FELP Foresight Energy Partners LP

Full-Year 2018 Highlights:

• Coal sales of $1.097 billion on record sales volumes of 23.4 million tons.
• Adjusted EBITDA of $313.6 million.
• Cash flows from operations of $133.4 million.
• Net loss of $61.6 million, or ($0.32) per common unit and ($0.55) per subordinated unit.
• Paid cash distributions to common unitholders totaling $18.1 million, or $0.2260 per unit, during 2018.
• Increased the distribution by 6% to $0.06 per unit from retained excess cash flow, to be paid on March 29, 2019, to unitholders of record as of March 19, 2019.
• Excess Cash Flow Sweep of $19.6 million to be applied to first lien debt in 2019.

Foresight Energy LP (“Foresight” or the “Partnership”) (NYSE: FELP) today reported financial and operating results for the fourth quarter and year ended December 31, 2018. Foresight generated fiscal year coal sales revenues of $1.097 billion on sales volumes of 23.4 million tons resulting in a net loss of $61.6 million, Adjusted EBITDA of $313.6 million and cash flows from operations of $133.4 million. Net loss reflects the receipt of $44.1 million of insurance proceeds, a $110.7 million non-cash impairment charge, and a $69.1 million non-cash contract benefit all related to the Hillsboro combustion event. Also included in net loss is a $25 million charge related to the settlement of litigation with Natural Resource Partners L.P. (“NRP”) related to matters at Hillsboro Energy and Macoupin Energy.

“Foresight’s financial and operating results for 2018 demonstrated our ability to capitalize on strong export markets and improved domestic spot opportunities to achieve record sales volumes,” remarked Mr. Robert D. Moore, Chairman, President, and Chief Executive Officer. “These volumes helped drive a 16% increase in sales revenues compared to the prior year, Adjusted EBITDA of over $313 million, and cash flows from operations exceeding $133 million, all while safely producing 23.3 million tons, maintaining our industry-leading cost structure, and capturing solid margins.”

Mr. Moore further commented, “In 2018 we, again, achieved excellent operating results and positioned the Partnership for future growth. Further, with the resolution of the litigation with NRP involving our Hillsboro complex, we were able to resume production at our Deer Run Mine with one continuous miner unit. We continue to evaluate our potential future mining options at the Deer Run Mine, which has the potential to be our lowest cost asset.”

Foresight announced that, due to the Partnership’s operating performance during the fourth quarter, the Board of Directors of its General Partner approved an increase of 6% in the quarterly cash distribution to $0.06 per unit from retained excess cash flow. The distribution is payable on March 29, 2019 for unitholders of record on March 19, 2019. In addition, an excess cash flow sweep payment of $19.6 million will be applied to the Partnership’s first lien debt in 2019.

Consolidated Financial Results

Year Ended December 31, 2018 Compared to Year Ended December 31, 2017

Coal sales totaled $1,097.4 million for 2018 compared to $944.4 million for 2017, representing an increase of $152.9 million, or 16%. The increase in coal sales revenues was driven by a nearly 10%, or 2.0 million, increase in tons sold combined with an increase in coal sales realizations of over 6%, or $2.71 per ton sold. The increases in sales volumes and sales realizations per ton were primarily the result of increased export sales, which experienced favorable API2 pricing during 2018, as well as more favorable domestic spot market pricing and improved demand.

Cost of coal produced was $527.0 million for 2018 compared to $485.6 million for 2017. The increase in cost of coal produced was due to higher sales volumes during the 2018 year compared to the 2017 year, as the cost per ton sold remained consistent year-over-year at $22.85 per ton sold.

Transportation costs increased $66.5 million from 2017 to 2018 because of higher sales volumes and a higher percentage of our sales going to the export market during the current year and the additional transportation and transloading costs associated therewith.

Selling, general and administrative expense increased $9.5 million from $30.1 million in 2017 to $39.6 million in 2018. The increase is primarily due to contractual increases in the management services agreement between Foresight and Murray Energy Corporation (“Murray Energy”), increased sales and marketing expense associated with our increased export sales volumes, and legal expenses associated with the settlement of the Hillsboro and Macoupin matters.

During 2018, Foresight recognized an aggregate impairment charge of $110.7 million related to certain long-lived assets and mineral reserves associated with our Hillsboro complex. During 2017, Foresight recorded impairment charges of $42.7 million associated with certain longwall equipment and other related assets that were permanently sealed within and were not recovered from our Hillsboro Deer Run Mine.

Other operating (income) expense, net increased $6.0 million for the year ended December 31, 2018 as compared to the prior year primarily due to the receipt of $43.0 million in payments from insurance companies offset by $25.0 million for the settlement of litigation related to the Hillsboro and Macoupin matters. This compares to $12.8 million in payments from insurance companies in the prior year.

Interest expense during 2018 decreased $5.1 million compared to interest expense during fiscal year 2017 primarily due to lower effective interest rates on our existing debt compared to the interest rates on the indebtedness retired in the March 2017 refinancing transaction and overall lower debt balances as the Partnership continues to pay down debt. The decrease was slightly offset by increased interest expense on revolving credit facility borrowings outstanding and overall higher variable interest rates during 2018.

During 2018, Foresight generated operating cash flows of $133.4 million and ended the year with $0.3 million in cash and $120.7 million of available borrowing capacity, net of outstanding borrowings and letters of credit, under its revolving credit facility. Capital expenditures for the year ended December 31, 2018 totaled $84.1 million compared $76.5 million for the year ended December 31, 2017. The increase in capital expenditures was primarily the result of the timing of infrastructure improvements at our Sugar Camp rail loadout, plus the addition of mining equipment that could allow for the reduction in longwall move outages at our longwall operations.

Three Months Ended December 31, 2018 Compared to Three Months Ended December 31, 2017

Coal sales were $297.0 million for the three months ended December 31, 2018 compared to $282.4 million for the prior year period. This change was driven by a slight increase in total tons sold, combined with a $1.32 per ton increase in sales realizations per ton. The increase in coal sales realizations per ton was principally driven by favorable API2 pricing on export sales, as well as more favorable domestic spot market pricing.

Cost of coal produced for the three months ended December 31, 2018 was $135.8 million compared to $139.2 million for the three months ended December 31, 2017. The decrease in cost of coal produced resulted from a slightly lower cash cost per ton sold as Foresight’s industry-leading productivity continued to translate into low operating costs.

Guidance for 2019

Based on Foresight’s contracted position, recent performance, and its current outlook on pricing and the coal markets in general, the Partnership is providing the following guidance for 2019:

Sales Volumes – Based on current committed position and expectations for 2019, Foresight is projecting sales volumes to be between 22.0 and 23.0 million tons, with over 7.0 million tons expected to be sold into the international market.

Adjusted EBITDA – Based on the projected sales volumes and operating cost structure, Foresight currently expects to generate Adjusted EBITDA in a range of $300 to $340 million.

Capital Expenditures – Total 2019 capital expenditures are estimated to be between $80 and $95 million.

Forward-Looking Statements

This press release contains “forward-looking” statements within the meaning of the federal securities laws. These statements contain words such as “possible,” “intend,” “will,” “if” and “expect” and can be impacted by numerous factors, including risks relating to the securities markets, the impact of adverse market conditions affecting business of the Partnership, adverse changes in laws including with respect to tax and regulatory matters and other risks. There can be no assurance that actual results will not differ from those expected by management of the Partnership. Known material factors that could cause actual results to differ from those in the forward-looking statements are described in Part I, “Item 1A. Risk Factors” of the Partnership’s Annual Report on Form 10-K filed on February 27, 2019. The Partnership undertakes no obligation to update or revise such forward-looking statements to reflect events or circumstances that occur, or which the Partnership becomes aware of, after the date hereof.

Non-GAAP Financial Measures

Adjusted EBITDA is a non-GAAP supplemental financial measure that management and external users of the Partnership’s consolidated financial statements, such as industry analysts, investors, lenders and rating agencies, may use to assess:

• the Partnership’s operating performance as compared to other publicly traded partnerships, without regard to historical cost basis or, in the case of Adjusted EBITDA, financing methods;
• the Partnership’s ability to incur and service debt and fund capital expenditures; and
• the viability of acquisitions and other capital expenditure projects and the returns on investment of various expansion and growth opportunities.

The Partnership defines Adjusted EBITDA as net income (loss) 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, contract amortization and write-off, a change in the fair value of the warrant liability and material nonrecurring or other items, which may not reflect the trend of future results. As it relates to commodity derivative contracts, 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 amount of aggregate settlements during the period. Adjusted EBITDA also includes any insurance recoveries received, regardless of whether they relate to the recovery of mitigation costs, the receipt of business interruption proceeds, or the recovery of losses on machinery and equipment.

The Partnership believes the presentation of Adjusted EBITDA provides useful information to investors in assessing the Partnership’s financial condition and results of operations. Adjusted EBITDA should not be considered an alternative to net (loss) income, operating income, cash flow from operations, or any other measure of financial performance presented in accordance with U.S. GAAP, nor should Adjusted EBITDA be considered an alternative to operating surplus, adjusted operating surplus or other definitions in the Partnership’s partnership agreement. Adjusted EBITDA has important limitations as an analytical tool because it excludes some, but not all, of the items that affects net (loss) income. Additionally, because Adjusted EBITDA may be defined differently by other companies in the industry, and the Partnership’s definition of Adjusted EBITDA may not be comparable to similarly titled measures of other companies, the utility of such a measure is diminished. For a reconciliation of Adjusted EBITDA to net (loss) income, please see the table below.

This press release references forward-looking estimates of Adjusted EBITDA projected to be generated by the Partnership during the year ending December 31, 2019. A reconciliation of estimated 2019 Adjusted EBITDA to U.S. GAAP net income (loss) is not provided because U.S. GAAP net income (loss) for the projection period is not practical to assess due to unknown variables and uncertainty related to future results. In recent years, the Partnership has recognized significant asset impairment charges, transition and reorganization costs, losses on early extinguishment of debt, and debt restructuring costs. While these items affect U.S. GAAP net income (loss), they are generally excluded from Adjusted EBITDA. Therefore, these items do not materially impact the Partnership’s ability to forecast Adjusted EBITDA.

About Foresight Energy LP

Foresight is a leading producer and marketer of thermal coal controlling nearly 2.1 billion tons of coal reserves in the Illinois Basin. Foresight currently operates two longwall mining complexes with three longwall mining systems (Williamson (one longwall mining system) and Sugar Camp (two longwall mining systems)), one continuous mining operation (Macoupin) and the Sitran river terminal on the Ohio River. Additionally, Foresight has recently resumed continuous miner production at its Hillsboro complex and continues to evaluate potential future mining options. Foresight’s operations are strategically located near multiple rail and river transportation access points, providing transportation cost certainty and flexibility to direct shipments to the domestic and international markets.

1 Foresight adopted pushdown accounting as of March 31, 2017 as a result of Murray Energy obtaining control of its general partner. As required by pushdown accounting, the Partnership revalued its balance sheet on the change of control date and therefore certain financial statement line items are not comparable to prior periods. As such, operational results prior to March 31, 2017 were recorded on the predecessor financial statements (the “Predecessor”). Operational results subsequent to March 31, 2017 were recorded on the successor financial statements (the “Successor”). References herein to the “Full-Year 2017”, the “year ended December 31, 2017”, the “fiscal year 2017”, and similar combine the operational results before and after March 31, 2017 to enhance the comparability of such information to the prior year.

 

Foresight Energy LP

Consolidated Balance Sheets

(In Thousands)

  (Successor)       (Successor) December 31, December 31, 2018 2017 Assets Current assets: Cash and cash equivalents $ 269 $ 2,179 Accounts receivable 32,248 35,158 Due from affiliates 49,613 37,685 Financing receivables - affiliate 3,392 3,138 Inventories, net 56,524 40,539 Prepaid royalties 2,000 4,000 Deferred longwall costs 14,940 9,520 Other prepaid expenses and current assets 10,872 10,844 Contract-based intangibles   1,326   11,268 Total current assets 171,184 154,331 Property, plant, equipment, and development, net 2,148,569 2,378,605 Due from affiliates — 947 Financing receivables - affiliate 60,705 64,097 Prepaid royalties 2,678 1,250 Other assets 4,311 5,358 Contract-based intangibles   726   2,052 Total assets $ 2,388,173 $ 2,606,640 Liabilities and partners’ capital Current liabilities: Current portion of long-term debt and capital lease obligations $ 53,709 $ 109,532 Current portion of sale-leaseback financing arrangements 6,629 4,148 Accrued interest 24,304 13,410 Accounts payable 99,735 76,658 Accrued expenses and other current liabilities 67,466 62,442 Asset retirement obligations 6,578 4,416 Due to affiliates 17,740 13,324 Contract-based intangibles   8,820   28,688 Total current liabilities 284,981 312,618 Long-term debt and capital lease obligations 1,194,394 1,205,000 Sale-leaseback financing arrangements 189,855 196,496 Asset retirement obligations 38,966 39,655 Other long-term liabilities 16,428 32,330 Contract-based intangibles   66,834   144,715 Total liabilities 1,791,458 1,930,814 Limited partners' capital: Common unitholders (80,844 and 77,644 units outstanding as of December 31, 2018 and 2017, respectively) 377,880 421,161 Subordinated unitholders (64,955 units outstanding as of December 31, 2018 and 2017)   218,835   254,665 Total limited partners' capital   596,715   675,826 Total liabilities and partners' capital $ 2,388,173 $ 2,606,640    

Foresight Energy LP

Consolidated Statement of Operations

(In Thousands, Except Per Unit Data)

    (Unaudited)   (Unaudited)   (Unaudited)         (Unaudited) (Successor) (Successor) (Successor) (Successor) (Successor) (Predecessor) Combined -

ThreeMonthsEndedDecember31, 2018

ThreeMonthsEndedDecember31, 2017

ThreeMonthsEndedSeptember30, 2018

YearEndedDecember31, 2018

Periodfrom April1, 2017throughDecember31, 2017

Period fromJanuary 1,2017 throughMarch 31,2017

Period fromJanuary 1,2017throughDecember31, 2017

Revenues Coal sales $ 297,000 $ 282,431 $ 291,987 $ 1,097,366 $ 716,617 $ 227,813 $ 944,430 Other revenues   1,907   2,180   1,949   7,625   7,527   2,581   10,108 Total revenues 298,907 284,611 293,936 1,104,991 724,144 230,394 954,538   Costs and expenses Cost of coal produced (excluding depreciation, depletion and amortization) 135,762 139,215 133,670 526,984 367,844 117,762 485,606 Cost of coal purchased 2,603 — 6,312 14,572 — 7,973 7,973 Transportation 63,336 58,100 61,239 230,052 125,772 37,726 163,498 Depreciation, depletion and amortization 53,128 64,503 52,780 212,640 167,794 39,298 207,092 Contract amortization and write-off (9,782 ) 8,286 (4,855 ) (86,481 ) 1,408 — 1,408 Accretion and changes in estimates on asset retirement obligations (10,364 ) 725 558 (8,516 ) 2,179 710 2,889 Selling, general and administrative 10,794 8,420 10,465 39,568 23,555 6,554 30,109 Long-lived asset impairments — 42,667 — 110,689 42,667 — 42,667 Loss on commodity derivative contracts — 389 — — 2,607 1,492 4,099 Other operating (income) expense, net   (258 )   1   24,849   (19,040 )   (13,537 )   451   (13,086 ) Operating income (loss) 53,688 (37,695 ) 8,918 84,523 3,855 18,428 22,283 Other expenses Interest expense, net 36,809 36,496 36,619 146,136 107,904 43,380 151,284 Change in fair value of warrants — — — — — (9,278 ) (9,278 ) Loss on early extinguishment of debt   —   —   —   —   —   95,510   95,510 Net income (loss) $ 16,879 $ (74,191 ) $ (27,701 ) $ (61,613 ) $ (104,049 ) $ (111,184 ) $ (215,233 )     Net income (loss) available to limited partner units - basic and diluted: Common unitholders $ 11,394 $ (38,256 ) $ (13,298 ) $ (25,783 ) $ (52,143 ) $ (56,259 ) $ (108,402 ) Subordinated unitholders $ 5,485 $ (35,935 ) $ (14,403 ) $ (35,830 ) $ (51,906 ) $ (54,925 ) $ (106,831 )   Net income (loss) per limited partner unit - basic: Common unitholders $ 0.14 $ (0.49 ) $ (0.17 ) $ (0.32 ) $ (0.68 ) $ (0.85 ) n/a Subordinated unitholders $ 0.08 $ (0.55 ) $ (0.22 ) $ (0.55 ) $ (0.80 ) $ (0.85 ) n/a   Net income (loss) per limited partner unit - diluted: Common unitholders $ 0.14 $ (0.49 ) $ (0.17 ) $ (0.32 ) $ (0.68 ) $ (0.85 ) n/a Subordinated unitholders $ 0.08 $ (0.55 ) $ (0.22 ) $ (0.55 ) $ (0.80 ) $ (0.85 ) n/a   Weighted average limited partner units outstanding - basic: Common units 80,844 77,644 80,505 80,016 77,145 66,533 n/a Subordinated units 64,955 64,955 64,955 64,955 64,955 64,955 n/a   Weighted average limited partner units outstanding - diluted: Common units 81,650 77,644 80,505 80,016 77,145 66,533 n/a Subordinated units 64,955 64,955 64,955 64,955 64,955 64,955 n/a   Distributions declared per limited partner unit $ 0.0565 $ 0.0605 $ 0.0565 $ 0.2260 $ 0.1252 $ — $ 0.1252    

Foresight Energy LP

Consolidated Statements of Cash Flows

(In Thousands)

    (Successor)   (Successor)   (Predecessor)

Year EndedDecember 31, 2018

Period from April 1,2017 throughDecember 31, 2017

Period From January1, 2017 throughMarch 31, 2017

Cash flows from operating activities Net loss $ (61,613 ) $ (104,049 ) $ (111,184 ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation, depletion and amortization 212,640 167,794 39,298 Amortization of debt issuance costs and debt discount 2,716 1,927 6,365 Contract amortization and write-off (86,481 ) 1,408 — Accretion and changes in estimates on asset retirement obligations (8,516 ) 2,179 710 Equity-based compensation 729 575 318 Settlements and losses on commodity derivative contracts — 2,435 5,216 Realized gains on commodity derivative contracts included in investing activities — — (3,520 ) Insurance proceeds included in investing activities (42,947 ) — — Change in fair value of warrants — — (9,278 ) Long-lived asset impairments 110,689 42,667 — Transition and reorganization expenses paid by Foresight Reserves (affiliate) — — — Current period interest expense converted into debt — — — Non-cash debt extinguishment expense — — 95,510 Non-cash impact of recording coal inventory to fair value in pushdown accounting — 8,868 — Changes in operating assets and liabilities: Accounts receivable 2,910 52 19,695 Due from/to affiliates, net (6,565 ) (14,321 ) (13,157 ) Inventories (13,712 ) 4,788 (917 ) Prepaid expenses and other assets 974 (10,535 ) (5,117 ) Prepaid royalties 572 1,368 (241 ) Commodity derivative assets and liabilities — 633 (532 ) Accounts payable 23,077 8,363 7,324 Accrued interest 10,894 8,961 (9,803 ) Accrued expenses and other current liabilities (12,276 ) (11,574 ) (3,430 ) Other   276   29   2,393 Net cash provided by operating activities 133,367 111,568 19,650 Cash flows from investing activities Investment in property, plant, equipment and development (84,147 ) (56,547 ) (19,908 ) Realized gains on commodity derivative contracts — — 3,520 Insurance proceeds included in investing activities 42,947 — — Return of investment on financing arrangements with Murray Energy (affiliate) 3,138 2,199 705 Proceeds from sale of equipment and other   —   —   1,898 Net cash used in investing activities (38,062 ) (54,348 ) (13,785 ) Cash flows from financing activities Borrowings under revolving credit facility 61,000 — — Payments on revolving credit facility (24,000 ) — (352,500 ) Net change in borrowings under A/R securitization program — (21,200 ) 7,000 Proceeds from long-term debt and capital lease obligations — — 1,234,438 Payments on long-term debt and capital lease obligations (106,146 ) (33,971 ) (970,721 ) Proceeds from issuance of common units to Murray Energy (affiliate) — — 60,586 Distributions paid (18,142 ) (9,725 ) — Debt extinguishment costs — — (57,645 ) Debt issuance costs paid — — (27,328 ) Payments on sale-leaseback and short-term financing arrangements   (9,927 )   (4,869 )   (1,892 ) Net cash used in financing activities   (97,215 )   (69,765 )   (108,062 ) Net (decrease) increase in cash, cash equivalents, and restricted cash (1,910 ) (12,545 ) (102,197 ) Cash, cash equivalents, and restricted cash, beginning of period   2,179   14,724   116,921 Cash, cash equivalents, and restricted cash, end of period $ 269 $ 2,179 $ 14,724    

Reconciliation of U.S. GAAP Net Loss Attributable to Controlling Interests to Adjusted EBITDA (In Thousands)

   

(Successor)ThreeMonthsEndedDecember31, 2018

 

 

(Successor)ThreeMonthsEndedDecember31, 2017

 

 

(Successor)ThreeMonthsEndedSeptember30, 2018

 

 

(Successor)Year EndedDecember31, 2018

 

 

(Successor)Period fromApril 1, 2017throughDecember31, 2017

 

 

(Predecessor)Period FromJanuary 1,2017 throughMarch 31,2017

 

 

Combined -Period fromJanuary 1,2017throughDecember31, 2017

  Net income (loss)(1)(2)(3) $ 16,879 $ (74,191 ) $ (27,701 ) $ (61,613 ) $ (104,049 ) $ (111,184 ) $ (215,233 ) Interest expense, net 36,809 36,496 36,619 146,136 107,904 43,380 151,284 Depreciation, depletion and amortization 53,128 64,503 52,780 212,640 167,794 39,298 207,092 Accretion and changes in estimates on asset retirement obligations (10,364 ) 725 558 (8,516 ) 2,179 710 2,889 Contract amortization and write-off (9,782 ) 8,286 (4,855 ) (86,481 ) 1,408 — 1,408 Noncash impact of recording coal inventory to fair value in pushdown accounting — — — — 8,868 — 8,868 Equity-based compensation 199 136 178 729 575 318 893 Long-lived asset impairments — 42,667 — 110,689 42,667 — 42,667 Loss on commodity derivative contracts — 389 — — 2,607 1,492 4,099 Settlements of commodity derivative contracts — (492 ) — — (172 ) 3,724 3,552 Change in fair value of warrants — — — — — (9,278 ) (9,278 ) Loss on early extinguishment of debt   —   —   —   —   —   95,510   95,510 Adjusted EBITDA $ 86,869 $ 78,519 $ 57,579 $ 313,584 $ 229,781 $ 63,970 $ 293,751   (1) - Included in net loss during the year ended December 31, 2018 was expense of $25.0 million related to the settlement of litigation related to the Hillsboro and Macoupin matters. (2) - Included in net loss during the year ended December 31, 2018 were insurance recoveries for the reimbursement of mitigation costs of $1.1 million, which were recorded in cost of coal sales (excluding depreciation, depletion and amortization) and the recovery of losses on machinery and equipment of $43.0 million, which were recorded in other operating (income) expense, net. (3) - Included in net loss during the period from April 1, 2017, through December 31, 2017, were insurance recoveries for the reimbursement of mitigation costs of $3.6 million, which were recorded in cost of coal sales (excluding depreciation, depletion and amortization) and business interruption proceeds of $12.8 million, which were recorded in other operating (income) expense, net.    

Operating Metrics (In Thousands, Except Per Ton Data)

   

(Successor)ThreeMonthsEndedDecember31, 2018

   

(Successor)ThreeMonthsEndedDecember31, 2017

   

(Successor)ThreeMonthsEndedSeptember30, 2018

   

(Successor)Year EndedDecember31, 2018

   

(Successor)Period fromApril 1, 2017throughDecember31, 2017

   

(Predecessor)Period FromJanuary 1,2017 throughMarch 31,2017

   

Combined -Period fromJanuary 1,2017throughDecember31, 2017

  Produced tons sold 6,087 6,008 6,000 23,065 16,085 5,165 21,250 Purchased tons sold   58   —   143   330   —   118   118 Total tons sold   6,145   6,008   6,143   23,395   16,085   5,283   21,368   Tons produced 6,061 4,955 6,167 23,313 15,912 5,267 21,179   Coal sales realization per ton sold(1) $ 48.33 $ 47.01 $ 47.53 $ 46.91 $ 44.55 $ 43.12 $ 44.20 Cash cost per ton sold(2) $ 22.30 $ 23.17 $ 22.28 $ 22.85 $ 22.87 $ 22.80 $ 22.85 Netback to mine realization per ton sold(3) $ 38.03 $ 37.34 $ 37.56 $ 37.07 $ 36.73 $ 35.98 $ 36.55   (1) - Coal sales realization per ton sold is defined as coal sales divided by total tons sold. (2) - Cash cost per ton sold is defined as cost of coal produced (excluding depreciation, depletion and amortization) divided by produced tons sold. (3) - Netback to mine realization per ton sold is defined as coal sales less transportation expense divided by tons sold.  

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Cody E. NettCorporate Secretary740-338-3100Investor.relations@foresight.comCody.Nett@coalsource.com