someone us hard They're hold that just needed might that fully mines needed development have bankruptcy someone They're done to go that some capitalized. to have and together had maintenance. are we

we that's to improves. in So the as find market do. And what that we're quickly to we move intend position

million to industry have I've anywhere from read in going a debate not lot of And year there's of it. for think million be a I'm ready some will that sure we'll whole studies, to be. next and recovery lot year. XXX XXX XXXX. where could the be about is we people tons this But coal

Michael Dudas

thoughts Okay. good the luck. gentlemen, I Thanks for agreed.

Operator

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

Matthew Fields

Hey everyone.

Have follow-ups any couple you in a lien days housekeeping purchased more me. the since bonds more odd for XX-some March XX? Just second

Mitesh Thakkar

do restriction tied is which leverage And have remind on a lien everyone just our We not have yet. to second to ratio. our that we

So, second our right are now not we lien buying debt.

Matthew Fields

the that Thank I CapEx think Okay. it you reductions. you. then And said the guidance was

$XX if million wrong me, correct XXXX but a lower I'm that's to from million think $XX I level. CapEx

$XXX like million to So, for is XXXX now? $XXX guidance that million

Mitesh Thakkar

are give you the a so neighborhood. in constant this work And not remember but in think guidance, you're range, I'll progress. I providing is the we not Again,

looking at everything. we So, are

of initial think steps. So that

Matthew Fields

your that other the Okay. decided for cash Enlow And mine PAMC? mentioned to sort then Fork cost in an us two you sort that to the of ton Enlow you give in comments of cost the the your idea cost of Can mine was you idle. higher Fork the compared -- per

Mitesh Thakkar

have that little cost subsidence run individual going So, you of call XXXX PAMC high terms on structure But we year. because this in a is bit think Matt, we started that we in about don't It and subsides often in But I year. skewed as Enlow complex. talk as of a know Fork a our through about mines. the this cost is talked

unless lower And the a be or structure very that figure we mine reason out that market careful the think way I at to where cost is how primary the we'll recovers, is back Enlow demand on online. brought

Jimmy Brock

add have XXXX. many be Enlow area moving up this there that geological lack before Matthew, eastern year Yes. and Enlow times out be will it in primarily conditions subsidence new is there. Fork, to that they bit be to in next reserves the our two Fork about little and out us in the would we'll up panels north. short just and you've a And to talk heard We only of moved of

have So, side we out normalize the before And the they and in higher there. the have of cost. the have I get the very we over conditions to It's reason there. them to the to cost just get complex they we cost-effective more to that's mean equipment. other the mentality for but operations our having of same North be expect allowed some mining operating

Mitesh Thakkar

because you decline. saying is back also demand I'll is current say COVID-XX-related are temporarily contracted make not money our here shipment-driven of environment low And our shipments, cost production. the shipments scaling at so the pace to doesn't Like at Enlow that current right? not This back production, mines. back idea is money -- make cannot we that our back higher of the also to scaling in scale shipment you're this when that automatically when your is you normal level prices. our Enlow if is get current at It fall add price. It Fork off, Fork

Matthew Fields

Okay. for clarifications. the help I understand. and Thanks all

Mitesh Thakkar

Yes.

Operator

next [Operator Stifel. with come Nick question Jarmoszuk Instructions] will from Our

Nick Jarmoszuk

Hi, good addressing CCR principal morning. any the to Question on has the regarding CCR/CEIX CEIX? due been there -- relationship. Will discussion or

Mitesh Thakkar

Repeat question Nick? that

Nick Jarmoszuk

away I'm going basically at be CEIX. due to is principal CCR chipping the to wondering

Mitesh Thakkar

because the as and cash. generally extent ticked distributed speaking uncertainty, the up. get And we ratio of leverage think you saw cash market To CCR the that generates I doesn't suspended the that any CCR distribution.

is think interest the expense CCR. for pay some save down debt will CCR for I -- to it save it prudent that

Nick Jarmoszuk

Question you price. on okay. -- for gas natural And the

$X about increase could XXXX for burn. coal outlook talking or $X you're So

start -- for seeing shipping Now it some Is number how customers? where gas magic is it Or in? about lower guys your to you're a do the $X? little coal what's you little switching think you need higher a

Jim McCaffrey

in First price at is said has $XX then that gas price that its we our Above pricing and adjustment PJM. get market all, improvement net entire in of price to across We've around equivalent the energy the into increase $X.XX an helps dollar that portfolio improve adds modes. market netback of our adjustment the back PJM. base energy every to up before for our any burn

forwards of today forwards about at to in end big are they're Now a looking jump we're showing to growth taking the by $XX the and year. July above and the the $XX

modeled we So we on improvement think going I year. But gas better of to Nick the or market our gas find for benefits. second to in most customers that's half and deals netback around say the $X.XX. make that that next the a minus for $X.XX any would plus

that's good a think number I out. to So model

Nick Jarmoszuk

-- question coming of contracts the last the And Exco this at right. Can any are regarding Okay. then discussions up updates there? just that regarding just year. end you All the

Jimmy Brock

Yes. contract have That some runs this discussions on December through And year. we discussions. started light There's that.

get the get once bit later we us of situation. coming back this pandemic get year heavy little We sort expect a we some of in certainty that out to into to when

Nick Jarmoszuk

you. Thank

Operator

Thank remarks. you. the back any I would over concludes our closing to like question-and-answer now for conference to This turn Nathan session. Tucker

Nathan Tucker

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

Jimmy Brock

Thank you, everyone.

Operator

is Thank The attending very for much concluded. today's now conference you presentation.

disconnect. You may now

Core Natural Resources (CNR) 11 May 202020 Q1 Earnings call transcript