Cloud Peak Energy Inc. (NYSE:CLD) Q1 2018 Earnings Conference Call - Final Transcript

Apr 26, 2018 • 05:00 pm ET

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Cloud Peak Energy Inc. (NYSE:CLD) Q1 2018 Earnings Conference Call - Final Transcript

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Q & A
Executive
Colin Marshall

the rate of plant closures will actually slow, and I think that would be a key thing though I think realistically most utilities have -- longer-term their plans are to close plants, but hopefully it is not -- they have gone through this round of closures and we have got a few years of stability.

Analyst
Lucas Pipes

That is a very comprehensive answer, and I appreciate that. Maybe just to hone in on the potential for retirements, as it stands today, how many million tons would be impacted in both 2019 and 2020 from the PRB specifically?

Executive
Colin Marshall

I haven't got that number at my fingertips, Lucas. I think it is a lot less than the last few years, but there is a factor there that it is worth recognizing that even if you get some closures, it doesn't mean you can't burn a lot of coal in the existing plants because utilization rates have gone down. So there's actually a fair bit of excess coal burn capacity even with maybe less actual plants than we had. I mean, obviously closing plants isn't a good thing but it doesn't mean there isn't the ability to go up when demand rises seasonally.

And I think that is the dynamic we are going to face going forward. So I think the actual -- the rate of closures, whilst it is not a good thing it is actually the demand level for power and the price of gas that is really going to drive coal burn and therefore the amount of demand for our coal.

Analyst
Lucas Pipes

Got it. Okay, well I will leave it here. I very much appreciate the detail. Thank you.

Executive
Colin Marshall

No problem.

Operator
Operator

Thank you. [Operator Instructions] And our next question is from Mark Levin with Seaport Global. Your line is open.

Analyst
Mark Levin

Thank you very much. Two quick questions, one of your competitors today decided to voluntarily pull back their shipments by about 10 million tons in the basin, I think you mentioned in your remarks that you still have about 5 million tons left to price for commit for the remainder of the year. Is there any sense if either prices don't get any better, or if demand doesn't get any better that you might keep those tons in the ground and simply not sell them this year?

Executive
Colin Marshall

Well, Mark if demand isn't there -- if the customers don't come after it, I think it is pretty clear we won't sell it. But the pricing -- there comes a price where we are obviously very close to it where you don't want to sell, and we have seen if you look at our business, the production has come down significantly in the last few years. We are looking for some stability this year, but we are actually -- we are obviously being helped significantly by the exports, which you guys look at our domestic planned -- or the middle of our guidance range, domestic is down by several million tons but we have to