The following discussion and analysis provides a narrative of our results of operations and financial condition for the three months endedMarch 31, 2020 andMarch 31, 2019 . You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and related notes appearing in this Form 10-Q and the audited financial statements for the year endedDecember 31, 2019 included in our Annual Report on Form 10-K for the year endedDecember 31, 2019 (the "2019 Annual Report"). Some of the information contained in this discussion and analysis or set forth elsewhere in this Form 10-Q, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, our actual results could differ materially from the results described in, or implied by, the forward-looking statements contained in the following discussion and analysis. Please see "Forward-Looking Statements." Overview We are aU.S. -based, environmentally and socially minded supplier to the global steel industry. We are dedicated entirely to mining non-thermal met coal used as a critical component of steel production by metal manufacturers inEurope ,South America andAsia . We are a large-scale, low-cost producer and exporter of premium met coal, also known as hard coking coal ("HCC"), operating highly-efficient longwall operations in our underground mines based inAlabama , Mine No. 4 and Mine No. 7. As ofDecember 31, 2019 , based on a reserve report prepared byMarshall Miller & Associates, Inc. ("Marshall Miller"), Mine No. 4 and Mine No. 7, our two operating mines, had approximately 105.3 million metric tons of recoverable reserves and, based on a reserve report prepared byStantec Consulting Services, Inc. ("Stantec") our undevelopedBlue Creek mine contained 103.0 million metric tons of recoverable reserves. As a result of our high quality coal, our realized price has historically been in line with, or at a slight discount to, the Platts Premium Low Volatility ("LV") Free On Board ("FOB") Australia Index Price ("Platts Index"). Our HCC, mined from the Southern Appalachian portion of theBlue Creek coal seam, is characterized by low sulfur, low-to-medium ash, andLV to mid-volatility ("MV"). These qualities make our coal ideally suited as a coking coal for the manufacture of steel. We sell substantially all of our met coal production to steel producers. Met coal, which is converted to coke, is a critical input in the steel production process. Met coal is both consumed domestically in the countries where it is produced and exported by several of the largest producing countries, such asChina ,Australia ,the United States , Canada andRussia . Therefore, demand for our coal will be highly correlated to conditions in the global steelmaking industry. The steelmaking industry's demand for met coal is affected by a number of factors, including the cyclical nature of that industry's business, technological developments in the steelmaking process and the availability of substitutes for steel such as aluminum, composites and plastics. A significant reduction in the demand for steel products would reduce the demand for met coal, which would have a material adverse effect upon our business. Similarly, if alternative ingredients are used in substitution for met coal in the integrated steel mill process, the demand for met coal would materially decrease, which could also materially adversely affect demand for our met coal. The global steelmaking industry's demand for met coal is also affected by pandemics, epidemics or other public health emergencies, such as the recent outbreak of the novel coronavirus disease 2019 ("COVID-19"), which has spread fromChina to many other countries includingthe United States . InMarch 2020 , theWorld Health Organization ("WHO") declared COVID-19 as a pandemic, and the President ofthe United States declared the COVID-19 outbreak a national emergency. The outbreak has resulted in governments around the world implementing increasingly stringent measures to help control the spread of the virus, including quarantines, "shelter in place" and "stay at home" orders, travel restrictions, business curtailments, school closures, and other measures. In addition, governments and central banks in several parts of the world have enacted fiscal and monetary stimulus measures to counteract the impacts of COVID-19. We are a company operating in a critical infrastructure industry, as defined by theU.S. Department of Homeland Security . As such, we continue to operate our mines in a safe manner under the guidelines issued by the Centers for Disease Control andPrevention and Alabama State Health Department . This includes, among other things, eliminating business travel, staggering manbuses, cage and shift start times to allow for social distancing, enhanced disinfectant cleaning at all locations, maintaining antibacterial supplies at all locations, providing employees with masks, gloves and other gear, eliminating visitors or vendors on property without strict screening process and testing the temperature of all employees. Notwithstanding our continued operations, COVID-19 has begun to have and may continue to have further negative impacts on our two operating mines, supply chain, transportation networks and customers, which may compress our margins, 19 -------------------------------------------------------------------------------- and reduce demand for the met coal that we produce, including as a result of preventative and precautionary measures that we, other businesses and governments are taking. The COVID-19 outbreak is a widespread public health crisis that is adversely affecting the economies and financial markets of many countries, including those of our customers, which are primarily located inEurope ,South America andAsia . Any resulting economic downturn could adversely affect demand for our met coal and contribute to volatile supply and demand conditions affecting prices and volumes. The progression of COVID-19 could also negatively impact our business or results of operations through the temporary closure of one of our mines, customers or critical suppliers, or theMcDuffie Coal Terminal at thePort of Mobile, Alabama , or a disruption to our rail and barge carriers, which would delay or prevent deliveries to our customers, among others. In addition, the ability of our employees and our suppliers' and customers' employees to work may be significantly impacted by individuals contracting or being exposed to COVID-19, or as a result of the control measures noted above, which may significantly affect the demand for met coal. Our customers may be directly impacted by business curtailments or weak market conditions and may not be willing or able to fulfill their contractual obligations or open letters of credit. We may also experience delays in obtaining letters of credit or processing letter of credit payments due to the impacts of COVID-19 on foreign issuing andU.S. intermediary banks. Furthermore, the progression of, and global response to, the COVID-19 outbreak has begun to cause, and increases the risk of, further delays in construction activities and equipment deliveries related to our capital projects, including potential delays in obtaining permits from government agencies. The extent of such delays and other effects of COVID-19 on our capital projects, certain of which are outside of our control, is unknown, but they may impact or delay the timing of anticipated benefits of capital projects. In light of the uncertainties regarding the duration of the COVID-19 pandemic and its overall impact on the Company, its operations and the global economy, we are withdrawing our full-year 2020 guidance issued onFebruary 19, 2020 at this time. We are also appropriately adjusting our operational needs, including managing our expenses, capital expenditures, working capital, liquidity and cash flows. In addition, as a precautionary measure, we borrowed$70.0 million under the ABL Facility onMarch 24, 2020 ( the "ABL Draw") in order to increase the Company's cash position and preserve financial flexibility. We intend on retaining the funds in cash to preserve liquidity amid the growing uncertainty surrounding the COVID-19 outbreak. We also delayed the budgeted$25.0 million development ofBlue Creek until at leastJuly 1, 2020 and temporarily suspended our Stock Repurchase Program. Our financial approach continues to focus on cash flow management and protecting the balance sheet in order to strategically move through this period of uncertainty and mitigate potential long-term impacts to the business (see Liquidity and Capital Resources below). OnMarch 27, 2020 , the President ofthe United States signed and enacted into law the Coronavirus Aid, Relief and Economic Security Act (the "CARES Act"). The CARES Act, among other things, provides temporary relief from certain aspects of the Tax Cuts and Jobs Act of 2017 that had imposed limitations on the utilization of certain losses, interest expense deductions and alternative minimum tax ("AMT") credits. The CARES Act also provides opportunities for businesses to improve their cash flows by obtaining refunds for prior taxable years and reducing their income and deferring payroll tax liabilities for the current taxable year. Specifically, Section 2305 of the CARES Act accelerates the ability to receive refunds of remaining AMT credits for tax years 2019, 2020 and 2021. As a result, we recorded an adjustment of approximately$11.3 million to reclassify AMT credits from a non-current income tax receivable to a current income tax receivable as we now expect to receive these refunds this year. We now expect to receive approximately$24.3 million in 2020 for refunds of AMT credits. We are continuing to evaluate the impact of the CARES Act on our business, financial results and disclosures. How We Evaluate Our Operations Our primary business, the mining and exporting of met coal for the steel industry, is conducted in one business segment: mining. All other operations and results are reported under the "All Other" category as a reconciling item to consolidated amounts, which includes the business results from our sale of natural gas extracted as a byproduct from our underground coal mines and royalties from our leased properties. Our natural gas and royalty businesses do not meet the criteria in ASC 280, Segment Reporting, to be considered as operating or reportable segments. Our management uses a variety of financial and operating metrics to analyze our performance. These metrics are significant factors in assessing our operating results and profitability and include: (i) Segment Adjusted EBITDA (as defined below), a non-GAAP financial measure; (ii) sales volumes and average selling price, which drive coal sales revenue; (iii) cash cost of sales, a non-GAAP financial measure; and (iv) Adjusted EBITDA, a non-GAAP financial measure. 20 --------------------------------------------------------------------------------
For the three months ended March 31, 2020 2019 (in thousands) Segment Adjusted EBITDA$ 69,824 $ 187,053 Metric tons sold 1,646 1,901 Metric tons produced 1,904 2,084 Gross price realization(1) 89 % 98 %
Average selling price per metric ton
$ 61,655 $ 181,018 (1) For the three months endedMarch 31, 2020 and 2019, our gross price realization represents a volume weighted-average calculation of our daily realized price per ton based on gross sales, which excludes demurrage and other charges, as a percentage of the Platts Index price. Segment Adjusted EBITDA We define Segment Adjusted EBITDA as net income adjusted for other revenues, cost of other revenues, depreciation and depletion, selling, general and administrative, loss on early extinguishment of debt, other income and certain transactions or adjustments that the Chief Executive Officer, our Chief Operating Decision Maker, does not consider for the purposes of making decisions to allocate resources among segments or assessing segment performance. Segment Adjusted EBITDA is used as a supplemental financial measure by management and by external users of our financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess: • our operating performance as compared to the operating performance of other companies in the coal industry, without regard to financing methods, historical cost basis or capital structure;
• the ability of our assets to generate sufficient cash flow to pay dividends;
• our 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 investment
opportunities.
Sales Volumes, Gross Price Realization and AverageNet Selling Price We evaluate our operations based on the volume of coal we can safely produce and sell in compliance with regulatory standards, and the prices we receive for our coal. Our sales volume and sales prices are largely dependent upon the terms of our annual coal sales contracts, for which prices generally are set on daily index averages. The volume of coal we sell is also a function of the pricing environment in the international met coal markets and the amounts ofLV and MV coal that we sell. We evaluate the price we receive for our coal on two primary metrics: first, our gross price realization and second, our average net selling price per metric ton. Our gross price realization represents a volume weighted-average calculation of our daily realized price per ton based on the blended gross sales of ourLV and MV coal, excluding demurrage and quality specification adjustments, as a percentage of the Platts Index daily price. Our gross price realizations reflect the premiums and discounts we achieve on ourLV and MV coal versus the Platts Index price because of the high quality premium products we sell into the export markets. In addition, the premiums and discounts in a quarter or year can be impacted by a rising or falling price environment. On a quarterly basis, our blended gross selling price per metric ton may differ from the Platts Index price per metric ton, primarily due to our gross sales price per ton being based on a blended average of gross sales price on ourLV and MV coals as compared to the Platts Index price due to the fact that many of our met coal supply agreements are based on a variety of indices such as the Platts Index and the Steel Index and due to the timing of shipments. 21 -------------------------------------------------------------------------------- Our average net selling price per metric ton represents our coal net sales revenue divided by total metric tons of coal sold. In addition, our average net selling price per metric ton is net of the previously mentioned demurrage and quality specification adjustments. Cash Cost of Sales We evaluate our cash cost of sales on a cost per metric ton basis. Cash cost of sales is based on reported cost of sales and includes items such as freight, royalties, manpower, fuel and other similar production and sales cost items, and may be adjusted for other items that, pursuant to accounting principles generally accepted inthe United States ("GAAP"), are classified in the Condensed Statements of Operations as costs other than cost of sales, but relate directly to the costs incurred to produce met coal and sell it FOB at thePort of Mobile, Alabama . Our cash cost of sales per metric ton is calculated as cash cost of sales divided by the metric tons sold. Cash cost of sales is used as a supplemental financial measure by management and by external users of our financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess: • our operating performance as compared to the operating
performance
of other companies in the coal industry, without regard to financing methods, historical cost basis or capital structure; and • the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment
opportunities.
We believe that this non-GAAP financial measure provides additional insight into our operating performance, and reflects how management analyzes our operating performance and compares that performance against other companies for purposes of business decision making by excluding the impact of certain items that management does not believe are indicative of our core operating performance. We believe that cash cost of sales presents a useful measure of our controllable costs and our operational results by including all costs incurred to produce met coal and sell it FOB at thePort of Mobile, Alabama . Period-to-period comparisons of cash cost of sales are intended to help management identify and assess additional trends that potentially impact us and that may not be shown solely by period-to-period comparisons of cost of sales. Cash cost of sales should not be considered an alternative to cost of sales or any other measure of financial performance or liquidity presented in accordance with GAAP. Cash cost of sales excludes some, but not all, items that affect cost of sales, and our presentation may vary from the presentations of other companies. As a result, cash cost of sales as presented below may not be comparable to similarly titled measures of other companies. The following table presents a reconciliation of cash cost of sales to total cost of sales, the most directly comparable GAAP financial measure, on a historical basis for each of the periods indicated. For the three months ended March 31, 2020 2019 (in thousands) Cost of sales$ 151,514 $ 182,628 Asset retirement obligation accretion (369 ) (373 ) Stock compensation expense (449 ) (319 ) Cash cost of sales$ 150,696 $ 181,936 Adjusted EBITDA We define Adjusted EBITDA as net income before net interest expense, income tax expense, depreciation and depletion, non-cash stock compensation expense, non-cash asset retirement obligation accretion, loss on early extinguishment of debt and other income. Adjusted EBITDA is used as a supplemental financial measure by management and by external users of our financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess: • our operating performance as compared to the operating performance of other companies in the coal industry, without regard to financing methods, historical cost basis or capital structure; and • the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment
opportunities. 22
-------------------------------------------------------------------------------- We believe that the presentation of Adjusted EBITDA in this report provides information useful to investors in assessing our financial condition and results of operations. The GAAP measure most directly comparable to Adjusted EBITDA is net income. Adjusted EBITDA should not be considered an alternative to net income or loss or any other measure of financial performance or liquidity presented in accordance with GAAP. Adjustments exclude some, but not all, items that affect net loss and our presentation of Adjusted EBITDA may vary from that presented by other companies. The following table presents a reconciliation of Adjusted EBITDA to net income, the most directly comparable GAAP financial measure, on a historical basis for each of the periods indicated. For the three months ended March 31, 2020 2019 Net income$ 21,545 $ 110,447 Interest expense, net 7,533 8,592 Income tax expense 3,241 27,984 Depreciation and depletion 28,692 22,233 Asset retirement obligation accretion (1) 733
812
Stock compensation expense (2) 1,733
1,194
Loss on early extinguishment of debt (3) - 9,756 Other income(4) (1,822 ) - Adjusted EBITDA$ 61,655 $ 181,018
(1) Represents non-cash accretion expense associated with our asset retirement
obligations. (2) Represents non-cash stock compensation expense associated with equity awards.
(3) Represents a loss incurred in connection with the early extinguishment of
debt (See Note 5 of the "Notes to Condensed Financial Statements" in this Form 10-Q). (4) Represents settlement proceeds received for the Shared Services Claim and
Hybrid Debt Claim associated with the Walter Canada CCAA (each discussed
below). 23
-------------------------------------------------------------------------------- Results of Operations Three Months EndedMarch 31, 2020 and 2019 The following table summarizes certain unaudited financial information for the three months endedMarch 31, 2020 and 2019. For the three months ended March 31, % of Total % of Total (in thousands) 2020 Revenues 2019 Revenues Revenues: Sales$ 221,338 97.6 %$ 369,681 97.7 % Other revenues 5,382 2.4 % 8,609 2.3 % Total revenues 226,720 100.0 % 378,290 100.0 % Costs and expenses: Cost of sales (exclusive of items shown separately below) 151,514 66.8 % 182,628 48.3 % Cost of other revenues (exclusive of items shown separately below) 7,561 3.3 % 7,745 2.0 % Depreciation and depletion 28,692 12.7 % 22,233 5.9 % Selling, general and administrative 8,456 3.7 % 8,905 2.4 % Total costs and expenses 196,223 86.5 % 221,511 58.6 % Operating income 30,497 13.5 % 156,779 41.4 % Interest expense, net (7,533 ) (3.3 )% (8,592 ) (2.3 )% Loss on early extinguishment of debt - - % (9,756 ) (2.6 )% Other income 1,822 0.8 % - - % Income before income taxes 24,786 10.9 % 138,431 36.6 % Income tax expense 3,241 1.4 % 27,984 7.4 % Net income$ 21,545 9.5 %$ 110,447 29.2 %
Sales and cost of sales components on a per unit basis for the three months
ended
For the three months ended March 31, 2020 2019Met Coal (metric tons in thousands) Metric tons sold 1,646 1,901 Metric tons produced 1,904 2,084 Gross price realization(1) 89 % 98 %
Average selling price per metric ton
(1) For the three months endedMarch 31, 2020 and 2019, our gross price realization represents a volume weighted-average calculation of our daily realized price per ton based on gross sales, which excludes demurrage and other charges, as a percentage of the Platts Index price. Sales for the three months endedMarch 31, 2020 were$221.3 million compared to$369.7 million for the three months endedMarch 31, 2019 . The$148.3 million decrease in revenues was primarily driven by a$98.9 million decrease in revenues related to a$60.00 decrease in the average selling price per metric ton of met coal, combined with a$49.6 million decrease in revenues due to a 255 thousand metric ton decrease in met coal sales volume. 24 -------------------------------------------------------------------------------- For the three months endedMarch 31, 2020 , our geographic customer mix was 54% inEurope , 26% inSouth America and 20% inAsia . For the three months endedMarch 31, 2019 , our geographic customer mix was 49% inEurope and 27% inAsia and 24% inSouth America . Our geographic customer mix typically varies each period based on the timing of customer orders and shipments. There were no significant changes in our customer base for the three months endedMarch 31, 2020 . Other revenues for the three months endedMarch 31, 2020 were$5.4 million compared to$8.6 million for the three months endedMarch 31, 2019 . Other revenues are comprised of revenue derived from our natural gas operations, gains on sales and disposals of property, plant and equipment and land, as well as earned royalty revenue. The$3.2 million decrease in other revenues is primarily due to a decrease in average gas selling prices. Cost of other revenues for the period was consistent with the prior year period. Cost of sales (exclusive of items shown separately below) was$151.5 million , or 66.8% of total revenues, for the three months endedMarch 31, 2020 , compared to$182.6 million , or 48.3% of total revenues for the three months endedMarch 31, 2019 . The$31.1 million decrease is primarily driven by a$24.4 million decrease due to a 255 thousand metric ton decrease in met coal sales volumes combined with a$6.6 million decrease due to a$4.16 decrease in average cash cost of sales per metric ton. Depreciation and depletion was$28.7 million , or 12.7% of total revenues, for the three months endedMarch 31, 2020 , compared to$22.2 million , or 5.9% for the three months endedMarch 31, 2019 . The$6.5 million increase in depreciation and depletion is driven by an increase in depreciable assets. Selling, general and administrative expenses were$8.5 million , or 3.7% of total revenues, for the three months endedMarch 31, 2020 , compared to$8.9 million , or 2.4% of total revenues, for the three months endedMarch 31, 2019 . Selling, general and administrative expenses for the period was consistent with the prior year period. Interest expense, net was$7.5 million , or 3.3% of total revenues, for the three months endedMarch 31, 2020 , compared to$8.6 million , or 2.3% of total revenues, for the three months endedMarch 31, 2019 . The$1.1 million decrease is driven by the retirement of debt of$131.6 million in the first quarter of 2019. Interest expense, net is comprised of interest on our Notes (as defined below) and ABL Facility and the amortization of debt issuance costs, offset partially by earned interest income. For the three months endedMarch 31, 2019 , we recognized a loss on early extinguishment of debt of$9.8 million upon the extinguishment of$131.6 million of our Notes (as defined below). The loss on early extinguishment of debt represents a premium paid to retire the debt, accelerated amortization of debt discount, net, and fees incurred in connection with the transaction. Other income was$1.8 million , or 0.8% of total revenues, for the three months endedMarch 31, 2020 . OnJuly 15, 2015 , Walter Energy, Inc. ("Walter Energy") and certain of its wholly ownedU.S. subsidiaries, includingJim Walter Resources, Inc. ("JWR") filed voluntary petitions for relief under Chapter 11 of Title 11 of theU.S. Bankruptcy Code (the "Chapter 11 Cases") in theNorthern District ofAlabama , Southern Division. OnDecember 7, 2015 ,Walter Energy Canada Holdings, Inc. ,Walter Canadian Coal Partnership and their Canadian affiliates (collectively "Walter Canada") applied for and were granted protection under the Companies' Creditors Arrangement Act (the "CCAA") pursuant to an Initial Order of theSupreme Court of British Columbia . In connection with our acquisition of certain core operating assets of Walter Energy, we acquired a receivable owed to Walter Energy byWalter Canada for certain shared services provided by Walter Energy toWalter Canada (the "Shared Services Claim") and a receivable for unpaid interest owed to Walter Energy fromWalter Canada in respect of a promissory note (the "Hybrid Debt Claim"). Each of these claims were asserted by us in the Walter Canada CCAA proceedings. Walter Energy deemed these receivables to be impaired for the year endedDecember 31, 2015 and we did not assign any value to these receivables in acquisition accounting as collectability was deemed remote. InMarch 2020 , we received an additional$1.8 million in settlement proceeds for the Shared Services Claim and Hybrid Debt Claim which is reflected as other income in the Condensed Statement of Operations. These settlement proceeds are in addition to the$22.8 million received in 2019. The collectability of additional amounts, if any, related to the Shared Services Claim and Hybrid Debt Claim depends on the outcome of, and the timing of any resolution of, the Walter Canada CCAA proceedings and cannot be predicted with certainty. For the three months endedMarch 31, 2020 , we utilized a discrete period method to calculate taxes, as we do not believe that the annual effective tax rate method represents a reliable estimate given the current uncertainty surrounding the recent outbreak of COVID-19 and its impact on our annual guidance. For the three months endedMarch 31, 2020 , we 25 --------------------------------------------------------------------------------
recognized income tax expense of
OnMarch 27, 2020 , the President ofthe United States signed and enacted into law the CARES Act. The CARES Act, among other things, provides temporary relief from certain aspects of the Tax Cuts and Jobs Act of 2017 that had imposed limitations on the utilization of certain losses, interest expense deductions and AMT credits. The CARES Act also provides opportunities for businesses to improve their cash flows by obtaining refunds for prior taxable years and reducing their income and deferring payroll tax liabilities for the current taxable year. Specifically, Section 2305 of the CARES Act accelerates the ability to receive refunds of remaining AMT credits for tax years 2019, 2020 and 2021. As a result, we recorded an adjustment of approximately$11.3 million to reclassify AMT credits from a non-current income tax receivable to a current income tax receivable as we now expect to receive these refunds this year. We now expect to receive approximately$24.3 million in 2020 for refunds of AMT credits. We are continuing to evaluate the impact of the CARES Act on our business, financial results and disclosures. Liquidity and Capital Resources Overview Our sources of cash have been met coal and natural gas sales to customers, proceeds received from the issuance of the Notes (as defined below) and access to our ABL Facility. Historically, our primary uses of cash have been for funding the operations of our met coal and natural gas production operations, our capital expenditures, our reclamation obligations, payment of principal and interest on our Notes, professional fees and other non-recurring transaction expenses. In addition, we have used available cash on hand to repurchase shares of our common stock, pay quarterly dividends, and pay special dividends, each of which reduces cash and cash equivalents. Going forward, we will use cash to fund debt service payments on our Notes, the ABL Facility and our other indebtedness, to fund operating activities, working capital, capital expenditures, and strategic investments, and, if declared, to pay our quarterly and/or special dividends. Our ability to fund our capital needs going forward will depend on our ongoing ability to generate cash from operations and borrowing availability under the ABL Facility, and, in the case of any future strategic investments, capital expenditures, or special dividends financed partially or wholly with debt financing, our ability to access the capital markets to raise additional capital. Our ability to generate positive cash flow from operations in the future will be, at least in part, dependent on continued stable global economic conditions. InMarch 2020 , the WHO declared the outbreak of COVID-19 as a global pandemic. There is significant uncertainty as to the effects of this pandemic on the global economy, which in turn may, among other things, impact our ability to generate positive cash flows from operations, fund capital expenditure needs and successfully execute and fund key initiatives, such as the development ofBlue Creek . As events relating to COVID-19 continue to develop globally and impact the capital markets, our liquidity could also be adversely impacted due to possible deterioration in our customers' financial condition and their ability to timely pay outstanding receivables owed to us. Our available liquidity as ofMarch 31, 2020 was$302.8 million , consisting of cash and cash equivalents of$256.7 million and$46.1 million available under our ABL Facility. As ofMarch 31, 2020 , there was$70.0 million outstanding under the ABL Facility, with$46.1 million available, net of outstanding letters of credit of$8.9 million . For the three months endedMarch 31, 2020 , cash flows provided by operating activities were$21.0 million , cash flows used in investing activities were$20.2 million and cash flows provided by financing activities were$62.6 million . We believe that our future cash flows from operations, together with cash on our balance sheet and proceeds from the ABL Draw, will provide adequate resources to fund our debt service payments and planned operating and capital expenditure needs for at least the next twelve months. However, as the impact of the COVID-19 pandemic on the economy and our operations evolves, we will continue to assess our liquidity needs. A continued worldwide disruption could materially affect our future access to our sources of liquidity, particularly our cash flows from operations, financial condition, capitalization and capital investments. In the event of a sustained market deterioration, we may need additional liquidity, which would require us to evaluate available alternatives and take appropriate actions. If our cash flows from operations are less than we require, we may need to incur additional debt or issue additional equity. From time to time we may need to access the long-term and short-term capital markets to obtain financing. Our access to, and the availability of, financing on acceptable terms and conditions in the future will be affected by many factors, including: (i) our credit ratings, (ii) the liquidity of the overall capital markets, (iii) the current state of the global economy and 26
--------------------------------------------------------------------------------
(iv) restrictions in our ABL Facility, the Indenture (as defined below), and any other existing or future debt agreements. There can be no assurance that we will have or continue to have access to the capital markets on terms acceptable to us or at all. Statements of Cash Flows Cash balances were$256.7 million and$193.4 million atMarch 31, 2020 andDecember 31, 2019 , respectively. The following table sets forth, a summary of the net cash provided by (used in) operating, investing and financing activities for the period (in thousands):
© Edgar Online, source