Good day, and thank you for standing by. Welcome to the Advanced Emissions Solutions Third Quarter 2021 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers' presentation there will be a question-and-answer session. . I would now like to hand the conference over to your first speaker today, Mr. Ryan Coleman, Investor Relations. Sir please go ahead.

Thank you, and good morning, everyone, and thank you for joining us today for our third quarter 2021 earnings results call. With me on the call today are Greg Marken, who per the 8-K filed yesterday afternoon is now Chief Executive Officer, President and Treasurer; as well as Morgan Fields, our Chief Accounting Officer. This conference call is being webcasted live within the Investor Section of the website, and a downloadable version of today's presentation is available there as well. A webcast replay will also be available on the site and you can contact Health IR through Investor Relations support at 312-445-2870. Let me remind you that the presentation and remarks made today includes forward-looking statements as defined in Section 21E of the Securities Exchange Act. These statements are based on information currently available to us and involve risks and uncertainties that could cause actual and future results, performance and business prospects and opportunities to differ materially from those expressed in or implied by these statements. These risks and uncertainties include but are not limited to, the factors identified on slide two of today's slide presentation in our form 10-Q for the quarter ended September 30, 2021, and other filings with the Securities and Exchange Commission. Except as expressly required by securities laws, the company undertakes no obligation to update those factors or any forward-looking statements to reflect future events, developments or change circumstances or for any other reason. In addition, it is very important to review today's presentation and today's remarks in conjunction with GAAP references in the financial statements. With that, I will turn the call over to Greg.

Thank you, Ryan, and thanks to everyone for joining us this morning. Yesterday, after the close of markets, we reported our third quarter results, which are highlighted on Slide 3. Overall, our results were significantly improved over last year, and in line or ahead of our expectations going into the third quarter. Distributions from Tinuum remain strong as we approach the end of the tax credit generation period. And our APT segment delivered record quarterly revenue and strong gross margins. Tinuum distributions to ADES totaled $22.9 million for the quarter, compared to $9.7 million in Q3 of 2020. Royalty earnings from Tinuum group also increased and were $4.2 million compared to $3.6 million in the prior year. In addition, both quarterly RC segment operating income and adjusted EBITDA more than doubled compared to the prior year. Similar to what we saw in the second quarter, the increased number of investment facilities as well as higher prices for alternative fuel sources such as natural gas have supported high demand for the RC customers. Of note we had six RC facilities reached the end of their scheduled expiration of their 10 year tax credit generation period. We now have 16 operational facilities, all of which will reach their expiration date for generating tax credits no later than December 31. Our APT segment also benefited from higher natural gas prices and the year-over-year impact of the Cabot supply agreement, which contributed to a record quarter as revenue grew 56% compared to last year. The segment's operating income was $4.6 million, compared to an operating loss of $3.3 million in 2020. Segment adjusted EBITDA was $4.2 million, compared to a loss of $1.6 million in the prior year. The segment also demonstrated the inherent operating leverage it possesses as strong volumes drove our gross…

Thank you, Greg. Slide 4 shows a snapshot of our third quarter and year-to-date financial performance. Third quarter earnings from equity method investments were $22.2 million compared to $9.5 million for the third quarter of 2020. The increase in earnings as a result of distributions from Tinuum group being in excess of the carrying value of the investment and therefore excess distributions are recognized as equity method earnings in the period in which the distributions occur. In addition, Tinuum group had a higher number of RC facilities for majority of the current year due to three new RC facilities added during 2020. Third quarter revenues and cost of revenues were $28.9 million and $18 million respectively, compared to $19.5 million and $15 million for the third quarter of 2020. The increase in revenue was primarily the result of higher sales of consumables as well as higher royalty income. Third quarter net income was $24.3 million or $1.31 per diluted share, compared to $5 million or $0.27 per diluted share for the third quarter of 2020. The increase was driven by higher earnings from equity method investments, as well as higher volumes and improved margins within the APT segment. Third quarter consolidated adjusted EBITDA was $28.5 million, compared to $8.7 million for 2020. The increase in adjusted EBITDA was driven by the increase in distributions from Tinuum as well as higher consumables revenue at more favorable margins. Our cash balance, including restricted cash totaled $82.1 million, an increase of $46.2 million compared to December 31, 2020. The restricted cash stems from our surety bond and the requirement to post collateral of $10 million for the obligations due under the reclamation contract related to the mine in Marshall, Texas. With the full repayment of our term loan last quarter, the company's only…

Thank you Morgan. Turning to slide 5, you can see our expected future RC cash flows. During the third quarter six invested RC facilities reached the end of their scheduled expiration of their 10 year tax credit generation life. As such Tinuum now has the 16 invested RC facilities that we have just discussed in the updated cash flow guidance. As we discussed earlier, the remaining 16 invested facilities tax credit generation periods are scheduled to expire by the end of this year. As I mentioned some of the expired facilities will likely remain in place utility customers to apply our front end technologies to assist them in meeting emissions control requirements. As such, we expect there to be a small but stable revenue opportunity from these customers after the wind down of Tinuum. Of the previously invested facilities that have reached the end of their tax credit generation period we are also seeing some transitioning to our front end chemical technology. We believe our front end technologies and our activated carbon products offer viable and sustainable options for these utilities bound by Mercury Air Toxic Standards. Slide 6 reflects the APT segment growth channels that we have been discussing where we are either currently active or have identified future opportunities. We're approaching three years since our acquisition of carbon solutions in December of 2018. At that time, we immediately became the go to provider of activated carbon solutions for coal fired power plants that needed to adhere to Mercury Air Toxic Standards. Since that time, coal fired power generation in general has declined faster than forecast predicted, largely driven by abundant and competitively priced natural gas. Today, we possess a much more diversified commercial in market mix after considerable time and effort building out our internal sales team and…

Thanks, Greg. As many of you have seen similar to past quarters, we included invitation to submit questions ahead of time at the bottom of the conference call announcement press release as well as yesterday afternoon’s earnings press release. Thanks for those of you who continue to send your questions. We'll continue this practice going forward and we invite you to submit your questions ahead of future calls as well. The first question we received is there anything in the currently proposed bill back better legislation that could either extend the life of the Tinuum business or benefit the carbon solutions business.

Ryan, there is currently nothing in the bill back better bill that relates to extending the life of the refined coal production tax credits. While it's difficult to predict outcomes in D.C., we in Tinuum consider such an extension unlikely. Also the window for Tinuum to continue even a portion of its operation is closing. Tinuum closed multiple units during Q3 and continues down that path in Q4 as they are planning for the end of that business. As it relates to our APT segments, there are multiple sections related to the recently passed bipartisan infrastructure bill and ADES could possibly qualify for certain of these provisions included in that bill. However, actual funding and probability of qualifying is unknown. So we can't truly predict any benefit are tailwind at this point.

The second question was last quarter your commentary identified that the margin headwinds in the AAPT segment would persist into 2022. But this quarter that is changed to well into 2022. What has changed?

The primary driver continues to be higher natural gas prices. It's clear as we move into the colder months, that high natural gas prices are not likely to subside anytime soon, at least not to a level that would lead to call the gas switching. As a result, we expect demand to remain high and for our top line to be very strong, which is going to require us to continue to source inventory from third parties. The other factor is the broader inflationary pressures we are seeing across the economy in general, from transportation and freight costs, commodity prices and input prices for certain additives that we use. We are certainly not immune to those price pressures, which do not seem to be easing. So those will create a bit of headwind as well.

And our last question that we received, are you able to quantify the revenue opportunity from switching current RC customers to utilizing activated carbon and other of your front end technologies to meet emissions regulations?

It's difficult to quantify at this stage because it will be highly dependent on the individual utility and the technology that they choose to adopt. It also depends on whether we have the capacity to serve those customers. Thus, it is still too early to identify an annualized run rate revenue opportunity at this point. However, we know that our front end technology combined with our activated carbon technologies are a competitive and viable solution, especially in a post defined coal world. So we intend to provide this option for customers going forward.

Thanks, Greg. And thanks again to everyone that submitted questions. I'll turn the call back over to Greg for closing remarks.

Thanks, Ryan, and thanks to everyone for joining the call this morning. And for your continued support. We look forward to updating everyone next quarter.

This concludes today's conference call. Thank you all for participating. You may now disconnect.