CNX Coal Resources LP

Investor Presentation March 2016

Cautionary Statements
This presentation is not a prospectus, is not an offer to sell securities and is not soliciting an offer to buy securities.
An investment in the Partnerships common units involves risks associated with the Partnerships business, environmental, health, safety and other regulations, the structure
of the Partnership and the tax characteristics of the Partnerships common units. You should carefully consider the risk factors under the heading Risk Factors in the
Partnerships Registration Statement on Form S-1 (File No. 333-203165) and Annual Report on Form 10-K for the fiscal quarter ended December 31, 2015, together with all
of the other information included in therein, including the matters addressed under Forward-Looking Statements, in evaluating an investment in the common units.
This presentation contains statements that express the Partnerships opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or
future results, in contrast with statements that reflect historical facts. Examples include discussion of our strategies, EBITDA forecasts, financing plans and growth
opportunities. In some cases, you can identify such forward looking statements by terminology such as anticipate, intend, believe, estimate, plan, seek, project,
expect, may, will, would, could or should, or the negative of these terms or similar expressions. While we base these statements in good faith on assumptions that
we believe to be reasonable when made, these forwardlooking statements are not a guarantee of our performance, and you should not place undue reliance on such
statements. Forwardlooking statements are subject to many risks and uncertainties that are outside our control and could cause our actual results to differ materially from
those we thought would occur, such as: the amount of coal we are able to produce from our mines and the efficiency of our mining, preparation and transportation of coal,
which could be adversely affected by, among other things, operating difficulties, unfavorable geologic conditions, inclement or hazardous weather conditions and natural
disasters or other force majeure events; overall domestic and global economic and industry conditions, including the market price of, supply of and demand for domestic and
foreign coal; the consumption pattern of industrial consumers, electricity generators and residential users; the price and availability of alternative fuels for electricity
generation, especially natural gas; competition from other coal suppliers; the impact of domestic and foreign governmental laws and regulations, including environmental and
climate change regulations and regulations affecting the coal mining industry and coal-fired power plants, and delays in the receipt of, failure to receive, failure to maintain or
revocation of necessary governmental permits; the costs associated with our compliance with domestic and foreign governmental laws and regulations, including
environmental and climate change regulations; technological advances affecting energy consumption; the costs, availability and capacity of transportation infrastructure; the
cost and availability of skilled labor (including miners), the effects of new or expanded health and safety regulations and work stoppages and other labor difficulties; and
changes in tax laws. You should also carefully consider the statements under the heading Forward-Looking Statements in the Registration Statement and Annual Report on
Form 10-K.
Any forward-looking statement speaks only as of the date on which such statement is made, and the Partnership undertakes no obligation to correct or update any forwardlooking statement, whether as a result of new information, future events or otherwise, except as required by applicable law.
This presentation also contains information about the Partnerships adjusted EBITDA, which is not a measure derived in accordance with U.S. generally accepted accounting
principles (GAAP) and which excludes components that are important to understanding the Partnerships financial performance. Adjusted EBITDA should not be
considered an alternative to net income or any other measure of financial performance or liquidity presented in accordance with GAAP. Adjusted EBITDA excludes some, but
not all, items that affect net income or net cash, and our presentation may vary from the presentations of other companies. As a result, adjusted EBITDA as presented herein
may not be comparable to similarly titled measures of other companies. Reconciliations of adjusted EBITDA to net income, the most directly comparable GAAP financial
measure, can be found in the Registration Statement and in this presentation.

Offering
CNXCTimeline
Investment

Focus on Safety,
Compliance and
Continuous Improvement

Cash Flows Supported by

Multi-Year Contracts

Proposition

Operate some of the industry's safest underground mines; 51% lower Mine Safety and Health Administration (MSHA)
incident rate vs. national average
Underground training academy dedicated to training miners and improving their safety performance and regulatory
compliance
Seek to minimize direct commodity exposure through multi-year, committed and priced sales contracts; contracted position
at 100%, 61% and 49% for 2016, 2017 and 2018 expected sales volumes
Well-established credit-worthy customer base comprised primarily of utility companies in the eastern U.S. willing to commit
to multi-year contracts

Strong Sponsor

Access to significant pool of management talent, deep industry knowledge and strong commercial relationships
Economically incentivized to grow CNXC through ownership of IDRs and LP units as well as 80% retained interest in the PA
mining complex

Experienced Management
Team

Significant expertise owning, developing and managing complex coal mining operations
Proven track record of successfully building coal assets in a reliable and cost-effective manner

Quality Reserve Base with

Substantial Capital
Investment

Extensive high-quality contiguous reserves of high-Btu bituminous coal in Pittsburgh No. 8 Coal Seam are ideal for high
productivity, low-cost longwall operations

Advantageous coal quality with relatively higher heat content, lower sulfur content and lower chlorine content

Strategically Located
Operations with Access to
Key Infrastructure

Logistics infrastructure and proximity to coal-fired power plants allow operational and marketing flexibility
Significant transportation cost advantage compared to many of our competitors
Direct access to domestic customers and Baltimore Marine Terminal through Norfolk Southern and CSX rail lines

Low-cost Highly Productive

Operations
Advanced Distribution
with Cutting Edge Loadout
Technology

2015 average cash margins were the highest of our MLP peers; CNXC: $21.76 per ton versus average of other MLP peers:
$14.16 per ton
Recent capital investment has optimized our mining operations and logistics infrastructure to maintain low operating costs
Dual-batch facility that operates 24/7 and loads up to 9,000 tons of coal per hour and ten unit trains per day
Strong relationship with Norfolk Southern and CSX rail lines - investing significant capex to increase rail takeaway

Solid distribution yield supported by world class asset base

2

Significant Focus on Safety, Compliance and

Continuous Improvement

Continued focus on core values of safety, compliance and

continuous improvement
Operate some of the industrys safest underground mines

Underground Training Academy

MSHA incident rate ~53% lower than national

average rate(1)
MSHA significant and substantial citation rate ~22%
lower than the industry average rate(2)
Promotes greater reliability in operations, lower operating
costs and long-term customer relationships

CONSOL recently constructed the first underground

training academy in the United States dedicated to
training miners and improving their safety
performance and regulatory compliance

Exemplary Safety and Compliance Record (PA

mining complex)
6.0

100

4.95

90

5.0
75

4.0

59

3.0

2.35

2.6

50

Technical Services and R&D Laboratory

2.03

2.0
25

11

1.0

16

21

0.0

Incident Rate

S&S Citation Rate

Industry Average

PA Operations

Notice of Violation/Non-compliance
2011

2012

2013

2014

2015

Experienced staff and dedicated in-house coal lab

provide technical marketing services to assist
customers in the new, expanded, and continued use
of our coal

We continue to focus on our core values of safety, compliance and continuous

improvement
(1)
(2)

Based on incident rates for 2012- 2015 period. Source: MSHA

For the Feb 1, 2015-Jan 31, 2016 period ; National industry rate for significant & substantial citations & orders per 100 inspection hours. Source: MSHA

CNX Coal Resources LP - Overview

Growth-oriented master limited partnership formed by CONSOL Energy, Inc. (NYSE:CNX) in 2015 to manage and
further develop all of its active thermal coal operations in Pennsylvania.

Initial assets include a 20% undivided interest in, and operational control over, CONSOL Energys Pennsylvania
mining complex

Sponsor has provided us the Right of First Offer (ROFO) on the retained 80% undivided interest in the
Pennsylvania mining complex, and certain other Sponsor Assets

Initial Public Offering June 2015

Current Ownership Structure

Sponsor retained 12.7 million LP units (53.4% limited partner interest) including 11.6 million subordinated units

5.5 million LP units (23.2% limited partner interest) owned by Greenlight Capital

5.1 million LP units (21.4% limited partner interest) held by other public holders

Current market capitalization: $151M(1)

Total debt outstanding: $185M as of December 31, 2015

(1)

Priced as of COB February 22, 2016

Navigating Current Challenges in Energy Markets

Operational
Adjustments

Temporarily idled one longwall and re-aligned schedules for remaining longwalls

Continue to optimize corporate and production employee base

Reset compensation and benefit structure for all employees

Seeking additional cost savings from vendors/supply chain

Continue to optimize the cost structure through operational improvements

Align the marketing strategy to the MLP structure through aggressive contracting
and reduced price volatility

Marketing Targets

Continue to pursue incremental sales to improve targeted sales volume and/or

backfill changes to existing customer shipment schedule

Financial Priorities

Improve customer product shipment schedules to improve operational consistency

Maintain current distribution level

Continue to control costs and defer discretionary capital spending

Identify other opportunities to improve the distribution coverage ratio

Continue to evaluate potential for a drop-down/acquisition

Focused on Distribution Preservation While Retaining Flexibility for Growth

5

CNXC Organizational Structure

CNXC 20% Undivided Interest in Pennsylvania Mining
Complex (Bailey, Enlow Fork and Harvey mines)

CNXC owns a 20% undivided interest in

and operational control over CONSOL
Energys Pennsylvania mining complex

CONSOL Energy Inc.

(CONSOL Energy)
NYSE: CNX
1,050,000 Common Units
11,611,067 Subordinated Units
53.4% limited
partner interest

CONSOL Energy retained an 80%

undivided interest in the Pennsylvania
mining complex and own 100% of CNXCs
general partner, as well as the incentive
distribution rights

100% ownership
interest

CNX Coal Resources GP LLC

(our general partner)
2% General Partner Interest
Incentive Distribution Rights

2% general partner
interest

80% undivided
ownership interest

CNX Coal Resources LP

(the Partnership)
NYSE: CNXC

Economically incentivized to grow

CNXC

44.6% limited
partner interest

Public and Private

Placement
10,561,067
Common Units
5,561,067

100% ownership interest

CONSOL Energy granted CNXC a right of

first offer to acquire the remaining 80%
undivided interest

Certain other Sponsor ROFO Assets

Majority of units owned by our Sponsor are

subordinated

CNX Coal Resources Operating

LLC
100% ownership interest

CNX Thermal Coal

Company LLC
20% undivided ownership interest
and management and control rights

Pennsylvania mining
complex

Strategically aligned with CNXC and incentivized to support growth to enhance value of
MLP business
6

Overview of Pennsylvania Mining Complex

Pennsylvania mining complex consists of three like-new underground

mines and related infrastructure with high-Btu bituminous coal (791.4
million tons proven and probable(1))

PA mining complex 791.4 million tons reserves / 28.5 million tons

annual capacity(1)

Train loadout facility (up to 9,000 tons per hour) with dual rail access
with Norfolk Southern and CSX

High-Btu bituminous thermal coal is primarily sold to utility companies in

the eastern United States: ~13,000 Btus per pound average gross heat
content and 2.36% average sulfur content

Five longwalls and 18 continuous mining sections

Access to seaborne markets through CONSOL-owned Baltimore Marine

Terminal for exporting thermal and metallurgical coal

Over $2.0 billion invested in Harvey Mine, new slopes, overland

conveyor belts, equipment, and plant upgrades since 2008
Average
AR Gross
Heat
Content
(Btu/lb) (1)

Average AR
Sulfur
Content (1)

Annual
Production
Capacity
(tons) (1)

Production
(tons) (1)

Bailey

271.7

12,940

2.64%

11.5

10.2

Enlow Fork

316.2

12,940

2.19%

11.5

9.0

Harvey

203.5

13,070

2.25%

5.5

3.6

Total

791.4

12,970

2.36%

28.5

22.8

11,363

2.95%

12,394

3.22%

11,525

2.44%

Illinois Basin
Other NAPP
Other Coal
(3)
MLPs

(2)

(2)

Baltimore
Terminal

Active Complex

Port/Dock

Total
Recoverable
Reserves
(tons) (1)

Mine

PA Mining
Complex

(1) For the period ending and as of December 31, 2015.

(2) Source: EIA. Represents average power plant deliveries for the eleven months ending November 30, 2015.
(3) Source: Company filings from FELP, ARLP, WMLP and RNO for NAPP and Illinois Basin reserves.
Note: Data shown on a 100% basis for the PA Mining Complex. CNXC owns a 20% interest in the complex.

2015 PA Mining
Complex Customers

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Reduced Cash Flow Volatility Through Long Term

Contracts

Reduced spot commodity price exposure via multi-year, committed and priced sales contracts

Well-established, credit-worthy customer base comprised primarily of utility companies in the eastern United States
willing to commit to multi-year contracts

While unusually warm weather and ongoing low natural gas prices have resulted in fluctuating delivery schedules, we
continue to work with our customers to ensure our contracted volumes get shipped

Contracted Volume(1)

Major Customers Include:

38%
51%

100%

19%

43%

2016E

Committed and Priced

2017E

Committed and unpriced

49%

2018E

Uncommitted

Secured multi-year commitments with key power plants in the upper Midwest and
Southeast markets, which historically been thought of as domain of other coal basins
(1) Source: Annual Filings 10-K of CNX Coal Resources, Inc. and CONSOL Energy Inc. Committed and priced tons percentages based on the projected sales volume during that year and subject to
rounding adjustments. Our committed and priced contracts include those contracts that contain fixed prices with preestablished price adjustments based on (i) variances in the quality
characteristics of coal delivered to the customer beyond threshold quality characteristics specified in the applicable sales contract, (ii) the actual calorific value of coal delivered to the customer,
and/or (iii) fluctuations in the power market.

Not All NAPP Longwalls Are Created Equal

25

2015 Production - PA Mining Complex

2015 Production - Other Longwalls

5.0

2015 Sulfur

4.0
3.5

15

3.0
2.5

10

2.0

Closed
in 2015

1.5
1.0
0.5

Higher
Sulfur

Near End of
Reserve Life

Mine Mouth
Operations

Primarily
Met Coal
Producer

Powhatan (1)

Century (1)

Tunnel Ridge (1)

Ohio County (1)

Cumberland (1)

Marshall County (2)

Leer (1)

Mountain View (1)

Harrison County (1)

Emerald (1)

Federal (1)

Monongalia County (1)

0.0

Marion County (1)

Serve River Markets

PA Mining Complex is uniquely positioned among NAPP longwall producers to provide

a sustained supply of high-quality coal to rail-served power plants in the eastern U.S.
Source: EIA 923, MSHA; Number of longwalls indicated in parentheses.

Sulfur (% as received)

20

PA Mining Complex (5)

Production (million tons)

4.5

Impact of Power Plant Pollution Control Regulations

Traditional Pollutants

Coal plants expected to remain operating beyond 2019

42 GW of coal-fired capacity retired between 2011 and 2015

24 GW of additional capacity will likely retire through 2019,
largely in response to MATS and low natural gas prices

Remaining fleet of ~250 GW will be clean, modern and

efficient, with capacity to increase coal burn relative to 2015

Greenhouse Gases (i.e., CO2)

The Carbon Pollution Standard for new plants, 111(b), will

severely hinder the construction of new coal-fired power

plants for 10 or more years
The Clean Power Plan, 111(d), was finalized by EPA in

August 2015, but faces an uncertain future

Designed to reduce GHG emissions from existing

plants beginning in 2022

The Supreme Court stayed implementation of the

Clean Power Plan pending judicial review on
February 9, 2016

PA Complex
Remaining (Non-Retiring)
Coal Power Plants

Under any scenario, the most efficient, cleanest coal plants

are positioned to survive; these are the ones we are targeting

Our Strategy: Focus domestic steam sales on clean, modern and efficient plants in our
core market. Push into former CAPP market, and take advantage of crossover and
export opportunities
10
Source: EIA and CNX data estimates.

Our Strategy in Action

Capacity Factors: January-October 2015

Announced 2016 Coal Unit Retirements

12,000

Top 15
PA Mining
Complex
Customer
Plants(1)
57%

All Other
Plants(2)
51%

Core Market States(3)

Top
PA Mining
Complex
Customer
Plants(1)
56%

All Other
Plants(2)
45%

10,000

Retiring Capacity (MW)

Eastern U.S.

8,000

6,000

4,000

2,000
(1)
(2)
(3)

Ranked based on total coal deliveries for CY 2015.

Excludes plants that retired during 2015.
Defined to include PA, WV, MD, VA, NC, SC, NJ, DE, NY, CT, MA, NH

United States Eastern U.S.

Current PA
Mining
Complex
Customers

Superior performance of top PA Mining Complex customers due to:

Aligning with strong performers in our traditional core market
Success in selling to key plants outside of our core, rather than moving tons to weaker core market plants or to the export market
Effect of strong-performing customers picking up generation left by retirements
PA Mining Complex customer plants are minimally impacted (~200 MW retiring) by the final wave of MATS retirements in 2016

We have continued to increase sales to our highest capacity factor customers in 2016,
and we are well positioned to come out in the lead when the market rebounds.
Source: EIA and CNXC data estimates.

11

Coal Prices vs. Natural Gas Prices

A 1% increase in coals share of generation equates to a 20-25 million ton / year increase in U.S. electric power
sector coal demand

Right-sizing of coal supply under current market conditions will help set the stage for coal prices to rebound with
uptick in gas prices

Coal Share of Monthly Generation (%)

Coal Share of U.S. Generation vs. Natural Gas Price Ranges (January 2012 November 2015)
46%
44%
42%
40%
38%

Range

36%

Average

34%
32%
Source: EIA

30%
28%

< $2.50

$2.50-$3.00

$3.00-$3.50

$3.50-$4.00

$4.00-$4.50

> $4.50

Monthly Average Natural Gas Price ($/mmBtu, Henry Hub Spot)

Natural gas prices are suppressing coal prices, but that dynamic can change quickly
Source: EIA.

12

Financial Strategy Targeted at Maintaining

Current Distribution Level
CNXC is committed to maintaining current distribution level

Capitalize on Strong
Financial Profile

Pro forma leverage of ~2.0x Debt/TTM EBITDA

Target leverage ratio of approximately 3.0x

Reduced the borrowing on our $400M credit facility to $185 million from $200M
at the IPO

Improve Cash Flow

Stability

Maintain Growth
Flexibility

Continue to optimize production levels while working with customers to ensure delivery
of committed coal
Focus on maintaining industry leading cash margins and high quality, well established
customer base
Reduced operating and capital spending levels while efficiently running our longwall
mining operation

Improve distribution coverage despite challenging coal markets

CNXC will be flexible with respect to drop-down timing and financing mix to strive to
achieve its distribution targets

Distribution stability being prioritized over growth

13

4Q15 Earnings Highlights and 2016 Outlook

Announced quarterly cash distribution of $0.5125 per

unit

Implied distribution yield of 31.5% (1)

Generated distributable cash flow of $9.8 million

Estimated distribution coverage of 0.8x (1.05x

since the IPO)

Adjusted EBITDA of $18.7 million

Coal sales of 1.0 million tons

Net income of $8.7 million

4Q15 earnings impacted by unusually warm winter

weather, low natural gas prices and reduction in
planned shipments

Improved forward contracted position by continuing to

be anchor supplier in core markets while penetrating
non-traditional NAPP markets in upper Midwest and
Southeast

Achieved significant cost improvements through

improved productivity, negotiating lower prices with
suppliers, reduced employee-related costs
(1) Priced as of COB February 22, 2016

Coal Production
Coal Sales
Realized Price
Cost of Coal Sold

million tons
million tons
Per ton
Per ton

2016 Guidance
Estimated Coal Sales million tons
Adjusted EBITDA
$ million
Capex
$ million

Three Months Ended

31-Dec-15
31-Dec-14
0.9
1.3
1.0
1.3
$52.57
$60.10
$39.84
$42.77

Low
4.4
57
24.5

High
5.2
67
27.5

14

Benchmarking vs. MLP Coal Peers

Average 2015 Cash Margin(1) ($ / ton)

Debt/2015E EBITDA(3)

$30.00

5.0x

$21.76

4.4x

4.0x

$20.24

$20.00

2.9x

3.0x

$15.08

2.0x
2.0x
$10.00

1.2x
1.0x

$0.00

.0x
CNXC

ARLP

FELP

RNO

ARLP

RNO

FELP

Current Yield (%)(4)

EV/2016E EBITDA(2)
8.9x
8.0x

6.0x

CNXC

35.0%

33.2%

31.5%

30.0%

4.8x

5.3x

5.7x

24.7%

25.0%
20.0%

4.0x

15.0%
10.0%
10.0%

2.0x

5.0%
.0x

0.0%
CNXC

(1)
(2)
(3)

ARLP

FELP

Coal C-Corps

CNXC

AMZ

FELP

ARLP

Determined by deducting Company operating costs including transportation costs excluding DD&A; FELP on RNO data is only for 9M15
Net debt as of December 31, 2015. EV and EBITDA based on mean of select Wall Street Research when guidance not available, FactSet as of February 22, 2016. ARLP on GP-adjusted basis. RNO and
FELP debt as of September 30, 2015.
15
Current yield calculation based on COB February 22, 2016.

Roadmap to Unitholder Returns

Optimize Cost Structure

Improve Contracted Shipment

Schedules

Pursue Incremental Volumes

Cash Flow Sustainability

Distribution Coverage

Improve 2017-19 Hedge Book

Improved Cost of Capital

Flexible Drop-downs

Broaden Institutional Appeal

16

Non-GAAP Reconciliation

CNXC 4Q15 Adjusted EBITDA and Distributable Cash Flow

($ in thousands)

Three Months Ended

December 31, 2015

Net Income
Interest Expense
Depreciation, Depletion and Amortization
Unit Based Compensation
Adjusted EBITDA
Less:
Cash Interest
Estimated Maintenance Capital Expenditures
Distributable Cash Flow

8,673
1,898
8,063
25
18,659

Net Cash Provided by Operating Activities

Less: Interest Expense, Net
Less: Other, Including Working Capital
Adjusted EBITDA
Less:
Cash Interest
Estimated Maintenance Capital Expenditures
Distributable Cash Flow

16,562
1,898
199
18,659

1,583
7,319
9,757

1,583
7,319
9,757

17