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

1 For required disclosures, including analyst certification, please refer to the important disclosures section on page 34 of this report

US Coal Markets: An Investor’s Perspective

2

Companies Under Coverage

Source: Company reports

3

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

What The Markets Want?

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Regional Cost Breakdown

Source: Company reports, BB&TCM estimates 2014 2015 Total 2015E Met as a % of 2015E Actual Guidance APP Shipments Total APP Volume ARLP $39.72

• 10.4

NA CNX $41.67

• 29.3

14% ANR $61.66 $58-$64 34.5 45% RNO $60.47

• 2.2

NA ACI $63.39 $56.75-$59.75 12.2 52% ALL OTHER

• 130.3
• TOTAL

218.8 APPALACHIAN COST POSITION 2014 2015 Total 2015E Actual Guidance IB Shipments FELP $20.80

• 23.0

ARLP $32.47

• 32.9

BTU $35.70

• 23.0

HNRG $31.43 $27 in H2 7.5 ARMSTRONG $38.46

• 8.5

ALL OTHER

• 35.4

TOTAL 130.3 ILLINOIS BASIN COST POSITION

2014 2015 Total 2015E Actual Guidance PRB Shipments CLD $10.19

• 76.0

ACI $11.05 $10.60-$11.00 109.5 ANR $11.15 $10.00-$11.00 38.0 BTU $9.92

• 140.0

WLB

• 28.7

ALL OTHER

• 10.6

TOTAL 402.8 POWDER RIVER BASIN COST POSITION

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US Coal Company Capex

Source: Company reports, BB&TCM estimates

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

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Cash Burn Analysis

Source: Company reports, BB&TCM estimates

Symbol 2016E Adj. EBITDA 2016E Int. Expense 2016E Capex 2016E Dividends 2016E FCF ACI $239 ($365) ($140) $0 ($266) BTU $667 ($465) ($530) $0 ($328) CLD $84 ($46) ($42) $0 ($4) HNRG $87 ($15) ($26) ($5) $42 WLB $245 ($90) ($78) $0 $78 AVG. $264 ($196) ($163) ($1) ($69) 2016 Estimated FCF Calculation

7

EBITDA Sensitivities

Source: BB&TCM estimates

Every $10/mt increase in met prices impact on 2016/2017 EBITDA Every $5/st increase in thermal (East) impact on 2016/2017 EBITDA Every $1/st increase in thermal (PRB) impact on 2016/2017 EBITDA

Ticker $ Change EBITDA % Change EBITDA $ Change EBITDA % Change EBITDA ACI $36 15% $46 21% BTU $96 14% $96 12% CNX $29 3% $42 4% 2017 2016 Ticker $ Change in EBITDA % Change in EBITDA $ Change in EBITDA % Change in EBITDA ACI $18 7% $20 9% CNX $52 6% $90 9% 2016 2017 Ticker $ Change EBITDA % Change EBITDA $ Change EBITDA % Change EBITDA ACI $50 21% $74 34% BTU $38 6% $80 10% CLD $17 20% $37 57% 2016 2017

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US Coal Company Balance Sheets (2008A)

Source: Company reports, BB&TCM estimates

Total Net Debt

ACI ANR ARLP BTU CLD CNX WLT 1.6x

• 0.3x

1.1x 1.3x 0.9x 0.8x 3.4x Net Debt/TTM EBITDA ACI ANR ARLP BTU CLD CNX WLT 9.9x 11.1x 11.6x 8.4x 10.2x 29.6x 16.5x TTM EBITDA/Interest

($500) $0 $500 $1,000 $1,500 $2,000 $2,500 ACI ANR ARLP BTU CLD CNX WLT $1,242 ($137) $276 $2,344 $194 $910 $1,481 $'s in Millions

9

US Coal Company Balance Sheets (2014A)

Source: Company reports, BB&TCM estimates ACI ANR ARLP BTU CLD CNX WLT 14.9x 11.2x 1.0x 7.0x 1.9x 3.0x 195.0x Net Debt/TTM EBITDA ACI ANR ARLP BTU CLD CNX WLT 0.7x 0.8x 23.1x 1.9x 2.6x 4.7x 0.0x TTM EBITDA/Interest

Total Net Debt

$0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 ACI ANR ARLP BTU CLD CNX WLT $4,164 $2,751 $814 $5,689 $377 $3,112 $2,667 $'s in Millions

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US Coal Company Liquidity (as of 6/30/15)

Source: Company reports, BB&TCM estimates

$0 $500 $1,000 $1,500 $2,000 $2,500 HNRG WLB FELP ARLP CLD ACI BTU $16 $36 $28 $43 $96 $689 $487 $41 $87 $203 $345 $628 $812 $2,100 $'s in Millions Cash Total Liquidity

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Distribution Of Debt Maturities

Source: Bloomberg Note: Does not include non-interest bearing cash commitments like VEBA’s and LBA’s

Peabody Energy Arch Coal

$0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 $2,000 2015 2016 2017 2018 2019 2020 2021 $0 $0 $0 $1,852 $1,725 $500 $1,000 $'s in Millions $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 2015 2016 2017 2018 2019 2020 2021 $0 $0 $0 $1,519 $0 $1,766 $1,340 $'s in Millions

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Access to Capital

The Have’s And The Have Not's

Limited Access to Capital No Access to Capital

13

Arch: Unsecured Bond Prices

Source: Bloomberg

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Peabody: Unsecured Bond Prices

Source: Bloomberg

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Foresight: Unsecured Bond Prices

Source: Bloomberg

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US Coal Production Data

Source: EIA, BB&TCM estimates

EIA Production Data by Region

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

Note : For purposes of this table, CAPP is southern WV, eastern KY, TN & VA. NAPP is northern WV, PA, MD & OH. IB is western KY, IL & IN. PRB is WY & MT.

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US Utility Coal Inventories

Source: EIA, BB&TCM estimates

U.S. Electric Utility Co al Sto ckpiles

Short tons (thousands) Year Jan Feb March April May June July Aug Sept Oct Nov Dec 2000 138,894 143,501 142,113 144,904 144,330 136,353 127,811 122,746 118,896 120,402 117,765 102,296 2001 96,545 98,220 109,154 118,523 127,521 126,683 119,005 113,066 115,750 126,747 135,428 138,496 2002 139,400 143,151 146,443 153,375 155,313 152,134 142,634 137,130 135,962 140,800 144,608 141,714 2003 134,761 130,372 133,536 140,709 146,104 144,257 134,968 126,747 124,518 127,645 126,692 121,567 2004 111,758 107,709 113,131 121,104 123,739 120,263 111,625 108,062 106,209 111,148 113,299 106,669 2005 97,514 98,059 105,226 115,919 119,902 115,524 105,631 98,879 98,192 101,218 106,573 101,137 2006 105,401 105,986 112,141 125,097 133,841 135,734 127,894 123,884 126,872 134,941 140,442 140,964 2007 136,377 133,468 141,389 149,657 154,735 154,812 145,450 140,668 142,666 150,075 154,292 151,221 2008 146,973 142,782 146,497 154,029 159,408 152,542 142,572 139,352 143,903 155,659 163,390 161,589 2009 156,075 160,601 174,223 185,790 195,103 195,656 193,563 191,532 197,208 199,477 203,765 189,467 2010 178,091 171,026 177,742 189,260 191,669 181,490 169,504 159,987 163,776 175,686 183,389 174,917 2011 164,840 161,439 166,737 173,999 174,619 165,707 147,967 139,225 144,438 156,906 168,354 175,100 2012 181,621 186,958 196,391 203,394 202,816 198,422 184,586 177,246 180,648 184,661 186,633 184,923 2013 180,318 177,208 173,241 173,078 177,977 170,751 160,403 155,640 153,813 153,352 155,754 147,973 2014 132,324 118,949 117,974 128,321 136,218 132,885 125,389 121,042 124,176 136,188 141,742 151,362 2015A/E 155,115 150,322 155,564 168,192 174,558 167,828 160,206 156,041 159,786 169,692 176,480 173,833 5-YR AVG (2010-14) 167,439 163,116 166,417 173,610 176,660 169,851 157,570 150,628 153,370 161,359 167,174 166,855 % Above/Below L5YR AVG

• 7.4%
• 7.8%
• 6.5%
• 3.1%
• 1.2%
• 1.2%

1.7% 3.6% 4.2% 5.2% 5.6% 4.2%

Jul/Jun Jul Y/Y Jul '15 Jun '15 Chg. Jul '14 Chg. Northeast Inventories (000 tons) 7,497 7,743 (3.2%) 5,650 32.7% South Inventories (000 tons) 36,559 40,041 (8.7%) 33,439 9.3% Midwest Inventories (000 tons) 51,571 54,393 (5.2%) 38,621 33.5% West Inventories (000 tons) 37,032 38,446 (3.7%) 23,556 57.2% Total U.S. Days of Burn Bituminous 77 73 4 59 18 Subbituminous 66 65 1 43 23

N ot e : St ockpile lev els r eflect a su r v ey sa m ple of pow er pla n t s u sed t o gen er a t e da y s

• f bu r n . Will n ot equ a l t ot a l r epor t ed EIA st ockpile lev els. Exclu des lign it e coa l.

Utility Coal Inventories & Days of Burn By Region

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US Coal Production Data

Source: EIA, BB&TCM estimates

Estimated Full-Year 2015 Production Data by Region

BB&T 2015 Y/Y BB&T Coal Region Estimates 2015E Annualized % Var. 2014E % Chg. 2016E Central Appalachia (CAPP) 84,603 101,718 20.2% 116,213 (12.5%) 82,234 Northern Appalachia (NAPP) 118,197 127,972 8.3% 134,010 (4.5%) 117,960 Illinois Basin (IB) 130,298 126,279 (3.1%) 137,156 (7.9%) 134,207 Powder River Basin (PRB) 402,767 397,660 (1.3%) 440,182 (9.7%) 405,586 Other U.S. 169,315 152,717 (9.8%) 172,089 (11.3%) 169,955 U.S. Total 905,180 906,345 0.1% 999,650 (9.3%) 909,943

Note : For purposes of this table, CAPP is southern WV, eastern KY, TN & VA. NAPP is northern WV, PA, MD & OH. IB is western KY, IL & IN. PRB is WY & MT. Based on info through week 40 of 2015.

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US Coal Generation Data

Source: EIA, BB&TCM estimates

EIA Generation by Fuel Source Data

• Coal accounted for 34.9% of electricity generation in July 2015. This compares to 35.0% for natural gas,

17.9% for nuclear, 5.3% for hydro, and 6.9% for all other sources.

• Coal as a percentage of the overall generation mix bottomed at 30.3% in April of 2015.

Y/Y M/M YTD YTD Y/Y % Jul-15 Jul-14 % Chg, Jun-15 % Chg. 2015 2014 Chg. Net Generation (billion KWh) Coal 139.4 150.0 (7.1%) 126.3 10.4% 827.9 954.4 (13.3%) Natural Gas 140.0 114.6 22.2% 120.5 16.2% 745.4 622.6 19.7% Nuclear 71.4 71.9 (0.7%) 68.5 4.2% 467.8 457.5 2.3% Hydro 21.0 24.3 (13.3%) 20.0 5.1% 155.3 164.8 (5.8%) All Other* 27.8 24.7 12.2% 26.4 5.2% 200.4 200.3 0.1% U.S. Total 399.6 385.5 3.7% 361.7 10.5% 2,396.8 2,399.6 (0.1%) Fossil Fuel Consumption (quantity) Coal (tons in 000's) 76,401 81,580 (6.3%) 69,299 10.2% 448,858 510,324 (12.0%) Natural Gas (mmcf) 1,078,451 875,603 23.2% 920,110 17.2% 5,613,976 4,741,303 18.4%

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Potential Clean Power Plan (CPP) Impact on US Coal Production

Source: EIA

Total US Coal production in Clean Power Plan cases, 2005-2040 (M tons)

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Potential Clean Power Plan (CPP) Impact on US Electric Generation

Source: EIA

Summary results for AEO2015 Reference case and Clean Power Plan cases

2020 Coal: 31% Gas: 32% Nuclear: 19% Wind/Solar: 8% 2030 Coal: 25% Gas: 31% Nuclear: 18% Wind/Solar: 15% 2040 Coal: 26% Gas: 29% Nuclear: 16% Wind/Solar: 18% Percentage of Total Generation Under Clean Power Plan (CPP) Base Case

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• Goal is to reduce CO2 emissions by ~30% below 2005 levels by 2030.
• Report clearly states, “Switching from coal-fired generation to natural gas-fired generation is

the predominant compliance strategy."

• The rule, if unmodified (highly doubtful) and implemented (dependent upon the courts/future

elections), would be a nightmare.

• Projected coal plant retirements, which are currently 40 GW under the current EIA base case

(mostly before 2017), would increase to 90 GW (nearly all by 2020).

• US coal production would fall 20% below the 2015 level by 2020 and by nearly a third lower by
• 2025. US coal production could be shaved by more than 200M tons.
• Which regions would be affected the most? In the near to intermediate term, the Interior

(mostly Illinois) and Western region's (mostly PRB) coal production would decline by a respective 24% and 22% from 2015 to 2020.

• On an absolute basis, the impact on the Western region (a projected decline of 130M tons) is

far worse than the Interior one (a projected decline of 53M tons).

• From a fuel mix perspective, coal would decline to 31% by 2020 and to 25% by 2030. It would

rise to 40% by 2040.

Potential CPP Impact

Source: EIA, BB&TCM estimates

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• What is met (coking) coal? Coal suitable to make coke for the manufacturing of steel. Met coal typically has a high Btu and low ash

content.

• From most valuable to least, what are the different grades of met coal?
• Low-vol: <20% volatile matter (impurities that become gaseous at certain temperatures) (27M tons in US)
• Mid-vol: 20-34% volatile matter

(12M tons in US)

• High-vol: 35%+ volatile matter (depending upon price, high vol also used as utility coal) (HVA=17M tons; HVB=20M)
• PCI:

Suitable for direct injection into a blast furnace in pulverized state

The Met Coal Market

Met Coal Consum ption, 20 0 9

Ch in a, 6 12 Rest of th e Wor ld, 3 0 6 In dia, 6 4 U.S., 14

(tons millions) Source: World Steel Institute

Coking coal represents only ~8% of total US production

Source: ABREE

2014 2015E 2016E 2017E 2018E 2019E 2020E Met coal imports Japan 51 51 50 48 47 46 46 EU 50 46 47 46 48 48 51 China 62 49 46 48 51 53 55 India 51 54 56 58 61 64 67 South Korea 34 34 34 35 37 38 39 Rest of world 62 72 75 76 74 74 72 Global imports 310 306 308 311 318 323 330 Met coal exports Australia 186 188 194 198 205 209 213 U.S. 57 55 51 48 46 44 41 Canada 31 29 29 29 30 30 31 Russia 21 22 22 23 23 24 24 Rest of world 15 12 12 13 14 16 21 Global exports 310 306 308 311 318 323 330

Global Seaborne Met Coal Trade

(millions of metric tons)

24

• Key price drivers:
• Global steel production/demand/utilization expectations
• Chinese steel consumption: ~45% of the global total
• Currency fluctuations, supply shut-ins, exogenous weather events
• Pace of US/CAN/Australian shut-ins versus development of major met reserves in Mozambique

(Tete Moatize) and Mongolia (Tavan Tolgoi)

Met Coal Drivers & Prices

Seaborne High-Quality Hard Coking Coal Prices

($/mt FOB Port)

Source: Bloomberg, Reuters, Platts

Period ($/mt FOB Port)

Q1'11 $225 Q2'11 $330 Q3'11 $315 Q4'11 $285 Q1'12 $235 Q2'12 $206 Q3'12 $225 Q4'12 $170 Q1'13 $165 Q2'13 $172 Q3'13 $145 Q4'13 $152 Q1'14 $143 Q2'14 $120 Q3'14 $120 Q4'14 $119 Q1'15 $117 Q2'15 $109.50 Q3'15 $93 Q4'15 $89 Note: Global benchmark price betw een the BHP Billiton-Mitsubishi Alliance (BMA) and Japanese steel producers for high-quality hard coking coal contracts for the Japanese fiscal year (4/1-3/31). HQHCC contracts settled on a quarterly basis beginning 4/1/10.

$80 $130 $180 $230 $280 $330 $380 January-11 March-11 May-11 July-11 September-11 November-11 January-12 March-12 May-12 July-12 September-12 November-12 January-13 March-13 May-13 July-13 September-13 November-13 January-14 March-14 May-14 July-14 September-14 November-14 January-15 March-15 May-15

Platts' Low-Vol Met Spot Prices (Peak Downs)

Current: $79.45 (10/13/15) High: $383.00 (1/20/11) Low: $79.45 (10/13/15)

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Met Coal Market Indicators

Source: Bloomberg

Global Steel Capacity Utilization US Steel Capacity Utilization Chinese Hot-Rolled Steel Prices Chinese Coal Net Imports

50% 60% 70% 80% 90% 2008 2009 2010 2011 2012 2013 2014 2015 Most Recent: 68.0% (Aug. '15) High: 88.4% (Mar. '08) Low: 58.1% (Dec. '08) 30% 40% 50% 60% 70% 80% 90% 100% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Current: 72.2% (10/3/15) High: 95.9% (Apr. '00) Low: 33.5% (Dec. '08)

• 10

10 20 30 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 millions of metric tons

Imports Exports Net Imports

Most Recent: 13.0 mt (Aug. '15) High: 28.2M mt (Dec. '12) Low: -5.8M mt (Mar. '05) 1,500 2,500 3,500 4,500 5,500 6,500 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Yuan/metric ton Current: CNY 1,982 (10/13/15) High: CNY 5,957 (Jul. '08) Low: CNY 1,982 (Oct. '15)

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Chinese Steel Margins

Source: Platts

Platts China Long Steel Spread (CLSS using IODEX)

• The Platts China long steel spread is calculated by taking the difference between long steel prices in

China and the two input costs of IODEX CFR China iron ore and hard coking coal 64 mid vol CFR China

160 180 200 220 240 260 280 300 320 340 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 $/MT Current: $170.50 (10/12/15) High: $324.33 (5/31/13) Low: $170.50 (10/12/15)

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Valuation Summary Page

Source: BB&TCM estimates, FactSet; Prices as of 10/13/15

Equity Ratings, Price Targets & Balance Sheet Price Price Shares Out. Market Total Legacy Liab. Shareholders Book Value/ Enterprise Current Net Debt/ Total U.S. Coal Producers Ticker 10/13/15 Rating Target (Dil.) Cap Debt (12/31/14) Cash Equity Share Value (ex. LL) Dividend Yld TTM EBITDA Debt/Cap. Arch Coal ACI $3.83 Hold NA 21.3 $82 $5,146 $542 $746 $1,394 $65.47 $4,482 0.0% 14.0x 78.7% Cloud Peak Energy CLD $2.98 Hold NA 61.0 $182 $499 $216 $109 $1,033 $16.92 $572 0.0% 0.4x 32.6% CONSOL Energy CNX $11.37 Hold NA 228.7 $2,600 $3,708 $1,347 $10 $4,682 $20.47 $6,298 0.4% 4.1x 44.2% Hallador Energy HNRG $7.46 Hold NA 29.0 $217 $278 $0 $16 $203 $6.99 $478 2.1% 2.9x 57.8% Peabody Energy BTU $21.05 Hold NA 18.2 $382 $6,305 $2,547 $533 $1,656 $91.22 $6,154 0.0% 8.3x 79.2% Westmoreland Coal WLB $14.78 Buy $24 17.9 $265 $1,033 $764 $36 ($423) ($23.59) $1,262 0.0% 4.6x 169.2% U.S. Coal Avg. 0.5% 5.9x 58.5% Estimates & Trading Data 30-Day Avg. Short Total U.S. Coal Producers 2015E 2016E 2017E 2015E 2016E 2017E 2015E 2016E 2017E 2015E 2016E 2017E Volume (mil.) Interest % Liquidity Arch Coal $2,642 $2,634 $2,635 ($23.83) ($19.65) ($20.46) $265 $239 $220 ($11.23) ($12.52) ($11.06) 2.65 31.9% $812 Cloud Peak Energy $1,179 $1,209 $1,220 ($0.50) ($0.95) ($1.18) $126 $84 $64 ($0.50) ($0.07) ($0.37) 1.71 23.9% $628 CONSOL Energy $3,121 $3,556 $3,881 ($2.20) $0.62 $0.72 $802 $925 $1,029 ($2.01) $0.50 $0.27 7.42 16.9% $1,316 Hallador Energy $341 $301 $335 $1.05 $0.76 $0.72 $102 $87 $91 $1.62 $1.44 $1.46 0.10 3.5% $41 Peabody Energy $5,736 $6,010 $6,104 ($34.85) ($20.75) ($14.73) $445 $667 $783 ($21.36) ($18.09) $3.74 1.07 31.9% $2,100 Westmoreland Coal $1,517 $1,564 $1,579 ($3.68) ($2.22) ($2.50) $241 $245 $240 $3.85 $4.34 $4.33 0.27 19.9% $87 U.S. Coal Avg. 2.59 21.6% $831 Valuation Metrics 5-Yr Median 5-Yr Median Reserve Life U.S. Coal Producers 2015E 2016E 2017E Fwd Multiple 2015E 2016E 2017E Fwd Multiple 2015E 2016E 2017E P&P Tons (M) % Assigned % Owned (Yrs; 2014E) Arch Coal

• 9.8x

18.3x 21.0x 23.3x 6.1x

• 5,064

34% 23% 39 Cloud Peak Energy

• 10.8x

4.4x 6.4x 8.1x 4.9x

• 1,122

100% 5% 15 CONSOL Energy

• 18.2x

15.9x 12.5x 8.3x 6.9x 6.2x 6.4x

• 22.9x

42.7x 3,238 32% 72% 111 Hallador Energy 7.1x 9.8x 10.4x NA 4.5x 4.8x 4.3x NA 4.6x 5.2x 5.1x 199 82% 0% 27 Peabody Energy

• 11.4x

14.6x 10.2x 8.6x 6.3x

• 5.6x

7,550 61% 32% 35 Westmoreland Coal

• 12.0x

5.1x 4.8x 4.6x 4.0x 3.8x 3.4x 3.4x 1,265 68% 9% 22 U.S. Coal Avg. 7.1x 14.0x 13.1x 11.3x 10.0x 9.9x 10.1x 5.5x 4.6x 14.0x 17.8x 62% 26% 45 Revenues P/E Coal Reserve Data (as of 12/31/14) EPS EBITDA Free Cash Flow/Share EV/EBITDA P/FCF

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Additional Statistical Information

Source: BB&TCM estimates, FactSet; Prices as of 10/13/15

Shipment Statistics

• Prod. By Mine

EV/ EV/ U.S. Coal Producers 2015E 2016E 2017E 2015E 2016E 2017E 2015E 2016E 2017E 2015E 2016E 2017E % Surface Reserves

• Assgn. Res.

Arch Coal 122.0 127.0 127.0 6.4 6.5 6.5 128.4 133.5 133.5 5% 5% 5% 86% $0.88 $2.58 Cloud Peak Energy 76.0 76.0 76.0 0.0 0.0 0.0 76.0 76.0 76.0 0% 0% 0% 100% $0.51 $0.51 CONSOL Energy 25.2 28.1 27.8 4.1 4.0 4.0 29.3 32.0 31.8 14% 12% 13% 7% $1.94 $6.15 Hallador Energy 7.5 7.0 8.0 0.0 0.0 0.0 7.5 7.0 8.0 0% 0% 0% 0% $2.40 $2.93 Peabody Energy 203.0 207.5 210.5 14.5 14.5 14.5 217.5 222.0 225.0 7% 7% 6% 90% $0.82 $1.34 Westmoreland Coal 56.7 57.0 57.0 0.0 0.0 0.0 56.7 57.0 57.0 0% 0% 0% 100% $1.00 $1.47 U.S. Coal Avg. $1.26 $2.50 Additional Shipment Statistics U.S. Coal Producers 2015E 2016E 2017E 2015E 2016E 2017E 2015E 2016E 2017E CAPP NAPP IB PRB WBIT / SW OTHER Arch Coal 97% 45% 20% 81% 11% 0% 96% 43% 19% 11% 0% 0% 83% 6% 0% Cloud Peak Energy 100% 67% 26% NA NA NA 100% 67% 26% 0% 0% 0% 100% 0% 0% CONSOL Energy 98% 53% 19% 71% 18% 0% 94% 49% 17% 25% 75% 0% 0% 0% 0% Hallador Energy 100% 87% 46% NA NA NA 100% 87% 46% 0% 0% 100% 0% 0% 0% Peabody Energy 100% 63% 25% 55% 0% 0% 100% 59% 23% 0% 0% 11% 62% 10% 17% Westmoreland Coal 100% 100% 100% NA NA NA 100% 100% 100% 0% 0% 0% 51% 12% 37% U.S. Coal Avg. 99% 63% 27% 69% 9% 0% 98% 61% 26% Margins, Returns & Other % Miners U.S. Coal Producers 2015E 2016E 2017E 2015E 2016E 2017E 2015E 2016E 2017E 2015E 2016E 2017E Union Domestic International Arch Coal 10% 9% 8%

• 0%

92% 8% Cloud Peak Energy 11% 7% 5%

• 0%

95% 5% CONSOL Energy 26% 26% 27%

• 3%

3%

• 2%

2%

• 4.4%

2.3% 1% 95% 5% Hallador Energy 30% 29% 27% 14% 9% 8% 8% 6% 6% 21.7% 19.3% 19.5% 0% 100% 0% Peabody Energy 8% 11% 13%

• 1%
• 17.8%

39% 86% 14% Westmoreland Coal 16% 16% 15% 15% 8% 8% 2% 3% 3% 26.0% 29.4% 29.3% 64% 93% 7% U.S. Coal Avg. 17% 16% 16% 14% 6% 6% 8% 4% 3% 21.7% 11.8% 13.2% 17% 94% 6% FCF Yields % Met Priced % Coal Shipments (2014E) Total Shipments (millions of tons) Met Coal (millions of tons) Met as % of Total EBITDA Margins Thermal Coal (millions of tons) % Thermal Priced Regional Shipment Breakdown % (2014E) ROE ROCE % Total Priced

29

BB&T vs. Consensus Estimates

Source: BB&TCM estimates, FactSet; Prices as of 10/13/15

EPS Estimates U.S. Coal Producers BB&T Consensus ∆ BB&T Consensus ∆ % ∆ BB&T Consensus ∆ % ∆ BB&T Consensus ∆ % ∆ Arch Coal ($5.68) ($5.85) $0.17 ($23.83) ($24.71) $0.88

• ($19.65)

($20.36) $0.71

• ($20.46)

($18.83) ($1.64)

• Cloud Peak Energy

($0.09) ($0.13) $0.04 ($0.50) ($0.56) $0.06

• ($0.95)

($0.74) ($0.21)

• ($1.18)

($0.75) ($0.43)

• CONSOL Energy

$0.03 ($0.02) $0.05 ($2.20) $0.09 ($2.29) (2,488%) $0.62 $0.41 $0.21 50% $0.72 $1.04 ($0.32) (31%) Hallador Energy $0.27 $0.27 ($0.00) $1.05 $1.06 ($0.01) (1%) $0.76 $0.90 ($0.13) (15%) $0.72 $0.72 ($0.00) (0%) Peabody Energy ($10.53) ($8.39) ($2.14) ($34.85) ($31.99) ($2.85)

• ($20.75)

($21.30) $0.55

• ($14.73)

($12.94) ($1.79) 14% Westmoreland Coal ($0.49) ($0.38) ($0.12) ($3.68) ($3.34) ($0.34)

• ($2.22)

($2.03) ($0.20)

• ($2.50)

($2.22) ($0.28)

• U.S. Coal Avg.

18% (6%) EBITDA Estimates ($M) U.S. Coal Producers BB&T Consensus ∆ BB&T Consensus ∆ % ∆ BB&T Consensus ∆ % ∆ BB&T Consensus ∆ % ∆ Arch Coal $65.6 $63.9 $1.6 $264.7 $278.7 ($14.0) (5%) $238.5 $246.5 ($8.0) (3%) $219.5 $265.9 ($46.4) (17%) Cloud Peak Energy $36.9 $32.9 $3.9 $125.5 $116.1 $9.4 8% $83.6 $95.0 ($11.4) (12%) $64.5 $89.6 ($25.2) (28%) CONSOL Energy $192.5 $183.0 $9.5 $801.7 $801.8 ($0.1) (0%) $925.1 $955.6 ($30.5) (3%) $1,028.8 $1,161.2 ($132.4) (11%) Hallador Energy $24.6 $27.5 ($2.9) $101.6 $107.9 ($6.3) (6%) $87.2 $83.4 $3.8 5% $90.6 $83.0 $7.6 9% Peabody Energy $82.3 $116.7 ($34.3) $445.1 $513.6 ($68.5) (13%) $666.6 $667.2 ($0.6) (0%) $783.0 $816.0 ($33.1) (4%) Westmoreland Coal $63.4 $65.8 ($2.4) $240.5 $248.5 ($8.0) (3%) $245.0 $236.6 $8.4 4% $239.8 $242.3 ($2.5) (1%) U.S. Coal Avg. (3%) (10%) Historic Share Price Performance U.S. Coal Producers MTD QTD YTD 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Arch Coal 16.1% 16.1% (78.5%) 45.9% 15.0% 125.0% (24.0%) 50.8% (63.4%) 39.5% 57.6% (58.6%) (49.6%) (39.2%) (60.0%) Cloud Peak Energy 13.3% 13.3% (67.5%)

• 59.5%

(16.8%) 0.1% (6.9%) (49.0%) CONSOL Energy 16.0% 16.0% (66.4%) 54.6% 61.5% 60.5% (0.7%) 124.2% (59.8%) 76.2% (2.1%) (24.7%) (12.5%) 18.5% (11.1%) Hallador Energy 7.3% 7.3% (32.2%)

• (25.0%)

16.7% (14.3%) 161.7% 33.6% (5.3%) (16.8%) (2.4%) 36.6% Peabody Energy 1.7% 1.7% (81.9%) 44.9% 96.0% 105.0% (1.5%) 63.8% (62.9%) 100.3% 41.5% (48.2%) (19.6%) (26.6%) (60.4%) Westmoreland Coal 4.9% 4.9% (55.5%) 48.9% 74.1% (24.8%) (14.1%) (29.3%) (20.1%) (19.7%) 34.0% 6.8% (26.7%) 106.5% 72.2% U.S. Coal Average 9.9% 9.9% (63.7%) 48.6% 61.6% 66.4% (13.1%) 45.2% (44.1%) 71.6% 37.4% (24.5%) (20.9%) 8.3% (12.0%) S&P 500 Index 4.4% 4.4% (2.7%) 26.4% 9.0% 3.0% 13.6% 3.5% (38.5%) 23.5% 12.8% (0.0%) 13.4% 29.6% 11.4% 2015 2016 2016 2017 Q3 2015 2017 Q3 2015 2015

30

Coal MLPs: Valuation Summary Page

Source: BB&TCM estimates, FactSet; Prices as of 10/13/15

Equity Ratings, Price Targets & Balance Sheet Price Price Units Out. Market Total Legacy Liab. Shareholders Book Value/ Enterprise Net Debt/ Total U.S. Coal MLPs Ticker 10/13/15 Rating Target (Dil.) Cap Debt (12/31/14) Cash Equity LP Unit Value (ex. LL) TTM EBITDA Debt/Cap. Alliance Resource Partners ARLP $23.15 Buy $28 74.2 $1,717 $873 $252 $43 $1,052 $14.18 $2,547 1.1x 45.4% CNX Coal Resources LP CNXC $12.41 Buy $20 23.2 $288 $184 $8 $0 $172 $7.41 $472 1.4x 51.7% Foresight Energy LP FELP $6.74 Buy $12 130.0 $876 $1,697 $31 $55 $128 $0.99 $2,519 3.9x 93.0% Natural Resource Partners NRP $2.55 Hold NA 122.3 $312 $1,432 $5 $28 $712 $5.82 $1,716 4.7x 66.8% Coal MLP Avg. 2.8x 64.2% Estimates & Trading Data 30-Day Avg. Short U.S. Coal MLPs 2015E 2016E 2017E 2015E 2016E 2017E 2015E 2016E 2017E Volume (000s) Interest % Beta Alliance Resource Partners $3.75 $3.55 $1.70 $782 $748 $562 $7.89 $6.55 $4.04 279 2.4% 0.55 CNX Coal Resources LP $2.10 $1.66 $2.66 $92 $121 $220 $2.38 $2.19 $3.32 55 1.3% 0.75 Foresight Energy LP $0.30 $0.56 $0.20 $385 $351 $318 $1.58 $1.31 $1.01 229 3.2% 0.64 Natural Resource Partners $0.62 $0.55 $0.68 $273 $276 $292 $1.47 $1.60 $1.77 332 2.7% 0.94 Estimates & Trading Data 5-Yr Median U.S. Coal MLPs Current Rate 2015E 2016E 2017E Current 2015E 2016E 2017E Yield 2015E 2016E 2017E Alliance Resource Partners $2.700 $2.675 $2.819 $2.934 11.7% 11.6% 12.2% 12.7% 6.1% 1.82x 1.53x 0.90x CNX Coal Resources LP $2.050 $1.039 $2.248 $2.495 16.5%

• 33.3%

37.0% NA 2.29x 0.97x 1.33x Foresight Energy LP $1.520 $1.499 $1.604 $1.682 22.6% 22.2% 23.8% 25.0% NA 1.05x 0.82x 0.60x Natural Resource Partners $0.360 $0.620 $0.360 $0.360 14.1% 24.3% 14.1% 14.1% 8.1% 2.25x 4.44x 4.91x Coal MLP Avg. 16.2% 19.4% 20.9% 22.2% 7.1% 1.85x 1.94x 1.94x Valuation Metrics 5-Yr Median 5-Yr Median U.S. Coal MLPs 2015E 2016E 2017E

• Fwd. Multiple

2015E 2016E 2017E

• Fwd. Multiple

2015E 2016E 2017E Alliance Resource Partners 6.2x 6.5x 13.6x 11.1x 3.1x 3.0x 4.0x 4.6x 2.9x 3.5x 5.7x CNX Coal Resources LP 5.9x 7.5x 4.7x NA 4.5x 5.8x 4.5x NA

• 5.7x

3.7x Foresight Energy LP 22.5x 12.0x 33.7x NA 6.2x 7.0x 8.1x NA 4.3x 5.1x 6.7x Natural Resource Partners 4.1x 4.6x 3.8x 18.4x 6.4x 6.3x 6.0x 10.0x 1.7x 1.6x 1.4x Coal MLP Avg. 9.7x 7.6x 13.9x 14.8x 5.1x 5.5x 5.6x 7.3x 3.0x 4.0x 4.4x Shipment Statistics Total % Met % Assign. % Owned U.S. Coal MLPs 2015E 2016E 2017E Reserves Reserves Reserves Reserves CAPP NAPP IB PRB OTHER Alliance Resource Partners 43.3 46.0 46.0 1,169 1% 54% 20% 4% 20% 76% 0% 0% CNX Coal Resources LP 4.6 7.8 13.0 3,238 0% 32% 72% 0% 100% 0% 0% 0% Foresight Energy LP 23.0 24.0 26.0 3,071 0% 100% 0% 0% 0% 100% 0% 0% Natural Resource Partners 45.4 44.3 45.2 2,326 20% NA 100% 40% 19% 26% 6% 10% Coal MLP Avg. 5% 62% 48% P/DCF EV/EBITDA P/E Total Volumes (millions of tons) Regional Volume Breakdown (%) - 2014 EPU EBITDA Distributable Cash Flow/Unit Distribution/Unit Distribution Coverage Ratio Distribution Yield

31

Coal MLPs: BB&T vs. Consensus Est.

Source: BB&TCM estimates, FactSet; Prices as of 10/13/15

EPS Estimates U.S. Coal MLPs Actual Consensus ∆ Actual Consensus ∆ % ∆ BB&T Consensus ∆ % ∆ BB&T Consensus ∆ % ∆ Alliance Resource Partners $0.99 $0.88 $0.12 $3.75 $3.52 $0.22 6% $3.55 $3.27 $0.28 8% $1.70 $2.60 ($0.90) (35%) CNX Coal Resources LP $0.50 $0.55 ($0.05) $2.10 $1.96 $0.14 7% $1.66 $1.82 ($0.15) (9%) $2.66 $2.28 $0.38 17% Foresight Energy LP $0.15 $0.16 ($0.01) $0.30 $0.42 ($0.12) (29%) $0.56 $0.46 $0.10 23% $0.20 $0.46 ($0.26) (57%) Natural Resource Partners $0.10 $0.11 ($0.02) $0.62 $0.64 ($0.01) (2%) $0.55 $0.63 ($0.08) (12%) $0.68 $0.67 $0.01 2% Coal MLP Avg. 3% (18%) EBITDA Estimates ($M) U.S. Coal MLPs Actual Consensus ∆ Actual Consensus ∆ % ∆ BB&T Consensus ∆ % ∆ BB&T Consensus ∆ % ∆ Alliance Resource Partners $198.4 $199.3 ($1.0) $781.7 $784.5 ($2.8) (0%) $748.2 $760.4 ($12.2) (2%) $562.1 $677.1 ($115.0) (17%) CNX Coal Resources LP $22.1 $24.0 ($1.9) $92.1 $98.3 ($6.2) (6%) $121.1 $128.4 ($7.3) (6%) $220.1 $219.5 $0.7 0% Foresight Energy LP $89.4 $89.0 $0.4 $385.4 $389.7 ($4.3) (1%) $351.2 $363.7 ($12.5) (3%) $318.1 $372.8 ($54.7) (15%) Natural Resource Partners $64.9 $65.3 ($0.4) $273.5 $273.4 $0.0 0% $276.2 $281.7 ($5.6) (2%) $291.9 $293.1 ($1.3) (0%) Coal MLP Avg. (3%) (8%) Historic Share Price Performance U.S. Coal MLPs MTD QTD YTD 2009 2010 2011 2012 2013 2014 Alliance Resource Partners 4.0% 4.0% (46.2%) 61.3% 64.8% 14.9% (23.2%) 32.6% 11.8% CNX Coal Resources LP 10.3% 10.3%

• Foresight Energy LP

26.5% 26.5% (60.0%)

• (15.7%)

Natural Resource Partners 0.4% 0.4% (72.4%) 38.9% 32.2% (18.3%) (31.6%) 7.6% (53.6%) Coal MLP Avg. 10.3% 10.3% (59.6%) 50.1% 48.5% (1.7%) (27.4%) 20.1% (19.1%) S&P 500 Index 4.4% 4.4% (2.7%) 23.5% 12.8% (0.0%) 13.4% 29.6% 11.4% 2015 Q3 2015 2016 2016 2015 Q3 2015 2017 2017

32 Source: EIA, BB&TCM estimates

U.S. Coal Supply & Dem and (m illions of short tons)

Last Updated: October 12 , 2 0 15 EIA For ecasts for 2 0 14 - 2 0 16 as of October 6 , 2 0 15; EIA Pr ojection s for 2 0 2 0 -2 0 4 0 as of Apr il 2 0 15 as pu blish ed in An n u al En er gy Ou tlook 2 0 15. 2 0 0 7 2 0 0 8 2 0 0 9 2 0 10 2 0 11 2 0 12 2 0 13 2 0 14 2 0 15 E 2 0 16 E 2 0 15 E 2 0 16 E 2 0 2 0 E 2 0 2 5 E 2 0 3 0 E 2 0 3 5 E 2 0 4 0 E U.S. Coa l Su pply (m illion s of sh ort t on s) U.S. Coa l Produ ct ion By EIA Region Appalach ia 3 7 7 .8 3 9 0 .2 3 4 1.4 3 3 6 .4 3 3 7 .2 2 9 4 .1 2 6 9 .7 2 6 6 .6 2 18 .6 2 0 5.5 2 3 7 .1 2 2 5.4 2 6 0 2 4 8 2 4 3 2 3 5 2 2 8 In ter ior 14 6 .7 14 6 .6 14 5.8 156 .3 17 0 .8 17 9 .6 18 3 .0 18 8 .6 18 0 .1 18 1.0 17 5.4 17 7 .9 2 19 2 3 5 2 58 2 7 8 3 0 0 West 6 2 1.0 6 3 3 .6 58 5.0 59 1.6 58 7 .6 54 2 .7 53 0 .2 54 2 .8 50 4 .8 50 4 .8 4 9 8 .1 4 7 9 .6 59 2 6 2 2 6 17 59 7 58 9 Refu se Recov er y 1.2 1.4 2 .7 0 .0 0 .0 0 .0 2 .0 1.7 1.7 1.7 0 .0 0 .0 Tot a l U.S. Coa l Produ ct ion 1,14 6 .6 1,17 1.8 1,0 7 4 .9 1,0 8 4 .4 1,0 9 5 .6 1,0 16 .4 9 8 4 .8 9 9 9 .7 9 0 5 .2 8 9 3 .0 9 10 .6 8 8 2 .9 1,0 7 1 1,10 5 1,118 1,111 1,117 U.S. Coa l Produ ct ion By Region Cen tr al Appalach ia 2 2 6 .2 2 3 4 .0 19 6 .5 18 6 .1 18 5.4 14 7 .4 12 7 .6 116 .2 8 4 .6 7 2 .3 Nor th er n Appalach ia 13 2 .1 13 5.6 12 6 .2 12 9 .2 13 1.7 12 6 .1 12 3 .4 13 4 .0 118 .2 117 .0 Sou th er n Appalach ia (Alabam a) 19 .3 2 0 .6 18 .8 19 .9 19 .8 19 .6 18 .6 16 .4 16 .0 15.9 Illin ois Basin 9 9 .8 10 0 .2 10 3 .1 10 5.1 110 .8 12 6 .6 13 2 .1 13 7 .2 13 0 .3 13 0 .3 Powder Riv er Basin 4 9 0 .7 50 8 .2 4 6 7 .9 4 6 8 .4 4 7 5.4 4 3 8 .1 4 3 0 .2 4 4 0 .2 4 0 2 .8 4 0 0 .8 Wester n Bitu m in ou s (Color ado & Utah ) 6 0 .7 56 .4 50 .0 4 4 .5 4 6 .7 4 5.0 4 1.2 4 1.9 4 1.3 4 1.0 Oth er 117 .8 116 .8 112 .4 13 1.1 12 5.8 113 .5 111.7 113 .8 112 .1 115.6 Tot a l U.S. Coa l Produ ct ion 1,14 6 .6 1,17 1.8 1,0 7 4 .9 1,0 8 4 .4 1,0 9 5 .6 1,0 16 .4 9 8 4 .8 9 9 9 .7 9 0 5 .2 8 9 3 .0 Pr im ar y In v en tor y With dr awals 2 .5 (0 .7 ) (6 .6 ) (2 .1) (2 .1) 4 .5 3 .5 0 .9 0 .9 0 .9 1.1 1.0 Expor ts (Steam ) 2 7 .0 3 9 .0 2 1.8 2 5.6 3 7 .6 55.9 52 .0 3 4 .3 2 5.0 18 .8 3 0 .4 2 6 .1 Expor ts (Met) 3 2 .2 4 2 .5 3 7 .3 56 .1 6 9 .5 6 9 .9 6 5.7 6 3 .0 50 .4 4 0 .3 4 6 .7 4 2 .0 Total Expor ts 59 .2 8 1.5 59 .1 8 1.7 10 7 .3 12 5.7 117 .7 9 7 .3 7 5.4 59 .1 7 7 .2 6 8 .2 9 5 112 13 0 13 1 14 1 Im por ts (Steam ) 3 4 .7 3 2 .5 2 1.6 17 .8 11.5 8 .0 7 .9 10 .1 9 .3 9 .4 Im por ts (Met) 1.7 1.7 1.0 1.5 1.6 1.1 1.0 1.2 1.1 1.2 Total Im por ts 3 6 .3 3 4 .2 2 2 .6 19 .4 13 .1 9 .2 8 .9 11.3 10 .4 10 .6 11.5 10 .8 1 1 1 1 1 Net Exp o rts 2 2 .8 4 7.3 3 6 .5 6 2 .3 9 4 .2 116 .6 10 8 .8 8 6 .0 6 5 .0 4 8 .5 6 5 .7 5 7.4 9 4 110 12 9 13 0 14 0 Tot a l Prim a ry Su pply 1,12 6 .4 1,12 3 .8 1,0 2 9 .7 1,0 19 .9 9 9 9 .4 9 0 4 .3 8 7 9 .6 9 14 .6 8 4 1.1 8 4 5 .3 8 4 6 .0 8 2 6 .5 9 7 7 9 9 5 9 8 9 9 8 1 9 7 7 Secon dar y In v en tor y With dr awals (8 .4 ) (11.6 ) (2 7 .1) 14 .9 1.9 (12 .5) 3 7 .9 (3 .8 ) (2 3 .1) (3 .0 ) (4 .1) 3 .4 Waste Coal Su pplied 14 .1 13 .7 12 .4 13 .7 13 .2 11.0 10 .2 11.2 10 .9 11.0 10 .8 11.1 11 10 10 10 10 Tot a l Su pply 1,13 2 .1 1,12 5 .9 1,0 15 .0 1,0 4 8 .5 1,0 14 .5 9 0 2 .8 9 2 7 .7 9 2 2 .0 8 2 8 .8 8 5 3 .3 8 5 2 .7 8 4 1.0 9 8 7 1,0 0 5 9 9 9 9 9 0 9 8 8 Gro w th R a tes Appalachia (3.4%) 3.3% (12.5%) (1.5%) 0.2% (12.8%) (8.3%) (1.1%) (18.0%) (6.0%) (11.1%) (4.9%) 9.7% (4.6%) (2.0%) (3.3%) (3.0%) I nterior (3.1%) (0.0%) (0.5%) 7.2% 9.3% 5.2% 1.9% 3.1% (4.5%) 0.5% (7.0%) 1.4% 24.9% 7.3% 9.8% 7.8% 7.9% W est 0.3% 2.0% (7.7%) 1.1% (0.7%) (7.6%) (2.3%) 2.4% (7.0%) 0.0% (8.2%) (3.7%) 18.9% 5.1% (0.8%) (3.2%) (1.3%) To ta l (1.4 %) 2 .2 % (8 .3 %) 0 .9 % 1.0 % (7.2 %) (3 .1%) 1.5 % (9 .5 %) (1.3 %) (8 .9 %) (3 .0 %) 17.6 % 3 .2 % 1.2 % (0 .6 %) 0 .5 % Central Appalachia (4.2%) 3.4% (16.0%) (5.3%) (0.4%) (20.5%) (13.4%) (8.9%) (27.2%) (14.5%) Northern Appalachia (3.0%) 2.6% (6.9%) 2.4% 1.9% (4.3%) (2.1%) 8.6% (11.8%) (1.0%) Southern Appalachia (Alabam a) 2.8% 6.6% (8.7%) 5.9% (0.6%) (1.2%) (4.8%) (12.0%) (2.5%) (0.5%) I llinois Basin 4.8% 0.5% 2.9% 1.9% 5.4% 14.3% 4.3% 3.8% (5.0%) 0.0% Pow der River Basin 0.4% 3.6% (7.9%) 0.1% 1.5% (7.8%) (1.8%) 2.3% (8.5%) (0.5%) W estern Bitum inous (Colorado/ Utah) (2.6%) (7.1%) (11.3%) (11.0%) 4.9% (3.6%) (8.4%) 1.7% (1.5%) (0.6%) Other (6.2%) (0.8%) (3.8%) 16.6% (4.0%) (9.8%) (1.6%) 1.9% (1.5%) 3.2% To ta l (1.4 %) 2 .2 % (8 .3 %) 0 .9 % 1.0 % (7.2 %) (3 .1%) 1.5 % (9 .5 %) (1.3 %) Exports (Steam ) 22.1% 44.6% (44.1%) 17.4% 46.9% 48.6% (7.0%) (34.0%) (27.0%) (25.0%) (11.4%) (14.1%) Exports (Met) 17.0% 32.1% (12.2%) 50.4% 23.9% 0.5% (6.0%) (4.1%) (20.0%) (20.0%) (25.9%) (10.1%) Total Exports 19.3% 37.8% (27.5%) 38.2% 31.3% 17.2% (6.4%) (17.3%) (22.5%) (21.7%) (20.7%) (11.7%) 23.1% 17.9% 16.1% 0.8% 7.6% I m ports (Steam ) 0.3% (6.3%) (33.5%) (17.4%) (35.5%) (30.1%) (1.2%) 27.2% (8.0%) 1.0% I m ports (Met) 0.0% 0.0% (41.2%) 52.0% 5.3% (30.0%) (13.7%) 24.3% (5.0%) 4.0% Total I m ports 0.3% (5.8%) (33.9%) (14.3%) (32.3%) (30.1%) (2.8%) 26.9% (7.7%) 1.3% 1.8% (6.1%) (91.3%) 0.0% 0.0% 0.0% 0.0% Net Exports 70.1% 107.5% (22.8%) 70.8% 51.1% 23.8% (6.7%) (20.9%) (24.4%) (25.3%) (23.6%) (12.6%) 43.1% 17.0% 17.3% 0.8% 7.7% W aste Coal Supplied (2.1%) (2.8%) (9.3%) 10.3% (3.6%) (16.7%) (7.3%) 9.9% (3.0%) 1.0% (3.6%) 2.8% 15.5% (9.1%) 0.0% 0.0% 0.0% BB&T Est . EIA Est .

33 Source: EIA, BB&TCM estimates

U.S. Coal Supply & Dem and (m illions of short tons)

Last Updated: October 12 , 2 0 15 EIA For ecasts for 2 0 14 - 2 0 16 as of October 6 , 2 0 15; EIA Pr ojection s for 2 0 2 0 -2 0 4 0 as of Apr il 2 0 15 as pu blish ed in An n u al En er gy Ou tlook 2 0 15. 2 0 0 7 2 0 0 8 2 0 0 9 2 0 10 2 0 11 2 0 12 2 0 13 2 0 14 2 0 15 E 2 0 16 E 2 0 15 E 2 0 16 E 2 0 2 0 E 2 0 2 5 E 2 0 3 0 E 2 0 3 5 E 2 0 4 0 E U.S. Coa l Con su m pt ion (m illion s of sh ort t on s) Electr ic Power Sector 1,0 4 5.1 1,0 4 0 .6 9 3 3 .6 9 7 5.6 9 3 2 .5 8 2 3 .6 8 58 .4 8 51.4 7 7 0 .5 7 7 0 .5 7 8 1.4 7 7 8 .3 9 17 9 3 5 9 3 0 9 2 1 9 19 Coke Plan ts 2 2 .7 2 2 .1 15.3 2 1.1 2 1.4 2 0 .8 2 1.5 2 0 .4 19 .8 19 .3 18 .9 18 .2 2 1 2 1 2 0 19 18 Oth er In du str ial 56 .6 54 .4 4 5.3 4 8 .5 4 6 .2 4 2 .8 4 3 .3 4 2 .8 4 1.1 4 1.7 4 1.0 4 1.9 4 7 4 7 4 8 4 8 4 9 Com m er cial & Residen tial 3 .5 3 .5 3 .2 3 .1 2 .8 2 .0 2 .0 2 .2 2 .2 2 .3 2 .7 2 .6 2 2 2 2 2 Coal-to-Liqu ids Heat & Power 0 .0 0 .0 0 .0 0 .0 0 .0 0 .0 0 .0 0 .0 0 .0 0 .0 0 .0 0 .0 Coal-to-Liqu ids Pr odu ction 0 .0 0 .0 0 .0 0 .0 0 .0 0 .0 0 .0 0 .0 0 .0 0 .0 0 .0 0 .0 Tot a l Coa l Con su m pt ion 1,12 8 .0 1,12 0 .5 9 9 7 .5 1,0 4 8 .3 1,0 0 2 .9 8 8 9 .2 9 2 5 .1 9 16 .8 8 3 3 .6 8 3 3 .7 8 4 4 .0 8 4 1.0 9 8 7 1,0 0 5 9 9 9 9 9 0 9 8 8 U.S. Coa l In v en t ories By Sect or a t Yea r-En d Prim a ry Inv ento ries Pr odu cer s an d Distr ibu tor s 3 4 .0 3 4 .7 3 5.9 4 9 .8 51.9 4 6 .2 4 2 .7 4 4 .7 4 3 .8 4 2 .9 4 3 .7 4 2 .7 Seco nd a ry Inv ento ries Electr ic Power Sector 151.2 16 1.6 18 9 .5 17 5.2 17 2 .4 18 5.1 14 8 .0 151.4 17 3 .8 17 6 .4 154 .7 150 .9 Coke Plan ts 1.9 2 .3 2 .0 1.9 2 .6 2 .5 2 .2 1.9 1.9 1.9 1.9 1.8 Retail & Gen er al In du str y 5.6 6 .0 5.1 4 .5 4 .5 4 .5 4 .1 4 .8 5.5 5.9 5.5 5.9 Com m er cial/ In stitu tion al 0 .0 0 .5 0 .5 0 .0 0 .0 0 .6 0 .5 0 .5 0 .5 0 .5 0 .5 0 .5 Tot a l U.S. Coa l In v en t ories a t Yea r-En d 19 2 .8 2 0 5 .1 2 3 3 .0 2 3 1.4 2 3 1.4 2 3 8 .9 19 7 .5 2 0 3 .3 2 2 5 .5 2 2 7 .6 2 0 6 .3 2 0 1.8 Av er age Daily Con su m ption By Electr ic Power Sector 2 .9 2 .9 2 .6 2 .7 2 .6 2 .3 2 .4 2 .3 2 .1 2 .1 2 .1 2 .1 Av era ge Da y s of Bu rn 5 2 .8 5 6 .7 7 4 .1 6 5 .5 6 7 .5 8 2 .0 6 2 .9 6 4 .9 8 2 .3 8 3 .6 7 2 .3 7 0 .8 Tot a l In v en t ory In crea se Y/ Y 5 .8 12 .3 2 7 .9 (1.6 ) 0 .0 7 .5 (4 1.4 ) 5 .8 2 2 .2 2 .1 3 .0 (4 .5 ) Losses 4 .2 5 .3 17 .5 0 .2 11.5 13 .6 2 .6 5 .2 (4 .8 ) 19 .6 8 .7 0 .0 Tot a l In v en t ory Ch a n ge & Losses 1.6 7 .0 10 .3 (1.8 ) (11.5 ) (6 .2 ) (4 4 .0 ) 0 .7 2 7 .0 (17 .5 ) (5 .7 ) (4 .5 ) Gro w th R a tes Electric Pow er Sector 1.8% (0.4%) (10.3%) 4.5% (4.4%) (11.7%) 4.2% (0.8%) (9.5%) 0.0% (8.2%) (0.4%) 17.4% 2.0% (0.5%) (1.0%) (0.2%) Coke Plants (1.1%) (2.8%) (30.5%) 37.6% 1.5% (3.0%) 3.5% (5.0%) (3.0%) (2.5%) (7.4%) (3.7%) 11.1% 0.0% (4.8%) (5.0%) (5.3%) Other I ndustrial (4.8%) (4.0%) (16.7%) 7.0% (4.7%) (7.3%) 1.2% (1.2%) (4.0%) 1.4% (4.2%) 2.2% 14.6% 0.0% 2.1% 0.0% 2.1% Com m ercial & Residential 8.5% (0.6%) (7.7%) (4.0%) (9.1%) (27.0%) (4.6%) 12.8% 1.2% 1.2% 22.7% (3.7%) (25.9%) 0.0% 0.0% 0.0% 0.0% Coal-to-Liquids Heat & Pow er 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Coal-to-Liquids Production 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% To ta l Co ns um p tio n 1.4 % (0 .7%) (11.0 %) 5 .1% (4 .3 %) (11.3 %) 4 .0 % (0 .9 %) (9 .1%) 0 .0 % (7.9 %) (0 .4 %) 16 .9 % 1.8 % (0 .6 %) (0 .9 %) (0 .2 %) Prim a ry Inv ento ries Pr odu cer s an d Distr ibu tor s (7 .0 %) 2 .1% 3 .5% 3 8 .7 % 4 .2 % (11.1%) (7 .5%) 4 .7 % (2 .0 %) (2 .0 %) (2.2%) (2.3%) Seco nd a ry Inv ento ries Electr ic Power Sector 7 .3 % 6 .9 % 17 .3 % (7 .5%) (1.6 %) 7 .4 % (2 0 .1%) 2 .3 % 14 .8 % 1.5% 2.2% (2.5%) Coke Plan ts (3 4 .4 %) 19 .8 % (13 .9 %) (4 .0 %) 3 6 .8 % (3 .0 %) (12 .8 %) (13 .6 %) (1.0 %) 0 .0 % 0.0% (5.3%) Retail & Gen er al In du str y (13 .9 %) 7 .1% (15.0 %) (11.8 %) 0 .0 % (0 .6 %) (8 .2 %) 16 .8 % 14 .0 % 7 .0 % 14.6% 7.3% Com m er cial/ In stitu tion al 0 .0 % 10 0 .0 % 0 .0 % (10 0 .0 %) 0 .0 % 0 .0 % 0 .0 % 0 .0 % 0 .0 % 0 .0 % 0.0% 0.0% Tot a l % Ch a n ge In In v en t ories Y/ Y 3 .1% 6 .4 % 13 .6 % (0 .7 %) 0 .0 % 3 .2 % (17 .3 %) 3 .0 % 10 .9 % 0 .9 % 1.5 % (2 .2 %) BB&T Est . EIA Est .

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