CEIX - Earnings call transcript Q3 2020 | Core Natural Resources, Inc.

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Operator

Good day, and welcome to the CEIX and CCR Third Quarter 2020 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please note this event is being recorded. I would like now to turn the conference over to Nathan Tucker, Director of Finance and Investor Relations. Please go ahead.

Nathan Tucker

good and Matt, you, morning, everyone. Thank CONSOL XXXX earnings to Energy and quarter third Resources Coal conference CONSOL Welcome call. we've press Any of Exchange forward-looking filings meaning subject which of are about and XXXX. future in statements or statements of comments to we are considered Section some within our XXE and Act in releases make forward-looking expectations outlined SEC our the risks, Securities the updating any otherwise. do forward-looking for We obligations not or any future of undertake events statements

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

You can the on also our regarding companies websites www.consolenergy.com www.ccrlp.com. additional find and information

which deck posted supplemental slide we both also reference call, a to this morning. our websites of We may prior this to

with Braithwaite, today Executive and In and President it Dan for transactions, liability of results performance Connell, Mitesh Sales. and specific recently Brock, as our With call Dan which then be our provide to to a and and will XXXX remarks, Thakkar, CEO, available over Chief of the insights completed turn our will the our After that, President operations. our participate remarks, details well. Q&A his Bob Vice recap will third preliminary of program prepared Jimmy management session in prepared our discuss Jimmy let expectations me Strategy; Financial quarter Brock. Chief there our XXXX. a financial be marketing are and me and on Vice our Officer; Jimmy Mitesh will Officer; Marketing On of Senior Bob

Jimmy Brock

morning, good and everyone. Nate, you, Thank

provide quarter. quarter. marketing high-level several and milestones We a brief third the of I Before recap into jump operational during details, important achieved the let the me

zero Fork On the had a Marine Itmann Terminal our safety and we strong Bailey project, Enlow very each incidents. delivered recordable Plant, as Preparation Mine, CONSOL performance front,

continued 'XX priority remains Additionally, 'XX versus our significantly Managing our COVID-XX below operations. the national of average our QX for XX% by and QX a to improved total at remain rate of industry. in from recordable well risk incident

to operations. safety continue team everything The distancing social the sanitization, very places we and forefront several at CONSOL our measures do. takes of We enhanced other these seriously execute at precautionary measures our entire and

after the and demand we hot from summer significant by headwinds operations On in a marketing demand in prices fronts; gas reduced 'XX, higher in facing of steady second customer QX the pickup experienced quarter, natural the driven weather. and

We fourth As our of quarter. for early in four August. coal such, improvement to compared in throughout quarter the for demand wall of longwalls five saw most up ramping second the third ran the steady our we after quarter the our

our see further fourth and quarter healthy by sell of levels to are expect reduced We reopening countries globe customers in and remained forward many the stockpile summer gas across their relatively the most strong the as improvements prices burn.

improve On completed in we the on quarter income liquidity. flexibility. liquidity half only deleveraging 'XX of our To transactions continue that, multiple not also remain that and our to boost second during our the and sheet we the achieve financial but improving laser-focused front, balance financial

simplify forward. announced company public one by merging CONSOL our our and to have into also recently We CCR transaction moving corporate Energy structure

metrics. we company also one believe discuss, will improve credit will Mitesh having As public our

Our finance related pandemic and operations through on they downturn. teams spending the continue manage to reducing discretionary focus as

effects pandemic. due in to to a was compared COVID-XX Complex of tons operational X.X with million the million the at performance. year Coal me year reduction The customer ago came Pennsylvania prior demand X.X deal in at compared let Now, to continue review period, lingering as decline quarter Mining tons QX to of 'XX in quarter. we production in the the our third the

in sold this nearly quarter restart was our mentioned is the fourth since noting earlier produced worth Demand as of QX us and our steadily of has production double second XX. in August. QX in 'XX it of early allowed what to I that the and However, increased we end longwall

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

quarter, Marine ago $X and to $XX Terminal for the declined $XX.X average On lower during primarily the in second a cost the when months actually was million operations $XX.XX that quarter. Alving of performance front, 'XX tight costs, cost maintenance production million coal producing tons our us expenditures quarter. is contractors assets volume. longwall The overall in to was in over as financial impact August in terminal three and keeping service the The ton our reduced period. was September, to Compared a The improved million particularly you partially and compared cost had to expenses. adjustments quarter quarter. noteworthy in per reduce that cost operations ago consider project tons mine million typically sold our moves we cost. ton in in shipments, $XX to per by coal million all at the year million had and QX quarter as second of the CONSOL average cash the decline to three compared our compared mitigate X.X of revenues improvement sold supply increased cash driven Despite our X which 'XX half cost of allowed we third were purchase $XX.XX throughput mine in cash to cash our to the our control year the team and of in from made production and volume This on QX of successful were the

the products, continued at their an update the year were trends winter COVID-XX sales for mild coal natural of million in versus $X.X QX pandemic, point of overall as summer its second up we total Additionally, in challenging ago weather, shutdowns quarter economic May. XX% improved at limit the in from turned natural and the overall our in its the coal in This will extremely took fourth improved ramp and low positive quarter. XX%. difficult million cash to the expand, $X.X longwall After According provide expenditures generation and prices only many operating for cash XX% Hot in demand the our 'XX. market coal year the third an to start successfully in with money improved XXXX. costs fleet perspective, low now markets with increasing and overall that of employees pie. a not I period an demand higher the gas weather our overview due on bigger performance share pie a to a of From did third coal the customers EIA, the gas the were by the accomplishments. August generation able widespread electricity put in to to quarter even in and April, slice to and from quarter prices low means of a

On West the to QX QX day-ahead prices lower front price power in XX% were of of PJM average power 'XX. 'XX compared

in quarter of prices the a gas QX decline was far down positive similar in 'XX at Henry XX% million it was less second started significant trend in year-over-year which Hub 'XX, has which of to a followed Natural was third gas of BTU of quarter note, natural than continued the October upward in a from XXXX. or a to However, improved the end saw compared August, spot of quarter roughly 'XX. BTU. decrease over this per fall. $X the the days which million XX% XX% averaging prices QX decline trend averaged compared in We prices which per year-over-year spot during was Hub QX multiple the $X Henry on

go of find XXXX the the above mark. March to way You back to spot all have prices $X to

have These coal While the few in gas these decreased the to resulted a demand also led inventories of US, is burn natural and increase encouraging. improvement for very are most in our data to which an trend overall customers. just coal in led higher recent prices points,

we trends the continue On follow natural market gas domestic and front, very coal the closely. to

oil earlier capital year, prices crude to companies. activities reduce and this and for gas natural led low E&P First, expenditures

rigs rig the decline entire in domestic expected nearly tons to active of reports additional As a the October increase relating for calendar drive XXXX XX leading for EIA active from XX to coal of US of as reversing in seen continue result, turn gas trend XXXX production is XXXX, is we've to strip, burn XXXX. in of This number IHS This XXX million to period in US coal forecast improved gas reduction XX% $X which the same at that gas coal time a demand project versus burn prices XXXX. rigs help stood Markit to a the US is count X, natural of downward. XXXX. the in

will competitiveness will we expect continue we firmly an XXXX head very as close which XXXX will as quickly to in strong meet prioritized of in cost for We this the out factors space and lock to investment to up lack we've gives ramp demand, advantage and believe work industry's ability across back be We be well us to future situation volumes. these could coal minds the limit up. the capitalized the advantageous as coal ability improve to keeping this markets, a us scale our into

impacts recover than reduced due coal prices global slower market front export the to continued pandemic. thermal LNG the of the COVID-XX the On and seaborne markets were the to domestic

However, as seeing here trends we well. positive are

down We of begins related period. XX% their coke prices APIX XX% at late Gulf the early and the buyers were from constraints, pushing cement highest the compared quarter, are in seeing year-to-date nearly increased globe the of look as in to we by specifically turn the fuels. our by from seeing since across XXXX third are nevertheless during in are as XX% prompt plants supply prices to compared the increased its of quarter India October over through May marked to to economy shutdowns the had at is pet the which that in year-ago while recover October to Due and inquiries the of They XXXX. levels activity US COVID-XX month pickup

into coal existing prices currently mid-October reaching continue XX-month LNG that and perspective, steadily Japan low From marketing has from encouraging beyond Korea to a see of perspective see to XXXX. to an improvement for since our XXX% a are XXXX. at of it in demand maintain improved base high, continue contracting customer Additionally our of we point as its May, and is

XX XX.X contracted tons million in September of XXXX. are As we

now and are volumes the the middle the update. financial season will Mitesh RFP expect we of meaningful secure in coming I months. to provide call turn to However, the domestic that With we to over in

Mitesh Thakkar

good and Jimmy, you, morning Thank everyone.

XQ update I XQ and XXXX. recently completed review our an on and providing by opportunities. 'XX our start for me our and on financial transactional results color then management program Let outlook liability will

revolving been and Our have financial improve credit strategy, this reducing year despite risk execute for liquidity in significant our other order facility, while by profile the and the on create value It our ensuring of access priorities demand for with outstanding XXXX has we sheet objectives. financial initiated of Management coal the aimed debt several maintain brought pandemic. in to starts at actions shareholders. maintaining to success long-term this full to balance a reduction strong strategic our COVID-XX our

our year, throughout First, those efforts the reducing majority to discretionary levels initiated demand. output the metallurgical dollars CapEx and XX% to mine with growth realigned included CapEx have to reduction debt spending. the XXXX reduction. up cost at match BMC reduced and of We allocating and better compared our coal Itmann we operations deferring to This

Second, we million $XX suspended $XX million at which at cash XXXX, CCR's second gas annual distribution and quarter CEIX level. holders, of conservation all to level approximately of in unit approximately CCR the in resulted

to early million also us covenant quarters facility. moved amend with while credit providing agreement, continued to provided we revolving our Third, which relaxation, eight access credit our of $XXX

discount liquidity, second-lien flexibility notes by back capital retire of notes par. leverage program outstanding below additional suspending without value, million arbitrage annual we have bought million. to interest notes have XQ amount in we in reduced a to our back par $XX to and our 'XX third notes also the at as the well and deployed debt our of second-lien million second-lien of Fourth, which $X $XX strategic test. added have We million traded the to quarter. repurchase in we conserve $X significant been second-lien buying Year-to-date, our reduced our a approach face expense approximately After leverage the our capturing to

'XX that and XQ improved additional expected items We liquidity portion million debt an its million continue XXXX. in and cash completed of $XX of and of during XXXX. and in second half beyond. and cash be gain the capital to million during in in quarter XXXX, to additional and million to aggregate, remainder towards of buyback $XX In expects XX in the these 'XX. million deploy $XX income expect $XX million anticipates in million boosted sale that received $XX record million in the as in CEIX cash 'XX assets million quarter CEIX perspective, the XQ $XX $X the $XX in collected income half fourth in October to of month In miscellaneous XXXX. to million fourth on our $XX approximately multiple transactions of of CEIX to $XX To to record related gains financial and million receiving in CCR $XX flexibility. to to The the second $X of well. XXXX, and recorded cash second $XX is respectively XQ second-lien million record extent, half expects million we third CCR to million to ' in to quarter From flow approximately a $X and

$X cash XQ in $X during For million CCR during million XQ receiving 'XX. approximately cash anticipates and in X share, approximately 'XX

CEIX common of in a own signed This all merger both for a an to all-stock with already outstanding for multitude an is recently agreement transaction entities transaction. does of CEIX CCR that CCR Finally, important reasons. acquire extremely not units

As transparency Jimmy it investors and our simplifies creates analysts. reporting our streamlines which corporate structure, additional and mentioned, for financial

$XX holders. in immediate credit X.X enhanced our leverage metrics, improvement we CEIX's side, transaction, equity forma benefits and capital third bank the by in an will EBITDA ton financial long-term access approximately our to in to improvement for million, ratio. see XXXX Pro expect quarter this for our resulting On improve net

capital the expect More given are test returns initiate our accelerate importantly, this X.X leverage covenants, ability to deal ratio times. currently to of which we under our restricted,

million Despite we an We of midst synergies. challenging unlocks I'm also our this accomplishments expect transparency. of the perspective, significant an transaction improved in from the summarize, in flexibility annual approximately all proud for to a financial extremely ongoing value deal $X this To through of generate stakeholders and extremely demand pandemic, believe year to the indicated as our current to in me improve team actions flexibility they as continue ways With market these in now liquidity. third recovery recap quarter stronger position put take forwards. to our our have let advantage much financial that believe identify us gas of potential We the results. and XXXX that, a by

net from CEIX as a On $X.X $X.XX review $XX.X positive attributable from recover of flow CEIX quarter of note, CCR. CEIX then reported to marks free demand 'XX net the pandemic-driven XQ or million and EBITDA minus of 'XX organic cash million, or We which significant adjusted diluted improvement will share first, reported million share third decline. operations levels began XQ XQ of a per $X.X diluted $X.XX million XXXX to in 'XX. income per $X.X loss compared our

capacity third from in at XQ our utilization ran is This CEIX average if We cash they the $X.X our two they outstanding. at free ended quarter. XQ revolving our access received that approximately with the end sales. $XX repayment. It XX-plus-percent reduction noting $XX covenants capability At the Of of million $XXX capacity the with highlights million equivalents from when cash, cash the credit we consider third XX% credit modest to of of done years. generation utilization, run compliance assets full have facility quarter. million 'XX, debt in quarter last as no million asset with during the importantly, in maintained you and of approximately $XX cash on of we million, flow from towards second cash were million borrowings full 'XX mines the approximately $XX our end and our generated only More used a cash worth in reduction at

$X.X trailing adjusted quarter. due reduction continued of $X quarter. and CCR third EBITDA improvement the income intercompany Now net of in year EBITDA, a million Nonetheless, $X.X CCR. loan finished in capital. in $XX reduce of and the This we of in cash generated included the $X.X expenditure let million, X.X the XX-month from $X $XX.X $X.X $X.X with loss flow operating million for million net capital third debt accounting adjusted which compares After million distributable This million, the for million million negative activities, finance leverage cash working net and quarter. distributable quarter to on me of update a morning, a million CCR cash the 'XX, reported million lease payments, million CEIX to of with XQ CCR times. In in in net flow able by ago ratio $X.X in outstanding of $X.X you our to were on EBITDA

color heading me on let provide Now, what some expect we preliminary into XXXX.

front, to fourth in exists. operational shutdowns. more still 'XX the we On the levels, improve more been COVID-related that to normal significantly third have Shipments 'XX, returning absent expect production any quarter despite quarter to of uncertainty compared

India our cost containment of levels the the advantage taking the opportunistically We is have while focused debt liquidity will are of be below price fourth time delivery year. for normal demand and at top in for at economy XXX,XXX publicly-traded plants managing XXXX the the Staying into domestic market this customer where the of our in most is improving of of as natural or back reopening. seen and gas on and our quarter Exports prices inventory well, an quarter improvement levels as arbitrage rising we into tons priorities. the specifically inquiries third during secured on

and in rebound of me through reiterate tightness burn a spot pricing Jimmy This for competitiveness main seen from should drivers, strip. XXXX, in for the walked willingness coal up discussions the look that market forward utilities of we the and driving is we have engage the coal. our long-term let contract. natural product expect in supply to we improve As into but in demand currently the and a gas

leverage We on have ready ton, XX any additional approximately an and will an price focus can things are of expected $XX improvements the control ensure of we XXXX expect strip. we tons assuming price megawatt at million position to marketplace. in balance continue sheet PJM With turn the the capitalize the we on that, to quarters. of contracted perspective, a per peak quarter and forward mark power third From leverage fully let consistent back per currently coming comments. Jimmy $XX.XX final with average further in improvement to We in expect to a it XXXX West hour, to me make some current

Jimmy Brock

Thank you, Mitesh.

move some an have session, other of that this year-to-date. working development on accomplishments provide to business we the Before me we recap been Q&A and take initiatives our update on on let to opportunity our of a

conditions. market ramp when diversification. our capital operating cost. at Mine we coal and the what encouraged conditions warrant, minimal We with allocation to project terms this maintain process continue same a at where And We solid our Itmann to in consistent with quality mining one-shift-per-day single up of progress see organic pathway for project, and by continue capability we section development providing be are growth we to a

technology-driven dioxide of be We coal to is future carbon of first engineered waste next or our our growth that. engineering Mining fire in a portion detailed next as provided module capture University mineral to Complex. power our a FIRST is the achieve from first October our carbon on construction project bed on of with underway working combustion we'll operations next to the front-end of be products. be and equipped also on are development. with This US Under XX% late that positive with Preparation Pennsylvania mining study designed profiles we biomass waste pressurized of received after and well carbon year. would stream storage That seeing module vicinity into the track but in design of thickener efficient approximately utilize are Plant, possibility into the DOE salable commercial last underflow Coal an our will by convert project fluidized meaningful emissions. during which of and its initiatives. go-no-go operational we advanced and constructing that would The coal is of evaluating progress not technology We've R&D [ph] to proceed and the plant neutral X.X the net matter And the coal-to-products work Energy selected has funding well. firing and the CFOAM, a doing be in selected highly coal-based with of years Ohio least, phase breakthroughs Department news OMNIS to decision negative dioxide with by the point newly the project, seen plant

of obviously resolve the the provides extremely still the focused From endeavor, simply exciting we an are tangible that this setback I our from benefit in entire of and We onset proud help recovery. us for we early to team. it to opportunity we going fund react. We decided our position industry. of to to to of weren't future ourselves stages on but steps eventual the am of this believe pandemic, taking

access we CEIX This expected capital of This We today. merger and to is all beneficial this the to about, for creates future simplifies each entities one CONSOL's an is in head was stakeholders as as success uncertainty recent is We be structure entity CEIX important, this believe separate is set with most CCR. up is improved well increase than that public as we to in enhance navigate and will agreement have flexible the merger agreement While and one the transaction excited markets. what trading up the us two is and accomplishment shaping corporate which into float XXXX. market liquidity, I'm announced its step continued more believe our merger the stronger most our to CCR. and

come company given believe couldn't these believe recovery stronger faces. this success, market are at heading into thing are we we and is a and the the apart for better We crucial of for headwinds time can are a right to have sector consolidate potential than transaction the XXXX. completion are take All truly together of entities. this this advantage both do that of We full

we required expect holders. We approvals CCR and stockholders from will both that needed receive CEIX the unit

Lastly, negotiations Murray our on provide bankruptcy. me during a let brief the update

provide to before, As settlement update back we bankruptcy comment obligations assets entered consistent litigation clients. have our call we between to all the and Murray other settlement the on that settlement have payment an is settlement for can a related with into stated cannot and we instructions. certain practices matters workers' ongoing through statements. we each compensation will with parties. black with debtors. of but The Murray value party's you We CONSOL over historical assuring XX-Q along the the CONSOL the to I open Nate impact cooperation transfer financial that With sale provides lung further Murray's This the hand such addressed and of on in for with respect refer our between to to

Nathan Tucker

can can now Q&A provide to We instruction the our callers to Jimmy. Matt, please? you, the of Thank you call. move session our

Operator

Mark Please now with Benchmark will session. from question-and-answer begin Levin [Operator comes The We Our question first Company. Instructions] go the ahead.

Mark Levin

appreciate much, taking very my thanks Great, you questions.

cost can one at third comment Maybe you think sequential quarter will and on relative I'll go the production - look I'll the but big you basis, etc. then of first modeling then when how on a one longwall more The a move, quarter. picture, is you and fourth versus look

thinking kind about XQ? like what looks XQ of Just the

Jimmy Brock

think, is as we in going to We here. be than Okay, QX. thanks. significantly QX our earlier statement said Mark, better QX

running and longwalls all do are in longwall have not We now moves we four QX. any

said, market to prepared ramp well if to and run we've to are up need We we'll we conditions. always as

QX, have sub stay we XX in see goes, think as think we is that cost could and cash to that goal here moves. we some QX. in don't of cost far the longwall As We our improvements even

Mark Levin

news. that's And good very very,

about to a many me of don't you know me, Let bit in at can specifically not it even you maybe be in to as too able to, to maybe CONSOL let Murray, some there just I want you into the want least be little color specifics think know but I the, may you and impact beyond. financial in of you can, to how you and discussion to provide and Q, but and shift in XXXX bit get little a may to if the is

Jimmy Brock

is, Yes, of but do close question Mark and individual there. in come the out Q disclose I own you to look the can't our answer there math can kind and your can sermons, you

Mark Levin

enough. fair Okay, Fair enough.

started think in through terms scenario surety bond, me to companies, what a switch like party of to bond too positioned call up third US terms about providers guys some of come you in provide fund how the that Let bit is a door. relates are vis-à-vis collateral and more surety how you to and coming surety providers guideposts background that little worst-case That look might AROs cash if discussion. a obviously it as been on issue, lot and an maybe has could bond some coal

Mitesh Thakkar

take Mitesh Mark. that. in This Yes, I'll here.

with coal the we So, and markets particularly other well. and as it have you surety have insurance companies, challenging been for know increasingly as companies heard

our quarter, letters credit impact surety minimizing in dialogue on transparent providers. $XX open to surety been issued the our liquidity. During and with about third an - providers keep of our million have of large successful We a we overall large and

for I they to us and in work The this be to make We we numbers, going as that's our is that more anticipate necessary can conversation, help around has some we see from providers credit. started to done making liquidity. think anticipate and that access well. you the are comfort needs that business as key we to turn letters to that our providing understand have surety to doing sure sure of

same the the active third the it's an around number quarter quarter, fourth in in we and here So that process. had

providers. We have dialogue our continue active here with to an surety

Mark Levin

with And do to question my final has liquidity.

the that amount Jimmy, of So buying makes sense of liquidity back mean to number have backdrop, against minimum of that this this of versus manage do it in you what for maybe think I appropriate you going guys is is what how Mitesh you second open and will you that kind environment. - or market, liquidity into kind how sort liens. the in

Mitesh Thakkar

depending answer in mines So, you market when liquidity. we Like program on had that's conserving are the buyback suspended what think are the I your second where completely like in Right. not running different our are you the is when noticed actually you that we cycle. quarter

a cash consistent free when mines they Our flow running. are generate

facility. game us always started mentioned our buy credit market on on unfolding. will our that the on to have to basis To one also the extent as my that So last facility That been of one. contingent on lot our since on have comfortable we plan I to the revolving We operations. has for a as hand, or back going of not a be and to think improve, our back you the has liquidity before credit access I the it. source there that only have market I the into lien think much how cash day been plan but call in I is run our how on things second a but gives for borrowing that terms us feel revolving of comfort don't have we consistent anticipate

earlier we call very indication the fourth good Jimmy and on quarter really strong the looking XXXX. extent the have to is So for that a said

back I notice lien. be of past, second are us we start that, market like and our you in the a to lot going think comfort would just market-driven. to that going gives the into by But

we that in stay that our sure liquidity adequate we to and going compliance with we to are make sure make that have we covenants We are going need.

than a to and be to of - large weekly basis we do a we are a going we that. some on be, to buy rather like monthly, So not going are debt or something piecemeal one lot tender offer doing at time, going very, are

So...

Mark Levin

guys, Thanks appreciate the time. perfect. That's I

Jimmy Brock

Thanks, Mark.

Operator

Matthew comes of from question next Bank Please ahead. Our go Fields with America.

Matthew Fields

Hey, things everyone. me. Few for

I and say million XQ, million $XX you you $XX the was $XX XQ XQ, that? to First of all, the over because went Mitesh sort cash and appreciate $X $XX of 'XX fast. million, of you the the sales just to I these schedule. to in expect from go that asset color, over proceeds kind it million then rest on want beyond in million

Mitesh Thakkar

'XX, beyond is Yes, and the QX that. rest

Matthew Fields

Okay.

$XX of the $XX that's million second So half 'XX. in to million like

Mitesh Thakkar

of booking value back proceeds that million as half we $XX your higher, that million the is could discount than are income. Matt, we over that left beyond it per that to 'XX, well. calculation And second be when because actual might Not be $XX

Matthew Fields

piece? Okay. a have for other that - then, do timetable last And that you

Mitesh Thakkar

I would in say, not starting second half of material given period. XXXX, it's any

So over years. it's a bit spread be going to little out

Matthew Fields

held you. said, constant the revolver. because Thank Mark it's think answer, great. Have had LTEs to the fees think quarter against of but about you million that And I you're $XX a increase fourth; Okay, LTEs, you and increased then, in the you negotiation, tough asked in I yes?

Jimmy Brock

Yes.

Sorry, go ahead.

Matthew Fields

Yes.

$XX I think facility. between the million and AR the revolver

Mitesh Thakkar

Correct.

Matthew Fields

October? LTE Have collateral in you had anymore have to post increase

Mitesh Thakkar

are expecting well. of around I as the number same said in quarter we increase fourth the

Matthew Fields

Okay.

that? million collateral $XX another post of So

Mitesh Thakkar

the starts the results generating me good to what comfort doing And cash. well are. I had is, gives think gives more we said, and pouring lot companies like feel I our company where when of - little a that has most bit saw. we start a it dialog business surety about more started our the comfort with have in, surety I And

Matthew Fields

And then, of of think you do - to that on any collateral? line get sight have might release some you perhaps when

Jimmy Brock

are we things. on remember, of soon things But our anything capacity are too on, do excess now. announce surety have we of Couple right working on provider. some to but Also few working we

to So if around, we we move around. can move things need things

Matthew Fields

second-lien October? may Okay, that's more helpful. bonds you but this did in And passing, I then, just you in back mention buy think

Mitesh Thakkar

did - digit I'd of the high-single don't million say front dollars. should have I but number in the We We be exact me, did. - in

Matthew Fields

roughly Okay. market the price? And

Mitesh Thakkar

yes, we bought, open we it Well, market. bought whenever in

second-lien over then, our so. month or did has traded last that price but was the debt up notice I whatever So,

could So, than price be the market average blended lower what current the is.

Matthew Fields

Okay. the price buy bonds back when bond your in for you I might second-lien? Is or You fourth what's gating going on there factor liquidity, raise of X of factor And have the be fulsomely liquidity $XX don't points you million it more? kind then, what's by to buying like back Ultimately, more want the itself? of what's to are issue kind the know operating more the more mines gating they are in of comfortable quarter. plenty the like - the of sort buying

Mitesh Thakkar

said mines what this So, that before I liquidity But time, of concern. so is want deployment don't remember capital. definitely are also significant running At like I a do great. to

these beyond can't that around again of good to the you fourth couple shut out days potentially things and hope in We record goal. things a happen doesn't deployed do I you cognizant but Like visibility could how have bullets looks don't all situation a at fact be forget have like COVID playing in world ago. - and but are had a you how US I and things be of your the it quarter for that to that down too, we just a keep cases in mind want one

Matthew Fields

That's export And any tons XX.X then, a market? lastly for me, from contracted of in 'XX, fair million the of point. are the those

Bob Braithwaite

Bob. Matt; Hi, this is

exports some market is that that this very year contract next majority export under partner globe. mention work we're year pace the We time. do We have million customers. first then quarter, We did of volume partner, contract we volume volume tons And were million across in In carryover have with the of goal, with carryover little them. shut our at McCaffrey ton XX for and had have the currently export on this our that we continually with the mentioned we we working the that Xcoal. down to XX Jim

of have are in zero tons, that those I that to fourth. pick - volumes tons carryover of tons zero XX.X and shouldn't we the Xcoal seen we're I number. Xcoal should say, million quarter been working here - of some has that but tell you ensure And with say those the - So third in will into that I up those move,

get starting contract. here we'll going to shipped and bit clear volume Xcoal those a we're continue market we picture with So, the have get that little more to under work to forward on export

those basically So, next are volumes the million of year, domestic. XX.X majority the

Matthew Fields

And much, Thanks luck quarter. helpful. Okay, very good Thanks. guys. next very that's

Jimmy Brock

Matt. Thanks,

Mitesh Thakkar

you. Thank

Operator

[Operator Instructions] Our next question comes from Lucas Pipes with B. Riley. Please go ahead.

Lucas Pipes

I follow-up few to Hey. wanted Good morning, weeks from presentation on ago. your a everyone.

at a what on million contracted is asked And heels lot got the tons pricing the You've underpinning flow time, $XX the free of forma I on the XXXX of on sort pro consolidation. that cash of questions guidance. the of

you want question I that share. and other to color might be repeat so And able today to any

proceeds color. sales, appreciate from also asset the million For would in example, $XX be your flow? the you. I Thank included that of really free cash

Mitesh Thakkar

So in would Lucas, the I have income would expected to XXXX. be say, booked

from that flow But referred the I perspective. the million million cash cash $XX So number million it of, be reflected that $XX I think, for free quarter in been would have to not the in would to a generation $XX that number. second

Lucas Pipes

pricing pricing, Very that. of you then tons, terms unpriced can baked you assumptions sort what rather what also, to on XX.X so you. for helpful, tons speak are in? Obviously, million of contract balance? in thank And maybe booked the or assuming you've And are

Bob Braithwaite

Lucas, this Bob. is

are Jim right As the we now. heart mentioned, right season of in RFP

expect have We volumes. matter we And feedback several for and bids weeks. to next feedback mentioned, here secure some get we that meaningful expect over the as several out positive to some that Jim

those at this current one think, we're at of whether a be in front, power simply market there at look marks will what expecting I public There careful would no pricing would you, if for published general, in On that I when want you market. these out contango, - the you've are. prices you And Gas contango you are the heard that IHS at can what is in Coaldesk, there before. looking the etcetera; contango. competitive long-term. pricing live current I look marks lot suggest is to there, standpoint with be prices of say. those I prices our these suggest that reasons, to north you're out I are prices But to

our out. expectations are current better feel the to in what meaningful secure And volumes be about under RFPs that are seeing you're ability currently our will these very confident forward. So pricing we than

Dan Connell

just Yes, bit that. Lucas. more color Dan. add I to is This might little a

to those that We this sure year. the spot And coal are go XXXX the May of in rate climbing mean, power got period the XX that below about way people we $X.XX. published then, I August in find PJM market And stretch $X West of you year, had you three out you've And prices. the above of months, kind $X October, Henry back stretch, to to of when appreciate XX gas still obviously price. looking been were bottom above if to spot at January, with $X.XX the a of Hub transition kind at has look about of all the prior the here from gas, gas at gone that faced the Northern first always prices scenario in App you $XX.XX. had we've I'm $XX.XX, we never through months not and at been only at

line got back fell to published megawatt right on at a App to up $XX see Northern BTU, price $XX time the And soon for power improve hour. right PJM million strip XXXX, given now change And thereafter around forward to spot did similar spot in recover, West into prices has going to $X we prices. to per gas about basis around $XX very where per next and year. right sits

at and market up, to When the and a gas I power for fundamentals said, say. same need XXXX, very as Bob many setting would of you the So, heading similar and exist. into think just I look scenario balance strips still the forward

Lucas Pipes

And sure to That's missing would XXXX that well. the questions, for at are second this the earlier the very of prepared this outlook you that. but anything, then point question, helpful, and on And in just right. fully not as some running are touched thank be you mines for is here, remarks the that I'm make

Jimmy Brock

tons well have go running but We'll other we're if that we we Currently, to set we're and about tons. ramp Lucas, million ready tell conditions at would run to you our so running we're warrant market longwalls. we quarter today, to currently well longwall as and four four. million that, But five, tons tons XX.X Typically million run X.X you up running XX I a would to can million love. we X know,

number. to have I tons So plus at back up XX capacity million if today about warrants, XX% to we're market would ability say the running that we and currently ramp certainly

Lucas Pipes

and continued of that luck. appreciate best I helpful. very That's

Jimmy Brock

Thanks, Lucas.

Mitesh Thakkar

Thanks.

Operator

Nick question ahead. Stifel. next Our go with Please from comes Jarmoszuk

Nick Jarmoszuk

taking for thanks Hi, the questions.

know if that is first tons Directionally you on pricing replaced, for up down. The the the one XX.X contracts million with or 'XX. those us let

Jimmy Brock

question. following I'm say replaced, When contracts you sure not I'm your

Mitesh Thakkar

contracts, new Nick. the mean You

Nick Jarmoszuk

new contracts million you what tons, XXXX? for is receiving yes. up those Yes, for those roughly relative XX.X to tons is were in $XX, The that it

Mitesh Thakkar

number. So the said I'd XXXX, currently that probably timing a the we're that we're on that market little you're depends would bit $XX today. below contracts currently average I It deals the that suggest of negotiating. negotiating or

I happening COVID. about utilities that right one many However, thing are see concerned now is still

not that the leaving more open think I buying, to their needs burn suggest just They're working through lot market. in to And people went say back next economies they're their spot offices, reopen, Dan good going year. should for XXX% some a math of kids I'll school. So for these should back get

improve. I a demand first even strong out. spot there'll that in further quarter at of the spot time, be think pricing think potentially happened the and will I market next that in And year

have talking currently say again somewhat $XX about, So price for they currently marks, above we're contracts average I'd probably but the we are today. published somewhere below the the

Nick Jarmoszuk

[ph] I have repurchases. $XXX million limit believe you for those a on annual then the And buybacks. second lien

First is up back there is consideration place still the any then to in that going to and is, that first lien to lenders question loosen basket.

Mitesh Thakkar

have basket. we that finance that the perspective. at on say we all have tools availability I still a Listen, from will we look corporate that

we relief it's back that. to anything or not need to go So seek like that

given is liquidity - the is bonds on prices without right in basket second on the on I the value. and but is trading value high, do buyback million liquidity think - as liquidity is the I I my of face now of market think of the when like lien trading running that market second don't $XX lien can

I'm right. you $X, market on like depends do million. the rounding. retire $X.XX It at So can $XX on value,

next up for hopefully through will going for go I us us. I think December. baskets and have year we new going are is that mean, for leverage to other get bucket we that's a - and our to open that capacity good down is

X, of year, bucket from perspective, if have you back. about will rest you to year. next the think the And baskets So, open you below you that I other for allow a drops buy you our new up bucket think this it, will if strategic have have leverage will

don't to go will. more lien the ask to first need more, for to you if capacity, lenders So back I see the

Nick Jarmoszuk

then working the And next capital. use final about source question, that Okay. capital. How of we of think quarters, whether couple just for a or on should it's

Mitesh Thakkar

by will mine lot bit space, lot back and the the last compared balance That now. the the receivable lot so we question noticed working your and is producing, a shipping that are answer a don't of month come have stop coal have know, more a times collect as as will has you might what of our picked to little down payments last tough because you I'll from to quarter, we driven inventory tell capital is you a mines why, because the do, we

one year. capital that things next example, year to right in it's mentioned other should capital are driver, second million expecting $XX that payment now, going is, the the reverse million is working is So that to quarter $XX help of we sits that for that to next going working couple the I on that

Nick Jarmoszuk

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

Jimmy Brock

Nick. Thanks,

Operator

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

Nathan Tucker

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

Jimmy Brock

Thanks, everyone.

Operator

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

You disconnect. now may

Core Natural Resources (CNR) 5 Nov 202020 Q3 Earnings call transcript