Nathan Martin: Great. Really appreciate the information, guys. Thanks for the time. And best of luck in ’23.
Jimmy Brock: Thanks, Nate.
Operator: Our next question here will come from Ryan Rahinsky with Blue Outlier Capital. Please go ahead.
Ryan Rahinsky: Hi, good morning. Congrats on the quarter. I am just trying to get some more color on the shareholder returns going forward. I am really happy to see that you guys have started buybacks this quarter. Any idea of the buybacks or the percentage of shareholder returns going forward? This quarter shareholder returns are much more skewed towards dividend. And I am just wondering if that can be expected going forward, or whether dividend and buybacks will be more balanced?
Robert Braithwaite: Well, going forward, as we said we had that goal of $300 million of gross debt. And we saw this happening in Q1 is why we started our share repurchases. In Q4, we purchased 124,000 shares or about $8 million. And we expect to raise the return to shareholders 35% to 50% as we continue to get rid of debt. But if you look at it, we actually paid down $647 million in debt since 2018. And sometimes, we lose sight of that. But, that’s created equity value of $18 a share if you look at our 35 million shares outstanding. So, what we will do is we are lucky enough to have great free cash flow generation. And if things hold, I think what you will see us do is steadily increase that number. And we will able to do all three.
Or, if one provides a better return back to the shareholders, we can certainly pivot to that way. But currently, our plan is to stick with what Mitesh mentioned in his remarks, we want to retire the term loan B as well as the second lien and continue to pay back return to shareholders in forms of dividend or share backs. And we really haven’t thought too far about which way we lean on — do we go heavier on dividends? Or do we do all share buybacks? That will be a Board decision, and we’ll have a discussion with them when the time comes. The good news is we believe that we’re going to generate enough free cash flow to do all those things pretty quickly here in 2023.
Ryan Rahinsky: Thank you. Appreciate the additional color.
Jimmy Brock: Thank you.
Operator: And our next question will be a follow-up from Lucas Pipes with B. Riley Securities. Please go ahead.
Lucas Pipes: Thank you very much for taking my follow-up question. I just wanted to try to get a little bit more color on the domestic market. How much buying of coal is going on today, are utilities active today? And where would you place the domestic market for 2023 and 2024? Thank you very much.
Robert Braithwaite: Well, Lucas, of the 8.3 million tons that we contracted for through 2025, 5 million was to a domestic customer under a term deal through 2025. So, again, I guess this just shows the fact that people are out there buying under term contracts, they are concerned about supply going forward. We’re also in discussions with another domestic customer of our term deal as well. And then, when you look at the export side, I can’t say much more, but we are in discussions with several end users in both Europe and Asia on term deals, and I’m hopeful by our next earnings call, we’ll have a little bit more to report there. The pricing is kind of in line with where markets are at the time we conclude those deals. I mean we look at power and gas every time at that present time, we’re concluding.
And basically coming up with what we feel is the right netback and I think the customers are doing the same. So, that continues to fluctuate at $2.50 gas price, obviously, the mine prices aren’t as attractive as they were when they were $6, but there’s still certainly profits being made pretty much all cycles through the $2.50 through $7 gas price.
Lucas Pipes: I really appreciate that color, Bob. And you touched on it there, obviously, like domestic energy markets changed fairly dramatically since the beginning of December, more than a 50% drop. How much have attitudes changed? Is it too early to tell? Or is this having a real impact when you sit down with your utility customers?
Robert Braithwaite: I’d say it’s too early to tell. I think you’re going to see a lot of utilities, pretty much take a seat on the sidelines for the next couple of months, kind of see how this market evolves. As Jimmy mentioned, inventory levels are, I would say, comfortable, but these can change very, very quickly. And we saw that happen last year. And once we get into summer, if it is a game changer, I think you’re going to see a lot of utilities come to the market to try to secure their supply for the long-term. So, I’d say, give it two, three, four months. And by the time we have our next earnings call, we probably — we will have, I should say more color and be able to give some more commentary on that.
Jimmy Brock: And Lucas, I’ll add that, I think we have significant flexibility, as you know of moving into domestic and export market depending on where the best arbitrage is, right? And this is clearly visible in terms of the amount of exports that we are going to do this year versus last year despite having higher production numbers, right? So I think we are going to be market-driven. And as markets change, we’ll just adapt to it. And our terminal at automotive allows us that flexibility.
Lucas Pipes: Very helpful. Thank you. Along this vein, do you have a target or a rough target for 2024 split between domestic and exports?
Robert Braithwaite: Lucas, I would suggest to you, we could see exports climb to 14 million tons or thereabouts in 2024. I mean, obviously, we’ll continue to watch the market and see where the best arbitrage is. But I think 14 million tons is a possibility for 2024.
Lucas Pipes: Thank you. And then, back to the domestic market. Have you heard in the industry or have you experienced any requests from utilities to push out coal deliveries?
