Arch Resources (ARCH) 28 Jul 222022 Q2 Earnings call transcript

And ladies and gentlemen, please stand by. Good day. And welcome to the Arch Resources, Inc.

Second Quarter 2022 Earnings Conference Call. Today’s conference is being recorded. to President call of like Slone, to now Vice Senior Strategy. would turn over the Deck I Please go ahead.

Good morning today. for joining from St. Louis, and thanks us

statements according including begin, during financial expected Act. performance we let considered remind Private and that Before forward-looking Securities be statements Reform me future business this the relating statements certain call, may to to our you made Litigation

future in nature, degrees described forward-looking cause by to update can that, Drexler, Paul. their discuss the be may will Lang, to address as annual detail will or this of you required uncertain. Investors With our call archrsc.com. to press the CFO. different than in whether morning’s uncertainties, in statements, of end which this otherwise, by have now we at release, participating posted result on statements, are and with be different over our like also our law. website our the CEO; turn call materially that measures matters be Matt reports do Forward-looking our that formal of we find to information, we not Also I the Paul our non-GAAP a take will questions. to you your statements. quarterly are copy John remarks, These morning COO; which the After plan our more of Giljum, file our results that be happy financial section reconciliation the a in to events at a forward-looking undertake and that remind to actual we those except as expressed future may I’d new We of SEC

the us your if coking the the impressive that that record team’s in premier these good straight important and coking excellent exceptionally the capabilities. record delivered accomplishments, as to with testament and We work in out these pleased everyone. strong in well platform, as join this QX record have are and poor earnings strong issues, metallurgical it’s and cash coal Deck, Even and underscore Thanks, coal process, for glad view been to two team would the our results second call stronger quarter our cash margins. results rail morning. still, you report costs generating metallurgical could Arch our am first a QX, realizations interest our related building not logistical for I in as the third I on appreciate being Arch in the morning, to the service, segment. and to

operations been I you first that the at inadequate month QX. recent As am all situation issue itself And has of into know, rail disappointed to our in of persistent extended service the report a has quarters.

continue with on Eastern so we we While a in QX. rail to or less over our reality saw improvement to QX, can continuous more carriers our basis, there’s service the rectify only much rail situation. engage incremental In the an operations do is

actually Western the Railroads performance While declined.

that their hopeful and service is extraordinarily situation the of our recover the the we through all progress assurances However, as overall customers. But move remain slow based of frustrating painfully continue the from year. on remains will we for railroads, to balance

geologic item dampen at issue a financial other quarter The was second South. localized that acted to results Leer our

price. inventory a QX costs metallurgical was some record attributable material in quarter segments saw quarter. our well average While that during actually It related our significant higher the volumes, in as and up supply as was issue we selling had the to current coking inflationary increase no built sensitive costs. the costs higher of environment, sales contributor to our in pushing the sales Obviously, we effect on

anticipated than for expect year those increase largest our fully as lead significantly our me John tougher cost proceed. the encountered we performance South. which will that of share to late the should conditions metallurgical Leer our cost improve segment let additional we However, in say some component an improving segment details, cutting to the conditions from Well, in stemmed August,

reduced about the shareholders $XX total for significant million, inclusive return fund ongoing recently into future. reached and million of $XXX second security quarter, the creation of program. in the strong we reclamation return that In While settlements actionable the other continuing $XXX and the we excess consistent are position results well positive initiatives value or QX, by through while than a financial capital company mine re-launched net as a more recently on payment value creation during our thermal we program. just established the XX%, to quarter position, short, the July million for stay team not dividends of ended are long-term the pleased so position if million indebtedness our progress to in to a believe range with simultaneously Among success targeted funding under and more, the returning deployed by debt clear, capital company’s cash true made of accomplishments level via we strategic noteworthy, our convertible given they and strategy financial cash for $XXX fortify Arch

$XXX centerpiece overseas in if share shareholders. dividend $XXX past, customers. in for shipping that proposition that heavy a note or to in schedule returned not would receivable here important the drive per also to of our this value we this view to June an of significant As accounts million our in It’s QX, we million program way add that September. million quarterly precipitated we today build by our to and was the declared capital been stated balance of in figure while should $X I excellent QX for addition $XXX payable value long-term have we as higher the

future mechanisms. to or simply impact the issue, those be a dividends via cash is capital will to is we shareholders expect the return Fortunately, funds which timing received say, this of other as is returned

by As a of our to you was XX% formula, which know, the implemented return capital quarter returning dividend generate we flow discretionary envisions dividend. cash the recently amount our shareholders driven of each as

stated of variety other discretionary buybacks. cash of our other XX% to the that As cash our in putting share of including flow, we ways, for value a driving work intention

over While if second capital clearly the buyback end, and shareholders, is since use the that pleased Bringing stock inclusive under you reducing thermal will, all the the million over capital still Board recently start debt attractive dividend, that large to mine million. as $XXX I substantial authorization have September report deployed the XX% Board the an return risk lowering year we finishing the by our the a this to of million returning declared $XXX of of towards reclamation share particularly XX%, just to our increased fund. effective just company’s am and contributions profile Simultaneously, our it overall use steps by or of evaluating option. buybacks views we investment will the optimal program. To an to means have $XXX likewise, as taken together,

the I’d coal dynamics returning spend like call John, seeing coking over the few markets. about Before to to a in global currently we minutes are talking

recent at have you the As coal East U.S. being markets $XXX coal ton. High-Vol assessed off coking softened now weeks, markedly in with metric Coast per know,

at was which when and a about Arch’s the and assessed significant slowing number metal portfolio. from X.X%, a is metric behind While estimation on same from decrease growth production for price time the is imagine April, driver of The is strong coking a slowing impact price context price down hot that the our Xst considerable highly remains the Year-to-date, at pullback historical level principal is global demand can per pressuring seaborne the is still in ton, as coal production. economic $XXX prices. predictable this having coking steel profitable you coal a it’s

balance markets. coking exports XXXX out year-to-date. XX% more depressed of we about traditionally undershooting long-term supply continue in support coal the arena, market the than dynamics, supply of particularly other However, should and to continue source of note, supply the already seaboard supply coking coal that levels of healthy by Australia, see seaborne particular Of to a in are coking or demand the X% the

underinvestment Russian war aggregate coal strong exceptionally Elsewhere, U.S. in term than pricing X the coking are coal million to outlook exports despite less export summary, for coking in supplies, week levels environment. Ukraine of particularly pricing in for the second threatens the capacity EU’s the the weigh Russian to year-to-date, imports recent longer of effect years continues coking ban In global in tons coal and Canadian the well up which first coal the August. for coal year. half long-term should Additionally, bode metallurgical levels, on on trim once takes heavily

thermal support coal for nearly $XXX ton, coal up highlight to as roughly coal have mechanism Finally, is coal premium markets Europe is prices. stands Australia $XXX current precedented metric expect the coking coking a It in price that don’t of The trading the and to for thermal to to in significant for per the thermal I’d at potentially price coal international strength thermal like out we last. Northern at ton. metric and per around coal a

anticipate coal to of global should we crossing a coal fact, marketplace, coking over that In fair which time. larger supply amount support much over coal serve prices thermal coking the into is already

portfolio Laurel capitalize fourth had success into been ship coal positioning for in with own upgraded imagine, our exploring success Even operating the quarter this coal to thermal constraints future. to reiterate volumes success Arch. mine greater with can on coking are continues for that our we the expanded have market and still logistical into you Europe. In of out week, have closing, of me uncommitted of last and months period allow cargo opportunity As environment, a several Mount company to every us issues, some while markets, a let typical the progress amazing and and this

pullback still John? market to along into constructive course, coal the I the even coking of some in Drexler inevitable that certain way. was will recognize there’s turn call well healthy, to operating numerous recent twists the for turns pricing and and we over and see our further in that, now you, be arguably profitable John future, the With While details a results.

morning. and Paul, good Thanks,

logistical matters accomplish in incredibly record As of what I am on More and and pursuit priorities to the Paul focus in team all delivered safely maintaining another localized and and key navigating geologic pressures of and work they professional areas strategic Arch’s and inflationary during talented, issues. I ESG ongoing earnings sharp a responsibly. drove while operational proud second setting performance ongoing excellence on mounting working most feel the such challenges, just group. still, progress our fortunate same team’s arena, diligent the with the particularly even this significant quarter, tremendous while the discussed,

Let’s drivers during QX. to behind performance turn now operating our some the key of

sales volumes segment with our drive operating several grappling indicated, that As to up metallurgical our our despite and core results, financial delivered suppress issues acted costs. exceptional

As received even quarter performance. did this Paul QX we one was poor of the significant we the and progressed, challenge rail see faced only with minds. fair, for improvement, improvement but still we during indicated, our operation be second logistical of require efficient XX% the trains To as

indicated, reduced implications shortfall coal tons estimate this our from communicated significant logistical around know we levels by cash a for as and QX XXX,XXX well quarter, rail coking you previously had As for which our generation. that had shipments -- the

result this quarter at valuable in million shortfall, minds the highly the at the on X.X levels with QX we built a As ground again coking ports. tons of coal and ending our of inventory approximately

much to to to the progresses. July and holiday is to May compared with off performance and that quarter week a start shortfall of July slow miners is third quarter but attributable we expect the as levels service in Xth as vacations, June, The improve retracing

quarter, geologic challenges our other to and While constrain inflate the logistical to pressures, costs. localized our issues acted second volumes operating sales including rail service acted during

Of and middle tough we encountered be operating move required. and our ramp to to quick course, outset longwall impact These we the have areas the relative that a of miners substantial expect second ramp behind geology adjusting the of the but costs significance predictable August changes sandstone experienced continuously in to challenging levels great -- isolated mid-June. were May, productivity us in see tough Leer portfolio. panel, a with used productivity minds thereafter. the South end improvements given the After mid by and at of first we persisted, size But forecasted and at in the in as conditions conditions a of successful as our within South, on Leer should

as improve five importantly, of More the we district. through panel conditions further to balance first expect we progress the

we conditions. both and confident I We the would superior of that third simultaneously the the to developed to vast have these that infrastructure develop the longwall it already favorable. encouraged see team and appear the short, there is second base. the fourth that in what for deliver majority Leer the district time, continue seeing we Leer have while South exceptionally conditions South initiated as offer we panel are levels of very In to and also we panels in cutting know out are are and well we development experiencing develop beginning reserve we add the productivity by kinds yet as will

highly now Let’s well to generate our contracted business, levels thermal where our market of export as legacy to assets, attractive environment. cash significant we continue from of very from transition a healthy as book

than $XX you million our in substantial we an this deliver of these million level aggregate years just have segment mine of strong. continued to way. we cash way, have and a we will to the million view this the generated put remains in segment and EBITDA QX, of nine strategy segment of thermal noted, the billion half continued progress also same expending another $XXX know, that that exceptionally cash in $X.X Moreover, As harvest launching times expect approximately That just is final for our expending total we segment In Thunder that Paul fund, we value from reclamation means which in five aside more the we the have XXXX assets, have for since asset, generated while our put expended CapEx. EBITDA, Or as focus while in very creating ago, and mine beyond. harvesting capital. a around more of the on generated objective level $X.X means thermal as reclamation Black We our cash hugely we generation through it as new and we for shareholders. cash for need outlook that -- we

few Before other might moving that a useful. items on, let me discuss prove

on I segment First, represent to to a the that appears thermal drag be. service would service not continues that is way the and significant well in as -- note Western improving rail legacy our Eastern

that’s the since As tons XXXX. expected a and million we by now the tons into X our Well, result, clearly expect move to have start level the not of given year, reduced those shipment ideal the for well. as time mean next already our cash value that does thermal are generating strong segment exceptionally we looks book confident healthy it of money, prospects and that XXXX increasingly our about year growing

while due that at in costs you was in our a to higher remind sensitive from part average in substantial that stemming increased would I substantially Second, our price. large sales our increase QX selling costs West Elk mine

spend like the call handing several I’d Finally, to over to minutes few discussing the a marketing arena before developments Matt. in

an which meaningful opportunity price With the in to met in great fashion deal coal. metallurgical has there move are currently of coal into a metallurgical pricing, higher the discussion a about thermal markets, been almost coal enjoying unprecedented drop than

Europe with this to High-Vol an as pricing that only fixed but should metallurgical a also provide into coal marks. substantially support B a current a High-Vol coking for High-Vol agreement vessel thermal coal. B very move, We a above Not move creating recently is signed have is it of value price fourth quality price quarter opportunistic to help product

efforts tons transaction Europe, volume capabilities, providing a and also additional to cash from although, coal thermal tons anticipate generating pricing beginning we in volumes, tons our opportunities these total also of into million currently lock there Elk into from these X.X markets of coal due thermal netbacks a of will of enhancing as consisting price progresses. our rail X believe overall portfolio, attractive you is the Thunder. We part opportunity Western be pricing the of limited Black fixed constraints. attractive XXXX, year during our our Moreover, export recently types transactions for X.X moving multiyear Elk strong in million our to concluded will extremely at export West recall, extremely for Western In and as West million We as is for netbacks. XXXX

further advanced segment levels from for our performance. Matt? legacy and modest flows thoughts sharply are performance the effort cash we core every equally it logistical With productivity is to drive While are outlook call the In focused the are impressive. on another over at that with increasingly let on on an Matt on year of restoring thermal and cash turn of me our focused our in railroads portfolio Leer remain drags flows for thermal the these constraints, financial closing, results, robust capability volumes the strengthened significant and possible to overall rates cash strong reiterate South. additional Even generating XXXX. given improvement that should I way we will be that, in coking in the engaging our and evident

Thanks, in perspective, Good with and weakest the heavily half new the receivables. on in quarter flows. a of Rail wanted service operating generating $XXX was increases already, in due John. quarterly receivable contribution the capital the $XX Arch’s in records our was and for weighted capital working metallurgical to the additional the fund. growth working revenues inventories, activities result cash setting quarter, the earnings exceptional, in in second the quarterly back both accounts was touched some flows. and change to April from totaled million into quarter, vast growth The to in reclamation thermal cash majority resulting and improved detail of later segment quarter. million financial a everyone. morning, around provide earnings From despite I million Cash Paul of $XXX robust Well, the

the benefit While collections from QX. will clearly disappointing, in is those we timing

million, capital on utilizing program, for with million the of and in a dilution $X share. under dividend million stockholders $XXX of liquidity availability we in payments. the in record cash our ended cash dividend expenditures our of paid program, facilities. total settlement $XXX the while to cash convertible Turning September reduce on of the more to nearly will flow million has including $XXX amount million million notes XXth in the quarter for return capital on quarter, $XXX and Discretionary $XX That per XXst. return of August $XXX declared used of than $XXX and over under investing We million dividend our financing hand the and capital that or quarter flows, be credit was spent Board XX% to the with

several reducing and enhancing balance prioritized have reclamation Over liquidity. sheet, debt, the quarters, derisking last pre-funding the we

we today, here sit priorities. addressed largely As we have those

totaled end the debt million up Our made which of $XXX equipment are at just tax will exempt XXXX, bonds, largely on a callable not and June, continue to amortize of is basis. leases, monthly until and which

reclamation in Thunder. for roughly have the obligation Regarding million to current funded ARO now $XXX we July, funding, equivalent including Black amounts in place,

increasing a the with As future. forward, more quarterly the Thunder this Black by of going to ongoing we quarter but after the expect work as reclamation event, accretion than for foreseeable the reminder level at we contributions million be the offset additional ARO, expect keep In completed. would to fund no the $X of liability, any

we commence to Thunder Black from expect fund final now. work Finally, we begin from to years at as draw reclamation money the significant several

minimum approximately over million to we most million, we several the in cash. Given $XXX now last of steps have with maintain of significant quarters, $XXX the taken to liquidity held that levels expect

quarter’s clear quarter these maintaining of of additional program plan of hold in would we each to the return course on of the end quarter, of the third amount liquidity substantial XX% dividend. line that capital at to a cash sight a the over addition, the the targets. We execute following expect second portion represents an In

portion Board to Paul we outstanding uses portion million. the have program. as in second that the And Given down authorization the $XXX a of our buybacks convertible the of recently for the settlement mentioned, has notes for significant increased narrowed the quarter, of share

a turning haven’t call time income topic Before over wanted address discussing spent for we taxes. the questions, to I much previously that

net recent to in tax carry-forwards, resulting loss payments and benefited from continue historically benefit in zero operating have effectively years. significant We income

these market the carry-forwards have With conditions, into to pay last likely several taxes way. over we quarters, continue the and NOLs Based XXXX the expect will in earnings utilization a our next income on substantial year. to no current of carry strength in accelerated of substantial we

in market pre-tax rate products if begin of pricing our historical to taxes earnings. above cash remains would averages, up for However, to effective XXXX with of pay expect to an we X%

market XXXX you. assuming to pre-tax all utilized would tax we we payments XX% that, our take back carry-forwards, most and the of NOL ready have are turn questions. to the call of annual we With will XX% environments. I expect Operator, income be Beyond to substantially over between earnings in

you. Lucas Instructions] with And will [Operator Thank with Pipes Riley begin Securities. we B.

Thank Lots very everyone. of… Good you morning, much, Operator.

morning, Good Lucas.

short. here, pieces Lots keep of questions I will to my try moving

for have do first The the down obviously, points? rail we struggle. seen the into I they flat of the is two movement those continued keep remainder them cadence side, very you rail rates, on to you can terms there the of appreciate we you shipments or coal that next be your on disappointing look to year, color met as expect much. would Thank of and of price But going kind in year, what dependent,

are to network. It’s earnings all their Yeah. recent additional they rails. questions. we had. been working Look, In calls, the issues, with the Lucas, they getting related employees and address primarily, work the to into that challenges public, good very closely the have continue labor

off we July, levels start. a we that was to to We are that. have improve encouraged expect a we see approach slow ongoing It’s we to to things as going There reasons need beginning indicated, are there. for are continue that improvement. few ongoing. continued to to But

shipped tons million the with in X.X at the current been guidance shipped kind X.X million has the our ramp the tons X.X second quarter. you with tons, quarter, look first in of So at million how

from in this we XX% use We quarter. modest probably improvements are say, where at indicating increase QX. were I’d

of get out tons, on for X.X are us a X.X we So guidance the have midpoint million put that would above now the million at you you X.X there. tons, to of pace currently QX that an to million tons approaching

we that are the In agreement what rail pricing. an of as of looking capped. -- to this -- kind we to have we before we at got we is with of forward. provider move -- indicated It rates, kind regards we are that’s kind have So, flexes, the with

can indicated maybe dollars, kind into that $XX on comes that few push that the well. as levels pricing it for again, But surcharges What saw for fuel that’s We several it, the going that, a fuel, well. at of we at level that so higher second have some the dollars are especially see depending during as is once to max incrementally before kind where of of capped. pricing that is also we there’s quarter

Lucas, -- rates remember arrears. is are the And in it determined Deck. And

rate So, pricing. basically this quarter’s of is reflective quarter’s last

to to continue it prices QX current would into be a get range, meaningful, stay would it, obviously be sort think of probably how we market has with right about much of in seeing, and commensurate in know details the about you that won’t meaningful there down back we way step But the there. So sort and the think that’s how pulled are pullback. much the

And that also XXXX. hold for would

Correct.

And the cap…

Yeah.

the as And well. cap

Yes.

I think correct, Lucas. is that

bad them CSX anecdote, learned because person real trucking, am business home to switching refinancing yesterday the last you. did that Thank helpful. give and long-haul to into is is for appraisal year encourage call. Very is Quick my estate a my I who going I so

other appreciate well. Lucas We would railroad and as that any

four together But Railroads Western is better of quarter. got in last They months was I started disaster. three Like hopeful first I frustration and quarter CSX level other only two act the a the got than I slow. am I or more the railroads the better second have to any of their a months. job Lucas, credit. increasing. the with -- give CSX said, We They done off the

bad much switching and into helpful -- second into today, on opportunity. where what you X much. market Good, good next given Thank to I next in thermal prices want that thermal today of coal how coal million met most is modeling the into you, coal CSX, helpful the question Theoretically, tons market met that like, of very for switch to over are year? or couple could am there. And When obviously, over ballpark? this That’s you hear. you that the my most the going you years

it’s price we Yeah. high. the No. is Lucas, seeing given The is the are interest question. significant, opportunity markets that now. a good thermal Look, another the in extremely

the in what are a this and seeing we We where we of do We marketplace. time, over the in is and a plan think are situation over reverse position time to right opportunities. We think view take of will now to advantage if persists, correct this itself. matter evaluate -- we is going although it it are unprecedented if now the

in coal do move So, our taking we we wrong, now into our we Don’t not continue we are see and currently, see optimize more we here opportunity, discussions we metallurgical booking thermal met we Europe work interesting forward. recently have we were advantage But additional successful dislocation we right to are get the Clearly, -- segment, in a now a as here producer. plan to put vessel the continue some us think on are we into we what of value forward. where pressure over to which the into with time will met with go with could we but as customers, going changing markets. closely

Lucas, Deck. it’s

little be overall the certain they coals mix but of and into to, really look, then not and clear U.S. clear, A, followed we -- the that, while that going and be the are with we High-Vol take And coking thermal would their customer but Low-Vol PCI, PCI, which a should B would more to metallurgical into these market already, are High-Vol order used blended These good of fit. in sort by certain seeing as base. coal so, coal than should the and PCI, it’s what engage parameters the be different a I say are can understanding easily

So really The reserve the is making are always we our we to while, customers good higher thermal advantage value, price the feel for of higher and good John rebalancing the we that said, the that, they and added as take are are steel having. a conversations We product of have going going are there fact look, view the now out and right if about customers think to get that preference. there has opportunities market. benefit certainly how

is coal, remain higher that and bringing at we of focused balance. coal interested that on in we transactions. are do thermal you those So, a would back very anomalous level metallurgical into think than trading those sort quite this things unusual have and We

will one Very you. one in. last helpful. squeeze I Thank

quarter preference you for use a to to kind alluded buybacks, deploy is quickly, million-ish just if largest Is that were that’s the trying buyback for would that be the You over how authorization Theoretically, full buybacks decide you into share other it you or to of to would a it coming of get down? -- XX%. other on XXX go to of the it? XX% path cadence share sense have factor deployed the buybacks you

we in -- fairly well. of that a maybe decision made, of to but balance would cash be that And with levels look Lucas, excess as cash Yes. million quarter at But certainly mentioned, liquidity envisioned, time. with a quickly this it’s at as to period. that the cash little have point than thing end we didn’t receivables is targeting, in at the quarter here sort sheet Obviously, one feel ended and that have we last the in this July. liquidity, Matt. have from less $XXX keep program are terms we the we that should of like we frankly, in a seen can perspective, the quarter, cadence going collections are of we up are start like I to a as some a position of million we end the after very strong had, blackout what quarter, as base The dividend have then next we $XXX to that most call exit mind, at pay it we on the we in the that

XX%. be looking have for our the a dividends that to to aside be to will enough we cash aside to the used really, have set the be and that, manage So of have most liquidity minimum rest really position other in to cash could set

color the of best all the you. Thank detail, all appreciate and luck. I Understood.

Lucas. Thanks,

from Now Capital we with BMO will the move to Markets. David a Gagliano question

topics. I them here, questions. allocation. All right. my trying to I taking Thanks capital few through get have am a for different all

it’s follow-up are in the uses XX% to that there. evaluating buybacks, consideration? other uses on for and And Board that are aside buybacks Just mentioned, commentary down includes the that narrowed question under other from the XX%. for other What the options Lucas’s is the

is Yes. this Matt. David,

the We there have balance about talked other of some convertibles some basically some potential sheet, We for the the in the, cash dilutive are capital the also about securities outstanding. past the on preservation. holding back talked still

don’t want doing particular look, direction, is but I Obviously, that the those in think market versus really price today, Board other of if to sit we ultimately narrowing the as in at stock you evaluation, weigh So at where lead are presuppose be look their two of where that consider. and options you be the going look sort the to And things. the down that those we the through would certainly other to will think being a decided. would I goes value to they benefits might how the other the

Okay. Thank you.

Just wanted on that to one. the check box

Leer confidence improve a August? issues never mining at obviously a On what in long after will these good or perspective isn’t, wall thing, my view the it gives but Arch least from that South Sandstone issues is Sandstone the

Dave… Yeah.

the costs for met along South? assumption at given expectations what’s reasonable also the XQ cash Leer And

Yeah.

ramped and In that course we about Dave, panel panel So, a We we scheduled will longwall over up longwall move timing. panel We of in finished number move started two Then and late started and the a we recap. to of May productivity efficient the a mining, longwall had we very team two talk mid safe quickly Leer bit in first in great the X. expected. expected May, levels along that South Panel congratulate productivity. got levels on little of that ramped

how we is was To were then through was. our going very were encountered how hard this some challenges mean it we we it. of sandstone So don’t but how we would we time of not It encounter that we large expected through it sandstone encouraged that I and just lot the hard extent it have the see sandstone cut not mines we kind it’s moving with panel, all and a that sandstone. we

sections gives out It’s we importantly remind to we to But it panel, and we this and the are see the going was only working given of us more to things through really question that -- mined, certain end confidence the move you improve. had as half is encountering where the to So panel, see we forward XXXX kind what to built are of are foot in we we be substantially with to Sentinel. mine And productivity panel, that in of mined Generally at this of start that back improve by panel. your there. the of it. through August levels get expect we to

We reduces. district, the that five expected panels, couple all of first sandstone the we move continue four geology shows But as and and some that three, the our panels. in into mapping in of first sandstone to of

those we supported mapping with two, again, our we we three, three Equally, gate panel started be reduced are And in With have got drilling geology just and if once that the four. we of and panel further now should importantly, developing even and favorable gate that More the mapping all into they that have issues have which reporting and we us done, conditions, got geology have in more beyond the of important, will which and are what head developing seeing. areas. sandstone districts cutting that are future, the and many not all well panels continuous miners actually more indicate developing head longwall confidence gives in are

cutting good are have well. that conditions those continuous with out We developing the miners as

additional dealing you we into a gives that little hope insight So what and with. perspective are

the given? Thanks. just quarter costs, helpful. third then cash That’s met And on

continuing are of quarter. -- We to the course work through over this the and third

guided as indicate at in should it cash had currently bit going the midpoint less segment. favorable a how for is than be met get our platform. we I had meaningful an in Clearly higher across we see we challenging. costs QX it QX to $XX of And in though, as probably we little and or should than QX we seeing or We productivity least is would then in to QX be have than quarter we full in we are higher saw QX. improvement see but a

you. Thank Okay.

in Okay. Switching working quarter, capital million a in $XXX to quarter? do benefit receivable swing gears working second to the capital fourth accounts you the expect that

a Yes. benefit. David, to back I expecting of it’s third are swing that our the in we would quarter, Matt. to lot say

here issues of going quarter we saw timing to toward likely given in the We are we the of the wrestling production more that issues the some as to are QX now. weighted in back still same have shipments with of with QX be the half

to going most level in as the we see we that today, an at QX. probably elevated in QX but are look and receivables, sit pricing the we of where that So difference we build between would in that June we reverses anticipate of saw still timeframe

any that do $X.XX dividend free math, flow Okay. upcoming Right. quarter $XX and million is the generation And cent works through not math? to assume reason math this of other cash do not Any that share is if goes we do special cash to to half just any the it there that reason without zero. or per a out

that be don’t I the wouldn’t case, why and any see reason Dave.

of what average Okay. volumes? this for point? the is the price Basin Powder PRB to And -- gears what River position at the then is for price XXXX XXXX, And volumes switching those for on terms

know, a a continue But good representing. across that’s guidance to to in come I not have related as what think question that of we couple are that. you we Dave things provided

in a with have the are we very positioned the out how of We thermal assets. both book -- building portfolio of thermal good business all the

position at expectation are least levels. shipment are at with to willing what we think the XXXX I now of share is, a we

commitments approaching we probably for are are. of give that take next or are year XX%, levels where around We

we feel good business. about we very So built of that how book

you pricing. least at give Second, some color on

very from we XXXX. But were we clearly the about able the in feel during XXXX, is this in when contracts to we I negotiations good long-term outstanding seeing out the out at that saw strong to all are book. the working some significant good achieve from the are not what Probably rest booked for We above we opportunity and cash the portfolio the and course PRB. historical going generation some it’s right getting we really to the real levels lock of the think of where over forward. market build to But, time expectation shade now that to averages can

put year, that, mine this And $XXX David. aside thermal to this the Hey, fund. during look reclamation It’s going million we Deck. are -- to and add have, be about already I would into

funds So, those available not are return capital to in the shareholders program.

that But do, would being we year, and envision contributions. not potentially they making Next modest would any modest, if be we very very indeed.

to an there’s $XXX that million cash that shareholders of means assets. that from so And thermal will available the additional be

that to have And pricing XXXX up, would for the thing see PRB, we to continue realize, price and so other the the be got that average and continue base. committed relative so improved marching look we we that to

And so, we are seeing that march up.

price ongoing transactions. to of not at while year, in we are moving PRB the yet, certainly we has date average been there that terms so with the in in what might steadily selling was be direction in And John as our said, PRB or looking this

And Dave of seeing is we further, into lot a come the to that add are to for market multiyear utilities volumes.

export export pretty of domestic we and out. we from are price is for have Elk at up to building volumes, again where contribution next the more final so good been we and to small the business was point, I on all the be since have that seeing that learning The So confidence amount it the attractive from indicated. with visibility business, us really are done all beyond price domestic they West West already meaningful step and very The comes not Obviously, would cash a for a portfolio export capability significant sold Elk, focused also, are say a out already fixed West upside potential much at once year, that with, to relative Elk, have -- again, of attractive. month. we of very business done for are market, Deck some reserving going on a so we this in layered side generating only we on the as are XXXX, giving

this is Paul. David,

a cash PRB with great implementation effectively. have out get in reclamation we we smart frankly, got And amount chasing a stakeholders, we what now, we cost option to and in are going already spend not of the up we to lot play going bank huge we fund, the freedom just closure would we good with there, by not anything employees returns. long other to to prices. going are is, in to this as But changed going are capability of I really of have the the do call, think got screw a generating the look, and that got and And in going mind keep I the there, not with think money I it be do we created the but the a to try what’s right end, we and this my lot so it thing we out are PRB. going of frankly, this, have are

in those appreciate a it. lot answers. I Okay. There’s

-- here to a that. few ask just on So follow-ups I just want

that. all So a average, something on not pretty future, like range. that’s like, but range, mean above wide first I think that’s XX the or to like historic I of the XX bucks

ton been So reasonable to zone in something -- be now? say signed that contracts $XX it reasonable for XXXX a to maybe it’s for to $XX is have

is Look, David, the solid. you expectation XX that pretty is know I think

And wouldn’t be unreasonable.

sound plans to capital the Is the there there it XXXX -- you assume being Doesn’t to the Okay. XXXX? into conversely, any fade some PRB assuming? like in continue point? going spent to what’s is year-over-year is Thank point? volumes flat booked of are in fair to, and it are how volumes there growth? for be then Is the selling at we at this to you. related mentioned And on note, a is XXXX much And that XXXX denominator

Look, years year-over-year, on down on I’d the year-over-year. out David, were sales step say typical, a

prod talk said, really expansion to hear that’s Relative no. your more a on easy Although question term starting contracts. about are I people answer as capital we longer to

is this mentioned, on John XX%, that year’s The predicated run rate.

a we think be, have of So that that’s sense while the from going a to denominator. I And gives exactly guidance. pretty good don’t you what know the got sense you

the not the to same term availability swung then around pendulum would much, of in the certainly a lock awful are an because are lot look, long-term as swinging the now to that pricing. the for this to maybe sort that, extent And can sort next year. concerns we back of XXXX levels to was clearly generators, chase. business extent XX% scarcity, after it that of mean I basis, be that volume, their has back, going coal reach the possible that’s year on volume, that to that’s we concerns of going buying of wanting as they indicated, prompt to that to we as that within But tell, so XX% good of, are far is XX% there suggesting So about longer that’s certainly so power interesting were where Paul as

a ton? into there’s is international price indicated to last half prices Elk in What the Okay. included this release markets I Thunder your My expectation that XXX,XXX incremental Thank tons of second you. the promise XXXX of question, incremental the Black press $XX.XX XXX,XXX those that of realized had for of West thermal the for plans sell and is year. are thermal

again, to have is don’t for the right Yes. David, once guidance, split of currently, market, me, netback at specifically, with well is the where it there floating you expectation market that a ton. opportunities here of is that opportunity is though, unnecessarily the look that. in, I you $XXX Elk of excess that in West like built look in get operation front the but the can we some in But is

that million West that, approaching of year, remarks, million So I we both prepared Thunder, of in X plan are the to tons take tons Black full X.X and my Black indicated Elk exports for the advantage total think X.X Elk West for Thunder. I

Western tons. better, quarters’ have logistical railroads to that primarily, back million the go prior you to seem with have that indicated, X.X problems dropped as getting If we at don’t have issues that we be discussion, our But we of expectation. because

working there’s with think going our the were rails, presented, take opportunity there, opportunity we significantly So are of very to we generate closely is we very, that to increases advantage and it there’s, opportunity cash. the full

here the David, is one obvious the on frustration rails. the

John mine get importantly, said what million huge, domestic on the couple coal out, Elk its though the backs, the times that more is. or backs could West net debt are a aren’t tons, As even more three or four probably Black of digits. triple the coal pricing if Thunder, And we volumes

extraordinarily they volumes, but look, leveraging. huge not are are So they

this go coal exports. there’s where here year You huge but we European on our really incremental bigger a clearly And last, picture help benefit to what good going and to, a stand we how going be it’s allies. some isn’t back, that’s to of of focused long is think, there’s trying business, this are next needs to a some these

on So, that Dave, on look, piece one [ph], I would committed that’s the the XXXX other on say business.

market, are there, is fully of are not those with there discussing. times float those upside a lot So the the certainly export we tons we do

floating that depending is the with is So XX% on price still where more that of probably meaningful so than and XX% and of XXXX or market. upside

So, we definitely see lift could that XXXX. some to

deal about, with as at fixed well. of Europe, we multiyear attractive out because development are Paul situation very was are ongoing And the that additional discussions to Elk there’s that what It utilities seeing circle just other for into Europe. in to West a and significant back, current with a back given was lock opportunities demand talking the on of prices

the of So, cash potential generating we will really be focused the portfolio. and value on thermal optimizing the

Thank of you Okay. helpful. all questions. Very much. my Thank very taking for you

David. you, Thank

David. Thanks,

Martin now Company. hear Nathan from will The We Benchmark with

Good my question. Hey. Thanks taking morning, guys. for

Nate. morning, Good

Nate. Hi,

Very far. so robust discussion

been questions Maybe on I a off of list thermal probably my most drilling this just checked think point. at little more. So on have my down

to price the West well, a XXXX? of deferred flat out then of XXXX could in especially call given, those out a tons in of maybe Given Could getting chunk multiyear PRB? we think, up you likelihood year-over-year shipments, I the fixed rail at higher And John, looking to shipments as issues, be contract? Elk actually the PRB XXXX see the

the tons Yeah. that X Nate, the our committed carry that of on kind position, market question, guess, But right, the where, ultimately, now. million of so go. first That’s level part of going to from we out I XX% the moved dependent much perspective, to on our its markets see. be we over expect we of

at perspective historically. position a are a much from commitment we higher We have been than

increase the you see again, rails market the once year-over-year, are be lot right of an now, could out. So plays just a incredibly challenged that going where but to

Elk question, not West long here, Elk ago. producing On was the that lot all lower a volume West

has tremendous West multiyear volume for And a lock been opportunity healthy at this Elk very to pricing. in so

from levels are of the given the export in production, healthy on are mine be so, making perspective, focused we achieve And is, next our that to a position years. levels very we we putting historical expectation sure several able West there to we and a to at for committing opportunity are to the are going be Elk, the for

You know, Deck. Nate. It’s

goes. in X are is can consumption actually we the so limit there to how be clearly is that While limit million in we do previously than Obviously, provided, is over produce also we do we coal to a that there believe to drifting tons much could where the and much with see how thermal produce look, we say U.S. there there now. more guidance to that I ship, a the longer will can term but we as down. going we PRB will so think going physical we -- so still or again, the

could so, coal that -- seem we is good XXXX coming and in to prices is into like that continued now see demand But that And gas even XXXX. you they it plant still with does closures. where robust right going day are, see are

decline late? just met we then thoughts domestic the thoughts. met a in timing of your Very especially seen commentary contracting far helpful on appreciate that of given touched yet, so as on Just maybe prices on have And there, Got it. any topic season, color nobody’s shifting kind the any over guys.

Yeah. an know expectation early think, it’s little can bit with there’s we Nate, an touched have weigh this I now and what it’s interesting But earlier. on in others pretty on it if dynamic it’s still don’t going of -- and will I still right and we when begin. a

a got met have You weakening market.

thermal the got volume the that’s into market thermal met to a from beginning away have You pull market. market

into are of type next We seeing thing. opportunities year that for

anything around and may done for that, on We you things well, are we improve have to there’s those happening start ongoing. if removed have lot negotiations that’s haven’t volumes into question But when yet. year, marks of into right, starters economy as as others, the the those negotiation if would the available them look met thermal somewhat into market, been next put a market,

that So hard we see to say, how continues but out. play to will

the I the into is Nate, last if We the surprised presence change. about North year, question sell and and U.S. it’s into may wouldn’t we answer U.S. this I domestic I effectively be or answered our coal zero coal is think pretty Canada, little I the same. going think, don’t market in a sell to small but market. met we into bit think the

best of will leave luck second and Perfect. helpful, Very there the half. it in I guys.

Nate. you, Thank

Thanks, Nate.

time that with Looks for today Dudas and like Vertical will have Research. we from Michael come one question more

I hope keep Well, better one it to can I here.

morning, Good Mike. Okay.

Michael. are morning, you? How Good

have You some… we know,

know… You

talking a going coal thermal first crossovers, all they company about am Yeah. guys observation my off just these I can great. are think to thermal is, -- export again. be and I you you

careful, be So guys.

and in labor you you the marketplace seeing or keep are move what with the tightness force or of you us the assume that? occur increases through and inflation labor intact profit improve fairly might this remind feel in I around to the contracts comfortable sharing synthetic on and you. drive like are productivity So here marketplace and how the as levels turnover

see is for broader well. we concerns and an our Yeah. views. of issue. you discussed give I as our know, as it We kind color issues within see everywhere economy, Michael, an the on additional will labor we all industry

turnover relative foundationally, a have historical got that, historically lived a we is for turnover, is basis our low very just low from operations While Tier very, X our cost, have we mines. safe, rates. The higher, on long had reason perspective for very

be to that of there, employees So foundational we treat the incredibly fairly. then to, attracts wants that’s kind just that workforce a one,

again, and modestly. gotten droven forward. we pandemic our tight, and driven More satisfied. hard keeping And of recent so, pressures gotten a I team things tight, our -- up have sure feel here real to employees the taking we company out think make they labor’s rates part has as once turnover have the we But been and of are come the working

manage variety on to We part and they those us moving team But it employee success ways, continue is it feel again, of we we we are forward. as once, that an levels on where and to are make that do of everybody to pressure think else. moving our well. is manage inflationary in But able the our that continue be and to responsive will sure and see working to addressing a closely so see market to and forward we

digits benefit could payroll changes changes mid-single -- like, forward? does -- you -- that ben and costs year-over-year Overall low-to-mid as is move

-- some a annual on little I basis the are things digits, doing we an forward. maybe mid-single of probably Yeah. with moving bit that it’s that above

guys. Thanks, Great.

you, Thank Michael.

Michael. Thanks,

conclude session. I does the remarks. that to And closing question-and-answer our host for back will turn call your

I’d Arch. for the my like again long-term In maturation of in to is creation and view, thank growth. company interest you your our strategy value for the approaching

our premier believe minimal relative will of portfolio out basis capital going build and the we on completed coal need forward. have a We coking

principal a trust positive and years. over several liability shareholders in back our short, and significant fund have their a mine cash position we program and long-term patience a return the with seized capital new we now already rolled to our net have reclamation are rightfully new thermal last are value. out We position debt has for that to driven reward In our we

As and There I commodity degree. story have increasingly will is always design said mine and times, one. there’s some cycles Arch’s simple to always going by issues to be many be

in and markets, but the generating trough October. the conclude sure for to prepared build the strong the we are model take come. periods and group however, have, look healthy inevitable safe the a necessary that, to hard that work compelling will Stay only steps has the to completed cash reporting not We call Operator, and to forward With that everyone.

your Once, today. and your may you We for you again, disconnect. participation now this thank conference ladies and conclude gentlemen, for does do