Alliance Resource Partners (ARLP) 27 Jul 202020 Q2 Earnings call transcript

Good morning, and welcome to Alliance Resource Partners Second Quarter 2020 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions]. After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions]. is event this note being recorded. Please now Brian L. would like to to over conference the turn I Cantrell, President Senior Vice and Chief Officer. Financial ahead. go Please

Thank prospective quarter everyone. Partners welcome, discuss these results, you, morning, well now conditions. Gary, Resource as as Alliance our and Earlier we’ll released market financial XXXX this second results and on operating its and

call our Following your to prepared remarks, we’ll questions. open the

of reminder may subject with a Commission begin, filings that uncertainties variety include to in reflected statements we our our today are morning’s some and that Before remarks the assumptions press are forward-looking that a in Exchange are release. risks, and of also this Securities contained and time-to-time from

partnership or more these uncertainties forward-looking our or assumptions or as those or obligation of statements underlying unless of if providing expected. no based materialize events projected these from or so. incorrect, law vary currently materially to are remarks, required whether statement may has forward-looking one otherwise, actual by update available we the to publicly results a prove information, information risks any future do or While these new if In result revise on to us,

reconciliations furnished non-GAAP site directly measures be release, Web X-K. has of also SEC Definitions end ARLP’s measures the non-GAAP of our GAAP Finally, we’ll been the on and the press are which these financial financial on and measures. between discussing comparable certain differences posted most and financial to the Form contained at

to our President was Officer, perspective. quarter, crushing required which the taking demand. the call begin Coming and ARLP Executive turn the pandemic, with review Craft, for to preliminaries of the way, Chairman, over results, the into COVID-XX out mitigate then effects energy I’ll Chief action global his XXXX With of our the was and the of Joe

approximately XX Illinois existing costs, Specifically, and through cash to million immediately flows objective our to We optimizing East of and of capital numerous all to sales reduce operation match production expenses we for of idled our initiatives operations XXXX. all capital expenditures. with commitments temporarily focused Basin on working our Kentucky the partnership tons reduce

In XXXX and decline more the At ARLP’s due we half partner quarters. distribution by general that than Directors first ARLP’s to for and severely to XXXX impacted contribution in our from to segment from cash expected even Board the more unitholders second these segment addition, time, would suspended production of coal coal adjusted be EBITDA and the of operations mineral performance to actions, the for million lower the the sequential operating particularly compared in I significantly reduction to debt report quarter, control execution of optimize am the to costs financial flow $XX.X than cash our slightly we led plans the quarter. XXXX for And while expected. quarter. and total quarter results XXXX of pleased to strong were ARLP’s and actually the came better

excise to our XX.X%, the expenses, $XX.XX ton, inventory $XX.XX ton due lower as and to and and offset to expense total quarter. XX.X% million falling volumes sequential On $XX.X segment per adjusted $XX.X sequential caused quarter. the were tons XX.X% sales segment the Lower to partially compared by in operations, complexes X% higher tons the sequential coal coal $XX.XX decision an million our well XXXX severance seven taxes reduction of production as to a quarter, five pandemic increased Appalachia to temporarily to COVID-XX sequentially XXXX and idle realizations in per our sales and sales XXXX decline respectively, to sequential Lower by Coal quarter. sold EBITDA per impacted, adjusted quarter. ton compared volumes higher-priced the the that led lower grew sales sales to revenues, primarily price ARLP’s also operations charges coal X.X higher rose coal revenues in compares the effects of quarter. in in EBITDA the coal in For to million response from XX.X% to the quarter to of mix XX.X% mining a compared coal basis, of

For fell revenues XX% lease the quarter $XX.X to bonuses in our million million compared realizations total also to oil XX% due in oil volumes adjusted segment sales from Accordingly, for and decline quarter the the gas to the gas to minerals sequential results quarter million. XXXX compared and reduced to sequential gas royalties segment, and and XXXX caused amid Global and to demand declined oil $X.X price $X.X pandemic. the quarter. EBITDA

offset and mineral million. loss for XXXX XXXX lower EBITDA Adjusted for operating falling and ARLP’s partially Our sales, the also Lower contributed compared period minerals pandemic net compared net six million by impacted first this and billion period interests. XXXX coal items, to XX.X% XXXX. adjusted Total period revenues decreased the adjusted by to also for of ARLP’s revenues period. disruptions lower $XXX due period the of XXXX to non-cash conditions an income our to for market revenues Weak contributed $XX.X million months quarter. caused to million to of the results XX.X% from XX.X% revenues, $X.XX the COVID-XX EBITDA segment for transportation consolidated adjusted excluding $XXX.X the XXXX was segment lower of expenses the for largely $XXX.X

earlier, by to expenditure current quarter. were respectively, quarter. mentioned the capital reduced as ARLP’s through million, million efforts, expenditures have These liquidity yielded general XX.X% to sharp working during $XX.X we benefits and cash million XX.X% also XXXX XXXX sequential and compared financial declined XXXX efforts flow requirements our Working XXX,XXX by capital position. control and by volatility, ARLP the significant requirements, As period. both initiatives to declined quarter capital compared these period free tons cash total coal organization’s sequential optimize the during the $XX.X which XX.X% XX%, the $XXX.X increased the expenses, Alliance Through quarter, focus and administrative on during reduce to lowered from by expenses the debt as XXXX to entire capital all the inventories and strictly and, managed increased reduced flows, as

Although XXXX strong X.Xx in over covenant covenants, to comfortably remained with leverage X.Xx. Joe. and ARLP's that, at our I’ll to of the including our compliance total total With the quarter, turn call of debt end increased all balance leverage the now sheet

Thank you, Brian, morning, and good everyone.

declined approximately XX gas million from also day. this operators the first As the with the half pandemic demand commodity in Eastern react the half loss million activity oversupply oil XXXX. coal-fired falling rapid Demand response, barrels months The XX prices. challenges barrels as to natural Brian States explained, In for associated reduced quickly high and reduction resulting affected by first has first lower crushed energy production of entire curtailed of during to coal, the globe per to economic industry, gas. oil in per which compared many a demand. demand United Year-over-year natural X% generation United had for the XXXX due production natural the oil the a XXXX well. resultant also States year of volumes driving including pressured six eloquently down of power of COVID-XX to around presented and gas day to of negatively in earlier ARLP, has third and have oil been the The production

subsequently Illinois each Basin location toll the quarter operating mining during environment seven As this our this was year. producing closely aggressive its of River with exacted the in on XXXX determine tremendous the and match coal quarter in Appalachia. the we production action coal XXXX in period. as the customers Gibson levels complexes to mining at than be coal inventories ARLP’s financial delivery most Consistent and an the mines remaining performance necessary View and effort Throughout especially we are the reported resumed when the with ARLP and in it ARLP resume furlough tough having this production. to would plan, All took for to coal. complexes; Warrior for May contracted quarter, morning, of more Hamilton the of Illinois workforce at monitored operations quarter the the half at our and schedules Mining to MC XXXX of now of worked sales each with underground its to in coal and and The Basin

several less capacity these at continues full market seaborne for a be due and are market spot mines U.S. than However, that sub-economic running domestic to of a to limited production.

are lower contracted pushed increased than in temperatures This as June. favorable in coal electricity coal have consecutive for we take projections United demand time are in XX% of improving While our contributing In and global August encouraging second have the pandemic economy year, minimum as strong for August. month-over-month economic all demand average since intention much burn, this stockpiles well to in and Recently, to the month country the for burn Lower and create XXXX. with increased July levels. weather continues States; jumped at the Eastern most activity the demand, which uncertainty kept the tons first coal of indicated to the energy patterns signs. and similar suppress their marks across utility cases seeing customers

be respectively. year full XXXX volumes sales and We million currently XX tons are and to production targeting tons, XX million

many has the shut-in from beginning drilling E&P and business, Permian signs stabilized of rebounding already a to completed. oil are minerals meaningful and gas show our wells returning lows we where in to are and companies being increase particularly and wells are drilled For activity in seeing prices recent life, production Basin

of for stockpiles The the the remain, coal cautious for than fall and ranges optimism half to are curves second ARLP’s uncertainties be outlook utility natural expected coal by coal this support With to that normal balance encouraging businesses for the these gas is and the also minerals of the will encouraging. trends year-end, over year improving. projected year continue favorable for our better Although oil toward forward demand first. currently trends and

representative of essential our necessary the the that results governments as first As we quarter an Alliance. call, continue to not down of when Coal the meet federal of infrastructure country, underlying XXXX just demands the for the decided critical discussed and earnings state last the during remains closed our are to of pandemic part believe needs our strength and our economy.

us improve service expand allow well exit country. meeting to heat made low located, competitors playing vital the participate a will keeping as role the wave, coal in domestic hopefully strategically the when customers market the and ARLP’s and international us well-capitalized, demand cost allow essential clear grid needs stable share market, our been conditions weaker nature again coal long in the opportunities with power to market our the During future. needs across coal life as near has recent as the export of surging operations in of

the over next pace we as quarters those at expect new reduced to of minerals the the to adjusted drilling be wells several prices, comparable in With commodity reported lower XXXX our EBITDA levels quarter. as segment well

who Someone reminded as business and been oil has coal been I the benefits the the long me of as recently minerals of for minerals in gas ownership. in business have

Specifically, that organic growth are the States he plays with the opportunities. mineral in in multi-decade core ARLP’s operators the industry-leading, primary basins, focus interests are a concentrated premier inventory for in providing of well-capitalized development resource areas of these United you free, of the said, area cost

on requires growth expenditures capital your part. Your no

an You well global considerable is for conviction his market conviction very costs. in years I stable the ARLP’s the that to low base the equally that to positioned I and the gas by be remain to our we will are gas of has and oil assets and and oil to minerals to source the in business. well own important meet perpetual believe share production be rights U.S. to respect many saying, with concluded of coal have He we holding our asset continue needs also he and with committed the customers more future. come. producer our positioned

focused With necessary through of We these remains on servicing the to long-term to value our well-being remain As we our committed employees, call protecting balance strong making of sustainable operator in a open flows return to will our and ARLP manage stakeholders. I’ll our hard deliver the the emerge with the questions. ask continue ARLP the that, needs customers for choices sheet. and foundation environment attractive cash to to from for uncertainties, current that growth

We question-and-answer [Operator will the begin Instructions]. session. now

go first from The is Please The Levin question Company. Benchmark with Mark ahead.

assume congratulations half. A for and questions, just the business. like free second XX XQ little half, reduction. debt you be guys the the you tons in bottom fire in so XX the sold cash over I generation Thank great. very and kind flow Okay, quick the couple a coal looks of modeling million of much will or Brian. the on million implying It first maybe

the that between thinking half? and how quarter of any on terms split get think in to or In about volumes to comments the third about back thoughts number, to fourth the the

be QX slowdowns Yes, to from fourth due, higher quarter. a sales in I that the think of are in will bit Most likely resulting volumes than the QX. holidays Mark, they typical in

of sort And to it’s spent guys number second you taking be think CapEx then rate? the kind the back half, in on perfect. about CapEx, the stuff half Okay, of looks XX how a versus right first have so less the about year? it half. been that generally kind half run or look out the guys at first comparable in the of you and of would you million it maybe like Is If

can look run do our want still a and won’t they making going sure are I be is closely. change. we That’s We’re monitor that, likely the always half of that than the rate continuing been efficiently. higher that to to is first year. that the in capitalized point so to back we and very the in CapEx priority safely taking out as half Run it very, at are our operations do

in than at are year bit Excel some it this may the see believe higher Mine, little in accruing X you’ll a of be was so our our completing back We first extension that half half. CapEx I the

rate we at $X.XX bulk as I we’re ton I of ton the and bit expect per think are likely what when of from were our today little be really south long-term our XXXX estimating run capital look and result of coming you boost. into to going a $X.XX total year maintenance, doing the per

that So hopefully can help you.

for know – the to XXXX ton that’s contracted out 'XX? us then contracted sort of but terms if just the what what’s stupid, color position Yes, pandemic maybe ton remind per a very or I in for of And could then v of about revenue just XXXX? you is And of helpful. 'XX looking per in any sounds price middle

million have answer contracted the XX over though. that tons. Yes, I position’s for you give I can’t number the revenue little to a you that. don’t actual

of took the or you about kind down? at or helpful idea about modulate just kind than hopefully a too next In giving you’ve more than realize been maybe XX Joe, XX. million early? where look. just per more about expectations of least snapshot think perceptions on, today how past, and do year-over-year I year, you your might If Would the XX Okay. of year idea to be some price of much Any next just ton or it it’s

It’s just increasing much means what the uncertainty that economy. early to tell. with the to and just so too There’s cases

get were saw anywhere feel now October. to buying to from $XX rise it’s we’ll we a call, million more next uncertain XX% back have to range. could some could cases, – before industry right September, we get We But have of it’s season; by $XX volumes Hopefully we do clarity. whole positive XXXX hard just that this that so the But that volumes recent within we in ton for predict. and as the possibly a million feeling

down? during Brian, at the sense. of lot. of SG&A makes hands was the number or what should all the that has be the the cost on down thinking deck of Is come Yes, driving XQ just it half of we about representative second pandemic in kind year a middle

the you would stable Well, quarters. run next saw that it’s relatively second deck the I’ll and to tell be on in I quarter several you hands the rate expect still all for

And just and kind miss in mentioned final read priority. to think maybe also press – of me the number protecting was like then sounded maybe balance I X.Xx, it release, but final, my debt one the so about it, reading perfect. you I Okay, question, so the sheet

looking level then is mutually excess guys two as at So and a around right, the about cash, thoughts know consider now it to distribution not that’s and but you you what resuming are you exclusive? would continue cash. think there’s I paying lot before excess debt there, structure about capital being to right then are in the if the or right priority for more – down generate first

are totally there not Yes, related.

just the a have that’s not six the natural economy, months. activity of months Natural the we’ll natural that impacted that gas and somewhat see happening as to the continue need of some a uncertainty gas prices. what’s the happening is rise expectation knowing natural think gas price. oil the prices patch, for will been in exactly impact and over to three I gas the significantly next has the declined with also with be gas burn what’s cautious prices in last There’s major coal the drilling in

key as So LNG natural gas issue well going prices as are shipment. a export forward the

our that to point, one yes, I focus to back So balance main the protect your is think number sheet.

uncertainly, During this exactly and down And demand, we there. once reassess in debt. the pull some then hopefully get stability to then where distribution of predictability we it from clarity get time back, was to the go just pay best we’d can

Okay, great. Thanks I it. appreciate much. very

Thank you, Mark.

The from Pipes B. Lucas FBR. next is with Please question ahead. Riley go

Hi. Good morning, everyone.

fact, times. very permanent on much. up I wanted questions. you through these in reduction In little reductions good output, uncertain here capacity? on to to one the kind follow in regards very of considered job of bit In Thank Mark’s operating – considering a managing have Brian, you

mean the rebounds. capacity closures? plan Are market I obviously reductions operating when that’s have mines I that capacity the talking keep Permanent we you to mine excess have and now, we we that of additional think capacity, about running hopefully available

increase would shut it some And down of currently but mines at make still complexes below sense are like sounds other running it capacity and number altogether? maybe to a running. capacity they’re So complexes full

we now, running River where is units, right which you today full XX markets, the unique these View In it got mines be where August, back Each have and it’s pandemic we’ve hit. – if running before at are four units so of capacity. Warrior to will was

whereby So a And June. three-unit it running should for capacity Then the Excel new we’ve is reserve. it’s the running capacity. mine. the third going coal should be that soon. be operation, We’ve coming one mid-August. normal X to up running got full MC one unit at at of up full at to capacity. be pretty Mettiki’s a designed We’ve another and been moving in up year. then end had And to installed

continues work worked very reduced shifts Hamilton at three low Tunnel reduced and been and So where Gibson of are operations. cost at we’ve those our to short, been Indiana running shifts and oversupplied And Ridge that’s all reduced shifts. has at market’s operation,

expect continued hopeful we those opportunities see there’s we’re mines. as So all that would we that our operations today, it for

about in really Joe our shifts, production base recall, reduce quite operate shifts. with have ability just longwalls we to flexibility talked how bit the run cetera, running mining et destroying continuous structure. number units cost of those our a that of we operations, And our without

answers your question. So hopefully that

the would you, you in the appreciate on on perspective helpful. there consolidations obviously And pre-pandemic discussion, and Brian, think and consolidation appreciate with on the that? lot a in to sort of this of really I detail. a and this is about industry up incredibly maybe how industry common and follow kind stress of I Joe of that the calls now, industry source your including wondered out was I

can’t but spoken in public, happen do that why. I’ve the I is and last since now, would I in or and would there will to willing we’re thought that. have call But opportunities not believe that then more our participant on And mentioned believe continue fact in hasn’t I and is a As that have other to couple needed. consolidation a I’ve mentioned needed in industry explain whether it happened earnings it’s you I been before activity I of

natural obvious sometimes why with – in compete need that just gas. happening. that Peabody, so we so and low Arch that’s just with It’s it on It’s I think that issue the we’re also and mentioned cost that this I consolidating have I’ve to industry we can a don’t as takes what’s but time. with going understand to obviously, and

be one of one seem levels, this month the to It June burn be back your perspective may happens on customer to of for that’s they your stronger kind stockpiles. and that the increased burn? fairly you. to the interesting see of of EBITDA would but me elevated to very activity Maybe the there. as XXXX wave in half and able will Stockpile what’s we’ve then most what your obviously Thank last year? heat and appreciate for perspective recent look the been just at, And kind also much a and appear how recent contracting lead with of terms

right. All

we’ve over recent the So, what definitely burn now, March been quite should August had deferrals, pleasant the has where there three last burn projected through shipping will have in the accelerations. there’s experience was. be yes, a months and now month the July equal a right been given August higher be to experience time. some

stockpiles about to are good with need and stockpiles. feeling cases replenish customers that’s our for a decision our the honor quarter we’re for just contract. think exception one I made Those declining most So to and third they’ve in shipments the major customers

they based hopeful – as uncertainties most too solicitations are projections that that’s year do, the our we’re domestic inventories anticipated same that XXXX, we timeframe on coming cases, have customer deferring only. as conversations we somewhere demand, we full this tons. in and export their their for had customers again get are came on expectations, on in XXXX to back out can It They with next include to but any conversations does But as are so not preliminarily And close September-October have and think and sales. are their declining there I take be that to levels that’s burn. sales to some you what instead that far base, us know to several in based wanted and going the back of And year. to there contract

team and of Thank very luck. I color Best really Brian and appreciate helpful. you. been that Joe, continue. This has

Thanks, Lucas.

Please next go Jarmoszuk Stifel. The with Nick from ahead. is question

Good Hi. morning.

The and first on to extent are to you bonds? free debt what targeting flow on you question reduction, revolver how your the versus open any about – the applied it’s generation, in talk purchases cash market terms of that thoughts

that acquire level would the ability for in have applied some open say to on revolver. but limitations reduction the at our be reduction that. revolver debt some bonds of do I’d the first the market, We has

So I think primarily on holding the we leasing amortization on as the focus well would ongoing programs. our back of as revolver

factor the deploy to and Another that capital that as relates is how capacity. we future that just back that capital determine to to trying to do

We So uncertainty, bond wouldn’t so that we the to our everything’s we’re until focused grasp, that bonds. right paid table. is Brian read don’t I into on have talking keeping were better buying revolver, speak. so while participate out we buybacks, now to on want But you a we in saying what

what Yes. repurchases? And is then the limitation bond on

permission. to I back and believe get We more. can have that do million. would basket’s XX go We

excess I the of maintain some And environment, in for pricing hoping versus pressure? terms there think talk margins to how you capacity. outlook about pricing and Yes. was about you downward ability the the you then was contracting that highlighted there being can

depends what – they how plan customers the commit. Well, to timing exactly and to again, take it plan on

current say on priced fair are are that they top the the think there rolling the pressure I will than be that it’s line. to so high that off, market contracts

impact exactly margins same margin. much, make some how that know the at there but can up to We’re of this our absent level be some will what and an that Don’t suggest measures be margin, year but hopeful compared with that reduction on of our we year next COVID-XX. will the cost

lack out of went second our the because quarter volume. sort primarily cost to because up of the take got picture You’ve of of

cost at first are more we’re high more our be we in levels of XX% half. the traditional margins going the and half, back think the versus second year So second what to half when looking the we’ll

up cost So cost of hopefully some revenue side. both make and the pressured the you some, on to going that got the we side. to look is Revenue at can but

then then you above is? market And you above the are associated think dollars that it the with is share ton that what how Okay. can sort do per contracts market, with and of many tonnage

As the million the for revenue XX question number them. I contract. are currently tons. But under the mix of tons roughly have million answer the hard mentioned to it’s earlier, open we on actual don’t off tons XX have the And open because that of I

XX million same million tons have we’ve sell got rate, to can have XX, this the to so more. If were year, committed. get million at we XX tons then we If planning it we’d XX. X We’re we

depends definitely more information all and January, what hopefully is – have what for we’ll that it So market blend the maybe has October. have by you in on but clarity we’ll better

Okay. Thank you.

go The Matthew is from with Please Fields Bank question next of America. ahead.

Hi, everyone.

to Just – modeling another us. for wanted question

for work the or be in? reduction, you think good that half from in capital You did reductions the more inventory positive modeling some cash flows we we inventories reducing back capital working in should second quarter. Can look to end

Yes.

see of down as continuing I come well. think and the to carrying inventories that being cost you’ll reduced see you’ll

XX that? less less than million magnitude I or Similar to like than of XQ or Is that benefitted. you million was think order or XX that that? it

that. the XXX,XXX about – the fourth tons the got be reduced there’s it of of we’re targeting We’ve to third in quarter. would half now year, another the back equal tranche Over quarter, inventory right in and

we quarter. this came So XXX down

half the coming back it the year. will of to over You continue down see gradually

have X.X to maybe we So XXX,XXX XXX,XXX. or XXX,XXX; like year, million the end we’d

on then the consolidation And the sector. – touched Lucas in on Okay.

consolidator. why participant be I of you been hasn’t the were don’t a that understand also – in you but would more said You position kind willing be that that think to there you the pole

are and to there the unique Is position trigger questions? there’s given pull the anti-trusts arch financing more it do isn’t I it there the urgency. than kind kind uncertainty why no Is more? been more of hasn’t anybody Like, else in so around other think you’re So no situation? you buyers, because why of BTU There think?

know. parties I of two don’t they competitor the they’re and reason, trying is takes the It to consolidate. survive such for consolidation don’t guess. see to And value landscape I that whatever

to point. to was conversations if your willing us, would affect be try they seller, Matt, had haven’t contacting to anything. We anybody But a

they So the case. just is ready because not that answer why can’t haven’t fact to that they’re is I the and

that of kind more talked Okay. the already allocation exactly of mind, reducing debt, is factors sort I whether matrix of decision? of or it you is And the give operational And of an of like wasn’t kind looking it debt. to ratio, that said it and about a us X.Xx in sort kind you really debt tied it distribution capital you a between of of contracting that distribution dollar know then little levels, idea kind but and you’re leverage of can at, whether bit sort keeping value is environment drives of covenant a

Again, we’re can to both to what it’s other gas opportunities uncertainty manage economy we the be good going balance prices be, demand going to natural what’s pace through capital? the for trying So best have so to prepared and the we can, deploy be is to what the protect to sheet the this trying bad. we that the the I of and going recovery to the be, And what’s going be, of the think what’s right?

to and worst for what we’re So saying, do. for plan the it’s the trying the old That’s best. prepare

it our where will distribution be So and to the to along benefit get we’re position And in base. trying of way. investments for we make shareholder to this the able for to the be stronger and understand through be position we prudent also ourselves a

had we we continue be those that it’s expectation years the will stable start cash they’ll that we get sustainable predictable. soon do that XX and growing fact in as flow distributions, for long-term somewhat back think that as when flows so with our in be predictability cash I distributions and

I me, last I XX then one XX% on you’re Nick on of limited you versus to value million know in repurchases, about that something of yields Okay. this don’t with you million touched from X%? already know million that sort yields and see And XX spending bond on the something spending XX but

given of that continue it’s the has making point our to off environment more as availability but about think times Yes, focus the door in may will a is flexibility, the uncertain capital about repurchase several that maintain sure flexibility out time, And other we able get pretty and talked debt math morning, we’re want But bonds, not straightforward. around that Joe what pushing future have so we Not I revolver. the back. clarity and we hold. this the our in, table until – be bit to the reduction on taking predictability we to the get at in this

enough. fair very much. that’s Thanks Okay,

Thank you.

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

Hi. I just ask morning. the call. to question. taking a for Good want Thanks quick

million XX are What contractor So Illinois half also and this year, XX million for volume the your and Basin volume. XXXX for Appalachia? between second mix sales

more I’d say the are exposed. coals Appalachia

So on the has Basin Illinois more contracted percentage Appalachia tons. than a tons basis

Okay.

their is should be think their maybe to are or going XXXX the like the be half, So half or percentage second similar going to to mix we first same about level?

XXXX I’m I comment. that talking about when made

far As as we’re XXXX, sold out.

So everything’s produce plan XXXX. we to that for in contracted

we margin think about Got so, I’m is or the you I also not Appalachia margin? think Basin strategy Should trying how guess about we margin Appalachia should coals Illinois you their between maximize talk it. best to the maximize the about more for and or best what the really? And will to and that your ask

the Appalachia Well, think for the is key market. met I issue

in XXX,XXX met XXX,XXX, look they the tons now the 'XX around right prices met be year-over-year for sold down if we market. would versus 'XX. you at market, And the So would

how to So develops. see that we’ll have

markets, on I think export depreciate dollar we recently. have seen the the

seen in continue. it’s two-month projections part. banks think that that going to I a the among suggest various that’s low I’ve

no year I of contango the API-X one has that’s help the reason that seeing half guess decline, export show all you’re potentially second the market. XX% into XXXX. why So would next so

strong there’s global as on we’ve gas back demand around structure that year. what’s the on Another dollars to next world, [ph] that the lot and natural But the the side, going rather side on to there. as the and the on really low the a is compared this energy dollar the stimulus versus are prices factor production met seen of gets out to be year continues side to to steam economy the steel economy

infrastructure production year. more plans? steel billed So I will next stimulus a we get for encourage

I work. of by lot get try think back governments to being it’s people to a money around thrown to

predict. So really it’s to hard

it. Thank I much. you very appreciate

up with Please Levin a is next Benchmark go Company. The The follow from Mark ahead. question

Okay, great.

about sold met in half terms a kind but just of the I from think least price price price you perspective on and I getting QX would mix QX or second think to was everything, near Lin changes was side this a realizations, Any anything little reason – in a to know the to going on at is at from maybe why there realizations how think of it realizations team? reason material the guys I some the other of Brian. have in about kind or of bit year, trying be

Illinois the Yes, second the to mix mix from Basin. higher obviously I benefitted of think Appalachian a relative in quarter

going mix QX, current realizations think a QX in I to more at normal for what were the to average look returns expectations see probably you and bit level. closer QX you’re they as if to

you XXX I That’s great. guess think that you I boosted up XX a And minimum then, feel make minimum you’re would keep you run the like helpful. that’s and million. business to of Okay, vicissitude just to where markets that like million, liquidity to targeted liquidity very and hand? you around the the sort there’s so craziness on capital some guys level – it Is – Is there there the to a of need need you to move amount the have? given just

so circumstances around to on I think degree would but $XXX target, is from to like somewhere what million some we’ve can time-to-time. range in the that just that flexible we said the be we in or depending past

Sure.

great. Thanks time Okay, That’s very it. all today. for much your

Mark. bet, You

Loomis go is Sayles. Please Shelly [Operator from ahead. Instructions]. McNulty The question with next

had Hi. made comment query a you a earlier. on I just

in XXXX think you was potentially referenced that I you levels had back excluding could XXXX get export. that and to thinking

to thinking XXXX? or XX aiming I million is what export I of XX for And top get you you’re addition of kind just you So an want Are were could sure XXXX? million that, that domestic be could to of understand. the you make in domestic volumes that thinking any then on of for tons in total

the more It’s latter.

Okay.

Looking at no projected. currently sales export with domestic sales

down repayment influenced then wasn’t it. seeing the market on anticipation the the like surety for maybe Okay, having the revolver, of the you’re the open got on right question pay that now over all at to with purchases, debt preference choice revolver And up that. that? Can what credit comment anything just to now letters needed your or or of bond you by security

all. It influence on has no at that

this We stage required at at have on point. significant this collateral our seen in a our not surety increase

great. Thanks. my are questions. Those Bye. Okay,

you. Thank

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

Thank everyone’s appreciate this and Gary. morning as support your you, We time interest well as continued Alliance. in

we our today. quarter third late occur and for expected continued in that Our time. participation join operating can at again and us financial currently to to your next concludes October discuss for everyone hope quarter call to and support. you results is Thanks This

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

disconnect. now may You