US Coal Markets: An Investors Perspective For required disclosures, - PowerPoint PPT Presentation

US Coal Markets: An Investor’s Perspective For required disclosures, including analyst certification, please refer 1 to the important disclosures section on page 34 of this report

Companies Under Coverage Source: Company reports 2

What The Markets Want? • Cost competitive (even in today’s market) • Heavily contracted position (which disadvantages met) • Free cash flow (EBITDA less capex less interest expense) through the cycle • Low leverage/conservative balance sheets (not one size fits all) • Limited CAPP exposure • Some tangible signs of market recovery (i.e. higher coal prices)! 3

Regional Cost Breakdown APPALACHIAN COST POSITION 2014 2015 Total 2015E Met as a % of 2015E Actual Guidance APP Shipments Total APP Volume ARLP $39.72 ---- 10.4 NA ILLINOIS BASIN COST POSITION CNX $41.67 ---- 29.3 14% ANR $61.66 $58-$64 34.5 45% RNO $60.47 ---- 2.2 NA 2014 2015 Total 2015E ACI $63.39 $56.75-$59.75 12.2 52% Actual Guidance IB Shipments ALL OTHER ---- ---- 130.3 ---- FELP $20.80 ---- 23.0 TOTAL 218.8 ARLP $32.47 ---- 32.9 BTU $35.70 ---- 23.0 HNRG $31.43 $27 in H2 7.5 POWDER RIVER BASIN COST POSITION ARMSTRONG $38.46 ---- 8.5 ALL OTHER ---- ---- 35.4 2014 2015 Total 2015E Actual Guidance PRB Shipments TOTAL 130.3 CLD $10.19 ---- 76.0 ACI $11.05 $10.60-$11.00 109.5 ANR $11.15 $10.00-$11.00 38.0 BTU $9.92 ---- 140.0 WLB ---- ---- 28.7 ALL OTHER ---- ---- 10.6 TOTAL 402.8 Source: Company reports, BB&TCM estimates 4

US Coal Company Capex 2011A 2012A 2013A 2014A 2015E 2016E Alliance Resource Partners $ (321.9) $ (424.6) $ (329.2) $ (307.4) $ (274.8) $ (235.0) YOY Growth 11% 32% (22%) (7%) (11%) (14%) Arch Coal (540.9) (335.2) (237.0) (87.3) (75.4) (80.0) YOY Growth 72% (38%) (29%) (63%) (14%) 6% (108.7) (53.6) (46.8) (18.7) (44.8) (41.8) Cloud Peak Energy YOY Growth 67% (51%) (13%) (60%) 139% (7%) CONSOL Energy (676.6) (662.9) (458.7) (383.7) (250.0) (200.0) YOY Growth (4%) (2%) (31%) (16%) (35%) (20%) Foresight Energy Partners (336.0) (209.9) (210.7) (229.3) (105.1) (108.0) YOY Growth 32% (38%) 0% 9% (54%) 3% Hallador Energy (33.0) (26.2) (31.4) (25.8) (34.5) (26.3) YOY Growth (5%) (21%) 20% (18%) 34% (24%) Peabody Energy (846.9) (986.0) (328.4) (194.4) (160.9) (180.0) YOY Growth 52% 16% (67%) (41%) (17%) 12% Rhino Resource Partners (91.9) (61.8) (54.5) (63.0) (45.0) (45.0) YOY Growth 250% (33%) (12%) 16% (29%) 0% Westmoreland Coal (27.6) (21.0) (28.6) (50.3) (71.8) (77.5) YOY Growth 21% (24%) 36% 76% 43% 8% $ (3,948.8) $ (3,575.1) $ (2,094.8) $ (1,637.9) $ (1,342.3) $ (1,328.6) TOTAL YOY Growth 44% (9%) (41%) (22%) (18%) (1%) Source: Company reports, BB&TCM estimates 5

Cash Burn Analysis 2016 Estimated FCF Calculation Symbol 2016E Adj. EBITDA 2016E Int. Expense 2016E Capex 2016E Dividends 2016E FCF ACI $239 ($365) ($140) $0 ($266) BTU $667 ($465) ($530) $0 ($328) CLD $84 ($46) ($42) $0 ($4) HNRG $87 ($15) ($26) ($5) $42 WLB $245 ($90) ($78) $0 $78 AVG. $264 ($196) ($163) ($1) ($69) Source: Company reports, BB&TCM estimates 6

EBITDA Sensitivities Every $10/mt increase in met prices impact on 2016/2017 EBITDA 2016 2017 Ticker $ Change EBITDA % Change EBITDA $ Change EBITDA % Change EBITDA ACI $36 15% $46 21% BTU $96 14% $96 12% CNX $29 3% $42 4% Every $5/st increase in thermal (East) impact on 2016/2017 EBITDA 2016 2017 Ticker $ Change in EBITDA % Change in EBITDA $ Change in EBITDA % Change in EBITDA ACI $18 7% $20 9% CNX $52 6% $90 9% Every $1/st increase in thermal (PRB) impact on 2016/2017 EBITDA 2016 2017 Ticker $ Change EBITDA % Change EBITDA $ Change EBITDA % Change EBITDA ACI $50 21% $74 34% BTU $38 6% $80 10% CLD $17 20% $37 57% Source: BB&TCM estimates 7

US Coal Company Balance Sheets (2008A) Total Net Debt $2,344 $2,500 Net Debt/TTM EBITDA ACI ANR ARLP BTU CLD CNX WLT $2,000 1.6x -0.3x 1.1x 1.3x 0.9x 0.8x 3.4x $1,481 $1,500 $1,242 $'s in Millions $910 $1,000 TTM EBITDA/Interest $500 $276 $194 ACI ANR ARLP BTU CLD CNX WLT $0 9.9x 11.1x 11.6x 8.4x 10.2x 29.6x 16.5x ($137) ($500) ACI ANR ARLP BTU CLD CNX WLT Source: Company reports, BB&TCM estimates 8

US Coal Company Balance Sheets (2014A) Total Net Debt $5,689 $6,000 Net Debt/TTM EBITDA ACI ANR ARLP BTU CLD CNX WLT $5,000 14.9x 11.2x 1.0x 7.0x 1.9x 3.0x 195.0x $4,164 $4,000 $'s in Millions $3,112 $2,751 $2,667 $3,000 TTM EBITDA/Interest $2,000 ACI ANR ARLP BTU CLD CNX WLT $814 $1,000 0.7x 0.8x 23.1x 1.9x 2.6x 4.7x 0.0x $377 $0 ACI ANR ARLP BTU CLD CNX WLT Source: Company reports, BB&TCM estimates 9

US Coal Company Liquidity (as of 6/30/15) $2,500 $2,100 $2,000 $1,500 $'s in Millions $1,000 $812 $689 $628 $487 $500 $345 $203 $87 $96 $41 $36 $28 $43 $16 $0 HNRG WLB FELP ARLP CLD ACI BTU Cash Total Liquidity Source: Company reports, BB&TCM estimates 10

Distribution Of Debt Maturities Arch Coal Peabody Energy $1,766 $2,000 $1,852 $1,800 $1,725 $1,519 $1,800 $1,600 $1,340 $1,600 $1,400 $1,400 $1,200 $'s in Millions $'s in Millions $1,200 $1,000 $1,000 $1,000 $800 $800 $600 $500 $600 $400 $400 $200 $200 $0 $0 $0 $0 $0 $0 $0 $0 $0 2015 2016 2017 2018 2019 2020 2021 2015 2016 2017 2018 2019 2020 2021 Source: Bloomberg Note: Does not include non-interest bearing cash commitments like VEBA’s and LBA’s 11

The Have’s And The Have Not's Access to Capital Limited Access to Capital No Access to Capital 12

Arch: Unsecured Bond Prices Source: Bloomberg 13

Peabody: Unsecured Bond Prices Source: Bloomberg 14

Foresight: Unsecured Bond Prices Source: Bloomberg 15

US Coal Production Data EIA Production Data by Region Week Week Week Ending Ending Y/Y Ending Weekly YTD YTD YTD % 10/3/15 10/4/14 % Chg. 9/26/15 % Chg. 2015 2014 Chg. By EIA Region Appalachia 4,434 4,756 (6.8%) 4,565 (2.9%) 179,119 206,890 (13.4%) Interior 3,373 3,545 (4.9%) 3,375 (0.1%) 130,354 141,974 (8.2%) Western 9,910 10,206 (2.9%) 9,570 3.6% 381,833 405,944 (5.9%) U.S. Total 17,717 18,506 (4.3%) 17,509 1.2% 691,306 754,808 (8.4%) Coal Region Estimates Central Appalachia (CAPP) 1,827 2,042 (10.5%) 1,911 (4.4%) 75,207 91,433 (17.7%) Northern Appalachia (NAPP) 2,326 2,412 (3.6%) 2,392 (2.8%) 92,771 102,969 (9.9%) Illinois Basin (IB) 2,536 2,541 (0.2%) 2,469 2.7% 99,665 103,346 (3.6%) Powder River Basin (PRB) 8,219 8,362 (1.7%) 7,843 4.8% 313,361 327,358 (4.3%) Other U.S. 2,809 3,149 (10.8%) 2,894 (2.9%) 110,302 129,702 (15.0%) U.S. Total 17,717 18,506 (4.3%) 17,509 1.2% 691,306 754,808 (8.4%) U.S. Railcar Loadings 102,604 107,884 (4.9%) 101,561 1.0% 4,002,528 4,404,417 (9.1%) Note : For purposes of this table, CAPP is southern WV, eastern KY, TN & VA. NAPP is northern WV, PA, MD & OH. IB is western KY, IL & IN. PRB is WY & MT. Source: EIA, BB&TCM estimates 16