Beruflich Dokumente
Kultur Dokumente
Investor Presentation
May 2017 FORESIGHT ENERGY
Disclaimer
It is understood and acknowledged that any persons access to, and use of, any of the attached materials constitutes their overall acceptance of the following: (i) the information
contained in this presentation has not been independently verified and no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the
information or opinions contained herein; (ii) the information set out herein may be subject to revision and may change materially before closing; (iii) no person should rely on
statements or representations made within these materials nor should any person rely on the statements or representations made by any other source based on these materials; and
(iv) neither Foresight Energy LP (Foresight or the Company) nor any other party involved in the preparation of the attached materials shall have any duty or liability to any
person in connection with the attached materials.
This presentation and the information contained herein have been prepared to assist interested parties in making their own evaluation of the Company and the facilities and does
not purport to be all-inclusive. Each recipient of the information and data contained herein should take such steps as it deems necessary to assure that it has the information it
considers material or desirable in making its decision to become a lender and should perform its own independent investigation and analysis of the facilities or the transactions
contemplated thereby and the creditworthiness of the Company. The recipient represents that it is sophisticated and experienced in extending credit to entities similar to the
Company. The information and data contained herein are not a substitute for the recipient's independent evaluation and analysis and should not be considered as a
recommendation that any recipient enter into the facilities.
The contents of this presentation are not to be construed as legal, regulatory, business, accounting or tax advice. You should consult your own attorney, business advisor,
accountant and tax advisor as to legal, regulatory, business, accounting and tax advice. Under no circumstances is this presentation or the information contained herein to be
construed as a prospectus, offering memorandum or advertisement, and neither any part of this presentation nor any information or statement contained herein shall form the
basis of or be relied upon in connection with any contract or commitment whatsoever. This presentation is not, and is not intended to be, an offer to sell, or a solicitation of an
offer to purchase, any securities or any other interest in the Company.
This presentation is confidential. Any reproduction or distribution of this presentation, in whole or in part, or the disclosure of the contents hereof, without the prior written
consent of the Company, is prohibited. The Company and its affiliates, officers, directors, employees, professional advisors and agents do not accept responsibility or liability for
this presentation or its contents.
Cautionary Note Regarding Forward-Looking Statements. This presentation contains, and oral statements made from time to time by our representatives may contain, forward-
looking statements about our business, operations, and industry, as well as the proposed transactions described herein, which involve risks and uncertainties, such as statements
regarding our plans, objectives, expectations and intentions. You can identify these forward-looking statements by the use of forward-looking words such as outlook,
intends, plans, estimates, believes, expects, potential, continues, may, will, should, seeks, approximately, predicts, anticipates, foresees, or the
negative version of these words or other comparable words and phrases. Any forward-looking statements contained in this presentation speak only as of the date on which we
make it and are based upon our historical performance and on current plans, estimates and expectations. While management believes that these forward-looking statements are
reasonable as and when made, there can be no assurance that the future developments affecting us will be those that we anticipate.
Our future results and financial condition may differ materially from those we currently anticipate as a result of the various factors, many of which are outside our control.
Furthermore, the successful consummation of the transactions described herein on the terms described herein, or at all, is subject to, among other things, agreement on principal
terms between the parties, successful negotiation of definitive documentation and any conditions contained therein, all of which is not solely within our control. Factors that
could affect the foregoing include, but are not limited to, the market price for coal, the supply of, and demand for, domestic and foreign coal, competition from other coal
suppliers, the cost of using, and the availability of, other fuels, the effects of technological developments, advances in power technologies, the efficiency of our mines, the
amount of coal we are able to produce from our properties, operating difficulties and unfavorable geologic conditions and other uncertainties. These factors should be read in
conjunction with the risk factors included in Part I. "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ending December 31, 2016.
You are cautioned not to place undue reliance on forward-looking statements, which are made only as of the date hereof. We undertake no obligation to publicly update or revise
any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise, except as required by law.
2
Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures. Management provides financial measures and terms not calculated in accordance with accounting principles generally accepted in the
United States (GAAP). Presentation of non-GAAP measures such as, but not limited to Adjusted EBITDA provides investors with an alternative method for assessing our
operating results in a manner that, when coupled with the GAAP results and the reconciliation to GAAP results, enables them to more thoroughly evaluate our performance.
These non-GAAP measures provide a baseline for assessing the our future earnings expectations. Our management uses these non-GAAP measures for the same purpose. The
non-GAAP measures included in this presentation are provided to give investors access to the types of measures that we use in analyzing our results. The calculation of non-
GAAP financial measures herein is not necessarily comparable to similarly titled measures reported by other companies. These non-GAAP measures may be considered in
addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP results, and they may exclude financial information that
some consider important in evaluating our performance. Schedules that reconcile non-GAAP financial measures used in this presentation to GAAP financial measures are
included with this presentation.
We define Adjusted EBITDA as net income (loss) attributable to controlling interests before interest, income taxes, depreciation, depletion, amortization and accretion. Adjusted
EBITDA is also adjusted for equity-based compensation, losses/gains on commodity derivative contracts, settlements of derivative contracts, changes in the fair value of the
warrants and material nonrecurring or other items which may not reflect the trend of future results. As it relates to derivatives, the Adjusted EBITDA calculation removes the
total impact of derivative gains/losses on net income (loss) during the period and then adds/deducts to Adjusted EBITDA the aggregate settlements during the period.
3
Overview of Foresight Energy LP
Foresight Energy LP (Foresight or the Company) is a thermal coal producer that controls approximately
2.1 billion tons of proven and probable coal reserves in the Illinois Basin (ILB)
Major supplier of thermal coal to domestic power plants, industrial users and international customers
Four state-of-the-art longwall mines1 and one continuous miner operation across four mining complexes
Operations represent some of the most productive and lowest cost mines in the U.S.
Produce high-heat content coal with ability to ship domestically and internationally
Mines are strategically located near multiple rail and river access points to provide transportation
optionality
Well-positioned to remain profitable throughout the cycle due to its low cost structure and high heat content
For LTM ended March 31, 2017, Foresight sold 20.8 million tons (Mst) of coal, generating total
revenues and Adjusted EBITDA of $940.1 million and $322.5 million, respectively
$1.4bn investment by Murray Energy Corporation (Murray Energy) in 2015 has generated significant
synergies and created the dominant U.S. coal producer focused on high high-heat content thermal coal
Recently completed refinancing that removed potential dilution from the Convertible PIK Note and allows
Foresight to resume distributions on common units, subject to the discretion of management and terms of
financing documents
Favorable outlook with evolving U.S. political landscape, stabilization of domestic and seaborne thermal
prices, improved capital structure, and clear path to resume distributions
4
Whats Happened Over the Past Year?
Strengthened Capital Structure Enhanced by Coal Industry Tailwinds
5
Foresight Overview
Portfolio of Tier 1 Assets in the Illinois Basin with Large Reserve Base
Williamson Energy Location of Assets
Reserves: 376 Mst
Mine Method: Longwall Macoupin Hillsboro
Total Longwall Capacity: 1
Current Longwalls Operating: 1
Productive Capacity per Longwall 7.5 Mst/yr Energy Energy
Macoupin Energy
Reserves: 64 Mst
Mine Method: FCT1 with
CM Unit
Productive Capacity 2.5 Mst/yr
Southern Illinois
Headquarters
St Louis,
Sugar Camp Complex Missouri
Reserves: 1,337 Mst
Mine Method: Longwall Viking
Total Longwall Capacity: 4
Current Longwalls Operating 2
Productive Capacity per Longwall 7.5 Mst/yr
25 miles Energy
Williamson 13.8
Sugar Camp 13.5
$22.65
Macoupin 9.4
$14.30 $14.23
$1.74
Top 35 U.S. Underground Coal Foresight NAPP Average ILB Average PRB Average
Average: 7.7 TPMH
Market Diversity
24% 17%
33% 30%
51% 52%
36% 42% Foresight Operations Key Rail Lines
Coal Terminal CN
Foresight Customers CSX
2013 2014 2015 2016
Scrubbed Plants NS
Rail / Truck Barge Export
10
Contracted Volumes Provide Stable and Predictable Cash Flows
9%
Customers diversified across the U.S. and seaborne markets, 16%
with majority of customers being U.S. domestic utilities
Low High
Priced / Contracted Uncontracted
11
2017E Guidance Range
$315
$285
$73
$68
A reconciliation of estimated 2017 Adjusted EBITDA to U.S. GAAP net income is not provided because U.S. GAAP net income for the projection period is not
assessable. The Partnerships net income in future periods will be impacted by the effects of pushdown accounting. The amount of such gains and losses from the effects
of pushdown accounting could be significant, such that the amount of additional net income would vary substantially from the amount of projected Adjusted EBITDA.
12
Coal Expected to Benefit from Evolving U.S. Political Landscape
On March 28, 2017 President Trump signed the Executive Order on Energy Independence, which calls for a review of
the Clean Power Plan (CPP)
Domestic energy regulators can submit plans to the White House to revise or rescind regulatory barriers that
impede progress towards energy independence
Trump Administration may repeal the EPAs endangerment finding, thereby removing legal support for much of the
Rolling Back EPAs previous action on climate change, including the CPP
Existing The endangerment finding was issued in 2009 after the U.S. Supreme Court ruled that greenhouse gases must
EPA be regulated under the Clean Air Act if they endanger health
Regulations
Trump Administration may also end government-sponsored legal defense of the CPP, which is presently subject to
judicial challenges
The Republican-controlled Congress could lower federal tax and royalty rates on coal
Various changes could alleviate regulatory burdens on industries that burn coal and result in increased demand
On February 16, 2017 Trump signed legislation under the Congressional Review Act revoking the Stream
Protection Rule which imposed new requirements to avoid damage to waterways outside mine boundaries
The EPA could transfer or delegate regulatory power to states, including allowing states more latitude to set
Transferring environmental policy
Environmental
Limiting sue and settle practice, where the EPA negotiates directly with regulated businesses and excludes state
Policy Back to
regulators
the States
New EPA administrator could also aim for more industry representation on the EPAs Science Advisory Board
Phasing Out
Trump has indicated that the Administration would work to remove subsidies so that all fuels can compete on a level
Subsidies for
basis
Renewables
13
Foresight-Murray Energy Partnership
Transaction With Murray Created the Dominant U.S. Coal Producer
Operational and
Leadership Position in
Operational Expertise Manufacturing
Premier Coal Basins
Expertise
Significant Synergies
Enhanced Transportation
Pure-Play ILB Exposure to ILB and Optionality
Producer NAPP
15
Murray is the Largest Privately Owned Coal Company in U.S.
Asset Map Commentary
Founded in 1988 by Mr. Robert E. Murray
11 active coal mines across 10 mining complexes in NAPP, ILB,
Uintah Basin and Colombia, South America
Tier I assets across premier coal basins with 2.1bn tons of high Btu
coal
Low cost producer, driven by longwall mining and low transportation
costs
Multiple transportation options at each complex for wide market
access
Strong customer relationships with long term off-take agreements
Best-in-class management team
ILB
I LB 10%
25%
NAPP NAPP
71% 80%
16
Ownership Structure Incentivizes Sponsors to Grow Distributions
History of Sponsors Ownership Organizational Structure
In 2006, the Cline Group formed Foresight Energy to develop and
operate Illinois mining assets and completed the IPO in 2014
Cline &
Affiliates Murray
In 2015, Murray acquired an economic interest in FEGP and FELP for
$1.4bn cash consideration, including:
The refinancing transaction provides significant benefits to Foresight and its common LP units, including:
A simplified capital structure with greater operational and financial flexibility
Extends maturity profile and removes potential dilution from Convertible PIK Notes
Provides ability to resume distributions on common LP units, subject to the discretion of management and
terms of financing documents
$825
$450 $425
$ 349
$300 $ 98 $296
$170
$353
2017 2018 2019 2020 2021 2022 2023+ 2017 2018 2019 2020 2021 2022 2023+
2nd Lien Notes New Revolver New 1st Lien Term Loan New 2nd Lien Notes
1st Lien Term Loan 2nd Lien Convertible PIK Notes
Undrawn Revolver Drawn Revolver
Note: Maturity profiles exclude Foresights Trade A/R Securitization Facility, Longwall Financing Arrangements and Capital Lease Obligations.
19
Sponsors Focused on Generating Cash Flow and Growing Distributions
Long-term sales contracts provide revenue visibility and stable cash flows
Cash Flow Industry leading low-cost position generates positive cash flow through commodity cycle
Generation Broad market access through transportation optionality; diversified customer base
Favorable coal industry outlook under the Trump Administration with upside through exports
Strong, flexible capital structure designed for growth
Clean balance sheet with no legacy pension and OPEB liabilities
Capital
Recently completed refinancing allows Foresight to resume distributions on common units, subject
Structure
to the discretion of management and terms of financing documents
Under new capital structure, cash flow available for distributions will increase as Foresight delevers
Focus on maximizing unitholder return through generating cash flow and growing distributions
Continue to control costs and seek highest netback prices in domestic and seaborne markets
Unitholder Intend to reinstate distributions to common unitholders
Returns
Seek to pay distributions utilizing percentage of excess cash flow
Continue to evaluate potential for drop-down acquisitions or opportunistic M&A
20
Clear Roadmap to Unitholder Returns
Leading Thermal Coal Producer with Exposure to Most Attractive U.S. Coal Basin
Low Cost Operations Allow for Significant Cash Flow Through the Cycle
Sponsors Strategically Aligned with Unitholders and Incentivized to Reinstate and Grow
Distributions
Expected Near-Term Deleveraging will Increase Cash Flow Available for Distributions
21
Appendix
Adjusted EBITDA Reconciliation
For the Year Ended December 31, Three Months Ended March 31,
($ in Thousands) 2012 2013 2014 2015 2016 2016 2017
Net (Loss) Income Attributable to Controlling
$125,831 $8,517 $137,567 $(39,454) $(178,789) $(41,704) $(111,184)
Interests1
Interest Expense, Net 82,580 115,897 113,030 117,311 149,201 32,995 43,380
Depreciation, Depletion and Amortization 124,552 162,177 169,767 195,415 164,212 36,417 39,298
Accretion on Asset Retirement Obligations 1,368 1,527 1,621 2,267 3,376 844 710
Transition and Reorganization Costs (Excluding
17,111 2,574 2,241
Equity-Based Compensation)2
Equity-Based Compensation 4,632 5,024 13,704 5,106 3,992 318
Loss (Gain) on Commodity Derivative Contracts (534) (2,392) (76,330) (45,691) 23,752 523 1,492
Settlements of Commodity Derivative Contracts (61) 19,204 61,223 12,644 5,119 3,724
Adjusted EBITDA - Capex $128,492 $152,712 $179,837 $253,382 $254,215 $45,204 $44,062
Adjusted EBITDA Margin 40.0 % 38.0 % 36.9 % 34.4 % 35.3 % 30.3 % 27.8 %
1 Included in net loss attributable to controlling interests are insurance recoveries for the reimbursement of mitigation costs and business interruption proceeds related to the combustion
event at our Hillsboro operation for the year ended December 31,2016.
2 Equity-based compensation of $4.3 million was recorded in transition and reorganization costs in the consolidated statement of operations for the years ended December 31, 2015 and
2016.
3 Capex is defined as investment in property, plant, equipment and development.
23