CTRA
$7.87
Contura Energy
($1.23)
(13.52%)
Earnings Details
2nd Quarter June 2020
Friday, August 07, 2020 7:30:00 AM
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Summary

Contura Energy (CTRA) Recent Earnings

Contura Energy (CTRA) reported a 2nd Quarter June 2020 loss of $2.96 per share on revenue of $411.8 million. The consensus estimate was a loss of $2.68 per share on revenue of $358.3 million. Revenue fell 37.2% compared to the same quarter a year ago.

Results
Reported Earnings
($2.96)
Earnings Whisper
-
Consensus Estimate
($2.68)
Reported Revenue
$411.8 Mil
Revenue Estimate
$358.3 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Contura Announces Second Quarter 2020 Results

BRISTOL, Tenn., Aug. 7, 2020 /PRNewswire/ -- Contura Energy, Inc. (NYSE: CTRA), a leading U.S. coal supplier, today reported results for the second quarter ending June 30, 2020.


(millions, except per share)


Three months ended


June 30, 2020

Mar. 31, 2020

June 30, 2019(2)

Net (loss) income(3)

$(238.3)

$(39.8)

$24.3

Net (loss) income(3) per diluted share

$(13.02)

$(2.18)

$1.25

Adjusted EBITDA(1)

$16.9

$60.2

$140.8

Operating cash flow(4)

$79.0

$(0.1)

$102.5

Capital expenditures

$(41.5)

$(49.6)

$(42.8)

Tons of coal sold

5.1

5.5

6.4

__________________________________

1.

These are non-GAAP financial measures. A reconciliation of Net Income to Adjusted EBITDA is included in tables accompanying the financial schedules.

2.

Excludes discontinued operations, except as noted.

3.

From continuing operations. First and second quarters 2020 no longer have discontinued operations.

4.

Includes discontinued operations. First and second quarters 2020 no longer have discontinued operations.

"Our second quarter results serve as continued evidence of Contura's commitment to adeptly managing through the current global uncertainty," said chairman and chief executive officer, David Stetson. "Even with a weeks-long furlough in April, our team increased our cash quarter-over-quarter, lowered our overall debt, and kept costs roughly on par with our stellar first quarter cost performance. As we look to the back half of 2020, we believe these steps to streamline our company will serve us well despite any additional market fluctuations that may occur."

Financial Performance

Contura reported a net loss from continuing operations of $238.3 million, or $13.02 per diluted share, for the second quarter 2020. The second quarter loss includes a pre-tax, non-cash asset impairment charge of $161.7 million, which resulted primarily from our strategic decisions to idle the Kielty mine and not pursue the new impoundment at Cumberland resulting in a significantly shorter mine life. In the first quarter 2020, the company had a net loss from continuing operations, including non-cash asset impairment charges of $33.7 million, of $39.8 million or $2.18 diluted share.

Total Adjusted EBITDA was $17 million for the second quarter, compared with $60 million in the first quarter, primarily due to lower CAPP - Met price realizations.

Coal Revenues


(millions)


Three months ended


June 30, 2020

Mar. 31, 2020

CAPP - Met

$316.3

$362.4

CAPP - Thermal

$36.7

$38.7

NAPP

$57.5

$66.9

CAPP - Met (excl. f&h)(1)

$261.5

$308.7

CAPP - Thermal (excl. f&h)(1)

$32.1

$35.0

NAPP (excl. f&h)(1)

$52.0

$64.6




Tons Sold

(millions)


Three months ended


June 30, 2020

Mar. 31, 2020

CAPP - Met

3.2

3.3

CAPP - Thermal

0.6

0.6

NAPP

1.3

1.5

__________________________________

1.

Represents Non-GAAP coal revenues which is defined and reconciled under "Non-GAAP Financial Measures" and "Results of Operations."

The CAPP - Met revenue decline in the second quarter was driven by an $11 per ton decline in price realizations relative to the first quarter. CAPP - Thermal revenues also declined quarter-over-quarter due to lower realized prices. Second quarter NAPP revenues were lower as a result of lower volumes and prices.

Coal Sales Realization(1)


(per ton)


Three months ended


June 30, 2020

Mar. 31, 2020

CAPP - Met

$81.61

$92.80

CAPP - Thermal

$49.52

$56.73

NAPP

$40.19

$42.81

__________________________________

1.

Represents Non-GAAP coal sales realization which is defined and reconciled under "Non-GAAP Financial Measures" and "Results of Operations."

The second quarter 2020 metallurgical coal prices continued softening, with our average CAPP - Met coal sales realization declining 12 percent to $81.61 per ton against the prior quarter. While our domestic business continues to benefit from annual fixed price contracts, the lower second quarter realizations were primarily driven by our export business, where prices declined as a result of COVID-19 related demand reduction. Thermal coal price realizations were also impacted by reduced demand in the second quarter with both CAPP - Thermal and NAPP segments experiencing lower realizations.

Cost of Coal Sales


(in millions, except per ton data)


Three months ended


June 30, 2020

Mar. 31, 2020

Cost of Coal Sales

$383.3

$397.9

Cost of Coal Sales (excl. f&h/idle)(1)

$310.5

$328.1




(per ton)

CAPP - Met(1)

$74.41

$70.68

CAPP - Thermal(1)

$45.38

$53.07

NAPP(1)

$32.98

$39.68

__________________________________

1.

Represents Non-GAAP cost of coal sales per ton which is defined and reconciled under "Non-GAAP Financial Measures" and "Results of Operations."

Contura achieved continued strong cost performance in its CAPP - Met segment in the second quarter. The reported second quarter cost of coal sales was $74.41 per ton versus $70.68 per ton in the first quarter. Excluding the impact of the April furloughs, incremental one-time COVID-19 mitigation costs, and the partially offsetting benefit from an annual severance tax adjustment, the second quarter cost of coal sales were roughly on par with first quarter.

NAPP cost of coal sales for the quarter was $32.98 per ton, down from $39.68 per ton in the first quarter, which was impacted by a longwall move in March. CAPP - Thermal also reported solid cost of coal sales performance, improving to $45.38 per ton for the quarter as compared to $53.07 for the prior quarter.

Selling, general and administrative (SG&A) and depreciation, depletion and amortization (DD&A) expenses


(millions)


Three months ended


June 30, 2020

Mar. 31, 2020

SG&A

$12.0

$15.5

Less: non-cash stock compensation and one-time expenses

$(1.9)

$(2.1)

Non-GAAP SG&A(1)

$10.1

$13.4




DD&A

$49.3

$54.5

__________________________________

1.

Represents Non-GAAP SG&A which is defined under "Non-GAAP Financial Measures."

As a result of additional overhead reductions, Contura's second quarter 2020 SG&A expenses were $10.1 million, excluding non-cash stock compensation expense and one-time expenses of $1.9 million, and down $3.3 million from the prior quarter. Contura expects non-GAAP SG&A expenses for the full year 2020 to be in the range of $45 million to $50 million.

Liquidity and Capital Resources

"In response to the wide-ranging impacts of the COVID-19 pandemic, we took aggressive action in early April to optimize cash by temporarily idling certain operations, which resulted in a $41 million reduction in inventory and overall net working capital change of $99 million in the second quarter," said Andy Eidson, Contura's chief financial officer. "As we continue to analyze our liquidity, we expect capex for the remainder of the year to be in the $45-$50 million range, and we still anticipate receiving an accelerated AMT tax refund of approximately $66 million in the second half of the year and approximately $14 million of payroll tax deferrals until 2021 and 2022."

Cash provided by operating activities for the second quarter 2020 was $79.0 million and capital expenditures for the second quarter were $41.5 million. In the prior period, the cash used in operating activities was $0.1 million and capital expenditures were $49.6 million. Contura expects capital expenditures for the full year 2020 to be in the range of $135 million to $140 million.

As of June 30, 2020, Contura had $238.4 million in unrestricted cash and $157.5 million in restricted cash, deposits and investments. Total long-term debt, including the current portion of long-term debt as of June 30, 2020, was $628.1 million, down approximately $25 million from the prior quarter.  At the end of the second quarter, the company had total liquidity of $240.2 million, including cash and cash equivalents of $238.4 million and $1.8 million of unused commitments available under the Asset-Based Revolving Credit Facility. The future available capacity under the Asset-Based Revolving Credit Facility is subject to inventory and accounts receivable collateral requirements and the achievement of certain financial ratios. As of June 30, 2020, the company had $30.8 million in borrowings and $121.7 million in letters of credit outstanding under the Asset-Based Revolving Credit Facility. 

Operational and Strategic Update

As previously announced, certain operations were temporarily idled in early April in response to market conditions, inventory levels and expected customer deferrals. As of May 4, all Contura sites were back to nearly normal staffing levels and operating capacity with additional precautions in place to help reduce the risk of exposure to COVID-19.

On May 29, two previously wholly-owned subsidiaries of Contura Energy—Contura Coal West, LLC and Contura Wyoming Land, LLC—merged with certain subsidiaries of Eagle Specialty Materials, LLC. In completing this transaction, Contura ended its connection with the Powder River Basin.

On June 22, the company announced that its Ruby Energy (also known as Kielty) underground mine and the Delbarton Preparation Plant were to be idled due to adverse market conditions and uneconomic pricing and cost structures. Kielty produces both thermal and metallurgical coal.

During the second quarter, the company also decided against spending over $60 million for a refuse impoundment at Cumberland Mine and amended its supply agreements to expire as of December 31, 2022. Unless a buyer emerges for the Cumberland Mine, the company will cease operations upon the expiration of its outstanding coal supply commitments in late 2022 or early 2023.

Also in June, the company completed the acquisition of the Feats Loadout facility in Logan County, West Virginia, which is served by the CSX railroad. With this transaction, Contura adds transportation optionality to its existing network and increased ability to leverage low vol metallurgical coal sales opportunities through Dominion Terminal Associates.

Looking ahead, the company continues to progress on its capital projects and its shift to higher-quality, lower-cost mines. "Even in spite of the disruptions caused by the COVID-19 pandemic, development at our new metallurgical mines remains on schedule," said Jason Whitehead, Contura's chief operating officer. "The low vol Road Fork No. 52 Mine added a second production section in mid-June, and will be positioned to be at three sections by the first of 2021, while the high vol project at Lynn Branch has completed initial underground cuts and expects to be in production by the fourth quarter of this year. The Black Eagle Mine, our high vol A project, is progressing well through the corridor to the main reserve block, which we anticipate to be in production by next year."

Conference Call

The company plans to hold a conference call regarding its second quarter 2020 results on August 7, 2020, at 10:00 a.m. Eastern time. The conference call will be available live on the investor section of the company's website at https://investors.conturaenergy.com/investors. Analysts who would like to participate in the conference call should dial 866-270-1533 (domestic toll-free) or 412-317-0797 (international) approximately 15 minutes prior to the start of the call.

ABOUT CONTURA ENERGY

Contura Energy (NYSE: CTRA) is a Tennessee-based coal supplier with affiliate mining operations across major coal basins in Pennsylvania, Virginia and West Virginia. With customers across the globe, high-quality reserves and significant port capacity, Contura Energy reliably supplies both metallurgical coal to produce steel and thermal coal to generate power. For more information, visit www.conturaenergy.com.

FORWARD-LOOKING STATEMENTS

This news release includes forward-looking statements. These forward-looking statements are based on Contura's expectations and beliefs concerning future events and involve risks and uncertainties that may cause actual results to differ materially from current expectations. These factors are difficult to predict accurately and may be beyond Contura's control. Forward-looking statements in this news release or elsewhere speak only as of the date made. New uncertainties and risks arise from time to time, and it is impossible for Contura to predict these events or how they may affect Contura. Except as required by law, Contura has no duty to, and does not intend to, update or revise the forward-looking statements in this news release or elsewhere after the date this release is issued. In light of these risks and uncertainties, investors should keep in mind that results, events or developments discussed in any forward-looking statement made in this news release may not occur. 

INVESTOR CONTACT
investorrelations@conturaenergy.com

Alex Rotonen, CFA
423.956.6882

MEDIA CONTACT
corporatecommunications@conturaenergy.com 

Emily O'Quinn
423.573.0369

FINANCIAL TABLES FOLLOW

Non-GAAP Financial Measures

The discussion below contains "non-GAAP financial measures." These are financial measures which either exclude or include amounts that are not excluded or included in the most directly comparable measures calculated and presented in accordance with generally accepted accounting principles in the United States ("U.S. GAAP" or "GAAP"). Specifically, we make use of the non-GAAP financial measures "Adjusted EBITDA," "non-GAAP coal revenues," "non-GAAP cost of coal sales," and "Adjusted cost of produced coal sold." We use Adjusted EBITDA to measure the operating performance of our segments and allocate resources to the segments. Adjusted EBITDA does not purport to be an alternative to net income (loss) as a measure of operating performance. We use non-GAAP coal revenues to present coal revenues generated, excluding freight and handling fulfillment revenues. Non-GAAP coal sales realization per ton for our operations is calculated as non-GAAP coal revenues divided by tons sold. We use non-GAAP cost of coal sales to adjust cost of coal sales to remove freight and handling costs, depreciation, depletion and amortization - production (excluding the depreciation, depletion and amortization related to selling, general and administrative functions), accretion on asset retirement obligations, amortization of acquired intangibles, net, idled and closed mine costs and coal inventory acquisition accounting impacts. Non-GAAP cost of coal sales per ton for our operations is calculated as non-GAAP cost of coal sales divided by tons sold. Non-GAAP coal margin per ton for our coal operations is calculated as non-GAAP coal sales realization per ton for our coal operations less non-GAAP cost of coal sales per ton for our coal operations. We also use Adjusted cost of produced coal sold to distinguish the cost of captive produced coal from the effects of purchased coal. The presentation of these measures should not be considered in isolation, or as a substitute for analysis of our results as reported under GAAP.

Management uses non-GAAP financial measures to supplement GAAP results to provide a more complete understanding of the factors and trends affecting the business than GAAP results alone. The definition of these non-GAAP measures may be changed periodically by management to adjust for significant items important to an understanding of operating trends and to adjust for items that may not reflect the trend of future results by excluding transactions that are not indicative of our core operating performance. Furthermore, analogous measures are used by industry analysts to evaluate the Company's operating performance. Because not all companies use identical calculations, the presentations of these measures may not be comparable to other similarly titled measures of other companies and can differ significantly from company to company depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which companies operate, and capital investments.

Included below are reconciliations of non-GAAP financial measures to GAAP financial measures.

CONTURA ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(Amounts in thousands, except share and per share data)



Three Months Ended June 30,


Six Months Ended June 30,


2020


2019


2020


2019

Revenues:








Coal revenues

$

410,614



$

653,828



$

878,981



$

1,260,788


Other revenues

1,224



2,378



3,317



4,532


Total revenues

411,838



656,206



882,298



1,265,320


Costs and expenses:








Cost of coal sales (exclusive of items shown separately below)

383,279



496,746



781,139



1,012,440


Depreciation, depletion and amortization

49,262



62,814



103,727



124,085


Accretion on asset retirement obligations

7,304



6,847



14,679



13,079


Amortization of acquired intangibles, net

2,096



(343)



2,961



(7,026)


Asset impairment and restructuring

184,173



5,826



217,882



5,826


Selling, general and administrative expenses (exclusive of depreciation, depletion and amortization shown separately above)

12,028



14,783



27,509



35,734


Merger-related costs



156





987


Total other operating (income) loss:








Mark-to-market adjustment for acquisition-related obligations

(2,052)



1,014



(17,049)



2,950


Other (income) expense

(124)



1,414



(704)



(7,485)


Total costs and expenses

635,966



589,257



1,130,144



1,180,590


(Loss) income from operations

(224,128)



66,949



(247,846)



84,730


Other income (expense):








Interest expense

(18,814)



(16,077)



(36,419)



(31,232)


Interest income

5,533



1,885



6,511



3,821


Loss on modification and extinguishment of debt



(26,459)





(26,459)


Equity loss in affiliates

(1,047)



(2,475)



(1,790)



(2,959)


Miscellaneous loss, net

188



(523)



(720)



(1,389)


Total other expense, net

(14,140)



(43,649)



(32,418)



(58,218)


(Loss) income from continuing operations before income taxes

(238,268)



23,300



(280,264)



26,512


Income tax (expense) benefit

(33)



1,000



2,155



5,778


Net (loss) income from continuing operations

(238,301)



24,300



(278,109)



32,290


Discontinued operations:








Loss from discontinued operations before income taxes



(163,867)





(165,457)


Income tax benefit from discontinued operations



25,906





26,321


Loss from discontinued operations



(137,961)





(139,136)


Net loss

$

(238,301)



$

(113,661)



$

(278,109)



$

(106,846)










Basic loss per common share:








(Loss) income from continuing operations

$

(13.02)



$

1.27



$

(15.22)



$

1.70


Loss from discontinued operations



(7.21)





(7.32)


Net loss

$

(13.02)



$

(5.94)



$

(15.22)



$

(5.62)










Diluted loss per common share








(Loss) income from continuing operations

$

(13.02)



$

1.25



$

(15.22)



$

1.66


Loss from discontinued operations



(7.10)





(7.14)


Net loss

$

(13.02)



$

(5.85)



$

(15.22)



$

(5.48)










Weighted average shares – basic

18,304,853



19,123,705



18,275,382



19,009,643


Weighted average shares – diluted

18,304,853



19,420,471



18,275,382



19,480,183


 

CONTURA ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(Amounts in thousands, except share and per share data)



June 30, 2020


December 31, 2019

Assets




Current assets:




Cash and cash equivalents

$

238,438



$

212,793


Trade accounts receivable, net of allowance for doubtful accounts of $793 and $0 as of June 30, 2020 and December 31, 2019

183,820



244,666


Inventories, net

143,198



162,659


Prepaid expenses and other current assets

122,354



91,361


Total current assets

687,810



711,479


Property, plant, and equipment, net of accumulated depreciation and amortization of $351,561 and $314,276 as of June 30, 2020 and December 31, 2019

423,367



583,262


Owned and leased mineral rights, net of accumulated depletion and amortization of $34,961 and $27,877 as of June 30, 2020 and December 31, 2019

495,303



523,141


Other acquired intangibles, net of accumulated amortization of $35,717 and $32,686 as of June 30, 2020 and December 31, 2019

103,439



125,145


Long-term restricted cash

109,930



122,524


Deferred income taxes



33,065


Other non-current assets

220,389



204,207


Total assets

$

2,040,238



$

2,302,823


Liabilities and Stockholders' Equity




Current liabilities:




Current portion of long-term debt

$

30,390



$

28,485


Trade accounts payable

70,027



98,746


Acquisition-related obligations – current

30,019



33,639


Accrued expenses and other current liabilities

161,453



154,282


Total current liabilities

291,889



315,152


Long-term debt

597,706



564,481


Acquisition-related obligations - long-term

18,283



46,259


Workers' compensation and black lung obligations

266,390



260,778


Pension obligations

198,582



204,086


Asset retirement obligations

207,001



184,130


Deferred income taxes

389



422


Other non-current liabilities

50,583



31,393


Total liabilities

1,630,823



1,606,701


Commitments and Contingencies




Stockholders' Equity




Preferred stock - par value $0.01, 5.0 million shares authorized, none issued




Common stock - par value $0.01, 50.0 million shares authorized, 20.6 million issued and 18.3 million outstanding at June 30, 2020 and 20.5 million issued and 18.2 million outstanding at December 31, 2019

206



205


Additional paid-in capital

777,650



775,707


Accumulated other comprehensive loss

(69,747)



(58,616)


Treasury stock, at cost: 2.3 million shares at June 30, 2020 and December 31, 2019

(106,955)



(107,984)


Retained earnings

(191,739)



86,810


Total stockholders' equity

409,415



696,122


Total liabilities and stockholders' equity

$

2,040,238



$

2,302,823


 

CONTURA ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(Amounts in thousands)



Six Months Ended June 30,


2020


2019

Operating activities:




Net loss

$

(278,109)



$

(106,846)


Adjustments to reconcile net loss to net cash provided by operating activities:




Depreciation, depletion and amortization

103,727



269,997


Amortization of acquired intangibles, net

2,961



(7,026)


Accretion of acquisition-related obligations discount

2,227



3,220


Amortization of debt issuance costs and accretion of debt discount

7,389



6,724


Mark-to-market adjustment for acquisition-related obligations

(17,049)



2,950


(Gain) loss on disposal of assets

(755)



1,372


Gain on assets acquired in an exchange transaction



(9,083)


Loss on modification and extinguishment of debt



26,459


Asset impairment and restructuring

217,882



22,294


Accretion on asset retirement obligations

14,679



13,079


Employee benefit plans, net

10,605



9,564


Deferred income taxes

33,032



(33,623)


Stock-based compensation

3,121



4,774


Equity loss in affiliates

1,790



2,959


Other, net

92



405


Changes in operating assets and liabilities

(22,654)



(90,086)


Net cash provided by operating activities

78,938



117,133


Investing activities:




Capital expenditures

(91,090)



(83,882)


Proceeds on disposal of assets

1,285



1,048


Purchases of investment securities

(18,607)



(9,899)


Maturity of investment securities

10,653



21,316


Capital contributions to equity affiliates

(2,416)



(4,807)


Other, net

47



93


Net cash used in investing activities

(100,128)



(76,131)


Financing activities:




Proceeds from borrowings on debt

57,500



544,946


Principal repayments of debt

(29,559)



(550,000)


Principal repayments of notes payable

(574)



(821)


Principal repayments of financing lease obligations

(1,614)



(2,100)


Debt issuance costs



(5,839)


Common stock repurchases and related expenses

(155)



(4,874)


Other, net



914


Net cash provided by (used in) financing activities

25,598



(17,774)


Net increase in cash and cash equivalents and restricted cash

4,408



23,228


Cash and cash equivalents and restricted cash at beginning of period

347,680



477,246


Cash and cash equivalents and restricted cash at end of period

$

352,088



$

500,474


The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the Condensed Consolidated Balance Sheets that sum to the total of the same such amounts shown in the Condensed Consolidated Statements of Cash Flows.


As of June 30,


2020


2019

Cash and cash equivalents

$

238,438



$

249,597


Short-term restricted cash (included in prepaid expenses and other current assets)

3,720



34,309


Long-term restricted cash

109,930



216,568


Total cash and cash equivalents and restricted cash shown in the Condensed Consolidated Statements of Cash Flows

$

352,088



$

500,474


 

CONTURA ENERGY, INC. AND SUBSIDIARIES

ADJUSTED EBITDA RECONCILIATION

(Amounts in thousands)



Three Months Ended


Six Months Ended June 30,


March 31, 2020


June 30, 2020


June 30, 2019


2020


2019

Net (loss) income from continuing operations

$

(39,808)



$

(238,301)



$

24,300



$

(278,109)



$

32,290


Interest expense

17,605



18,814



16,077



36,419



31,232


Interest income

(978)



(5,533)



(1,885)



(6,511)



(3,821)


Income tax (benefit) expense

(2,188)



33



(1,000)



(2,155)



(5,778)


Depreciation, depletion and amortization

54,465



49,262



62,814



103,727



124,085


Merger-related costs





156





987


Management restructuring costs (1)

947







947




Non-cash stock compensation expense

2,078



1,044



(546)



3,122



4,725


Mark-to-market adjustment - acquisition-related obligations

(14,997)



(2,052)



1,014



(17,049)



2,950


Accretion on asset retirement obligations

7,375



7,304



6,847



14,679



13,079


Loss on modification and extinguishment of debt





26,459





26,459


Asset impairment and restructuring (2)

33,709



184,173



5,826



217,882



5,826


Cost impact of coal inventory fair value adjustment (3)





1,033





8,209


Gain on assets acquired in an exchange transaction (4)









(9,083)


Loss on partial settlement of benefit obligations

1,167



63





1,230




Amortization of acquired intangibles, net

865



2,096



(343)



2,961



(7,026)


Adjusted EBITDA

$

60,240



$

16,903



$

140,752



$

77,143



$

224,134




(1)

Management restructuring costs are related to severance expense associated with senior management changes.

(2)

Asset impairment and restructuring for the six months ended June 30, 2020 includes long-lived asset impairments of $195,447 and restructuring expense of $22,435 as a result of continued weakening coal prices and the strategic actions with respect to two thermal coal mining complexes. Asset impairment for the six months ended June 30, 2019 primarily related to the write-off of prepaid purchased coal from Blackjewel as a result of Blackjewel's Chapter 11 bankruptcy filing on July 1, 2019.

(3)

The cost impact of the coal inventory fair value adjustment as a result of the Alpha Merger was completed during the three months ended June 30, 2019.

(4)

During the six months ended June 30, 2019, the Company entered into an exchange transaction which primarily included the release of the PRB overriding royalty interest owed to the Company in exchange for met coal reserves which resulted in a gain of $9,083.


 

CONTURA ENERGY, INC. AND SUBSIDIARIES

RESULTS OF OPERATIONS



Three Months Ended March 31, 2020

(In thousands, except for per ton data)

CAPP - Met


CAPP -
Thermal


NAPP


All Other


Consolidated

Coal revenues

$

362,403



$

38,743



$

66,907



$

314



$

468,367


Less: Freight and handling fulfillment revenues

(53,664)



(3,743)



(2,346)





(59,753)


Non-GAAP Coal revenues

$

308,739



$

35,000



$

64,561



$

314



$

408,614


Tons sold

3,327



617



1,508



5



5,457


Non-GAAP Coal sales realization per ton

$

92.80



$

56.73



$

42.81



$

62.80



$

74.88












Cost of coal sales (exclusive of items shown separately below)

$

292,972



$

38,482



$

63,013



$

3,393



$

397,860


Depreciation, depletion and amortization - production (1)

41,722



4,849



6,849



691



54,111


Accretion on asset retirement obligations

3,502



2,352



770



751



7,375


Amortization of acquired intangibles, net

2,581



(2,095)



354



25



865


Total Cost of coal sales

$

340,777



$

43,588



$

70,986



$

4,860



$

460,211


Less: Freight and handling costs

(53,664)



(3,743)



(2,346)





(59,753)


Less: Depreciation, depletion and amortization - production (1)

(41,722)



(4,849)



(6,849)



(691)



(54,111)


Less: Accretion on asset retirement obligations

(3,502)



(2,352)



(770)



(751)



(7,375)


Less: Amortization of acquired intangibles, net

(2,581)



2,095



(354)



(25)



(865)


Less: Idled and closed mine costs

(4,157)



(1,995)



(825)



(3,079)



(10,056)


Non-GAAP Cost of coal sales

$

235,151



$

32,744



$

59,842



$

314



$

328,051


Tons sold

3,327



617



1,508



5



5,457


Non-GAAP Cost of coal sales per ton

$

70.68



$

53.07



$

39.68



$

62.80



$

60.12




(1)

Depreciation, depletion and amortization - production excludes the depreciation, depletion and amortization related to selling, general and administrative functions.

 


Three Months Ended March 31, 2020

(In thousands, except for per ton data)

CAPP - Met


CAPP -
Thermal


NAPP


All Other


Consolidated

Coal revenues

$

362,403



$

38,743



$

66,907



$

314



$

468,367


Less: Total Cost of coal sales (per table above)

(340,777)



(43,588)



(70,986)



(4,860)



(460,211)


GAAP Coal margin

$

21,626



$

(4,845)



$

(4,079)



$

(4,546)



$

8,156


Tons sold

3,327



617



1,508



5



5,457


GAAP Coal margin per ton

$

6.50



$

(7.85)



$

(2.70)



$

(909.20)



$

1.49












GAAP Coal margin

$

21,626



$

(4,845)



$

(4,079)



$

(4,546)



$

8,156


Add: Depreciation, depletion and amortization - production (1)

41,722



4,849



6,849



691



54,111


Add: Accretion on asset retirement obligations

3,502



2,352



770



751



7,375


Add: Amortization of acquired intangibles, net

2,581



(2,095)



354



25



865


Add: Idled and closed mine costs

4,157



1,995



825



3,079



10,056


Non-GAAP Coal margin

$

73,588



$

2,256



$

4,719



$



$

80,563


Tons sold

3,327



617



1,508



5



5,457


Non-GAAP Coal margin per ton

$

22.12



$

3.66



$

3.13



$



$

14.76




(1)

Depreciation, depletion and amortization - production excludes the depreciation, depletion and amortization related to selling, general and administrative functions.

 


Three Months Ended June 30, 2020

(In thousands, except for per ton data)

CAPP - Met


CAPP -
Thermal


NAPP


All Other


Consolidated

Coal revenues

$

316,319



$

36,720



$

57,499



$

76



$

410,614


Less: Freight and handling fulfillment revenues

(54,852)



(4,634)



(5,492)





(64,978)


Non-GAAP Coal revenues

$

261,467



$

32,086



$

52,007



$

76



$

345,636


Tons sold

3,204



648



1,294



1



5,147


Non-GAAP Coal sales realization per ton

$

81.61



$

49.52



$

40.19



$

76.00



$

67.15












Cost of coal sales (exclusive of items shown separately below)

$

297,169



$

35,709



$

48,732



$

1,669



$

383,279


Depreciation, depletion and amortization - production (1)

38,800



7,260



2,172



694



48,926


Accretion on asset retirement obligations

3,517



2,267



769



751



7,304


Amortization of acquired intangibles, net

2,759



(903)



215



25



2,096


Total Cost of coal sales

$

342,245



$

44,333



$

51,888



$

3,139



$

441,605


Less: Freight and handling costs

(54,852)



(4,634)



(5,492)





(64,978)


Less: Depreciation, depletion and amortization - production (1)

(38,800)



(7,260)



(2,172)



(694)



(48,926)


Less: Accretion on asset retirement obligations

(3,517)



(2,267)



(769)



(751)



(7,304)


Less: Amortization of acquired intangibles, net

(2,759)



903



(215)



(25)



(2,096)


Less: Idled and closed mine costs

(3,906)



(1,670)



(566)



(1,669)



(7,811)


Non-GAAP Cost of coal sales

$

238,411



$

29,405



$

42,674



$



$

310,490


Tons sold

3,204



648



1,294



1



5,147


Non-GAAP Cost of coal sales per ton

$

74.41



$

45.38



$

32.98



$



$

60.32




(1)

Depreciation, depletion and amortization - production excludes the depreciation, depletion and amortization related to selling, general and administrative functions.

 


Three Months Ended June 30, 2020

(In thousands, except for per ton data)

CAPP - Met


CAPP -
Thermal


NAPP


All Other


Consolidated

Coal revenues

$

316,319



$

36,720



$

57,499



$

76



$

410,614


Less: Total Cost of coal sales (per table above)

(342,245)



(44,333)



(51,888)



(3,139)



(441,605)


GAAP Coal margin

$

(25,926)



$

(7,613)



$

5,611



$

(3,063)



$

(30,991)


Tons sold

3,204



648



1,294



1



5,147


GAAP Coal margin per ton

$

(8.09)



$

(11.75)



$

4.34



$

(3,063.00)



$

(6.02)












GAAP Coal margin

$

(25,926)



$

(7,613)



$

5,611



$

(3,063)



$

(30,991)


Add: Depreciation, depletion and amortization - production (1)

38,800



7,260



2,172



694



48,926


Add: Accretion on asset retirement obligations

3,517



2,267



769



751



7,304


Add: Amortization of acquired intangibles, net

2,759



(903)



215



25



2,096


Add: Idled and closed mine costs

3,906



1,670



566



1,669



7,811


Non-GAAP Coal margin

$

23,056



$

2,681



$

9,333



$

76



$

35,146


Tons sold

3,204



648



1,294



1



5,147


Non-GAAP Coal margin per ton

$

7.20



$

4.14



$

7.21



$

76.00



$

6.83




(1)

Depreciation, depletion and amortization - production excludes the depreciation, depletion and amortization related to selling, general and administrative functions.

 


Three Months Ended June 30, 2019

(In thousands, except for per ton data)

CAPP - Met


CAPP -
Thermal


NAPP


All Other


Consolidated

Coal revenues

$

494,093



$

81,701



$

78,034



$



$

653,828


Less: Freight and handling fulfillment revenues

(67,728)



(8,190)



(1,794)





(77,712)


Non-GAAP Coal revenues

$

426,365



$

73,511



$

76,240



$



$

576,116


Tons sold

3,429



1,189



1,747





6,365


Non-GAAP Coal sales realization per ton

$

124.34



$

61.83



$

43.64



$



$

90.51












Cost of coal sales (exclusive of items shown separately below)

$

369,703



$

69,932



$

56,433



$

678



$

496,746


Depreciation, depletion and amortization - production (1)

38,829



16,502



6,522



609



62,462


Accretion on asset retirement obligations

2,327



2,666



1,016



838



6,847


Amortization of acquired intangibles, net

3,870



(4,213)







(343)


Total Cost of coal sales

$

414,729



$

84,887



$

63,971



$

2,125



$

565,712


Less: Freight and handling costs

(67,728)



(8,190)



(1,794)





(77,712)


Less:  Depreciation, depletion and amortization - production (1)

(38,829)



(16,502)



(6,522)



(609)



(62,462)


Less: Accretion on asset retirement obligations

(2,327)



(2,666)



(1,016)



(838)



(6,847)


Less: Amortization of acquired intangibles, net

(3,870)



4,213







343


Less: Idled and closed mine costs

(2,165)



(567)



(733)



(886)



(4,351)


Less: Cost impact of coal inventory fair value adjustment (2)

(1,033)









(1,033)


Non-GAAP Cost of coal sales

$

298,777



$

61,175



$

53,906



$

(208)



$

413,650


Tons sold

3,429



1,189



1,747





6,365


Non-GAAP Cost of coal sales per ton

$

87.13



$

51.45



$

30.86



$



$

64.99




(1)

Depreciation, depletion and amortization - production excludes the depreciation, depletion and amortization related to selling, general and administrative functions.

(2)

The cost impact of the coal inventory fair value adjustment as a result of the Alpha Merger was completed during the three months ended June 30, 2019.

 


Three Months Ended June 30, 2019

(In thousands, except for per ton data)

CAPP - Met


CAPP -
Thermal


NAPP


All Other


Consolidated

Coal revenues

$

494,093



$

81,701



$

78,034



$



$

653,828


Less: Total Cost of coal sales (per table above)

(414,729)



(84,887)



(63,971)



(2,125)



(565,712)


GAAP Coal margin

$

79,364



$

(3,186)



$

14,063



$

(2,125)



$

88,116


Tons sold

3,429



1,189



1,747





6,365


GAAP Coal margin per ton

$

23.14



$

(2.68)



$

8.05



$



$

13.84












GAAP Coal margin

$

79,364



$

(3,186)



$

14,063



$

(2,125)



$

88,116


Add: Depreciation, depletion and amortization - production (1)

38,829



16,502



6,522



609



62,462


Add: Accretion on asset retirement obligations

2,327



2,666



1,016



838



6,847


Add: Amortization of acquired intangibles, net

3,870



(4,213)







(343)


Add: Idled and closed mine costs

2,165



567



733



886



4,351


Add: Cost impact of coal inventory fair value adjustment (2)

1,033









1,033


Non-GAAP Coal margin

$

127,588



$

12,336



$

22,334



$

208



$

162,466


Tons sold

3,429



1,189



1,747





6,365


Non-GAAP Coal margin per ton

$

37.21



$

10.38



$

12.78



$



$

25.52




(1)

Depreciation, depletion and amortization - production excludes the depreciation, depletion and amortization related to selling, general and administrative functions.

(2)

The cost impact of the coal inventory fair value adjustment as a result of the Alpha Merger was completed during the three months ended June 30, 2019.

 


Six Months Ended June 30, 2020

(In thousands, except for per ton data)

CAPP - Met


CAPP -
Thermal


NAPP


All Other


Consolidated

Coal revenues

$

678,722



$

75,463



$

124,406



$

390



$

878,981


Less: Freight and handling fulfillment revenues

(108,516)



(8,377)



(7,838)





(124,731)


Non-GAAP Coal revenues

$

570,206



$

67,086



$

116,568



$

390



$

754,250


Tons sold

6,531



1,265



2,802



6



10,604


Non-GAAP Coal sales realization per ton

$

87.31



$

53.03



$

41.60



$

65.00



$

71.13












Cost of coal sales (exclusive of items shown separately below)

$

590,141



$

74,191



$

111,745



$

5,062



$

781,139


Depreciation, depletion and amortization - production (1)

80,522



12,109



9,021



1,385



103,037


Accretion on asset retirement obligations

7,019



4,619



1,539



1,502



14,679


Amortization of acquired intangibles, net

5,340



(2,998)



569



50



2,961


Total Cost of coal sales

$

683,022



$

87,921



$

122,874



$

7,999



$

901,816


Less: Freight and handling costs

(108,516)



(8,377)



(7,838)





(124,731)


Less:  Depreciation, depletion and amortization - production (1)

(80,522)



(12,109)



(9,021)



(1,385)



(103,037)


Less: Accretion on asset retirement obligations

(7,019)



(4,619)



(1,539)



(1,502)



(14,679)


Less: Amortization of acquired intangibles, net

(5,340)



2,998



(569)



(50)



(2,961)


Less: Idled and closed mine costs

(8,063)



(3,665)



(1,391)



(4,748)



(17,867)


Non-GAAP Cost of coal sales

$

473,562



$

62,149



$

102,516



$

314



$

638,541


Tons sold

6,531



1,265



2,802



6



10,604


Non-GAAP Cost of coal sales per ton

$

72.51



$

49.13



$

36.59



$

52.33



$

60.22




(1)

Depreciation, depletion and amortization - production excludes the depreciation, depletion and amortization related to selling, general and administrative functions.

 


Six Months Ended June 30, 2020

(In thousands, except for per ton data)

CAPP - Met


CAPP -
Thermal


NAPP


All Other


Consolidated

Coal revenues

$

678,722



$

75,463



$

124,406



$

390



$

878,981


Less: Total Cost of coal sales (per table above)

(683,022)



(87,921)



(122,874)



(7,999)



(901,816)


GAAP Coal margin

$

(4,300)



$

(12,458)



$

1,532



$

(7,609)



$

(22,835)


Tons sold

6,531



1,265



2,802



6



10,604


GAAP Coal margin per ton

$

(0.66)



$

(9.85)



$

0.55



$

(1,268.17)



$

(2.15)












GAAP Coal margin

$

(4,300)



$

(12,458)



$

1,532



$

(7,609)



$

(22,835)


Add: Depreciation, depletion and amortization - production (1)

80,522



12,109



9,021



1,385



103,037


Add: Accretion on asset retirement obligations

7,019



4,619



1,539



1,502



14,679


Add: Amortization of acquired intangibles, net

5,340



(2,998)



569



50



2,961


Add: Idled and closed mine costs

8,063



3,665



1,391



4,748



17,867


Non-GAAP Coal margin

$

96,644



$

4,937



$

14,052



$

76



$

115,709


Tons sold

6,531



1,265



2,802



6



10,604


Non-GAAP Coal margin per ton

$

14.80



$

3.90



$

5.01



$

12.67



$

10.91




(1)

Depreciation, depletion and amortization - production excludes the depreciation, depletion and amortization related to selling, general and administrative functions.

 


Six Months Ended June 30, 2019

(In thousands, except for per ton data)

CAPP - Met


CAPP -
Thermal


NAPP


All Other


Consolidated

Coal revenues

$

966,584



$

144,640



$

149,564



$



$

1,260,788


Less: Freight and handling fulfillment revenues

(132,629)



(13,814)



(2,469)





(148,912)


Non-GAAP Coal revenues

$

833,955



$

130,826



$

147,095



$



$

1,111,876


Tons sold

6,672



2,181



3,399





12,252


Non-GAAP Coal sales realization per ton

$

124.99



$

59.98



$

43.28



$



$

90.75












Cost of coal sales (exclusive of items shown separately below)

$

745,622



$

140,645



$

123,995



$

2,178



$

1,012,440


Depreciation, depletion and amortization - production (1)

75,502



30,614



13,149



4,120



123,385


Accretion on asset retirement obligations

4,660



4,731



2,033



1,655



13,079


Amortization of acquired intangibles, net

1,050



(8,782)



706





(7,026)


Total Cost of coal sales

$

826,834



$

167,208



$

139,883



$

7,953



$

1,141,878


Less: Freight and handling costs

(132,629)



(13,814)



(2,469)





(148,912)


Less:  Depreciation, depletion and amortization - production (1)

(75,502)



(30,614)



(13,149)



(4,120)



(123,385)


Less: Accretion on asset retirement obligations

(4,660)



(4,731)



(2,033)



(1,655)



(13,079)


Less: Amortization of acquired intangibles, net

(1,050)



8,782



(706)





7,026


Less: Idled and closed mine costs

(3,986)



(984)



(1,562)



(2,181)



(8,713)


Less: Cost impact of coal inventory fair value adjustment (2)

(4,751)



(3,458)







(8,209)


Non-GAAP Cost of coal sales

$

604,256



$

122,389



$

119,964



$

(3)



$

846,606


Tons sold

6,672



2,181



3,399





12,252


Non-GAAP Cost of coal sales per ton

$

90.57



$

56.12



$

35.29



$



$

69.10




(1)

Depreciation, depletion and amortization - production excludes the depreciation, depletion and amortization related to selling, general and administrative functions.

(2)

The cost impact of the coal inventory fair value adjustment as a result of the Alpha Merger was completed during the three months ended June 30, 2019.

 


Six Months Ended June 30, 2019

(In thousands, except for per ton data)

CAPP - Met


CAPP -
Thermal


NAPP


All Other


Consolidated

Coal revenues

$

966,584



$

144,640



$

149,564



$



$

1,260,788


Less: Total Cost of coal sales (per table above)

(826,834)



(167,208)



(139,883)



(7,953)



(1,141,878)


GAAP Coal margin

$

139,750



$

(22,568)



$

9,681



$

(7,953)



$

118,910


Tons sold

6,672



2,181



3,399





12,252


GAAP Coal margin per ton

$

20.95



$

(10.35)



$

2.85



$



$

9.71












GAAP Coal margin

$

139,750



$

(22,568)



$

9,681



$

(7,953)



$

118,910


Add: Depreciation, depletion and amortization - production (1)

75,502



30,614



13,149



4,120



123,385


Add: Accretion on asset retirement obligations

4,660



4,731



2,033



1,655



13,079


Add: Amortization of acquired intangibles, net

1,050



(8,782)



706





(7,026)


Add: Idled and closed mine costs

3,986



984



1,562



2,181



8,713


Add: Cost impact of coal inventory fair value adjustment (2)

4,751



3,458







8,209


Non-GAAP Coal margin

$

229,699



$

8,437



$

27,131



$

3



$

265,270


Tons sold

6,672



2,181



3,399





12,252


Non-GAAP Coal margin per ton

$

34.43



$

3.87



$

7.98



$



$

21.65




(1)

Depreciation, depletion and amortization - production excludes the depreciation, depletion and amortization related to selling, general and administrative functions.

(2)

The cost impact of the coal inventory fair value adjustment as a result of the Alpha Merger was completed during the three months ended June 30, 2019.

 


Three Months Ended March 31, 2020

(In thousands, except for per ton data)

CAPP - Met


CAPP -
Thermal


NAPP


All Other


Consolidated

Non-GAAP Cost of coal sales

$

235,151



$

32,744



$

59,842



$

314



$

328,051


Less: cost of purchased coal sold

(30,334)



(893)







(31,227)


Adjusted cost of produced coal sold

$

204,817



$

31,851



$

59,842



$

314



$

296,824


Produced tons sold

2,964



604



1,508



5



5,081


Adjusted cost of produced coal sold per ton (1)

$

69.10



$

52.73



$

39.68



$

62.80



$

58.42




(1)

Cost of produced coal sold per ton for our operations is calculated as non-GAAP cost of produced coal sold divided by produced tons sold.

 


Three Months Ended June 30, 2020

(In thousands, except for per ton data)

CAPP - Met


CAPP -
Thermal


NAPP


All Other


Consolidated

Non-GAAP Cost of coal sales

$

238,411



$

29,405



$

42,674



$



$

310,490


Less: cost of purchased coal sold

(22,932)



(9)







(22,941)


Adjusted cost of produced coal sold

$

215,479



$

29,396



$

42,674



$



$

287,549


Produced tons sold

2,896



647



1,294



1



4,838


Adjusted cost of produced coal sold per ton (1)

$

74.41



$

45.43



$

32.98



$



$

59.44




(1)

Cost of produced coal sold per ton for our operations is calculated as non-GAAP cost of produced coal sold divided by produced tons sold.

 


Three Months Ended June 30, 2019

(In thousands, except for per ton data)

CAPP - Met


CAPP -
Thermal


NAPP


All Other


Consolidated

Non-GAAP Cost of coal sales

$

298,777



$

61,175



$

53,906



$

(208)



$

413,650


Less: cost of purchased coal sold

(67,320)



(2,443)







(69,763)


Adjusted cost of produced coal sold

$

231,457



$

58,732



$

53,906



$

(208)



$

343,887


Produced tons sold

2,819



1,144



1,747





5,710


Adjusted cost of produced coal sold per ton (1)

$

82.11



$

51.34



$

30.86



$



$

60.23




(1)

Cost of produced coal sold per ton for our operations is calculated as non-GAAP cost of produced coal sold divided by produced tons sold.

 


Six Months Ended June 30, 2020

(In thousands, except for per ton data)

CAPP - Met


CAPP -
Thermal


NAPP


All Other


Consolidated

Non-GAAP Cost of coal sales

$

473,562



$

62,149



$

102,516



$

314



$

638,541


Less: cost of purchased coal sold

(53,266)



(902)







(54,168)


Adjusted cost of produced coal sold

$

420,296



$

61,247



$

102,516



$

314



$

584,373


Produced tons sold

5,860



1,251



2,802



6



9,919


Adjusted cost of produced coal sold per ton (1)

$

71.72



$

48.96



$

36.59



$

52.33



$

58.91




(1)

Cost of produced coal sold per ton for our operations is calculated as non-GAAP cost of produced coal sold divided by produced tons sold.

 


Six Months Ended June 30, 2019

(In thousands, except for per ton data)

CAPP - Met


CAPP -
Thermal


NAPP


All Other


Consolidated

Non-GAAP Cost of coal sales

$

604,256



$

122,389



$

119,964



$

(3)



$

846,606


Less: cost of purchased coal sold

(146,859)



(5,327)







(152,186)


Adjusted cost of produced coal sold

$

457,397



$

117,062



$

119,964



$

(3)



$

694,420


Produced tons sold

5,390



2,088



3,399





10,877


Adjusted cost of produced coal sold per ton (1)

$

84.86



$

56.06



$

35.29



$



$

63.84




(1)

Cost of produced coal sold per ton for our operations is calculated as non-GAAP cost of produced coal sold divided by produced tons sold.

 

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SOURCE Contura Energy, Inc.