Good day, and welcome to the Arch Resources Inc First Quarter 2023 Earnings Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Deck Slone, Senior Vice President of Strategy. Please go ahead. Good morning from St. Louis, and thanks for joining us today. Before we begin, let me remind you that certain statements made during this call, including statements relating to our expected future business and financial performance, may be considered forward-looking statements according to the Private Securities Litigation Reform Act. Forward-looking statements by their nature address matters that are to different degrees uncertain. These uncertainties, which are described in more detail in the annual and quarterly reports that we file with the SEC, may cause our actual future results to be materially different than those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required by law. I'd also like to remind you that you can find a reconciliation of the non-GAAP financial measures that we plan to discuss this morning at the end of our press release, a copy of which we have posted in the investor section of our website at archrsc.com. Participating on this morning's call will be Paul Lang, our CEO, John Drexler, our COO, and Matt Giljum, our CFO. After our formal remarks, we'll be happy to take questions. With that, I'll now turn the call over to Paul. Paul? Thanks, Deck. Good morning, everyone. We appreciate your interest in Arch and are glad you could join us on the call this morning. I'm pleased to report that the Arch team has again demonstrated operational excellence in our core metallurgical segment in the first quarter while delivering strong value-driving financial results across the entire enterprise. Overall, Arch generated an adjusted EBITDA of $277.3 million during the period, driven by significant quarter-over-quarter improvements in the average selling price, unit cost, and cash margin achieved by our coking coal operations. In short, the team continued to press ahead on all fronts with our simple, clear, and actionable plan for long-term success and value creation. During the quarter, the Arch team showcased the company's expanded cash-generating capabilities by achieving more than a 31% sequential increase in the average cash margin for our core metallurgical segment, delivering an 8% sequential increase in adjusted EBITDA, and generating almost $96 million in discretionary cash flow despite a nearly $170 million build in working capital. We drove forward with our intense and ongoing efforts to streamline and strengthen our balance sheet by retiring our remaining convertible securities, reducing our already modest indebtedness by an incremental $27 million, or 15%, and maintaining a net cash positive position of $71 million. Finally, we generated significant value for our shareholders through our robust and precisely structured capital return program, declaring a quarterly dividend of $47.8 million, or $2.45 per share, and deploying $77 million to settle the last of our convertible securities and repurchase shares, thus avoiding dilution of approximately 554,000 shares. It's worth pausing here to reflect more on this last item, our capital return program, given the tremendous progress we've made since its relaunching in February of last year. Since that relaunch, just a period of over 12 months, Arch has deployed more than $1 billion through this program, consisting of dividend payments of more than $571 million, inclusive of the just-announced June dividend, and share repurchases along with convertible security settlements of more than $444 million. I might add that through these share repurchases and convertible security settlements, we've avoided an aggregate dilution of 3.5 million shares. Viewed over even a longer time horizon, Arch has now deployed more than $1.8 billion through our capital return program over the course of the past 6 years, demonstrating our cash-generating capabilities as well as our strong commitment to rewarding our shareholders. As we've stated repeatedly, we believe our capital return program has proven to be tremendously effective in driving shareholder value and view the capital allocation model as appropriate, durable, and well-aligned with shareholder interests and preferences. As a result, we fully expect this program to remain the centerpiece of our value proposition for the foreseeable future. Before turning the conversation over to John for additional color on the operations, I'd like to take a moment to discuss the dynamics we're seeing in the global coking coal markets. As you are no doubt aware, seaborne coking coal prices have retraced significantly in recent months, due largely, in our view, to global macroeconomic concerns. Since early March, the price of High Vol A coking coal loaded in a vessel on the U.S. East Coast has declined about 25% from $328 to $247 per metric ton. While that is a significant pullback, clearly, it's important to point out here that Arch's low-cost mines still generate a healthy cash margin even at today's stepped-down prices. Which illustrates again the value of being in the lowest quartile of the cost curve. What's particularly interesting about the pullback in seaborne coking coal prices is that we continue to see many constructive indicators in the marketplace. For instance, global steel prices continue to trade at levels around 50% above their November lows. Moreover, the vast majority of the blast furnace capacity idled in Europe last year in the face of weak steel demand, around 25 million tons by our count, has now restarted. Lead times for new orders of finished steel are twice what they were just a few months ago. At the same time, coking coal supplies remain constrained after years of under-investment, and the situation has been exacerbated by increasing regulatory pressures in all jurisdictions. This combination of circumstances is particularly evident in Australia, where coking coal exports declined by more than 9 million tons in 2022 versus the already depressed level of 2021, and have fallen an incremental 15% on a year-over-year basis during the first two months of 2023. Exports from the United States and Canada, the next two major sources of high-quality seaborne coking coal, were only marginally higher in 2022 than 2021, but continue to significantly undershoot pre-pandemic levels despite the sustained period of historically strong pricing that has prevailed in recent years. Finally, Russia, the other large supplier to the seaborne coking coal market, remains a significant question mark in the face of continuing hostilities in Ukraine, which in turn have created various challenges to moving these products due to credit considerations and logistics. While most of the Russian volume continues to find a home in global markets, we believe that mounting cost pressures, an increasingly difficult business climate, and heavy discounts for the product could make it difficult to maintain this dynamic indefinitely. Given these supply constraints, as well as our substantial and ongoing increases in steel demand and blast furnace capacity expansions across Southeast Asia, we remain constructive on hot metal output in the intermediate as well as the longer term. In summary, we continue to be sharply focused on our strategy for value creation over the long haul. In recent quarters, we've expanded and strengthened our world-class coking coal portfolio, extended the global reach of our high-quality coking coal products, restored our balance sheet to a net positive cash position, greatly simplified our capital structure, and extended our industry-leading ESG performance. We believe this progress across every facet of our business sets the stage for continued success, strong discretionary cash generation, and robust capital returns in the future. With that, I'll now hand the call over to John Drexler for some further thoughts on our operational performance. John? Thanks, Paul, good morning, everyone. As Paul just discussed, Arch's team maintained excellent operational momentum in Q1, as highlighted by sequential improvements in our average selling price, cash cost, and cash margin in our core metallurgical segment. The upshot of this strong execution was an EBITDA contribution of $263 million from the metallurgical segment in Q1, which I view as clear evidence of the substantial and stepped-up cash-generating capabilities of our coking coal franchise post the Leer South ramp. The metallurgical segment's cost performance during Q1, at $82.66 per ton, stands out as particularly noteworthy in my view. Despite ongoing inflationary pressures that have pushed the overall cost structure of many of our publicly traded metallurgical peers higher, Q1 marked Arch's best cost performance in the past six quarters, again underscoring the positive impact of the Leer South ramp on our entire coking coal portfolio. I might add here that the continued productivity gains and volume growth at Leer South through 2023 will result in another step-up in volumes in 2024 as we progress into still more favorable geology. Given this tailwind, we believe that our reiterated cost guidance of $84 per ton at the midpoint for full year 2023 is appropriate and achievable, and we're equally positive about the outlook for 2024 and beyond. Supplementing this strong contribution of our metallurgical business, our legacy thermal segment once again generated a substantial amount of cash flow as well, despite the continuation of suboptimal rail service in the Powder River Basin, a significant pullback in international thermal prices, and geologic challenges at our West Elk longwall operation in Colorado. In total, the thermal segment contributed $46.3 million in segment-level EBITDA in Q1, while expending just $5.5 million in capital. That brings the total EBITDA generation for this segment to more than $1.3 billion over the past six and a half years, against a total of just over $144 million in capital spending. The quick math is that we have generated in excess of 9x more EBITDA than we have expended in CapEx over that timeframe, which tells you just how effective our harvest strategy has been so far. Looking ahead, we expect only a modest contribution from the thermal segment in Q2, due largely to the geologic challenges at West Elk and the expectation of Q2 being a typical shoulder-season quarter in the Powder River Basin. As most of you are aware, West Elk has maintained a fairly stellar performance over the course of the past 15 years or so. Late in Q1, the mine encountered a clay layer in the coal seam that has resulted in a short-term degradation in our overall product quality and production volume. We expect the impact of this in-seam dilution to continue through the middle of the third quarter, at which time we expect to be able to have the long wall in a more favorable area of the reserve base. Because of this issue, West Elk's sales volumes could be down as much as 1 million tons in 2023 to around 3.5 million tons, which will lead to significantly constrained export shipments over the next two quarters. In total, we now expect West Elk to export only around 750,000 tons, all of which is currently priced and reflected in the guidance table, along with around 2.75 million tons of domestic volume. With this, we expect total EBITDA from the thermal segment to be modestly positive in Q2, better but still constrained in Q3, and back to business as usual status in Q4 and thereafter. On the marketing front, the Arch team has continued to make advances in expanding and strengthening our metallurgical contract book since 2023 began. As Paul noted, coking coal prices have softened in recent weeks in the face of growing anxiety about the strength of the global economy as a whole. Fortunately, Arch has already entered into commitments for more than 85% of our anticipated coking coal volumes in 2023 based on the midpoint of guidance and is in advanced discussions for a significant portion of the remainder. While the price for much of this volume will be tied to published market prices closer to the time of shipment, we believe this strong appetite for our products, even in the face of a weakening market environment, is a clear indication of the outstanding value and use of our high-quality product slate. We should also note that while we are essentially sold out in our thermal segment for 2023, we currently show that our committed thermal sales volume, which stands at 71 million tons, exceeds our thermal guidance for sales volume, which stands at 67 million tons at the midpoint. Given low natural gas pricing and ongoing rail issues in the Powder River Basin similar to prior years, we expect that as the year proceeds, we could enter into discussions with customers about carrying over thermal volume into future years. Of course, as in the past, we will only entertain such requests if we are certain we are preserving the full economic value of the existing commitments. We currently expect the carryover volumes could be 5% of our current Powder River Basin commitments. Let's turn our attention to our single most critical area of performance, safety and environmental stewardship. During Q1, Arch's subsidiary operations started the year in a strong fashion, on pace with last year's record safety performance, and once again recorded 0 environmental violations and 0 water quality exceedances. In total, Arch's subsidiary operations have now operated a total of more than 3 years without a water quality exceedance. In addition, the Leer Mine and the Leer and Leer South preparation plants were recently honored by the state of West Virginia with Mountaineer Guardian Awards for safety excellence. Leer's award represented the seventh time it has been so honored in the past eight years. The state of West Virginia also honored the Leer and Beckley mines, along with one of Arch's idled operations, with awards for reclamation excellence. The West Elk mine was honored by the state of Colorado with the Outstanding Safety Performance Award and Excellence in Mining Reclamation Award. I wanna congratulate our operations for these tremendous honors and thank the entire workforce for their deep and abiding commitment to our most important corporate values, safety, environmental stewardship, corporate citizenship, and the highest ethical behavior. We are truly fortunate to have such a talented, professional, and high-performing team. With that, I will now turn the call over to Matt for further discussion on our financial performance and results. Matt? Thanks, John. Good morning, everyone. From an earnings perspective, Paul and John have already covered the highlights with improved productivity and favorable pricing in the metallurgical segment, driving sequential improvement in EBITDA and pre-tax earnings. I will keep my comments focused on cash flows, liquidity, and capital structure. Starting with the quarter's cash flows, operating cash flow in Q1 totaled $126 million as we experienced a build in working capital of nearly $170 million. We had correctly anticipated the direction of the working capital change, but underestimated the amount of the increase. Notably, inventories at March 31st were at levels we haven't seen in nearly a decade, and current liabilities haven't been this low in nearly two years, or well before we started to see inflation accelerate. Clearly we expect to see much of this build unwind and benefit cash flows over the remainder of the year. Capital spending for the quarter totaled just over $30 million, which was below ratable based on our full year guidance. In the financing section of the cash flow statement, I wanted to point out two significant items. First of all, we received over $43 million in the quarter from the exercise of outstanding warrants. The warrants can either be exercised at the election of the holder on a gross basis, with the holder paying the exercise price, or on a net basis with no cash payment. In the quarter, we saw the exercise of nearly 800,000 warrants, with the vast majority of those opting for a gross settlement. The other item I wanted to highlight was the repurchase of convertible bonds during the quarter as we utilized proceeds from the warrant exercise along with the discretionary cash flow to repurchase the remaining convertibles. As we discussed last quarter, we have prioritized the settlement of the convertible bonds over the course of the last year and are happy to report that all the convertibles have now been settled or repurchased. Finishing up the discussion of cash flows. Discretionary cash flow for the quarter totaled $96 million, and consistent with the capital return formula, our board has declared a dividend of 50% of that amount, or $2.45 per share. The dividend will be paid on June 15th to stockholders of record on May 31st. We ended the quarter with cash on hand of $222 million and total liquidity of $348 million, including availability under our credit facilities. Cash and liquidity at quarter- end were at the lower end of our target range as we prioritized the repurchase of the remaining convertibles. Moving on to the remainder of 2023, I wanted to revisit the working capital discussion and how that could play out over the rest of the year. Looking first at accounts receivable, the pricing dynamics that we discussed last quarter have reversed at least quarter to date. The provisional pricing will likely be higher than the price we will realize on Asian export volumes following the ultimate true up later in the year. We would expect that dynamic to benefit second quarter cash flows. On the flip side, those higher provisional prices are likely to be offset to a large degree in terms of working capital by an expected increase in export shipments overall during the quarter, as well as currently anticipated vessel timing. Moving to inventory, while we don't expect to remain at the peak levels from March, some of the increase we have experienced should be viewed as permanent, as the increase in volumes from Leer South, the overall increase in export activity, and the need to hold more critical spare parts to protect against supply chain challenges require higher inventory levels. Based on these factors, we currently expect the overall change in working capital to be slightly favorable in the second quarter. The trends in the back half of the year will be largely dependent on the prevailing metallurgical prices. Assuming prices at current levels, we would expect a more significant benefit in the back half, with much of that weighted toward the fourth quarter. Next, I wanted to provide some additional detail around our capital structure and share count. As I mentioned, there were two significant steps towards simplifying the capital structure in Q1: the repurchase of the remaining convertibles and the exercise of nearly two-thirds of the remaining warrants. The convertible repurchase had two benefits. First, it reduced our quarter-end diluted share count by over 420,000 shares as compared to year-end levels. Second, it eliminated any future dilution that would have resulted from ongoing dividend payments. With regard to the warrants, the first quarter exercises resulted in an increase in the basic share count. The diluted share count already included the impact of the warrants based on the assumption of a net settlement. While the basic share count increased more than 1 million shares in the quarter due primarily to the warrant exercises, there was not a similar increase in fully diluted shares. In fact, we actually reduced the fully diluted count over the course of Q1 by 300,000 shares through the convertible repurchase and share buybacks. We now have just over 450,000 warrants that remain outstanding, and given their terms, would expect those to be exercised in the next couple of quarters. Going forward, to the extent we have additional warrants exercised on a gross basis, we will use the cash proceeds to reduce dilution just as we did in the first quarter. While the exercise of the remaining warrants will increase the basic share count, there should be no change in the fully diluted count. As we continue to execute on the second 50% of the capital return program, we would expect both the basic and the fully diluted share count to continue to decline over time. Finally, while we have repurchased all the convertible bonds, the capped call that we purchased at the time of the issuance remains outstanding. The capped call is not factored into our reported fully diluted share count or otherwise recorded in our financial statements. The intrinsic value of the capped call remains approximately $62 million, representing more than 520,000 shares at yesterday's closing share price. Before turning the call over for questions, I wanted to briefly highlight a few items from our operational and financial guidance. For the metallurgical segment, we are reiterating our sales volume and cost guidance and would anticipate a roughly 10% increase in volumes in the second quarter, with additional increases in the back half of the year. John has already noted the reduction in our thermal sales volume guidance. We have increased our cost guidance to reflect the impact of the lower volumes, with expected full year costs now in the range of $14.50-$15.50 per ton. We continue to expect full year capital spending of $150 million-$160 million and are also maintaining our previous guidance for SG&A, net interest expense and cash taxes. With that, we are ready to take questions. Operator, I will turn the call back over to you. We will now begin the question-and-answer session. To ask a question, you may press star then one on your touch-tone phone. If you're using a speaker phone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. Our first question comes from Lucas Pipes with B. Riley Securities. Please go ahead. Thank you very much, operator, and good morning, everyone. Good morning, Lucas. My first question is on the met coal cost side and good job there in the first quarter. I wondered if you could speak a little bit on the outlook there, specifically with the 10% increase in volumes expected for Q2. Are there any offsetting factors that should lead to even further cost improvements from here, like longwall moves or what are you seeing there? Would really appreciate your color as it relates to the met coal costs. Thank you. Hey, Lucas, this is John Drexler. You know, in the metallurgical segment, we've been making great progress as Leer South has ramped up and gotten to volume levels that we expect to be able to move forward with. I'm real proud of the team in the east in managing overall costs. We really benefited from, you know, kind of getting all of that production in line. We've still got a wide range in the cost guidance. We do expect a step up and opportunities to move more volumes in the back half of the year. If you look at kind of the cadence of our shipments, it would imply that we're kind of approaching that 10 million tons a year run rate in the back half of the year. I think we need 4.9 million tons of sales to get to that. So that should put us in a good position to be able to achieve the cost targets that we have out there. You know, we still do see inflationary pressures, supply chain pressures, but once again, the team's managing those well, and we'll continue to move forward, we think, with a great metallurgical portfolio and ability to demonstrate costs in the lowest quartile in the industry. Lucas, it's Deck. I would add that, look, in the first quarter, while we only shipped 2.1 million tons, we actually produced 200,000 tons more than that on the production side. You know, Q2 probably won't look terribly different, you know, in terms of production, and that's really the bigger driver on the cost front. While certainly we will be looking for those incremental improvements, given that production won't change that much in all likelihood in Q2 from Q1, you know, you maybe wouldn't expect a, you know, a further step down in Q2. As John said, Q3, Q4, as production continues to climb, that's certainly our target is to continue to drive those costs down. That's very helpful. A follow-up question related to the cost side. How would you frame up marginal cost globally at this time? Where would you say your assets sit on the global metallurgical coal cost curve? Lucas, it's Deck, that's a tough question, but let me give it a go. Let me start with just talking about the U.S., and here's maybe how I would frame it. You know, if you look at some of the public guidance out there for cost, it seems that the average cost in the U.S. for coking coal would be around $110. Again, just based on kind of the public guidance that we see from a range of competitors. If that's the case, you would certainly expect that the marginal cost of production would probably be, you know, call it $20 higher than that for that, you know, that highest cost increment, that top 10% in the cost curve. Given that fact, at $130 or so in the US, you know, when we are guiding to $84 at the midpoint, clearly that shows the sort of significant advantage we have in terms of cost structure. That $45 spread is really pretty fundamental to our value proposition in the marketplace. I guess I would add this, as John just said, the goal is to move towards 10 million tons next year. As we do move towards that 10 million tons, we believe we should be able to at least maintain our costs. Who knows? Maybe we can drive them down a bit further. Meanwhile, the rest of the industry is going to be fighting inflation, so that 130 marginal cost could grow. There's no counterbalance for most of those producers. They're not looking at reductions in costs in the way that we may be. Look, we think we're really exceptionally well-positioned in the U.S. There certainly are large Australian producers that have legacy assets, surface mines that aren't growing, but that are very low on the cost curve that would probably occupy that first quartile. I would say we're solidly in the second quartile, and then when you factor in the fact that our product quality is what it is from a margin perspective, we may be better than that. Again, we feel very good about our positioning. That is very helpful color, and I'll try to squeeze a third one in here, really quickly. On the thermal side, obviously lots of headwinds in the domestic market with where natural gas prices are. I wondered if you could provide a little bit of color as it relates to 2024 thermal coal fixed price commitments and roughly where those commitments have been coming in of late. Thank you very much for your perspective. Yeah. Lucas, the thermal markets, as we've seen, have weakened, with what we've seen natural gas pricing. You know, I think we continue to feel we've got a great book already established for 2024. Have locked in good pricing prior to seeing some of the weakness that we've seen more recently here for a significant portion of that volume. You know, as we indicated in our prepared remarks as well, given the low priced natural gas, given some of the pressures in the marketplace, you know, we expect that we may see up to 5% of our committed volumes roll over into 2024. You know, we'll make sure that we're capturing all of the value of any ton that does carry over into 2024. Once again, I think we're feeling, you know, good about the establishment of the book that we have for next year and how we'll move that forward. Lucas, it's Deck again. I would only add that in the last even the last few weeks, we've added a little bit to our position even for 2023 at solid prices. While there certainly is pressure out there's no doubt, and natural gas prices are low, we are finding opportunities, and that's largely driven by the fact that even now, inventories at utilities probably aren't, you know, where they would like them to be. There still is, you know, some modest opportunity, but there's no doubt that the thermal market has gotten tougher. All right. I appreciate all the color. Thanks again, and best of luck. Thank you, Lucas. The next question comes from Nathan Martin with The Benchmark Company. Please go ahead. Hey, good morning, guys. Thanks for taking my questions. Good morning, Nate. Hey, Nate. Maybe just following on Lucas's last comments on the thermal market. Appreciate your thoughts already there. I guess maybe from a production standpoint, I also noticed Coal Creek was down meaningfully quarter-over-quarter. Any updated thoughts on that? Hey, Nate. You know, at Coal Creek, as we've been reporting, we've been spending a significant focus on putting Coal Creek in a position to have substantial reclamation completed. We're at about 80% completed with the reclamation there. We do still have some commitments from a very small active area of that operation that we're able to continue to supply with a very small footprint from a property perspective and from an operations perspective, support perspective. You know, we kind of expect this as we move forward and things are continuing to play out at Coal Creek as we expect. Great. Appreciate those thoughts, John. You know, maybe when we look at the thermal shipment guidance in general, I mean, how much of the decrease would you guys say is from West Elk? It would seem maybe about 1 million tons or so there due to geology and how much is coming from the PRB? Yeah, Nate, if you look at the volume impact, yeah, as we indicated with the challenges that we've seen at West Elk, that the team there continues to manage very well and that we expect to get through as we move to another favorable area of the reserve base in the third quarter. About 1 million tons of the overall guidance reduction comes from West Elk with the remainder of that being that rough 5% expectation of carryover from our committed volumes into the following year. You know, Nate, I just, you know, wanna be clear that, you know, we obviously have these tons committed and, you know, we've seen this play out many times. We're trying to, you know, I think, get ahead of this and give everyone a good view of what the rest of the year could play out, which is really the source of the guidance that we're providing on the thermal side. Look, I think what's important though is if tons roll over, as John said, say 5%, we intend to retain that value or, you know, it'll be done at a price that's acceptable to us in the future. Makes sense, Paul. Appreciate that. Maybe shifting over to the met side. Maybe we could get a little more color about the opportunity there versus how that compares specifically to what you're seeing in the export market. Yeah, Nate, I think, you know, as we work through the quarter, the first quarter, there was some opportunity for additional domestic commitments. If you look at all the math there, we were pleased with the price we were able to obtain on those fixed price volumes for the full year. The remainder of the opportunity we see as we look for the rest of the year is primarily gonna be into the export market. We believe there could still be some opportunities, if need be, and we stand at the ready if things are there and we see appropriate value. We see most of the remaining value probably in the export market. Nate, we have seen at times, you know, underperformance by other producers at times in the North American market. You know, we stand at the ready to step in if we have the volumes and if it's economically attractive. That's typically for, you know, a few trains here, a few trains there, rather than anything significant. You know, that last North American deal we did was probably the last one done. It was very late in the season. As you look at it today, it seems pretty prescient because given where prices are today, you know, those net backs that we're achieving on those domestic sales exceed what the net back we would achieve today on current listed seaborne prices. We feel good about the way we've managed that and as John said, as we go forward, really the focus is going to be on the seaborne market. All right. Appreciate those thoughts, guys. Maybe Matt, one for you to wrap things up. You know, you mentioned the expectation for a slight favorable change in working cap here in the second quarter. Any way to put a dollar amount around that? Yeah. Nate, I guess the way I'd look at it, you know, maybe starting with a little more detail around the inventory build we saw for the quarter. You know, some of that, as I mentioned, we're gonna likely be viewing as permanent. You know, just using rough numbers, we built about $50 million of inventory during the quarter, and it's probably fair to say that, you know, two-thirds to three-quarters of that is probably not gonna reverse this year. If you look at what that means for the remaining build for the quarter, it's roughly about $130 million. We will see some favorable trends in receivables. As I mentioned, the provisional pricing impact will get offset a little bit primarily by vessel timing. I would say of that remaining working capital build that we do expect to turn, there's probably, you know, no more than 25% of that would turn in Q2 and the rest falls probably in the back half of the year. Obviously, all of that dependent on where met prices go from here. Assuming price is where they are, that's how I think it would play out. Very helpful, Matt. Appreciate that. I'll leave it there, guys. Thanks again for the time and best of luck. Thank you, Nate. Thanks. This next question comes from, Michael Dudas with Vertical Research Partners. Please go ahead. Good morning, gentlemen. Morning, Michael. Mike. First, more on West Elk, how's the market been? I mean, any indications? That product and what's certainly that's been the decline in reversal in pricing on the thermal side. Any thoughts on that market? As you ramp back up, you know, the health of that going into when you get back to normalized production, which I guess you indicated would be in Q4 of this year. Yeah, Michael, you know, look, I think, clearly disappointment in what we've encountered. Over time, West Elk's been a great reserve base. We're in the southern reaches where we're currently mining in sequence right now of that reserve base and ran into an unexpected kind of, in-seam, issue with a clay layer, and that's just caused our overall quality and production issues. We're managing through that. As we indicated mid-third quarter, we expect to be in better areas of the reserve base and have the issue behind us. From a market perspective, we're dealing with that. We're working with the customers to manage the reduction in volumes. Even with the softening in the thermal markets that we see, a couple things. One, West Elk does supply into the domestic market, both utility and industrial. With some of the issues that are occurring in that region from a production standpoint, you know, we're seeing that that coal is still needed. You know, we are excited to work through this and get back to where we need to be. Even in the international arena, despite the softening of market prices, it's still gets back to an attractive return. Our focus is to get back on sequence and get back to where we expect West Elk to run. The team's doing a great job of managing it there and, you know, get back to where we need to be. Mike, it's Deck. I mean, when you look longer term for West Elk, it's a pretty positive outlook. You know, when you think about, you know, overall thermal consumption in the U.S. has been coming down, you know, systematically since 2008. We're gonna continue to see that for the PRB asset. That market continues to get smaller as we see coal-based power generation shut down. West Elk actually has some large industrial customers that really are committed to coal and plan to run on coal for, you know, the foreseeable future. We could really see West Elk continuing to make a meaningful contribution, you know, over the life of the reserve base there. We certainly have 10 years or more at West Elk. West Elk can continue to roll on. Of course, when the window is open into the seaborne market, it's a highly profitable mine as we've seen. You know, as John noted right now, even with prices in the international market down somewhat and Newcastle sitting at $190, you know, that's a net back at West Elk of close to $100. You know, we continue to see West Elk as a highly profitable component for our thermal segment. Quite frankly, it's probably half the EBITDA from thermal in sort of normalized times. As indicated, while the PRB over time is going to its opportunity is going to be declining, you know, West Elk does not may not experience that same level of erosion. Yeah. The only other point I'd add is I think Deck did a good job of framing up, you know, our expectations longer term with West Elk are fairly positive. The other factor that's out there is, while the quality of the coal is better than Newcastle, that quality continues to improve over time. You know, our outlook for West Elk is, if anything, you know, look, we've hit a little bump in the road, but look, longer term, I think we're feeling really good about that mine. That's very encouraging. Quality is sense of heat and sulfur or anything else that's unique? Well, the quality we ship even today out of West Elk is better ash and better CV value than Newcastle. That calorific value is going to go up, Mike, over time. Excellent. Thank you. Paul or John, maybe you can assess performance of transportation logistics that you witnessed in the quarter and what you're seeing today, east and west. Again, we've seen, you know, changes in shipments or pricing for vessels and I don't know what the rail guys are saying, but any significant or meaningful changes in net backs that you can share with us? Yeah. You know, last three months on, it's a little bit different story east and west. I'll start in the east. You know, the east started off a little slow, as the quarter ran on, really could not have any issues with the service that we received, particularly out of CSX. You know, the railroad ran well, you know, by and large, the ports ran well also. We feel we're in pretty good shape going forward. The west is a little bit of a different story. January and February were pretty rough months, particularly in the Powder River Basin. You know, while we did see a little bit of improvement in March, and we're seeing a little bit more incrementally in April, you know, it was not the greatest performance we've seen. The western railroads are struggling to keep up with the improvements that we've seen in the east. On the pricing, you know, obviously, you know, we're heavily tied to the international marks. While we did very well in Q1, you know, we will see a little bit of diminution in Q2. The other thing that's gonna hurt us a little bit in Q2 is the rail rate is, you know, 1 quarter off the current rate. We'll see the higher rail rate in Q2, and it'll be adjusted then into Q3. Excellent. Thanks, gentlemen. Thank you, Mike. Bye. This concludes our question and answer session. I would like to turn the conference over to Paul Lang for any closing remarks. I wanna thank you again for your interest in Arch. As you can see, 2023 is off to a strong start, and the Arch team is executing at a high level. While the global coking coal market is experiencing a soft patch, you know, one that we believe could ultimately prove to be constructive, we remain focused on driving forward with our strategy for long-term value creation in every facet of the business. With each passing quarter, we believe our story is becoming sharper, simpler, and even more compelling. With that, operator, we'll conclude the call, and we look forward to reporting to the group in late July. Stay safe and healthy, everyone. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.