Q1 2024 CONSOL Energy Inc Earnings Call

Operator: Good morning, ladies and gentlemen, and welcome to the CIEX first quarter 2024 earnings conference call. At this time, all lines are in the listen-only mode.

Good morning, ladies and gentlemen, and welcome to the C. I E X first quarter 'twenty 'twenty four earnings conference call.

Operator: Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Tuesday, May 7, 2024. I would now like to turn the conference over to Nathan Tucker, Director of Finance and Investor Relations. Please go ahead.

Operator: At this time.

Nathan Tucker: All lines are in a listen only mode. Following the presentation, we will conduct a question and answer session, but any time during the call you require immediate assistance. Please press star zero for the operator. This call is being recorded on Tuesday may seven 2024, I would now like to turn the conference to originate them Tucker.

Nathan Tucker: Director of Finance and Investor Relations. Please go ahead.

Nathan Tucker: Good morning, everyone, and thank you for joining us. Welcome to CONSOL Energy's first quarter 2024 earnings conference call. Any forward-looking statements or comments we make about future events are subject to risk, some of which we have outlined in our press release and in our SEC filing and are considered forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. We do not undertake any obligation to update any forward-looking statements for future events or otherwise.

Nathan Tucker: Good morning, everyone and thank you for joining US welcome to Consol Energy's first quarter 2024 earnings conference call.

Nathan Tucker: We will also be discussing certain non-GAAP financial measures which are defined and reconciled to comparable GAAP financial measures in our 2024 first quarter press release furnished to the SEC on Form 8K, which is also posted on our website. Additionally, we filed our 10-Q for the quarter ended March 31st, 2024 with the SEC this morning. You can find additional information regarding the company on our website, www.consolenergy.com, which also includes a supplemental slide deck that was posted this morning.

Nathan Tucker: Any forward looking statements or comments, we make about future events are subject to risks certain of which we have outlined in our press release and in our SEC filings.

Nathan Tucker: Considered forward looking statements within the meaning of section 20, <unk> of the Securities Exchange Act of 1034.

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

Nathan Tucker: We will also be discussing certain non-GAAP financial measures, which are defined and reconciled to comparable GAAP financial measures in our 2024 first quarter press release furnished to the SEC on form 8-K, which is also posted on our website.

Nathan Tucker: Additionally, we filed our 10-Q for the quarter ended March 31, 2024 with the SEC. This morning, you can find additional information regarding the company on our website Www Dot consolidated Dot Com, which also includes a supplemental slide deck that was posted this morning.

Nathan Tucker: On the call with me today are Jimmy Brock, our Chief Executive Officer, Mitesh Thakkar, our President and Chief Financial Officer, and Bob Braithwaite, our Senior Vice President of Marketing and Sales. In his prepared remarks, Jimmy will provide a recap of our first quarter achievements and a detailed discussion of our operations. Mitesh will then provide an update on our marketing and financial progress and our updated 2024 guidance. In his closing comments, Jimmy will recap our capital allocation progress and lay out our key priorities for the remainder of the year. There will be a Q&A session followed by prepared remarks in which Bob will also participate. With that, I will turn it over to Jimmy.

Speaker Change: On the call with me today are Jimmy Brock, our Chief Executive Officer attached to car, our President and Chief Financial Officer, and Bob Braithwaite, Our senior Vice President of marketing and sales.

Nathan Tucker: In his prepared remarks, Jimmy will provide a recap of our first quarter achievements and a detailed discussion of our operations.

Nathan Tucker: Natasha will then provide an update on our marketing and financial progress and our updated 2024 guidance in his closing comments, Jimmy will recap our capital allocation progress and lay out our key priorities for the remainder of the year there will be a Q&A session followed by the prepared remarks in which Bob will also participate with that let me turn it over to Jimmy.

James A. Brock: Thank you, Nate. Good morning, everyone.

James A. Brock: Thank you Nate good morning, everyone.

James A. Brock: CONSOL Energy finished the first quarter with a strong operational performance and produced 6.5 million tons from the Pennsylvania Mine Encom, which was no small feat considering each of the three miles had a long wall move in the quarter. We're very proud of the PAMC team for their efforts during these moves and for completing them safely and efficiently. We continued our export shift, and 65% of our Q1-24 total recurring revenues and other income was derived from sales into the export market.

James A. Brock: While energy finished the first quarter with a strong operational performance and produced six 5 million tonnes from the Pennsylvania mining complex.

James A. Brock: Which was no small feat considering each of the three mines had a longwall move in the quarter.

James A. Brock: We're very proud of the <unk> team for their efforts during these moves and four completing them safely and efficiently.

James A. Brock: We continued our export shift and 65% of our Q1 'twenty four total reoccurring revenues and other income was derived from sales into the export market.

James A. Brock: We also continue to execute our strategy of returning value to our shareholders through share buybacks and deployed 89% of our Q1-24 free cash flow toward retiring 440,000 shares of our common stock. Before I move to the operational update, let me address the situation at our Consol Marine Terminal where vessel access to our terminal became blocked due to the collapse of the Francis Scott Key Bridge in Baltimore in late March. We'd like to again extend our condolences to all of those affected by this tragedy.

James A. Brock: We also continue to execute our strategy of returning value to our shareholders through share buybacks and deployed 89% of our Q1 'twenty four free cash flow toward returned 440000 shares of our common stock.

James A. Brock: This event has limited our ability to ship coal into the export market, and per multiple agency officials, this restriction is expected to continue through the end of May. However, we have successfully developed alternative strategies to partially offset the impact. First, we identified and worked with domestic customers to improve their shipment volume. Second, our rail and logistics partners have stepped up and helped us quickly divert some of our export shipments to an alternative port in Virginia, where we secured some incremental capacity which has allowed us to move approximately 50% of our planned export volume. Until the permanent 50-foot draft shipping channel is reopened in the Port of Baltimore, we expect to be operationally constrained.

James A. Brock: Before I move to the operational update let me address the situation at our Consol Marine terminal where vessel access to our terminal became blocked due to the collapse of the Francis Scott Key bridge and Baltimore in late March.

James A. Brock: The good news is that we are still shipping tons to the export market thanks to the cooperation of our rail and logistics partners, which has helped us partially mitigate the financial impact of the bridge collapse on our business. Now, let's discuss our operational performance in detail. On the safety front, our Itman Preparation Plant had zero employee recordable incidents during the first quarter of 2024.

Speaker Change: We'd like to again extend our condolences to all of those affected by this tragedy.

James A. Brock: This event has limited our ability to ship coal into the export market.

James A. Brock: And for multiple agency officials. This restriction is expected to continue through the end of May.

James A. Brock: However.

James A. Brock: We have successfully developed alternative strategies to partially offset the impact.

James A. Brock: We've identified and worked with domestic customers to improve their shipment volumes.

James A. Brock: Second our rail and logistic partners have stepped up and helped US quickly divert some of our export shipments to an alternative port in Virginia, where we secured some incremental capacity, which has allowed us to move approximately 50% of our planned export volumes.

James A. Brock: Until the permanent 50 foot draft shipping channel has reopened in the port of Baltimore, we expect to be operationally constrained.

James A. Brock: The good news is that we are still shipping tons into the export market. Thanks to the cooperation of our rail and logistic partners, which has helped us partially mitigate the financial impact of the bridge collapsed on our business.

James A. Brock: Now, let's discuss our operational performance in detail.

James A. Brock: On the safety front, our Edmond preparation plant had zero employee recordable incidents during the first quarter of 2024.

James A. Brock: Our coal operations finished the quarter with a total recordable incident rate well below the national average for underground coal mines. Coal production at the Pennsylvania Mining Complex came in at 6.5 million tons in Q1-24 compared to 7 million tons in the prior year period. Production was lower due to the previously mentioned longwall moves in Q1-24 compared to zero moves in Q1-23. As a result of these longwall moves, as well as ongoing inflationary pressures, our PAMC average cash cost of coal sold per ton for Q124 was $40.29 compared to $33.61 in Q123. Looking ahead, we expect to have only one longwall move for the remainder of the year. Moving on to HIP.

James A. Brock: Our coal operations finished the quarter with a total recordable incident rate well below the national average for underground coal mines.

James A. Brock: Oil production at the Pennsylvania mining complex came in at $6 5 million tonnes in Q1, 24 compared to 7 million tons in the prior year period production was lower due to the previously mentioned longwall moves in Q1 24 compared to zero moves in Q1 'twenty three.

James A. Brock: As a result of these longwall moves as well as ongoing inflationary pressures our PMC average cash cost of coal so per tonne for Q1, 'twenty four was $40 29 compared to $33 61 in Q1 'twenty three.

James A. Brock: Looking ahead, we expect to have only one longwall move for the remainder of the year.

James A. Brock: Moving on to it.

Miteshkumar B. Thakkar: During the first quarter of 2024, sales from the complex improved to 193,000 tons of coal, including third-party tons, compared to 159,000 tons in Q4-23. During the first quarter, all three operating sections continued to mine additional height for mains development, which requires cutting additional rock and slows mining. Furthermore, we continued to be impacted by equipment delivery issues with a major supplier and high employee turnover, which led to the idling of several production shifts throughout the quarter, given the recent pullback in Metcomar.

James A. Brock: During the first quarter of 2024 sales from the complex improved to 193000 tons of coal, including third party tons compared to 159000 tonnes in Q4 dollars 23.

Miteshkumar B. Thakkar: During the first quarter all three operating sections continue to demand additional height for mains development, which requires cutting additional rock and slower mining rates.

Miteshkumar B. Thakkar: Furthermore, we continue to be impacted by equipment delivery issues with a major supplier and high employee turnover, which led to the idling of several production shifts throughout the quarter.

Miteshkumar B. Thakkar: Given the recent pullback in met coal markets, we expect that employee turnover and supply chain bottlenecks could ease if we begin to see some supply rationalization.

Miteshkumar B. Thakkar: We expect that employee turnover and supply chain bottlenecks could ease if we begin to see some supply rationalization. Despite these setbacks, we expect to complete our long-term maintenance development during the second quarter, which will allow us to operate the mining sections at more efficient mining heights and improve production rates. Moving to the Consol Marine Terminal. Despite losing five days of potential vessel loading, we achieved a throughput volume of 4.5 million tons during Q1-24, compared to 4.6 million tons in the prior quarter.

Miteshkumar B. Thakkar: Despite these setbacks, we expect to complete our long term mains development during the second quarter, which will allow us to operate the mining sections at more efficient mining heights and improve production rates.

Miteshkumar B. Thakkar: Moving to the Consol Marine terminal.

Miteshkumar B. Thakkar: Despite losing five days of potential vessel loadings, we achieved a throughput volume of $4 5 million tonnes during Q1 'twenty for <unk>.

Miteshkumar B. Thakkar: <unk> to $4 6 million tons in the prior year quarter.

Miteshkumar B. Thakkar: Terminal revenues for the quarter came in at $24.5 million, and CMT operating cash costs were $7.2 million. Accordingly, CMT adjusted EBITDA finished at $16.8 million compared to $20.6 million in the prior year period. With that, let me turn the call over to Mitesh to provide the marketing and financial details. Thank you, Jimmy.

Miteshkumar B. Thakkar: Terminal revenues for the quarter came in at $24 5 million and CMT operating cash costs were $7 2 million.

Mitesh: Accordingly, CMT adjusted EBITDA finished at $16 8 million compared to $20 6 million in the prior year period.

Mitesh: With that let me turn the call over to <unk> to provide the marketing and financial updates. Thank you Jamie and good morning, everyone.

Miteshkumar B. Thakkar: Thank you, Jimmy, and good morning, everyone. Despite some demand softness in the power generation markets due to mild winter weather during the first quarter, demand for our product remains strong in the export markets, specifically the industrial and crossover metallurgical markets. As such, we continue to take advantage of our high-quality product and sold nearly 60% of our total volumes into the export markets during the quarter. From a revenue perspective, sales into the export markets accounted for 65% of our total recurring revenue and other income. Conversely, domestic power generation sales accounted for 30 percent of all sales.

Miteshkumar B. Thakkar: Despite some demand softness in the power generation markets due to mild winter weather during the first quarter demand for our product remains strong and export markets, specifically, the industrial and crossover metallurgical markets.

Miteshkumar B. Thakkar: As such we continue to take advantage of our high quality product and sold nearly 60% of our total volumes into the export markets during the quarter.

Miteshkumar B. Thakkar: From a revenue perspective sales into the export market accounted for 65% of our total recurring revenue and other income.

Miteshkumar B. Thakkar: Conversely, domestic power generation sales accounted for 30%.

Miteshkumar B. Thakkar: During 1Q24, we sold 6.1 million tons of PAMC coal at an average coal revenue per ton sold of $68.33 compared to 6.7 million tons at $84.32 in the year-ago period. We continue to see a lot of interest for our product in the export market. This is evident in the fact that, with the disruption caused by the temporary closure of the Baltimore Port, most of our customers are focused on moving and delaying current shipments instead of canceling their shipments. So we believe the demand has been delayed, not lost.

Miteshkumar B. Thakkar: During 124 resource $6 1 million tons of BMC coal at an average floor revenue potential of $68 33, compared to $6 7 million tonnes at $84 32 in.

Miteshkumar B. Thakkar: In the year ago period.

Miteshkumar B. Thakkar: We continue to see a lot of interest for our product in the export markets. This is evident in the fact that the disruption caused by the temporary closure of the Baltimore Port most of our customers are focused on moving on to foreign current shipments and sort of canceling their shipments.

Miteshkumar B. Thakkar: So we believe the demand has been deferred not lost.

Miteshkumar B. Thakkar: In the second half of 2024, we expect to increase the percentage of tons going into the export market compared to our projections when we begin the year. Our ability to sell our PMC product into many different end-use markets gives us significant flexibility to pivot shipments between markets depending on demand strength. We began 2024 initially forecasting to sell approximately 50% of our PMC volume into the export market. However, due to reduced domestic demand and our ability to pivot, we now expect to move 60% or more into the stronger international markets in 2024 despite the temporary port closure in Baltimore.

Miteshkumar B. Thakkar: And the second half of 2024, we expect to increase the percentage of tons going into the export market compared to our projections when we began the year.

Miteshkumar B. Thakkar: Ability to sell our PMC product into many different end use markets gives us significant flexibility to pivot tense between markets depending on demand strength.

Miteshkumar B. Thakkar: We began 2024 initially forecasting to sell approximately 50% of our PMC volume into the export markets.

Miteshkumar B. Thakkar: However, due to reduced domestic demand and our ability to pivot.

Miteshkumar B. Thakkar: We now expect a more 60% or more into the stronger international markets in 2024, despite the temporary foreclosure in Baltimore.

Miteshkumar B. Thakkar: In fact, the port closure has limited high CV thermal exports and improved CFR India prices along with API 2 prices over the past several weeks. Specifically, we have seen Indian retail inventories tighten due to these reduced high CV exports from the U.S., and with the monsoon season about to begin, we expect these inventories to remain low when the restocking season kicks off.

Miteshkumar B. Thakkar: In fact, the port closure has limited high CV thermal exports and improved CFR, India prices, along with API two prices over the past several weeks.

Miteshkumar B. Thakkar: Specifically, we have seen Indian retail inventories to item due to these reduced high CV exports from the U S and with the monsoon season about begin we expect these inventories to remain low when the restocking season kicks off.

Miteshkumar B. Thakkar: This could result in strong demand and prices once the monsoon season ends. On the crossover metallurgical front, we sold 508,000 tons of our PMC product into this market during 1Q24 and continue to focus on penetrating new markets. Currently, we are seeing renewed interest for our crossover products, particularly in Southeast Asia, where demand is picking up.

Miteshkumar B. Thakkar: This could result in strong demand and pricing once the monsoon season ends.

Miteshkumar B. Thakkar: On the crossover metallurgical front, we sold 508000 tonnes of our PMC product into this market during <unk> 2004, and continue to focus on penetrating new markets.

Miteshkumar B. Thakkar: Currently.

Miteshkumar B. Thakkar: We are seeing renewed interest for a crossover product vertical in southeast Asia. The demand is picking up.

Miteshkumar B. Thakkar: On the domestic front, despite the near-term coal demand weakness due to mild weather, there are long-term indicators for potential growth in domestic coal-fired generation demand. The biggest driver for this demand in the U.S. is the expected growth in artificial intelligence on top of the already growing power demand for electric vehicles, heat pumps, and the manufacturing of microchips, EVs, and batteries. The Wall Street Journal reports that AI servers could consume 6% of total U.S. electricity generation by 2026, up from 4% in 2022. The Journal also points out that a recent scientific study estimates that AI servers worldwide could consume as much power as a mid-sized economy like Sweden or the Philippines as early as 2027.

Miteshkumar B. Thakkar: On the domestic front, despite the near term core demand weakness due to mild weather.

Miteshkumar B. Thakkar: Long term indicators for potential growth in domestic coal fired generation demand.

Miteshkumar B. Thakkar: The biggest driver for this demand in the U S. As expected growth in artificial intelligence on top of the already growing power demand for electric vehicles heat pumps, and the manufacturing of microchips Evs and batteries.

Miteshkumar B. Thakkar: The Wall Street Journal reports that AI servers could consume 6% of total U S electricity generation by 2026 up from 4% in 2022.

Miteshkumar B. Thakkar: The journal also points out that the recent scientific study estimates that AI servers worldwide could consume as much power as a mid sized economy, like Sweden or the Philippines as early as 2027.

Miteshkumar B. Thakkar: Domestically, it has been reported that Samsung will double its semiconductor investments in Texas to $44 billion. Furthermore, a southeastern domestic utility recently made the decision to build new power plants in order to serve the increased demand from new data center loads. This new data center load will be serviced exclusively by natural gas, coal, and a small amount of battery. The same utility has also delayed the retirement of some of its coal-fired power plants in order to service this increased demand.

Miteshkumar B. Thakkar: Domestically it has been reported that Samsung with doubled at semiconductor investments in Texas to $44 billion.

Miteshkumar B. Thakkar: Furthermore.

Miteshkumar B. Thakkar: Southeastern domestic utility has recently made the decision to build new power plants in order to serve the increased demand from your data center load.

Miteshkumar B. Thakkar: This new data center load will be serviced exclusively by natural gas coal and a small amount of batteries.

Miteshkumar B. Thakkar: The same utility has also delayed the retirement of some of its coal fired power plants in order to service this increased demand.

Miteshkumar B. Thakkar: Consistent with these domestic demand trends, we recently completed a fixed-price three-year tone deal in the domestic market for 950,000 tons running from 2026 through 2028. We are also currently in negotiations with another domestic utility for a long-term fixed-price deal.

Miteshkumar B. Thakkar: Consistent with these domestic demand trends, we recently completed a fixed priced three year Don deal and the <unk>.

Miteshkumar B. Thakkar: Domestic market for 950000 tons running from 2026% through 2028.

Miteshkumar B. Thakkar: We're also currently in negotiations with another domestic utility for a long term fixed price deal.

Miteshkumar B. Thakkar: Now, let me provide a quick update on our financial results before moving on to our 2024 guidance and outlook. This morning, we reported a strong first quarter 2024 financial performance. We generated net income of $102 million, or $3.39 per dilutive share, and adjusted a bid of $182 million.

Speaker Change: Now let me provide a quick update on our financial results before moving on to our 2020 for guidance and outlook.

Miteshkumar B. Thakkar: This morning, we reported a strong first quarter of 2024 financial performance.

Miteshkumar B. Thakkar: We generated net income of $102 million or $3 39 per dilutive share and adjusted EBITDA of $182 million.

Miteshkumar B. Thakkar: During the quarter, we spent $42 million on CapEx, which resulted in approximately $41 million of free cash flow. We also deployed $58 million to our share buybacks and reduced outstanding debt by $4 million. Our free cash flow was impacted negatively by approximately $81 million of working capital changes. Let me highlight a few items that resulted in this negative working capital impact. First, the timing of long-wall moves in February and early March impaired our receivables collection during the quarter.

Miteshkumar B. Thakkar: During the quarter, we spent $42 million in Capex, which resulted in approximately $41 million of free cash flow.

Miteshkumar B. Thakkar: We also deployed 58 million towards share buybacks and reduced outstanding debt by $4 million.

Miteshkumar B. Thakkar: Our free cash flow was impacted negatively by approximately $81 million of working capital changes.

Miteshkumar B. Thakkar: Let me highlight a few items that resulted in this negative working capital impact.

Miteshkumar B. Thakkar: First the timing of longwall moves in February and early March embed, our receivables collection during the quarter second the closure of the Baltimore Polk resulted in our inability to ship approximately 450000 tons of coal at the end of the quarter, which is now sitting in inventory.

Miteshkumar B. Thakkar: Second, the closure of the Baltimore Port resulted in our inability to ship approximately 450,000 tons of coal at the end of the quarter, which is now sitting in inventory. Despite these issues, we ended the quarter with a net cash position of $65 million and total liquidity of $478 million. We continue to maintain strong liquidity of $502 million at the end of April as well. Our current capital allocation over the last few years, which prioritized debt repayment and bolstering liquidity, has significantly improved our ability to manage through a multi-month restriction on moving our export volume.

Miteshkumar B. Thakkar: Despite these issues we ended the quarter with a net cash position of $65 million and total liquidity of $478 million.

Miteshkumar B. Thakkar: We continued to maintain strong liquidity of $502 million at the end of April as well.

Miteshkumar B. Thakkar: Our prudent capital allocation over the last few years, which prioritize debt repayment and bolstering liquidity has significantly improved our ability to manage through a multi month restriction on moving our export volumes.

Miteshkumar B. Thakkar: Since our spinoff, we have increased our unrestricted cash and short-term investments by more than $100 million and reduced our annual debt servicing cost by more than $60 million. In other words, we have significantly reduced the fixed costs in the business, while simultaneously improving our liquidity and financial flexibility, which gives us comfort in managing through the terminal disruption. Before moving on to guidance, let me provide some perspective on the impact of the Baltimore Port closure and how it will drive our outlook for 2024. As Jimmy mentioned, we are restricted in our ability to export coal.

Miteshkumar B. Thakkar: Since our spinoff, we have increased our unrestricted cash and short term investments by more than $100 million and reduced our annual debt servicing cost by more than $60 million.

Miteshkumar B. Thakkar: In other words, we have significantly reduced our fixed cost in the business, while simultaneously improving our liquidity and financial flexibility, which gives us comfort in managing through the terminal disruptions.

Miteshkumar B. Thakkar: Okay.

Miteshkumar B. Thakkar: Before moving onto guidance, let me provide some perspective on the impact of the Baltimore Port closure, and how that will drive our outlook for 2024.

Miteshkumar B. Thakkar: As Jimmy mentioned, we are restricted in our ability to export coal and working with our customers and logistics partners. We are currently able to move approximately 600 to 800000 export tons per month from an alternate port compared to a typical one two to $1 5 million tonnes per month of our PMC product to Baltimore.

Miteshkumar B. Thakkar: In working with our customers and logistics partners, we are currently able to move approximately 600,000 to 800,000 export tons per month from an alternate port compared to a typical 1.2 to 1.5 million tons per month of our PMC product to Baltimore. We expect this situation to continue through the end of May. Assuming there are no restrictions at the Baltimore Port beginning in June, we will work to not only resume our historical average throughput rate but to potentially make up for the lost throughput tarnish from April and May.

Miteshkumar B. Thakkar: We expect this situation to continue through the end of May assuming there are no restrictions at the Baltimore Port beginning in June.

Miteshkumar B. Thakkar: We will work to not only resume our historical average throughput rate potentially make up for the lost throughput tonnage from April and May.

Miteshkumar B. Thakkar: Accordingly, we are adjusting our production guidance to reflect that assumption. Starting with the PAMC, due to the bridge collapse, we are reducing our 2024 sales volume to a range of 24 to 26 million tons from the previous range of 25 to 27 million tons. Our PAMC mines were running very well until the bridge collapsed and continue to run well under the current reduced schedules. The marketing team has also done a good job to quickly secure spare port capacity.

Miteshkumar B. Thakkar: Accordingly, we are adjusting our production guidance to reflect that assumption.

Miteshkumar B. Thakkar: Starting with the PMC due to the bridge collapse, we are reducing our 2024 sales volume to a range of 24 to 26 million ton from the previous range of 25 to 27 million tonnes.

Miteshkumar B. Thakkar: Our BMC mines were running very well until the bridge collapsed and continue to run routes under current reduced schedules.

Miteshkumar B. Thakkar: Our marketing team has also done a good job to quickly secure span both capacity.

Miteshkumar B. Thakkar: In preparation for the port reopening, the CMT team has focused these past few weeks on completing their planned shutdown projects while we ship PAMC tons to stockpile at the terminal. Our plan is for the CMT to then reduce the duration of its typical shutdown period and ship coal from the stockpile while the mines and railroads go through their summer maintenance shutdown. On the pricing front, we are maintaining our average coal revenue per ton sold range of $62.50 to $66.50.

Miteshkumar B. Thakkar: In preparation for the port reopening the CMT team has focused these past few weeks on completing the planned shutdown projects, while we shipped BMC ton to stockpile at the terminal.

Miteshkumar B. Thakkar: Our plan is for the CMT to then reduce the accumulation of its typical shutdown period and ship coal from the stockpile at the mines and railroads go through the summer maintenance shutdowns.

Miteshkumar B. Thakkar: On the pricing front, we are maintaining our average core revenue per tonne sold range of 62, 50% to $66 $50.

Miteshkumar B. Thakkar: Holding this range, despite the increased shipping costs for the export tons that pivoted to a Virginia port, reflects the improved API 2 benchmark pricing compared to earlier this year when the guidance range was initially set. Given the reduced tonnage range and lower fixed cost distribution benefit in April and May, we are increasing our PMC average cash cost of gold sold items to $37.50 to $39.50 per ton, an increase of $1 per ton on each end of the range.

Miteshkumar B. Thakkar: All industry range. Despite the increased shipping cost of the export tons that pivoted to our junior.

Miteshkumar B. Thakkar: Flex that crude API to benchmark pricing compared to earlier this year when the guidance range was initially set.

Miteshkumar B. Thakkar: Given the reduced tonnage range and lower fixed cost distribution benefit in April and May we are increasing our BMC average cash cost of coal sold guidance to $37 50 to 3900 $50 per ton an increase of $1 per ton on each end of the range.

Miteshkumar B. Thakkar: For our ITMAN mining complex, we are increasing our sales volume guidance to a range of 700,000 to 900,000 tons from the previous range of 600,000 to 800,000 tons. On the cash cost front, we are suspending our average cash cost of coal sold per ton guidance at the Itman Mining Complex due to the continued significant equipment delivery delays, reduced manpower, and the evolving mix of mined, purchased, and processed coal at the complex.

Miteshkumar B. Thakkar: But it's been mining complex, we are increasing our sales volume guidance to a range of 700 to 900000 tons from the previous range of 600 to 800000 tons.

Miteshkumar B. Thakkar: On the cash cost front.

Miteshkumar B. Thakkar: Our suspending our average cash cost of coal sold per ton guidance Edmund mining complex due to the continued significant equipment delivery delays reduced manpower and evolving mix of mind purchased and processed call at the complex.

Miteshkumar B. Thakkar: Lastly, on the capital expenditures front, in an effort to partially mitigate the effects of the bridge collapse, we are reducing our CAPEX guidance range by approximately $20 million to a range of $155 to $180 million from the previous range of $175 to $200 million. With that, I will turn it back to Jim.

Miteshkumar B. Thakkar: Lastly on the capital expenditures fund in an effort to partially mitigate the effects of the bridge collapsed.

Miteshkumar B. Thakkar: Reducing our capex guidance range by approximately $20 million to a range of $1 $55 million to $180 million.

Miteshkumar B. Thakkar: From the previous range of $1 $75 million to $200 million.

Miteshkumar B. Thakkar: With that let me turn it back to Jimmy.

Miteshkumar B. Thakkar: Yeah.

Jim: Thank you Ms <unk>.

James A. Brock: Let me now provide an update on our shareholder returns progress. We deployed approximately 89% of the free cash flow generated during the first quarter towards repurchasing shares of our outstanding common stock, in total, through April 2024. We deployed $37 million of our Q1-24 free cash flow towards repurchasing 440,000 shares of CEIX common stock at a weighted average price of approximately $84 per share. Since restarting our share repurchase program in late 2022, we've retired 6.1 million shares, or approximately 18% of our public flow.

Jim: Let me now provide an update on our shareholder return progress.

James A. Brock: We deployed approximately 89% of the free cash flow generated during the first quarter towards repurchasing shares of our outstanding common stock.

James A. Brock: In total through April 2024, we deployed $37 million of our Q1 'twenty four free cash flow towards repurchasing 440000 shares of <unk> common.

James A. Brock: Common stock at a weighted average price of approximately $84 per share since.

James A. Brock: Since restarting our share repurchase program in late 2022.

James A. Brock: We have retired $6 1 million shares or approximately 18% of our public float.

James A. Brock: As we have mentioned, we remain dedicated to returning value to our shareholders through our capital allocation framework. We continue to believe that the demand for our high-quality coal in the export industrial markets will be stronger for much longer than we're given credit for. We also believe that our long-term contracts provide us with strong revenue visibility. As such, we continue to believe that shared biobanks are the best use of our capital.

James A. Brock: As we have mentioned, we remain dedicated to returning value to our shareholders through our capital allocation framework.

James A. Brock: We continue to believe that demand for our high quality coal in the export industrial markets will be stronger for much longer than were given credit for.

James A. Brock: We also believe that our long term contracts provide us with strong revenue visibility as such we continue to believe that share buybacks are the best use of our capital.

James A. Brock: As always, we will continue to analyze this and prioritize the highest rate return. Moving forward through the remainder of 2024, our major focus will be on mitigating as much of the reduced export tonnage due to the bridge collapse as possible. Customer demand in the export markets has remained strong, and we have had constant communication with our customers to work through the delays and move shipments around. We continue to work closely with the Coast Guard and local authorities to open the shipping lane as soon as possible, as an example.

James A. Brock: As always we will continue to analyze this and prioritize the highest rate of return.

James A. Brock: Moving forward through the remainder of 2020 for our major focus will be on mitigating as much of the reduced export tonnage due to the bridge collapse as possible.

James A. Brock: Customer demand in the export markets has remained strong and we have had constant communication with our customers to work through the delays and boot shipments around.

James A. Brock: We continue to work closely with the coast Guard and local authorities to open the ship on line as soon as possible.

James A. Brock: As <unk> mentioned.

James A. Brock: We have a plan to accelerate our summer maintenance work at the CMT in conjunction with pre-shipping coal to the terminal to allow it to hit the ground running when the shipping lane opens. This will also allow CMT to continue shipping throughout the shutdown period when the railroads and mines are closed for maintenance. Before turning over the call, I want to thank our employees for their timely reaction to the accident in Baltimore.

James A. Brock: We have a plan to accelerate our summer maintenance work at the CMT in conjunction with free shipping coal to the terminal to allow it to hit the ground running when the shipping line opens.

James A. Brock: This will also allow the CMT to continue shipping throughout the shutdown period, when the railroads and minds will close for maintenance work.

Speaker Change: Before turning over the call.

James A. Brock: Want to thank our employees for their timely reaction to the accident in Baltimore.

James A. Brock: The CMT team jumped into action, working with local authorities and developing plans to accelerate maintenance. Our mining operations quickly pivoted to maximize efficiency and optimize their operating schedule. Our marketing team leveraged the strong relationships we've built with our transportation partners to secure some incremental capacity at an alternative export facility, as well as reroute trains to this port. Finally, the entire team across the board has been focused on managing as much spend as possible, to help partially mitigate the financial impact until the Port of Baltimore is reopened.

James A. Brock: CMT team jumped into action working with local authorities and developing plans to accelerate maintenance.

James A. Brock: Our mining operations quickly pivoted to maximizing efficiency and optimize their operating schedules.

James A. Brock: Our marketing team leveraging the strong relationships, we've built with our transportation partners to secure some incremental capacity at an alternative export facility as well as reroute trains to this port.

James A. Brock: Finally, the entire team across the board has been focused on managing as much spend as possible.

James A. Brock: To help partially mitigate the financial impact until the port of Baltimore is reopened.

James A. Brock: It is our team's dedication and hard work that allow us to so quickly manage through these unforeseen challenges that inevitably happen in this business. With that, I will hand the call back over to Nate for further instruction. Thank you, Jimmy. We will now move to the Q&A session of our call. At this time, I'd like to ask our operator something.

James A. Brock: It is our team's dedication and hard work that allow us to so quickly manage through these unforeseen challenges that inevitably happen in this business.

Nate: With that.

James A. Brock: Hand, the call back over to Nate for further instructions. Thank.

Nathan Tucker: Thank you, Jimmy. We will now move to the Q&A session of our call. At this time, I'd like to ask our operator to please provide the instructions to our caller. Operator, could you please provide the instructions? Thank you.

Nate: Thank you Jimmy we will now move to the Q&A session of our call at this time I would like to ask our operator to please provide the instructions to our callers.

Nathan Tucker: Operator.

Nate: Please provide the instructions.

Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by number one on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by number two. If you are using a speakerphone, please lift the handset before pressing any keys.

Nate: Thank you ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press star followed by number one on your Touchtone fallen you will hear more from that your hand is being raised should you wish to decline from the polling process. Please press star followed by number two if you are using a speaker phone please lift there.

Operator: A handset before pressing any Keith.

Operator: One moment for your first question. Your first question comes from the line of Lucas Pipes of B. Reilly Securities. Your line is now open. Please ask your question.

Operator: One moment for your first question.

Operator: Your first question comes from the line of Lucas pipes of B Riley Securities. Your line is now open. Please ask your question.

Lucas Nathaniel Pipes: Thank you very much. Good morning, everyone.

Lucas Nathaniel Pipes: Thank you Dan much good morning, everyone. Good job managing Q1, and also the impact of the tragedy.

James A. Brock: Good job managing Q1 and also the impact of the tragedy. My first question is about the Q2 outlook. Mitesh, you mentioned a few moving pieces, cash and liquidity balances in April. I hadn't had the time to do the math on what this means for your cash flow here, but maybe you could walk us through the various moving pieces both from a P&L perspective, volume perspective, and cash flow perspective in Q2 and then also for the remainder of the year. Thanks.

Lucas Nathaniel Pipes: My first question is on that.

Speaker Change: <unk> is on the Q2 outlook.

James A. Brock: You mentioned, a few moving pieces cash and liquidity balances in April.

James A. Brock: At the time too.

James A. Brock: Do the math on what this means for your cash flow here, but maybe you could walk us through various moving pieces both from a P&L perspective volume perspective cash flow perspective in Q2.

James A. Brock: And then also for the remainder of the year. Thank.

James A. Brock: Lucas, let me start out with the volume. So if you look at where we currently sit, we moved about 1.4 million tons in the month of April. So if you assume close to the same in May and then some of the unknowns, if the port opens up earlier, obviously, given an opportunity to move more, or if it's later, less. But just assume we hit the end of May, and then we're on track for May. My estimate for volume, and talking to the teams here daily, is we should approach somewhere approximately near 5 million tons, providing the Port of Baltimore does reopen at the end of May.

Speaker Change: Thank you.

Mitesh: Lucas, let me start out with with the volume.

James A. Brock: So if you look at where we currently said we moved about one 4 million tonnes and a market April so if you assume close to the same.

James A. Brock: In May and then some of the announced if the court opens.

James A. Brock: Opens up earlier, obviously, given an opportunity to move more or if it's later less but just assume we hit the end of May and then we're on track for May.

James A. Brock: Estimate for volume and talking to the teams here daily as we should approach somewhere.

James A. Brock: Proximately near 5 million tonnes, providing.

James A. Brock: Florida, Baltimore does reopened at the end of May.

Miteshkumar B. Thakkar: and Lucas, just on the cash flow perspective, we gave you some numbers to think about from a liquidity perspective. I think for the month of April, we generated about 20 million dollars of free cash flow. Now, that does not include the inventory at the Port of Baltimore is still there. We expect May to be a little bit lighter. We are optimistic that we should be in a position to generate free cash flow, assuming the port opens in time. But a lot of moving parts if there are any restrictions at the opening and those kind of things.

James A. Brock: And Luka just on the cash flow perspective, we gave you. Some some numbers to think about from a liquidity perspective I think.

Miteshkumar B. Thakkar: For the month of April we generated about $20 million of free cash flow.

Miteshkumar B. Thakkar: No that does not include.

Miteshkumar B. Thakkar: Inventory at the Port of Baltimore is still that we expect may to be a little bit lighter.

Miteshkumar B. Thakkar: But.

Miteshkumar B. Thakkar: We are optimistic.

Miteshkumar B. Thakkar: We should be in a position.

Miteshkumar B. Thakkar: Positioned to generate free cash flow, assuming the board opens in time.

Miteshkumar B. Thakkar: Got up moving box on.

Miteshkumar B. Thakkar: Restrictions at the opening and those kind of things. So it's hard for me to give you exact guidance on Q2, but.

Miteshkumar B. Thakkar: So it's hard for me to give you exact guidance on Q2. That's how I would think about it. We went into May with a little bit of free cash flow generation in April, May might be a little bit lighter, and June should recover.

Miteshkumar B. Thakkar: That's how I would think about it.

Miteshkumar B. Thakkar: We went into with a little bit of free cash flow generation in April may it might be a little bit later June should should recover.

Lucas Nathaniel Pipes: Got it, thank you. And just a quick follow-up, so on the 5 million tons of volumes or so, does this assume a really quick... [inaudible] We start at Baltimore, so... The shipping channel opens, you're more or less back to normal, or does it assume kind of a gradual... Ramp into June as the port operation kind of gears up and move along.

Speaker Change: Got it thank you and just a quick follow up so on the.

Lucas Nathaniel Pipes: 5 million tons of volumes. So does this assume a.

Lucas Nathaniel Pipes: Really.

Lucas Nathaniel Pipes: Rick.

Lucas Nathaniel Pipes: We started Baltimore so.

Lucas Nathaniel Pipes: No just shipping channel opens you more or less back back to normal or does it assume kind of a gradual.

Lucas Nathaniel Pipes: Ramp into into June.

Lucas Nathaniel Pipes: Yes.

Lucas Nathaniel Pipes: But the port operations.

Lucas Nathaniel Pipes: Kind of gear up.

Lucas Nathaniel Pipes: Yeah.

Speaker Change: Lucas one of the things that we're taking advantage of while we have the port idle here is moving forward some of the maintenance things that we were planning on doing in the shutdown. So we will have that terminal ready to go on June one and as <unk> mentioned, we have about 450000 tons of <unk>.

Lucas Nathaniel Pipes: Toy there that's ready to go so if Bobby has our customers lined up and the shipment I think we can start rather gate on June 1st move and everything that we planned and what we don't know the unknown. There is what will happen and how will we be allowed to enter and exit the port will it be new safety risk.

Lucas Nathaniel Pipes: Questions that we don't know, but we expect to ship normal and June out of the port.

Miteshkumar B. Thakkar: And everything that we have learned so far from the authorities as well, it seems to be like normal shipment will resume on the 1st of June. That is what our thought process is. And remember, we don't have to; we are not constantly accessing the channel. It's, you know, once the vessel pulls in for the next, let's call it 30 to 40 hours, we are dumping coal in it, and then it leaves. So it's not a constant access for us. That's something to think about as well.

Lucas Nathaniel Pipes: And everything that we have learned so far from the authorities as well it seems to be like.

Miteshkumar B. Thakkar: Normal shipment will resume first of June.

Miteshkumar B. Thakkar: I've thought processes and remember we don't have to we are not constantly accessing the channel one so that's helpful.

Miteshkumar B. Thakkar: For next quarter.

Miteshkumar B. Thakkar: Call It 30 to 40 hours.

Miteshkumar B. Thakkar: Jumping coordinate and I believe so it's not a constant access for us.

Miteshkumar B. Thakkar: That's something to think about it as well.

Lucas Nathaniel Pipes: Very helpful. Thank you all for that detail.

Speaker Change: Very helpful. Thank you all for that detail.

Lucas Nathaniel Pipes: For my second question, I want to touch on your contract book and pricing in 2024 and 2025. Would you be able to provide a breakdown between your fixed and kind of variable pricing or volume commitments for 2024 and 2025? How much do you expect to sell domestically versus exports? And what is the pricing sensitivity on the terms that are not fully priced here on a fixed basis? Thank you very much.

Speaker Change: My second question I wanted to.

Lucas Nathaniel Pipes: Touch on your contract and.

Lucas Nathaniel Pipes: And pricing in 2024 and 2025.

Lucas Nathaniel Pipes: Would you be able to provide a breakdown between your fixed and kind of.

Lucas Nathaniel Pipes: Paul.

Lucas Nathaniel Pipes: Pricing.

Lucas Nathaniel Pipes: Volume commitments, rather than 2425, how much do you expect to.

Lucas Nathaniel Pipes: So domestically versus exports and what is the pricing sensitivity.

Lucas Nathaniel Pipes: On the handset.

Lucas Nathaniel Pipes: Ali.

Lucas Nathaniel Pipes: Hopefully post here.

Lucas Nathaniel Pipes: On a fixed basis, thank you very much.

Robert Braithwaite: Good morning, Lucas. I'll give you the full breakdown for 2024. We have about 2.3 that's an index linked to power. Exports of 11.5 sitting here today, of which about 6.9 are linked to the indices, mainly API2. We have a small amount for Petcoke and then obviously our Highball B crossover index link deals as well, and then about 9.1 are domestic and fixed price. I would tell you the balance of tons we have left to sell.

Speaker Change: Good morning, Lucas I'll give you the full breakdown for 2024.

Robert Braithwaite: About $2 three that's index linked to power.

Robert Braithwaite: Exports of 11, and a half sitting here today of which about $6 nine are linked to the indices.

Robert Braithwaite: Mainly API two we have small amount for pet Coke and then obviously our high vol B.

Robert Braithwaite: Crossover.

Robert Braithwaite: And excellent deals as well and then about $9 one are domestic and fixed price.

Robert Braithwaite: <unk> tell you the balance of the tons, we have left to sell I would anticipate going into the export markets.

Robert Braithwaite: I would anticipate going into the export markets. We did just over 500,000 tons of crossover in Q1. Q2 will be a little lighter, mainly because of the channel issue, but I would expect to get back on that progress for Q3 and Q4.

Robert Braithwaite: Did just over 500000 tons of crossover in Q1, Q2 will be a little lighter mainly again because of the the channel issue, but I would expect to get back on that progress for Q3 and Q4.

Robert Braithwaite: So sitting here today, we're looking at pricing, you know, call it mid-60s, and we're basing that off of the $110 API2 price for the April through December period. And based on what we have left to ship, the current sensitivity for every dollar change is about $0.12 per ton across the entire portfolio. And then when you move on to 2025... As you notice, we increased our book by about 500,000 tons since last quarter

Robert Braithwaite: So sitting here today, we're looking at pricing call. It mid Sixty's and we're basing that off of $110 API two price for the April through December period, and based on what we have left to ship. The current sensitivity for every dollar change is about <unk> 12 per ton across the entire portfolio.

Robert Braithwaite: And then when you move on to 2025.

Robert Braithwaite: As you noticed we increased our book by about 500000 ton since last quarter. All of that is now was sold into the export market. So we now have two and a half late the power five nine is domestic and fixed and five one is export and all of it is tied to indices all has floors and ceilings.

Robert Braithwaite: All that is now was sold into the export market. So we now have two and a half linked to power; 5.9 is domestic and fixed. 5.1 is export, and all of it's tied to indices, and it has floors and ceilings associated with those as well. If you assume a 26 million production rate for 2025, which has typically been our midpoint, the current sensitivity there would be 14 cents for every dollar change in API 2, and we're basing that off of a $100 API 2 price in 2025. With that said, with the volume we have, $13.5 million, our average price sitting here today is in the mid...

Robert Braithwaite: <unk> with those as well.

Robert Braithwaite: Assume a 26 million production rate for 2025, which has typically been our midpoint.

Robert Braithwaite: The current sensitivity there would be 14 cents for every dollar change in API, two and we're basing that off of a $100 API two price in 2025.

Robert Braithwaite: With that said with the volume, we have $13 5 million or average pricing sitting here today is in the mid sixties.

Lucas Nathaniel Pipes: Thank you. Thank you very much for that, Paul.

Speaker Change: Thank you. Thank you. Thank you very much for that part.

Lucas Nathaniel Pipes: Sensitivity of 14 cents for next year; does that make assumptions about where the remaining uncommitted volumes are going?

Lucas Nathaniel Pipes: Sure.

Speaker Change: Sensitivity of 14 for next year does that make assumptions around where the remaining uncommitted volumes are growing.

Robert Braithwaite: It does not. So right now, that's just based on the 5.1 million tons that we currently have under contract and then assuming the balance would be sold under a fixed price arrangement, whether it be export or domestic. And again, based on a 26 million ton midpoint rate.

Paul: It does not so right now thats just based on the five $5 1 million tons that we currently have under contract and then assuming the balance would be sold under a fixed price arrangement, whether it would be export or domestic and again based on a 26 million ton midpoint range.

Lucas Nathaniel Pipes: Got it. But if I were to assume, for example, that you double your exports under similar pricing arrangements, then would it be fair to assume I kind of double that sensitivity to API 2 as well?

Robert Braithwaite: Got it but if I were to assume for example that E.

Lucas Nathaniel Pipes: Double your exports under similar pricing arrangements.

Lucas Nathaniel Pipes: Would it be fair to assume that kind of double that sensitivity to get to as well.

Lucas Nathaniel Pipes: Correct.

Robert Braithwaite: Correct. Okay, that's very helpful. Really appreciate all the color. Best of luck with the port reopening and keep up the good work. Thank you. Thank you, Lucas.

Speaker Change: Okay. That's very helpful really appreciate all the color.

Robert Braithwaite: Best of luck with the port reopening and keep up the good work.

Lucas Nathaniel Pipes: Thank you for your service.

Speaker Change: Thanks, a lot. Thank you Lucas.

Operator: Your next question comes from the line of Nathan Martin from The Benchmark Company. Your line is now open; please ask your question.

Lucas Nathaniel Pipes: Your next question comes from the line of Nathan Martin from the Benchmark Company. Your line is now open. Please ask your question.

Nathan Pierson Martin: Thanks, operator. Good morning, guys, and great job on the quarter. Thank you. Let's talk about price first. Price per ton in the first quarter, you know, above four-year guidance. Maybe you can talk about some of the drivers there, what led to that result?

Nathan Pierson Martin: Thanks, operator, good morning, guys.

Nathan Pierson Martin: In the third quarter.

Speaker Change: Thank you.

Nathan Pierson Martin: Let's talk about price price per ton in the first quarter above full year guidance, maybe can you talk about some of the drivers there.

Nathan Pierson Martin: What led to that result.

Robert Braithwaite: Yeah, Nate, I mean, a couple of things. Number one, we had a pretty strong January as it relates to our netback contracts. That certainly boosted the pricing in Q1. API 2 is slightly higher than what we had in our original forecast. And then the balance would be just the mix of the volumes.

Nathan Pierson Martin: Yes, I mean couple of things number one we had a pretty strong January as it relates to our netback contracts that certainly had had boosted the.

Robert Braithwaite: Pricing in Q1, API two is slightly higher than what we had in our original forecast and then the balance would be just the mix on the <unk>.

Robert Braithwaite: We end up selling a little bit more into the crossover market than we had originally projected. And as I mentioned, our thought going forward in Q3 and Q4 is we'll continue on at that pace. If you think about our pricing guidance, we have not changed that. One thing I think is important to note is that the volumes we're moving down through Norfolk today are costing us roughly $10 more per ton.

Robert Braithwaite: Volumes, we ended up selling a little bit more into the crossover market than what we had originally projected.

Robert Braithwaite: As I mentioned.

Robert Braithwaite: Our thoughts going forward in Q3, and Q4 as we will continue on that pace.

Robert Braithwaite: Think about.

Robert Braithwaite: Our pricing guidance, we have not changed that one thing I think is important to note is the volumes were moving down through Norfolk today are costing us roughly about $10 more per ton. So the fact that we're moving all this volume through Norfolk, incurring the additional costs and still maintaining our guidance range. It gives us a lot of confidence.

Robert Braithwaite: So the fact that we're moving all this volume through Norfolk, incurring the additional costs and still maintaining our guidance range gives us a lot of confidence going forward on the tons that we have left to sell, the crossover markets as they are today, and also

Robert Braithwaite: Going forward on the tons that we have left to sell the crossover markets as they are today and also where the API two prices.

Nathan Pierson Martin: And Bob, you kind of touched on what was going to be my next question. So it sounds like, again, you guys reiterated your four-year price-per-ton guidance despite that higher transportation cost, which I think you said was $10 a ton. So if we think about, you know, how much the price per ton would have actually increased versus prior guidance absent that drag, is that a way we can look at it, just kind of, you know, pull that $10 per ton difference out?

Speaker Change: And Bob you kind of touched on what was going to be my next question. So it sounds like again reiterated full year price per ton guidance. Despite the higher transportation cost, which I think you said was $10 a tonne. So if we think about.

Nathan Pierson Martin: How much price per ton would have actually increased versus prior guidance absent that drag is that a waiver you can look at it just kind of.

Nathan Pierson Martin: They are pulled out $10 per ton difference out.

Robert Braithwaite: Yeah, I mean, if you think about what Mitesh mentioned, we're moving roughly 600,000 to 800,000 tons a month through Norfolk. You know, so call it the midpoint 1.4 million tons, $10; that's $14 million. So we're losing, I wouldn't say losing, but the opportunity loss is roughly $14 million there.

Bob: Yes, I mean, if you think about what <unk> mentioned, we're moving roughly 600 to 800000 tonnes a month through Norfolk, So call. It the midpoint of $1 4 million tons $10. It's $14 million, so were losing I wouldn't say, losing but the opportunity losses roughly $14 million there.

Nathan Pierson Martin: Okay, I got it. Appreciate that, Bob.

Speaker Change: Okay got it I appreciate that Bob.

Nathan Pierson Martin: And maybe it's just a question of the cash return policy. Jimmy, you touched on this, obviously, in your prepared remarks, but, you know, returning 89% of first quarter free cash flow through repurchases. I think it was 85% last quarter. Obviously, each quarter ahead of your target, which is around 75%. Is this a pace we should kind of expect you guys to continue, or is this more of a case of just, I think, Jimmy, as you alluded to, returns looking better for buybacks right now versus other investments? It would be great to get your thoughts there as well.

Speaker Change: And maybe it's just a question on the cash return policy Jimmy you touched on this obviously in your prepared remarks, but returning 89% of first quarter free cash flow. After the repurchases I think it was 85% last quarter.

Nathan Pierson Martin: Obviously, each quarter ahead of your target, which is around 75%.

Nathan Pierson Martin: Is this a pace we should kind of expect you guys to continue or is this more of a case of just I think Jimmy as you alluded to returns looking better for buybacks right now versus other investments.

Nathan Pierson Martin: Okay, great to get your thoughts there as well.

James A. Brock: Yeah, I think you've kind of answered your own question. But what we do is, as we've said, we deploy that capital back to the highest rate of return. And today, as we look at the yields on both, it is share repurchase that's the highest rate of return. But that could change.

Speaker Change: Yes. Thank you kind of answered your own question, but what we do is we look at it and as we've said.

James A. Brock: We deploy that capital back to the highest rate of return and today as we look at the yields on both it is share repurchase that's the highest rate of return, but that could change as far as the percentage goes we've told everyone that we're going to imply a 60 or 75% of our free cash flow towards share buybacks as we.

James A. Brock: At the quarter and we look at where we are and opportunities that we had in the market then that number could be higher as it was this last quarter whenever we feel like our share price was undervalued and we took an opportunity of the excess free cash flow.

Nathan Pierson Martin: As far as the percentage goes, you know, we've told everyone that we're going to allocate 60 or 75% of our free cash flow towards share buybacks. But as we look at the quarter, and we look at where we are, and opportunities that we have in the market, then that number could be higher, as it was this last quarter. You know, whenever we feel like our share price is undervalued, we take an opportunity of the excess free cash flow. And that'll be... Got it.

Nathan Pierson Martin: Perfect. And then maybe one final one.

Nathan Pierson Martin: And that'll be got it.

Nathan Pierson Martin: Moving forward.

Nathan Pierson Martin: I hate to be maybe a little bit more on the negative side, but as we think about the Baltimore terminal reopening, hopefully here by the end of May, if, for whatever reason, the schedule gets pushed out, what kind of contingencies do you guys have in place if that main channel doesn't reopen for one week, two weeks, whatever the case may be beyond the end of May? Do you still have, you know, the alternative transportation in place going into June available to you? It would be great to get some more color there. Yeah, we do!

Nathan Pierson Martin: Perfect.

Nathan Pierson Martin: And then maybe one final one.

Nathan Pierson Martin: I hate to be maybe a little bit more on the negative side, but.

Nathan Pierson Martin: As we think about the Baltimore terminal reopening.

Nathan Pierson Martin: Here by the end of May.

Nathan Pierson Martin: If for whatever reason the schedule gets pushed out what kind of contingencies and you guys have in place that many channel doesn't reopen for one week two weeks whatever the case maybe beyond.

Speaker Change: You still have.

Nathan Pierson Martin: Alternative transportation in place going into June available to you.

Nathan Pierson Martin: Just would be great to get some more color there.

James A. Brock: Yeah, we do, Nate. You know, our transportation partners really stepped up during this time to really give us, to really assist us, and they're there for us as long as we need them, obviously. It's a better move to go from our Bailey mine to Baltimore versus down to Norfolk, but they're here to support us. You know, we've had long-term partnerships with them.

Speaker Change: Yes, we do Nate.

James A. Brock: Our transportation partners really stepped up during this time to really give to really assist us in and they are there for us as long as we need them. Obviously, it's a better move to go from our Bailey mine to Baltimore versus down in Norfolk, but they are here to support us.

James A. Brock: We've had long term partnerships with them obviously the longer the Baltimore Port is out the marvell will be constrained, but the 600 to 800000 tonnes. A month I think is is still achievable through June should this port.

James A. Brock: Obviously, the longer the Baltimore port is out, the more we'll be constrained, but the 600,000 to 800,000 tons a month, I think, is still achievable through June should this port's channel reopening be delayed. But the good news, too, is, as we mentioned, our terminal took advantage of the time to get their outfile maintenance done. So our goal, again, would be to make up as much volume as we possibly can into the first week of July, when, you know, typically that would be our shutdown.

James A. Brock: Channel reopening be delayed.

James A. Brock: But the good news too as we mentioned our terminal took advantage of the <unk>.

James A. Brock: Time to get their outbound maintenance done so our goal again would be to make up as much volume as we possibly can into the first week of July when typically that would be our shutdowns. So we'll continue to keep the terminals stuffed and.

James A. Brock: So we'll continue to keep the terminal stuffed, and, you know, the volume's still there. We haven't lost one vessel as we sit here today. So everything has been delayed, and we continue to get emails daily from our customers, you know, asking when this port's going to reopen because, you know, they want to get their vessels loaded ASAP. So again, good news there, and we'll continue to utilize the Norfolk port so long as we need to.

James A. Brock: The volume is still there we haven't lost one vessel.

James A. Brock: We sit here today.

James A. Brock: So all of that everything has been deferred and we continue to get emails daily from our customers asking when this port is going to reopen because they want to get their vessels loaded Asap. So again good news there and we will continue to utilize the the Norfolk port So long as we need to.

Nathan Pierson Martin: Alright, thank you guys very much. I appreciate the info and the time. Best of luck in the second quarter. Thank you, New York.

Speaker Change: Alright. Thank you guys very much I appreciate the info on the Tom Best of luck in the second quarter.

Speaker Change: Thanks, Good afternoon.

Operator: Thank you. We don't have any further questions at this time. Presenters, please continue.

Speaker Change: Thank you you don't have any further questions at this time presenters. Please continue.

Operator: We have a follow-up question from the line of Lucas Pipes of B. O'Reilly Securities. Your line is now open. Once again, Lucas Pipes from Be Riley Securities. Your line is now open. Please ask your question.

Operator: We have a follow up question from the line of Lucas pipes with B Riley's Securities. Your line is now open.

Lucas Nathaniel Pipes: Once again Lucas pipes from B Riley Securities. Your line is now open. Please ask your question.

Lucas Nathaniel Pipes: Thank you very much for taking my follow-up question. I want to ask about HITMAN, if there's an update from the vendor when that situation is expected to improve, and then also, kind of longer-term, where would you expect those costs to shake out? Is prior guidance still the best kind of yardstick, or would you expect increases from there? Maybe you will still see further improvements once the mine is fully up and running, but we'd appreciate your thoughts on that. Thank you.

Lucas Nathaniel Pipes: Sorry about that it was on mute. Thank you very much for taking the follow up question.

Lucas Nathaniel Pipes: I wanted to ask on <unk>.

Lucas Nathaniel Pipes: Okay.

Lucas Nathaniel Pipes: Update us on on the equipment delay if there is an update from the vendor win.

Lucas Nathaniel Pipes: That situation is expected to improve and then also.

Lucas Nathaniel Pipes: Kind of longer term, where would you expect those costs to shake out as the prior guidance.

Lucas Nathaniel Pipes: They are the best kind of yardstick or would you expect.

Lucas Nathaniel Pipes: Hi.

Lucas Nathaniel Pipes: Increases from there.

Lucas Nathaniel Pipes: Maybe you still see further improvements on some minus fully up and running but would appreciate your thoughts on that thank you.

James A. Brock: Yeah, so on the equipment delays, Lucas, we do have one thing that's going to help us. Hopefully, by the end of June or the first week in July, we do have some two pieces of rebuild equipment coming back to us that should help us. Those are both CM units, but we keep getting delays on our new units that are coming, which we really need because by that time, we're going to have the mains development complete, and we can put those new machines in these gates. As far as the cost, we withdrew the guidance because we want to have more certainty around what we give. And there's two things that's really hurting it right now.

Speaker Change: Yes, so on the equipment delays Lucas we do have one thing thats going to help us hopefully here by the end of June or the first week in July we do have some two pieces of equipment.

James A. Brock: Equipment coming back to us that should help us those are both cm units, but we keep getting delays on our new units that are coming which we really need because by that time, we're going to have the mines development complete and we can put those new machines and these gates as far as the costs were we withdrew the guidance because we want to.

James A. Brock: Have more certainty around what we get.

James A. Brock: One is the equipment, and the second is the labor. It's the manpower. So if we get those back to where we're not out in these sections and we have the equipment, the people that work, then I think we can give guidance. My expectation is to be within the guidance that we provided earlier, and it would be very similar to what others are running in Central Out. I still feel really good about the project. It's of great quality.

James A. Brock: There's two things that's really hurt Nathan right now one is the equipment and the second is the labor is the manpower.

James A. Brock: So if we get those back to or not I'll, let these sections and we have the equipment. The people that work then I think we can give guidance my expectation is to be within the guidance that we provided earlier and that would be very similar to what others are running in central App I still feel really good about the project, it's a great quality.

James A. Brock: We just have to get labor there and equipment, and it's been a challenge for us. I mean, we're working every day on it. We have job fairs, and we are getting closer to where we want to be, but we're not there yet where we can run 100% of the time. I mean, we've got anywhere from 25% to 40% of our shifts out, so it's hard to give guidance.

James A. Brock: We just have to get labor and equipment and it's been a challenge for US I mean, we're working every day at it we have job fairs, and we are getting closer to where we want to be but we're not there to whom we can run 100% of the time I mean, we're.

James A. Brock: Anywhere from 25% to 40% of our ships up so it's hard to give guidance.

Miteshkumar B. Thakkar: Lucas, another variable I would add is that we are buying a lot of purchase coal as well. As you know, we built that prep plan with additional capacity. And if you look at the sales volume that we provided for the first quarter, I think there was a fair amount of purchase volume in it, probably 40 to 45%. And so from that perspective, I would say, once we have a better view on how the purchase volume shakes out longer term, that will also determine that cost guidance.

James A. Brock: Another variable I would add is we are buying a lot of purchase call as well as you know we built a prep plant with additional capacity and if you look at.

Miteshkumar B. Thakkar: The sales volume that we provided for the first quarter I think there was a fair amount of which is volume and it probably 40% 45%.

Miteshkumar B. Thakkar: And so from that perspective, I would say.

Miteshkumar B. Thakkar: Once we have a better view on how.

Miteshkumar B. Thakkar: The purchase volume shakes out longer term as well.

Miteshkumar B. Thakkar: So determined that cost items.

Miteshkumar B. Thakkar: Sure.

Lucas Nathaniel Pipes: Very helpful. Thank you again.

Lucas: Very helpful. Thank you again.

Lucas Nathaniel Pipes: One two.

Lucas Nathaniel Pipes: I want to, Bob. So, let's circle back on the... I would love to hear your thoughts on the domestic market and how the pricing is holding up there on the backdrop of acutely weaker gas prices. The curve is obviously stronger, but how are those conversations going as you look out to 2025 and maybe beyond? What's the appetite to procure tungsten, and how would those prices compare to the net backs you could realize in the export market? Thank you for that. Yeah, I mean...

Lucas Nathaniel Pipes: Alright.

Lucas Nathaniel Pipes: So go back on the.

Lucas Nathaniel Pipes: Our pricing comments from earlier I Wonder if you could maybe specifically comment on the domestic market and.

Lucas Nathaniel Pipes: How how how the pricing is holding up there on the backdrop of acutely weaker gas prices.

Lucas Nathaniel Pipes: It's obviously stronger but.

Lucas Nathaniel Pipes: How are those conversations going.

Lucas Nathaniel Pipes: As you look out to 2025 and beyond what's the appetite.

Lucas Nathaniel Pipes: To procure to procure Thompson and how with those prices compare to two the net backs you could realize in the.

Lucas Nathaniel Pipes: The export market. Thank you for that perspective.

Robert Braithwaite: Yeah, I mean, there certainly was a lack of winter, for sure, this year again. And most of our customers are well-stocked, you know, heading into the shorter months that we're experiencing now. But I will tell you that, from what I hear from many, they are expecting a strong summer burn.

Lucas Nathaniel Pipes: Yes.

Robert Braithwaite: There certainly was a lack of winter for sure this year again.

Robert Braithwaite: Most of our customers are well stocked heading into the shoulder months that were experiencing now, but I will tell you that hearing from many there are they are expecting a strong summer burn and that should translate into some some strong demand in the third quarter.

Robert Braithwaite: And, you know, that should translate into some strong demand in the third quarter. I will tell you, as Ms. Mitesh mentioned, we did secure 950,000 tons for the domestic market. That volume was for 2026 through 2028. The pricing we secured there was pretty much in line with what the published marks are today. And we're also in negotiations for some additional volumes beginning in 2025 through 2028. So when you look at the gas forward curve, which is what we do, and I think a lot of our customers do as well, you can kind of back-calculate what a reasonable, I'll say, mine price is, which the forward curve, I think, is pretty spot-on as it sits there today.

Robert Braithwaite: I will tell you as Mr. <unk> mentioned.

Robert Braithwaite: And we did take care of 950000 tons and to the domestic market that volume was for 2026 through 2028.

Robert Braithwaite: The pricing we secured there was pretty much in line with what the published remarks are today and we're also in negotiations for some additional volumes beginning in 2025 through 2028. So when you look at the gas forward curve, which is what we do and I think a lot of our customers do as well.

Robert Braithwaite: You can kind of back calculate what.

Robert Braithwaite: Reasonable I'll say mine prices, which that the forward curve I think is pretty spot on as it sits there today.

Lucas Nathaniel Pipes: Thank you. Thank you very much.

Speaker Change: Thank you. Thank you very much.

Lucas Nathaniel Pipes: High level question too.

Speaker Change: From my side.

Lucas Nathaniel Pipes: Okay.

Lucas Nathaniel Pipes: A higher level question to end from my side. The recent final rule on the Clean Power Plan, what do you think this means for U.S. coal generation if it were to hold up in court? And how do you kind of square that with what you're seeing on the demand side from data centers and such? I would appreciate your thoughts on that.

Lucas Nathaniel Pipes: Recent final rule on the on the clean power plan when do you think.

Lucas Nathaniel Pipes: This means for U S coal generation, if it were to hold up in court.

Lucas Nathaniel Pipes: And how do you kind of square that.

Lucas Nathaniel Pipes: With what you're seeing on the demand side.

Lucas Nathaniel Pipes: Okay.

Lucas Nathaniel Pipes: Much.

Lucas Nathaniel Pipes: Would appreciate your thoughts on that thank you.

James A. Brock: Well, the first one that has the greatest amount of concern is the Clean Power 2.0 or Carbon Rule. Obviously, they have deadlines out there, and you can either decide you're going to retire the coal-fired plant and run it longer, or you can make the upgrades with carbon capture and be allowed to run for a longer period.

Speaker Change: Yes, well the <unk>.

James A. Brock: First one that has the greatest amount of concern as the clean power or the clean power to our carbon rule.

James A. Brock: They have deadlines out there and you.

James A. Brock: You can either.

James A. Brock: Besides you'd want to retire the coal fired plant and run longer or you can make the upgrades for the carbon capture and be allowed to run to a longer period. So to me Lucas. The big thing is about where are we going to get the power needed. If the rule goes in as is my expectation is there'll be a lot of litigation.

James A. Brock: So to me, Lucas, the big thing is about where we are going to get the power needed if the rule goes in as is. My expectation is that there will be a lot of litigation. I know it's already been talked about among trade associations and others, but the American people that are listening should be really worried about this because we are headed for a grid collision. I mean, power demand is moving in the exact opposite way, and then we're forcing these coal-fired plants to retire at an accelerated rate if this Clean Power Plan goes through as the regulations state on April 24th.

James A. Brock: I know, it's already been talked about a month trade associations and others, but the American people that our listeners should be really worried about this because we are headed for a grid collision power demand is moving in the exact opposite way and then were portion of these coal fired plants to retire at accelerated rate. If this claim.

James A. Brock: Our plan goes through as the regulations are stated on April 24th So to me.

James A. Brock: So to me, it has some concern, and I think it will probably be later in this decade before you start to see any of the direction it's going to go. So I think we have some time. But the way the rules are out today, it should not only be me worried; it should be all the American people about where they're going to get their electricity from with the demand rates coming as they are.

James A. Brock: It has some concern and I think it would be probably later in this decade before you started to see any of the direction. It's going to go. So I think we have some time, but the way the rules are out today. It should know they may where it should be all of the American people about where they don't get their electricity from.

James A. Brock: With the demand rates come in as they are.

Lucas Nathaniel Pipes: Jimmy, I really appreciate your perspective. Again, keep up the good work, and best of luck.

Speaker Change: Jimmy I really appreciate it.

Lucas Nathaniel Pipes: Your perspective.

Lucas Nathaniel Pipes: Keep up to quit working best of luck.

Jimmy: Thanks Lucas.

Operator: If you don't have further questions at this time, presenters, please continue.

Speaker Change: You wouldn't have further questions at this time presenters. Please continue.

Operator: Thank you. We'd like to thank you all for your participation this morning and for your support of CONSOL Energy. We hope we have answered your questions and we look forward to speaking with you on our next earnings call. Thank you. This concludes today's conference call. Thank you for your participation. You may now disconnect.

Speaker Change: Thank you we'd like to thank you all for your participation. This morning and for your support of Consol Energy. We hope we answered your questions and we look forward to speaking with you on our next earnings call. Thank you.

Operator: This concludes today's conference call. Thank you for your participation you may now disconnect.

Operator: Okay.

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Operator: Thank you.

Operator: Yes.