PR Newswire | Nov 9, 2020 07:31AM EST

11/09 06:30 CST

Contura Announces Third Quarter 2020 Results- Reports net loss from continuing operations of $69 million for the third quarter 2020- Posts Adjusted EBITDA(1) of $20 million for the third quarter 2020- Continues strong cost management in all operating segments with historically low CAPP - Met costs- Reduces long-term debt by approximately $31 million in the third quarter of 2020- Introduces 2021 guidance BRISTOL, Tenn., Nov. 9, 2020

BRISTOL, Tenn., Nov. 9, 2020 /PRNewswire/ --Contura Energy, Inc. (NYSE: CTRA), a leading U.S. coal supplier, today reported results for the third quarter ending September 30, 2020.

(millions, except per share)

Three months ended

Sept. 30, 2020June 30, 2020Sept. 30, 2019^(2)

Net (loss) income^(3) $(68.6) $(238.3) $(43.6)

Net (loss) income^(3) per diluted share$(3.75) $(13.02) $(2.29)

Adjusted EBITDA^(1) $19.7 $16.9 $40.0

Operating cash flow^(4) $(5.9) $79.0 $20.4

Capital expenditures $(27.8) $(41.5) $60.3

Tons of coal sold 5.5 5.1 5.8



^ These are non-GAAP financial measures. A reconciliation of Net Income to 1.Adjusted EBITDA is included in tables accompanying the financial schedules.

^ Excludes discontinued operations, except as noted. 2.

^ From continuing operations. Second and third quarters 2020 no longer have 3.discontinued operations.

^ Includes discontinued operations. Second and third quarters 2020 no longer4.have discontinued operations.

"Our third quarter results continued to highlight the discipline and safe, strategic performance of our operations team as we achieved the lowest full-quarter CAPP - Met cost per ton performance since the formation of our company," said chairman and chief executive officer, David Stetson. "As we introduce 2021 guidance, we expect our costs to remain very competitive at our recent levels while we tackle the continued softness in the met coal market and the many uncertainties facing the global economies."

Financial Performance

Contura reported a net loss from continuing operations of $68.6 million, or $3.75 per diluted share, for the third quarter 2020. In the second quarter 2020, the company had a net loss from continuing operations of $238.3 million or $13.02 diluted share, which included a non-cash asset impairment charge of $161.7 million.

Total Adjusted EBITDA was $20 million for the third quarter, compared with $17 million in the second quarter, primarily due to improved margins in the CAPP - Thermal and CAPP - Met segments.

Coal Revenues

(millions)

Three months ended

Sept. 30, 2020June 30, 2020

CAPP - Met $295.4 $316.3

CAPP - Thermal $39.8 $36.7

NAPP $64.8 $57.5



CAPP - Met (excl. f&h)^(1) $245.6 $261.5

CAPP - Thermal (excl. f&h)^(1)$36.8 $32.1

NAPP (excl. f&h)^(1) $62.8 $52.0



Tons Sold (millions)

Three months ended

Sept. 30, 2020June 30, 2020

CAPP - Met 3.3 3.2

CAPP - Thermal 0.6 0.6

NAPP 1.6 1.3



^ Represents Non-GAAP coal revenues which is defined and reconciled under 1."Non-GAAP Financial Measures" and "Results of Operations."

The CAPP - Met revenue decline in the third quarter was driven by an approximately $8 per ton decline in price realizations relative to the second quarter. CAPP - Thermal revenues increased due to higher realized prices. Third quarter NAPP revenues increased as a result of higher volumes, while prices were in line with the prior quarter.

Coal Sales Realization(1)

(per ton)

Three months ended

Sept. 30, 2020June 30, 2020

CAPP - Met $73.79 $81.61

CAPP - Thermal$57.86 $49.52

NAPP $40.01 $40.19





^ Represents Non-GAAP coal sales realization which is defined and reconciled1.under "Non-GAAP Financial Measures" and "Results of Operations."

Global metallurgical coal prices experienced continued softening in the quarter, which resulted in our average CAPP - Met coal sales realization declining 11 percent against the prior quarter to $73.79 per ton. While our 2020 domestic business continues to benefit from annual fixed price contracts, the lower third quarter realizations were primarily driven by our export business, where prices were soft during most of the quarter. The CAPP - Thermal segment experienced higher realization primarily due to improved customer mix.

Cost of Coal Sales

(in millions, except per ton data)

Three months ended

Sept. 30, 2020 June 30, 2020

Cost of Coal Sales $367.3 $383.3

Cost of Coal Sales (excl. f&h/idle)^(1)$305.6 $310.5



(per ton)

CAPP - Met^(1) $66.49 $74.41

CAPP - Thermal^(1) $45.98 $45.38

NAPP^(1) $35.03 $32.98



^ Represents Non-GAAP cost of coal sales per ton which is defined and 1.reconciled under "Non-GAAP Financial Measures" and "Results of Operations."

In the third quarter, the company reported its strongest full-quarter cost performance in the CAPP - Met segment since the company's 2016 formation, with CAPP - Met costs averaging $66.49 per ton in the third quarter. The second quarter cost of coal sales was $74.41 per ton, and excluding the impact of April furloughs, incremental one-time COVID-19 mitigation costs, and the partially offsetting benefit from an annual severance tax adjustment, the cost per ton was approximately $70 in the second quarter. The continued cost improvement trend that has been achieved in 2020 is driven by strong productivity growth, labor cost reductions instituted in the second quarter, and improved sourcing.

CAPP - Thermal also continued its impressive cost of coal sales performance, with third quarter cost of $45.98 per ton as compared to $45.38 for the prior quarter. NAPP cost of coal sales for the quarter was $35.03 per ton, up from $32.98 per ton in the second quarter.

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

(millions)

Three months ended

Sept. 30, 2020June 30, 2020

SG&A $14.5 $12.0

Less: non-cash stock compensation$(1.0) $(1.9) and one-time expenses

Non-GAAP SG&A^(1) $13.5 $10.1



DD&A $50.7 $49.3



^1.Represents Non-GAAP SG&A which is defined under "Non-GAAP Financial Measures."

Contura's third quarter 2020 SG&A expenses were $13.5 million, excluding non-cash stock compensation expense and one-time expenses of $1.0 million, compared with $10.1 million in the prior quarter.

Liquidity and Capital Resources

"We continue to closely manage our cash priorities as prolonged pandemic uncertainty has created additional softness in both end-markets and pricing for our products. As such, we expect fourth quarter capex to come in around $20 million, and we remain focused on continuing the outstanding execution on costs that has allowed us to weather adverse market circumstances," said Andy Eidson, Contura's chief financial officer. "We continue to expect to receive the accelerated AMT tax refund of $66 million in the near term. Furthermore, we have filed an NOL carryback in which we claimed approximately $70 million in additional tax refunds. The claim is subject to an IRS audit and we hope to finalize the audit during 2021. All of these items factor into the total liquidity picture for the company, and our philosophy remains one of strategic cash preservation as we close out an unprecedented year and issue guidance and expectations for 2021."

Cash used by operating activities for the third quarter 2020 was $5.9 million and capital expenditures for the third quarter were $27.8 million. In the prior period, the cash provided by operating activities was $79.0 million and capital expenditures were $41.5 million. Contura continues to anticipate that capital expenditures for the full year 2020 will be in the range of $135 million to $140 million, with 2021 capital expenditures expected to be materially lower in the range of $80 million to $100 million.

As of September 30, 2020, Contura had $161.4 million in unrestricted cash and $180.0 million in restricted cash, deposits and investments. Total long-term debt, including the current portion of long-term debt as of September 30, 2020, was $597.5 million, down approximately $31 million from the prior quarter. At the end of the third quarter, the company had total liquidity of $161.4 million, including cash and cash equivalents of $161.4 million and no remaining unused availability under the Asset-Based Revolving Credit Facility (ABL). The future available capacity under the ABL is subject to inventory and accounts receivable collateral requirements and the achievement of certain financial ratios. As of September 30, 2020, the company had $18.4 million in borrowings and $122.4 million in letters of credit outstanding under the Asset-Based Revolving Credit Facility. In October, subsequent to the quarter close, the company repaid $15.0 million of borrowed principal under the ABL.

2021 Full-Year Guidance

The company is introducing 2021 guidance with coal shipments guidance range of 20.4 million tons to 22.2 million tons, with CAPP - Met segment volume expected to be between 13.5 million to 14.5 million tons with pure metallurgical coal shipments of 12.5 million to 13.0 million tons and thermal shipments in this segment of 1.0 million to 1.5 million tons. CAPP - Thermal segment volume is anticipated to be between 1.3 million tons to 1.7 million tons. NAPP volumes are expected to be in the range of 5.6 million tons to 6.0 million tons.

For 2021, Contura has committed and priced approximately 34% of its metallurgical coal within the CAPP - Met segment at an average price of $86.41 per ton and 72% of thermal coal in the CAPP - Met segment at an average expected price of $52.11 per ton. In the CAPP - Thermal segment the company is 99% committed and priced at an average price of $57.17 per ton and 100% committed and priced for NAPP at an average price of $40.43 per ton.

The company expects our strong cost performance to continue in 2021 with CAPP - Met cost of coal sales per ton anticipated at a range of $68.00 to $74.00. CAPP - Thermal is expected to be in the range of $45.00 to $49.00 per ton and NAPP between $33.00 and $37.00 per ton.

For 2021, the company expects its SG&A to be in the range of $45 million to $50 million, excluding non-recurring items and stock compensation. In light of our decision to forgo certain capital expenditures for NAPP, our overall 2021 capital expenditures guidance at a range of $80 million to $100 million is near the maintenance capital level. Depreciation, depletion and amortization is expected to be between $160 million and $175 million and cash interest expense in the range of $51 million and $55 million.

2021 Guidance

in millions of tons Low High

Metallurgical 12.5 13.0

Thermal 1.0 1.5

CAPP - Metallurgical 13.5 14.5

CAPP - Thermal 1.3 1.7

NAPP 5.6 6.0

Total Shipments 20.4 22.2



Committed/Priced^1,2,3 Committed Average Price

Metallurgical 34 %$86.41

Thermal 72 %$52.11

CAPP - Metallurgical 37 %$80.52

CAPP - Thermal 99 %$57.17

NAPP 100 %$40.43



Committed/Unpriced^1,3 Committed

Metallurgical 27 %

Thermal 21 %

CAPP - Metallurgical 27 %

CAPP - Thermal 1 %

NAPP - %



Costs per ton^4 Low High

CAPP - Metallurgical $68.00 $74.00

CAPP - Thermal $45.00 $49.00

NAPP $33.00 $37.00



In millions (except taxes)Low High

SG&A^5 $45 $50

Idle Operations Expense $27 $33

Cash Interest Expense $51 $55

DD&A $160 $175

Capital Expenditures $80 $100

Tax Rate - %5 %

Notes:

* Based on committed and priced coal shipments as of October 27, 2020. Committed percentage based on the midpoint of shipment guidance range. * Actual average per-ton realizations on committed and priced tons recognized in future periods may vary based on actual freight expense in future periods relative to assumed freight expense embedded in projected average per-ton realizations. * Includes estimates of future coal shipments based upon contract terms and anticipated delivery schedules. Actual coal shipments may vary from these estimates. * Note: The Company is unable to present a quantitative reconciliation of its forward-looking non-GAAP cost of coal sales per ton sold financial measures to the most directly comparable GAAP measures without unreasonable efforts due to the inherent difficulty in forecasting and quantifying with reasonable accuracy significant items required for the reconciliation. The most directly comparable GAAP measure, GAAP cost of sales, is not accessible without unreasonable efforts on a forward- looking basis. The reconciling items include freight and handling costs, which are a component of GAAP cost of sales. Management is unable to predict without unreasonable efforts freight and handling costs due to uncertainty as to the end market and FOB point for uncommitted sales volumes and the final shipping point for export shipments. These amounts have historically varied and may continue to vary significantly from quarter to quarter and material changes to these items could have a significant effect on our future GAAP results. * Excludes expenses related to non-cash stock compensation and non-recurring business development expenses. Operational and Strategic Update

With regard to the Cumberland Mine in Pennsylvania, the company is in active negotiations for the divestiture of the Cumberland property with a potential purchaser. No definitive agreement has been reached at this time, and there can be no assurances that any transaction will result from these negotiations or as to the terms, timing or approval of any such transaction that may be proposed. More information will be announced if an agreement is reached.

Contura has made significant progress in streamlining the enterprise portfolio and incrementally adjusting toward a simplified, more efficient group of mines and plants to better serve the production and sales needs of the company. "Through strategic decisions to idle certain thermal properties in the organization, and by carefully planning how and when to mine out of properties as they come to the end of their expected tenures, we have meaningfully improved both costs and operational efficiencies this year," said Jason Whitehead, Contura's chief operating officer. "As mines have come offline, we have been able to realign coal processing into fewer plants, redeploy equipment to other locations across the company, and plan for the best utilization of the newer, high-quality mines in our portfolio. We expect to continue building on this success through the fourth quarter and into 2021."

Conference Call

The company plans to hold a conference call regarding its third quarter 2020 results on November 9, 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 metallurgical coal to produce steel. For more information, visitwww.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 CONTACTinvestorrelations@conturaenergy.com

Alex Rotonen, CFA423.956.6882

MEDIA CONTACTcorporatecommunications@conturaenergy.com

Emily O'Quinn423.573.0369

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 SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)(Amounts in thousands, except share and per share data)

Three Months Ended September 30, Nine Months Ended September 30,

2020 2019 2020 2019

Revenues:

Coal revenues $ 399,954 $ 523,987 $ 1,278,935 $ 1,784,775

Other revenues 737 1,877 4,054 6,409

Total revenues 400,691 525,864 1,282,989 1,791,184

Costs and expenses:

Cost of coal sales(exclusive of items 367,277 467,658 1,148,416 1,480,098shown separatelybelow)

Depreciation,depletion and 50,739 60,842 154,466 184,927amortization

Accretion on assetretirement 9,127 6,846 23,806 19,925obligations

Amortization ofacquired 2,219 2,314 5,180 (4,712)intangibles, net

Asset impairment 3,571 32 221,453 5,858and restructuring

Selling, generaland administrativeexpenses (exclusiveof depreciation, 14,501 17,387 42,010 53,121depletion andamortization shownseparately above)

Merger-related - 68 - 1,055costs

Total otheroperating (income)loss:

Mark-to-marketadjustment for 3,624 (3,238) (13,425) (288)acquisition-relatedobligations

Other (income) (1,359) 166 (2,063) (7,319)expense

Total costs and 449,699 552,075 1,579,843 1,732,665expenses

(Loss) income from (49,008) (26,211) (296,854) 58,519operations

Other income(expense):

Interest expense (18,389) (18,847) (54,808) (50,079)

Interest income 378 1,763 6,889 5,584

Loss onmodification and - - - (26,459)extinguishment ofdebt

Equity loss in (1,295) (1,845) (3,085) (4,804)affiliates

Miscellaneous loss, (368) (1,523) (1,088) (2,912)net

Total other (19,674) (20,452) (52,092) (78,670)expense, net

Loss fromcontinuing (68,682) (46,663) (348,946) (20,151)operations beforeincome taxes

Income tax benefit 45 3,102 2,200 8,880

Net loss fromcontinuing (68,637) (43,561) (346,746) (11,271)operations

Discontinuedoperations:

Loss fromdiscontinued - (11,516) - (176,973)operations beforeincome taxes

Income tax(expense) benefit - (13,455) - 12,866from discontinuedoperations

Loss fromdiscontinued - (24,971) - (164,107)operations

Net loss $ (68,637) $ (68,532) $ (346,746) $ (175,378)

Basic loss percommon share:

Loss fromcontinuing $ (3.75) $ (2.29) $ (18.96) $ (0.59)operations

Loss fromdiscontinued - (1.31) - (8.63)operations

Net loss $ (3.75) $ (3.60) $ (18.96) $ (9.22)

Diluted loss percommon share

Loss fromcontinuing $ (3.75) $ (2.29) $ (18.96) $ (0.59)operations

Loss fromdiscontinued - (1.31) - (8.63)operations

Net loss $ (3.75) $ (3.60) $ (18.96) $ (9.22)

Weighted average 18,319,947 19,025,462 18,290,346 19,014,974shares - basic

Weighted average 18,319,947 19,025,462 18,290,346 19,014,974shares - diluted

CONTURA ENERGY, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)(Amounts in thousands, except share and per share data)

September 30, 2020 December 31, 2019

Assets

Current assets:

Cash and cash equivalents $ 161,434 $ 212,793

Trade accounts receivable, net ofallowance for doubtful accounts of $432 179,671 244,666and $0 as of September 30, 2020 andDecember 31, 2019

Inventories, net 124,245 162,659

Prepaid expenses and other current assets 120,939 91,361

Total current assets 586,289 711,479

Property, plant, and equipment, net ofaccumulated depreciation and amortization 401,197 583,262of $395,397 and $314,276 as ofSeptember 30, 2020 and December 31, 2019

Owned and leased mineral rights, net ofaccumulated depletion and amortization of 489,631 523,141$40,623 and $27,877 as of September 30,2020 and December 31, 2019

Other acquired intangibles, net ofaccumulated amortization of $38,806 and 100,350 125,145$32,686 as of September 30, 2020 andDecember 31, 2019

Long-term restricted cash 124,065 122,524

Deferred income taxes - 33,065

Other non-current assets 221,591 204,207

Total assets $ 1,923,123 $ 2,302,823

Liabilities and Stockholders' Equity

Current liabilities:

Current portion of long-term debt $ 44,864 $ 28,485

Trade accounts payable 75,836 98,746

Acquisition-related obligations - current 18,206 33,639

Accrued expenses and other current 153,372 154,282liabilities

Total current liabilities 292,278 315,152

Long-term debt 552,676 564,481

Acquisition-related obligations - 19,286 46,259long-term

Workers' compensation and black lung 263,517 260,778obligations

Pension obligations 186,089 204,086

Asset retirement obligations 210,998 184,130

Deferred income taxes 368 422

Other non-current liabilities 54,943 31,393

Total liabilities 1,580,155 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, 50.0million shares authorized, 20.6 millionissued and 18.3 million outstanding at 206 205September 30, 2020 and 20.5 millionissued and 18.2 million outstanding atDecember 31, 2019

Additional paid-in capital 778,728 775,707

Accumulated other comprehensive loss (68,614) (58,616)

Treasury stock, at cost: 2.3 millionshares at September 30, 2020 and (106,976) (107,984)December 31, 2019

Retained (deficit) earnings (260,376) 86,810

Total stockholders' equity 342,968 696,122

Total liabilities and stockholders' $ 1,923,123 $ 2,302,823equity

CONTURA ENERGY, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)(Amounts in thousands)

Nine Months Ended September 30,

2020 2019

Operating activities:

Net loss $ (346,746) $ (175,378)

Adjustments to reconcile net loss to net cashprovided by operating activities:

Depreciation, depletion and amortization 154,466 330,840

Amortization of acquired intangibles, net 5,180 (4,712)

Accretion of acquisition-related obligations 2,882 4,367discount

Amortization of debt issuance costs and 11,087 10,446accretion of debt discount

Mark-to-market adjustment for (13,425) (288)acquisition-related obligations

(Gain) loss on disposal of assets (2,179) 1,462

Gain on assets acquired in an exchange - (9,083)transaction

Loss on modification and extinguishment of debt - 26,459

Asset impairment and restructuring 221,453 23,020

Accretion on asset retirement obligations 23,806 24,906

Employee benefit plans, net 15,135 14,513

Deferred income taxes 33,011 (22,021)

Stock-based compensation 4,200 7,512

Equity loss in affiliates 3,085 4,804

Other, net (5,356) 351

Changes in operating assets and liabilities (33,566) (99,620)

Net cash provided by operating activities 73,033 137,578

Investing activities:

Capital expenditures (118,896) (144,183)

Proceeds on disposal of assets 3,131 1,170

Purchases of investment securities (18,618) (65,193)

Maturity of investment securities 12,678 50,775

Capital contributions to equity affiliates (3,196) (7,600)

Other, net 68 (2,548)

Net cash used in investing activities (124,833) (167,579)

Financing activities:

Proceeds from borrowings on debt 57,500 544,946

Principal repayments of debt (43,364) (551,405)

Principal repayments of notes payable (14,951) (14,054)

Principal repayments of financing lease (2,291) (2,960)obligations

Debt issuance costs - (6,104)

Common stock repurchases and related expenses (171) (35,485)

Other, net - 952

Net cash used in financing activities (3,277) (64,110)

Net decrease in cash and cash equivalents and (55,077) (94,111)restricted cash

Cash and cash equivalents and restricted cash 347,680 477,246at beginning of period

Cash and cash equivalents and restricted cash $ 292,603 $ 383,135at end of period

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 September 30,

2020 2019

Cash and cash equivalents $161,434$152,638

Short-term restricted cash (included in prepaid 7,104 21,456 expenses and other current assets)

Long-term restricted cash 124,065 209,041

Total cash and cash equivalents and restricted cash shown in the Condensed Consolidated Statements of Cash $292,603$383,135Flows

CONTURA ENERGY, INC. AND SUBSIDIARIESADJUSTED EBITDA RECONCILIATION(Amounts in thousands)

Three Months Ended Nine Months Ended September 30,

June 30, 2020 September 30, September 30, 2020 2019 2020 2019

Net loss fromcontinuing $ (238,301) $ (68,637) $ (43,561) $ (346,746) $ (11,271)operations

Interest expense 18,814 18,389 18,847 54,808 50,079

Interest income (5,533) (378) (1,763) (6,889) (5,584)

Income tax expense 33 (45) (3,102) (2,200) (8,880)(benefit)

Depreciation,depletion and 49,262 50,739 60,842 154,466 184,927amortization

Merger-related - - 68 - 1,055costs

Non-cash stockcompensation 1,044 1,078 2,738 4,200 7,463expense

Mark-to-marketadjustment - (2,052) 3,624 (3,238) (13,425) (288)acquisition-relatedobligations

Accretion on assetretirement 7,304 9,127 6,846 23,806 19,925obligations

Loss onmodification and - - - - 26,459extinguishment ofdebt

Asset impairmentand restructuring ^ 184,173 3,571 32 221,453 5,858(1)

Managementrestructuring costs - - - 947 -^(2)

Cost impact of coalinventory fair - - - - 8,209value adjustment ^(3)

Gain on assetsacquired in an - - - - (9,083)exchangetransaction ^(4)

Loss on partialsettlement of 63 - - 1,230 -benefit obligations

Amortization ofacquired 2,096 2,219 2,314 5,180 (4,712)intangibles, net

Adjusted EBITDA $ 16,903 $ 19,687 $ 40,023 $ 96,830 $ 264,157

Asset impairment and restructuring for the nine months ended September 30, 2020 includes long-lived asset impairments of $198,963 and restructuring expense of $22,490 as a result of weakened coal prices and the strategic^ actions with respect to two thermal coal mining complexes announced during(1) the second quarter of 2020 and capital spending during the third quarter of 2020 at previously impaired locations requiring the impairment of certain additional assets not considered recoverable. Asset impairment for the nine months ended September 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.

^ Management restructuring costs are related to severance expense associated(2) with senior management changes during the three months ended March 31, 2020.

^ The cost impact of the coal inventory fair value adjustment as a result of(3) the Alpha Merger was completed during the three months ended June 30, 2019.

^ During the nine months ended September 30, 2019, the Company entered into(4) 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 SUBSIDIARIESRESULTS OF OPERATIONS

Three Months Ended June 30, 2020

(In thousands, except CAPP - Met CAPP - NAPP All Other Consolidatedfor per ton data) Thermal

Coal revenues $ 316,319 $ 36,720 $ 57,499 $ 76 $ 410,614

Less: Freight andhandling fulfillment (54,852) (4,634) (5,492) - (64,978)revenues

Non-GAAP Coal $ 261,467 $ 32,086 $ 52,007 $ 76 $ 345,636revenues

Tons sold 3,204 648 1,294 1 5,147

Non-GAAP Coal sales $ 81.61 $ 49.52 $ 40.19 $ 76.00 $ 67.15realization per ton

Cost of coal sales(exclusive of items $ 297,169 $ 35,709 $ 48,732 $ 1,669 $ 383,279shown separatelybelow)

Depreciation,depletion and 38,800 7,260 2,172 694 48,926amortization -production^ (1)

Accretion on assetretirement 3,517 2,267 769 751 7,304obligations

Amortization ofacquired intangibles, 2,759 (903) 215 25 2,096net

Total Cost of coal $ 342,245 $ 44,333 $ 51,888 $ 3,139 $ 441,605sales

Less: Freight and (54,852) (4,634) (5,492) - (64,978)handling costs

Less: Depreciation,depletion and (38,800) (7,260) (2,172) (694) (48,926)amortization -production^ (1)

Less: Accretion onasset retirement (3,517) (2,267) (769) (751) (7,304)obligations

Less: Amortization ofacquired intangibles, (2,759) 903 (215) (25) (2,096)net

Less: Idled and (3,906) (1,670) (566) (1,669) (7,811)closed mine costs

Non-GAAP Cost of coal $ 238,411 $ 29,405 $ 42,674 $ - $ 310,490sales

Tons sold 3,204 648 1,294 1 5,147

Non-GAAP Cost of coal $ 74.41 $ 45.38 $ 32.98 $ - $ 60.32sales per ton

^ Depreciation, depletion and amortization - production excludes the(1) depreciation, depletion and amortization related to selling, general and administrative functions.

Three Months Ended June 30, 2020

(In thousands, CAPP - Met CAPP - NAPP All Other Consolidatedexcept for Thermal per ton data)

Coal revenues$316,319 $36,720 $57,499$76 $ 410,614

Less: Total Cost of coal (342,245) (44,333) (51,888)(3,139) (441,605) sales (per table above)

GAAP Coal $(25,926)$(7,613)$5,611 $(3,063) $ (30,991)margin

Tons sold 3,204 648 1,294 1 5,147

GAAP Coal margin per $(8.09) $(11.75)$4.34 $(3,063.00)$ (6.02) ton



GAAP Coal $(25,926)$(7,613)$5,611 $(3,063) $ (30,991)margin

Add: Depreciation, depletion and38,800 7,260 2,172 694 48,926 amortization - production^ (1)

Add: Accretion on asset 3,517 2,267 769 751 7,304 retirement obligations

Add: Amortization of acquired 2,759 (903) 215 25 2,096 intangibles, net

Add: Idled and closed 3,906 1,670 566 1,669 7,811 mine costs

Non-GAAP Coal$23,056 $2,681 $9,333 $76 $ 35,146 margin

Tons sold 3,204 648 1,294 1 5,147

Non-GAAP Coal margin per $7.20 $4.14 $7.21 $76.00 $ 6.83 ton

^ Depreciation, depletion and amortization - production excludes the (1)depreciation, depletion and amortization related to selling, general and administrative functions.

Three Months Ended September 30, 2020

(In thousands, CAPP - except for per ton CAPP - MetThermal NAPP All OtherConsolidateddata)

Coal revenues $295,376$39,813$64,765$ - $399,954

Less: Freight and handling (49,742) (3,015) (1,947) - (54,704) fulfillment revenues

Non-GAAP Coal $245,634$36,798$62,818$ - $345,250 revenues

Tons sold 3,329 636 1,570 - 5,535

Non-GAAP Coal sales$73.79 $57.86 $40.01 $ - $62.38 realization per ton



Cost of coal sales (exclusive of items$276,170$33,999$57,661$ (553)$367,277 shown separately below)

Depreciation, depletion and 41,177 7,313 1,504 410 50,404 amortization - production^ (1)

Accretion on asset retirement 3,767 2,406 2,424 530 9,127 obligations

Amortization of acquired 2,535 (486) 145 25 2,219 intangibles, net

Total Cost of coal $323,649$43,232$61,734$ 412 $429,027 sales

Less: Freight and (49,742) (3,015) (1,947) - (54,704) handling costs

Less: Depreciation, depletion and (41,177) (7,313) (1,504) (410) (50,404) amortization - production^ (1)

Less: Accretion on asset retirement (3,767) (2,406) (2,424) (530) (9,127) obligations

Less: Amortization of acquired (2,535) 486 (145) (25) (2,219) intangibles, net

Less: Idled and (5,091) (1,742) (713) 546 (7,000) closed mine costs

Non-GAAP Cost of $221,337$29,242$55,001$ (7) $305,573 coal sales

Tons sold 3,329 636 1,570 - 5,535

Non-GAAP Cost of $66.49 $45.98 $35.03 $ - $55.21 coal sales per ton

^ Depreciation, depletion and amortization - production excludes the (1)depreciation, depletion and amortization related to selling, general and administrative functions.

Three Months Ended September 30, 2020

(In thousands, CAPP - except for per CAPP - Met Thermal NAPP All OtherConsolidatedton data)

Coal revenues $295,376 $39,813 $64,765$ - $ 399,954

Less: Total Cost of coal sales (323,649) (43,232) (61,734)(412) (429,027) (per table above)

GAAP Coal margin $(28,273)$(3,419)$3,031 $ (412)$ (29,073)

Tons sold 3,329 636 1,570 - 5,535

GAAP Coal margin $(8.49) $(5.38) $1.93 $ - $ (5.25) per ton



GAAP Coal margin $(28,273)$(3,419)$3,031 $ (412)$ (29,073)

Add: Depreciation, depletion and 41,177 7,313 1,504 410 50,404 amortization - production^ (1)

Add: Accretion on asset retirement 3,767 2,406 2,424 530 9,127 obligations

Add: Amortization of acquired 2,535 (486) 145 25 2,219 intangibles, net

Add: Idled and 5,091 1,742 713 (546) 7,000 closed mine costs

Non-GAAP Coal $24,297 $7,556 $7,817 $ 7 $ 39,677 margin

Tons sold 3,329 636 1,570 - 5,535

Non-GAAP Coal $7.30 $11.88 $4.98 $ - $ 7.17 margin per ton

^ Depreciation, depletion and amortization - production excludes the (1)depreciation, depletion and amortization related to selling, general and administrative functions.

Three Months Ended September 30, 2019

(In thousands, CAPP - except for per ton CAPP - MetThermal NAPP All OtherConsolidateddata)

Coal revenues $373,078$80,174$70,735$- $523,987

Less: Freight and handling (50,100) (9,869) (2,961) - (62,930) fulfillment revenues

Non-GAAP Coal $322,978$70,305$67,774$- $461,057 revenues

Tons sold 2,981 1,144 1,640 - 5,765

Non-GAAP Coal sales$108.35 $61.46 $41.33 $- $79.98 realization per ton



Cost of coal sales (exclusive of items$312,369$78,022$75,571$1,696 $467,658 shown separately below)

Depreciation, depletion and 38,212 13,972 6,241 2,070 60,495 amortization - production^ (1)

Accretion on asset retirement 2,326 2,670 1,017 833 6,846 obligations

Amortization of acquired 4,765 (3,359) 908 - 2,314 intangibles, net

Total Cost of coal $357,672$91,305$83,737$4,599 $537,313 sales

Less: Freight and (50,100) (9,869) (2,961) - (62,930) handling costs

Less: Depreciation, depletion and (38,212) (13,972)(6,241) (2,070) (60,495) amortization - production^ (1)

Less: Accretion on asset retirement (2,326) (2,670) (1,017) (833) (6,846) obligations

Less: Amortization of acquired (4,765) 3,359 (908) - (2,314) intangibles, net

Less: Idled and (1,956) (458) (659) (1,696) (4,769) closed mine costs

Non-GAAP Cost of $260,313$67,695$71,951$- $399,959 coal sales

Tons sold 2,981 1,144 1,640 - 5,765

Non-GAAP Cost of $87.32 $59.17 $43.87 $- $69.38 coal sales per ton

^ Depreciation, depletion and amortization - production excludes the (1)depreciation, depletion and amortization related to selling, general and administrative functions.

Three Months Ended September 30, 2019

(In thousands, CAPP - except for perCAPP - MetThermal NAPP All Other Consolidatedton data)

Coal revenues $373,078$80,174 $70,735 $- $ 523,987

Less: Total Cost of coal (357,672)(91,305) (83,737) (4,599) (537,313) sales (per table above)

GAAP Coal $15,406 $(11,131)$(13,002)$(4,599)$ (13,326)margin

Tons sold 2,981 1,144 1,640 - 5,765

GAAP Coal $5.17 $(9.73) $(7.93) $- $ (2.31) margin per ton



GAAP Coal $15,406 $(11,131)$(13,002)$(4,599)$ (13,326)margin

Add: Depreciation, depletion and 38,212 13,972 6,241 2,070 60,495 amortization - production^ (1)

Add: Accretion on asset 2,326 2,670 1,017 833 6,846 retirement obligations

Add: Amortization of acquired 4,765 (3,359) 908 - 2,314 intangibles, net

Add: Idled and closed mine 1,956 458 659 1,696 4,769 costs

Non-GAAP Coal $62,665 $2,610 $(4,177) $- $ 61,098 margin

Tons sold 2,981 1,144 1,640 - 5,765

Non-GAAP Coal $21.03 $2.29 $(2.54) $- $ 10.60 margin per ton

^ Depreciation, depletion and amortization - production excludes the (1)depreciation, depletion and amortization related to selling, general and administrative functions.

Nine Months Ended September 30, 2020

(In thousands, CAPP - except for per CAPP - Met Thermal NAPP All OtherConsolidatedton data)

Coal revenues $974,098 $115,276$189,171$390 $1,278,935

Less: Freight and handling (158,258) (11,392) (9,785) - (179,435) fulfillment revenues

Non-GAAP Coal $815,840 $103,884$179,386$390 $1,099,500revenues

Tons sold 9,860 1,901 4,372 6 16,139

Non-GAAP Coal sales $82.74 $54.65 $41.03 $65.00 $68.13 realization per ton



Cost of coal sales (exclusive of $866,311 $108,190$169,406$4,509 $1,148,416items shown separately below)

Depreciation, depletion and 121,699 19,422 10,525 1,795 153,441 amortization - production^ (1)

Accretion on asset 10,786 7,025 3,963 2,032 23,806 retirement obligations

Amortization of acquired 7,875 (3,484) 714 75 5,180 intangibles, net

Total Cost of $1,006,671$131,153$184,608$8,411 $1,330,843coal sales

Less: Freight and handling (158,258) (11,392) (9,785) - (179,435) costs

Less: Depreciation, depletion and (121,699) (19,422) (10,525) (1,795) (153,441) amortization - production^ (1)

Less: Accretion on asset (10,786) (7,025) (3,963) (2,032) (23,806) retirement obligations

Less: Amortization of acquired (7,875) 3,484 (714) (75) (5,180) intangibles, net

Less: Idled and closed mine (13,191) (5,432) (2,104) (4,202) (24,929) costs

Non-GAAP Cost $694,862 $91,366 $157,517$307 $944,052 of coal sales

Tons sold 9,860 1,901 4,372 6 16,139

Non-GAAP Cost of coal sales $70.47 $48.06 $36.03 $51.17 $58.50 per ton

^ Depreciation, depletion and amortization - production excludes the (1)depreciation, depletion and amortization related to selling, general and administrative functions.

Nine Months Ended September 30, 2020

(In thousands, CAPP - Met CAPP - NAPP All Other Consolidatedexcept for Thermal per ton data)

Coal revenues$974,098 $115,276 $189,171$390 $1,278,935

Less: Total Cost of coal (1,006,671)(131,153) (184,608)(8,411) (1,330,843)sales (per table above)

GAAP Coal $(32,573) $(15,877)$4,563 $(8,021) $(51,908) margin

Tons sold 9,860 1,901 4,372 6 16,139

GAAP Coal margin per $(3.30) $(8.35) $1.04 $(1,336.83)$(3.22) ton



GAAP Coal $(32,573) $(15,877)$4,563 $(8,021) $(51,908) margin

Add: Depreciation, depletion and121,699 19,422 10,525 1,795 153,441 amortization - production^ (1)

Add: Accretion on asset 10,786 7,025 3,963 2,032 23,806 retirement obligations

Add: Amortization of acquired 7,875 (3,484) 714 75 5,180 intangibles, net

Add: Idled and closed 13,191 5,432 2,104 4,202 24,929 mine costs

Non-GAAP Coal$120,978 $12,518 $21,869 $83 $155,448 margin

Tons sold 9,860 1,901 4,372 6 16,139

Non-GAAP Coal margin per $12.27 $6.59 $5.00 $13.83 $9.63 ton

^ Depreciation, depletion and amortization - production excludes the (1)depreciation, depletion and amortization related to selling, general and administrative functions.

Nine Months Ended September 30, 2019

(In thousands, CAPP - except for per CAPP - Met Thermal NAPP All OtherConsolidatedton data)

Coal revenues $1,339,663$224,814$220,298$- $1,784,775

Less: Freight and handling (182,729) (23,683) (5,430) - (211,842) fulfillment revenues

Non-GAAP Coal $1,156,934$201,131$214,868$- $1,572,933revenues

Tons sold 9,653 3,325 5,039 - 18,017

Non-GAAP Coal sales $119.85 $60.49 $42.64 $- $87.30 realization per ton



Cost of coal sales (exclusive of $1,057,988$218,667$199,566$3,877 $1,480,098items shown separately below)

Depreciation, depletion and 113,714 44,586 19,390 6,190 183,880 amortization - production^ (1)

Accretion on asset 6,986 7,401 3,050 2,488 19,925 retirement obligations

Amortization of acquired 5,816 (12,142) 1,614 - (4,712) intangibles, net

Total Cost of $1,184,504$258,512$223,620$12,555$1,679,191coal sales

Less: Freight and handling (182,729) (23,683) (5,430) - (211,842) costs

Less: Depreciation, depletion and (113,714) (44,586) (19,390) (6,190) (183,880) amortization - production^ (1)

Less: Accretion on asset (6,986) (7,401) (3,050) (2,488) (19,925) retirement obligations

Less: Amortization of acquired (5,816) 12,142 (1,614) - 4,712 intangibles, net

Less: Idled and closed mine (5,942) (1,442) (2,222) (3,877) (13,483) costs

Less: Cost impact of coal inventory fair (4,751) (3,458) - - (8,209) value adjustment ^(2)

Non-GAAP Cost $864,566 $190,084$191,914$- $1,246,564of coal sales

Tons sold 9,653 3,325 5,039 - 18,017

Non-GAAP Cost of coal sales $89.56 $57.17 $38.09 $- $69.19 per ton

^ Depreciation, depletion and amortization - production excludes the (1)depreciation, depletion and amortization related to selling, general and administrative functions.

^ The cost impact of the coal inventory fair value adjustment as a result (2)of the Alpha Merger was completed during the three months ended June 30, 2019.

Nine Months Ended September 30, 2019

(In thousands, CAPP - Met CAPP - NAPP All Other Consolidatedexcept for Thermal per ton data)

Coal revenues$1,339,663$224,814 $220,298$- $1,784,775

Less: Total Cost of coal (1,184,504)(258,512) (223,620)(12,555) (1,679,191)sales (per table above)

GAAP Coal $155,159 $(33,698)$(3,322)$(12,555)$105,584 margin

Tons sold 9,653 3,325 5,039 - 18,017

GAAP Coal margin per $16.07 $(10.13) $(0.66) $- $5.86 ton



GAAP Coal $155,159 $(33,698)$(3,322)$(12,555)$105,584 margin

Add: Depreciation, depletion and113,714 44,586 19,390 6,190 183,880 amortization - production^ (1)

Add: Accretion on asset 6,986 7,401 3,050 2,488 19,925 retirement obligations

Add: Amortization of acquired 5,816 (12,142) 1,614 - (4,712) intangibles, net

Add: Idled and closed 5,942 1,442 2,222 3,877 13,483 mine costs

Add: Cost impact of coal inventory 4,751 3,458 - - 8,209 fair value adjustment ^ (2)

Non-GAAP Coal$292,368 $11,047 $22,954 $- $326,369 margin

Tons sold 9,653 3,325 5,039 - 18,017

Non-GAAP Coal margin per $30.29 $3.32 $4.55 $- $18.11 ton

^ Depreciation, depletion and amortization - production excludes the (1)depreciation, depletion and amortization related to selling, general and administrative functions.

^ The cost impact of the coal inventory fair value adjustment as a result (2)of the Alpha Merger was completed during the three months ended June 30, 2019.

Three Months Ended June 30, 2020

(In thousands, CAPP - except for per ton CAPP - MetThermal NAPP All OtherConsolidateddata)

Non-GAAP Cost of $238,411$29,405$42,674$- $310,490 coal sales

Less: cost of (22,932) (9) - - (22,941) purchased coal sold

Adjusted cost of $215,479$29,396$42,674$- $287,549 produced coal sold

Produced tons sold 2,896 647 1,294 1 4,838

Adjusted cost of produced coal sold $74.41 $45.43 $32.98 $- $59.44 per ton^ (1)

^ Cost of produced coal sold per ton for our operations is calculated as (1)non-GAAP cost of produced coal sold divided by produced tons sold.

Three Months Ended September 30, 2020

(In thousands, CAPP - except for per ton CAPP - MetThermal NAPP All OtherConsolidateddata)

Non-GAAP Cost of $221,337$29,242$55,001$ (7) $305,573 coal sales

Less: cost of (12,511) 70 - - (12,441) purchased coal sold

Adjusted cost of $208,826$29,312$55,001$ (7) $293,132 produced coal sold

Produced tons sold 3,142 636 1,570 - 5,348

Adjusted cost of produced coal sold $66.46 $46.09 $35.03 $ - $54.81 per ton^ (1)

^ Cost of produced coal sold per ton for our operations is calculated as (1)non-GAAP cost of produced coal sold divided by produced tons sold.

Three Months Ended September 30, 2019

(In thousands, CAPP - except for per ton CAPP - MetThermal NAPP All OtherConsolidateddata)

Non-GAAP Cost of $260,313$67,695$71,951$- $399,959 coal sales

Less: cost of (47,731) (1,050) - - (48,781) purchased coal sold

Adjusted cost of $212,582$66,645$71,951$- $351,178 produced coal sold

Produced tons sold 2,558 1,127 1,640 - 5,325

Adjusted cost of produced coal sold $83.10 $59.13 $43.87 $- $65.95 per ton^ (1)

^ Cost of produced coal sold per ton for our operations is calculated as (1)non-GAAP cost of produced coal sold divided by produced tons sold.

Nine Months Ended September 30, 2020

(In thousands, CAPP - except for per tonCAPP - MetThermal NAPP All OtherConsolidateddata)

Non-GAAP Cost of $694,862$91,366$157,517$ 307 $944,052 coal sales

Less: cost of purchased coal (65,777) (832) - - (66,609) sold

Adjusted cost of $629,085$90,534$157,517$ 307 $877,443 produced coal sold

Produced tons sold9,002 1,887 4,372 6 15,267

Adjusted cost of produced coal sold$69.88 $47.98 $36.03 $ 51.17$57.47 per ton ^(1)

^ Cost of produced coal sold per ton for our operations is calculated as (1)non-GAAP cost of produced coal sold divided by produced tons sold.

Nine Months Ended September 30, 2019

(In thousands, CAPP - except for per CAPP - MetThermal NAPP All OtherConsolidatedton data)

Non-GAAP Cost of $864,566$190,084$191,914$ - $1,246,564coal sales

Less: cost of purchased coal (194,590)(6,378) - - (200,968) sold

Adjusted cost of produced coal $669,976$183,706$191,914$ - $1,045,596sold

Produced tons 7,948 3,215 5,039 - 16,202 sold

Adjusted cost of produced coal $84.29 $57.14 $38.09 $ - $64.53 sold per ton ^(1)

^ Cost of produced coal sold per ton for our operations is calculated as (1)non-GAAP cost of produced coal sold divided by produced tons sold.

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SOURCE Contura Energy, Inc.