ADA-ES INC - FORM 8-K - EX-99.1 - ANNUAL SHAREHOLDER MEETING PRESENTATION

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EX-99.2 - PRESS RELEASE - ADA-ES INC	d381904dex992.htm

Creating a Future with

Cleaner Coal

Annual Shareholder Meeting

July 19, 2012

NASDAQ:ADES

www.adaes.com

Exhibit 99.1

Please note that this presentation contains forward-looking statements within the meaning of Section 21E of the Securities

Exchange Act of 1934, which provides a "safe harbor" for such statements in certain circumstances. The forward-looking

statements include, but will not necessarily be limited to, statements or expectations regarding the growth in markets for our

products and services; amount and timing of revenues, earnings, operating income, segment income, cash flows and other

financial measures; timelines for our projects; future operations of refined coal facilities; impact of regulations; future supply and

demand; impact of a restatement and related matters. These statements are based on current expectations, estimates,

projections, beliefs and assumptions of our management. Such statements involve significant risks and uncertainties. Actual

events or results could differ materially from those discussed in the forward-looking statements as a result of various factors,

including but not limited to, changes in laws and regulations, government funding, accounting rules, prices, economic conditions

and market demand; timing of regulations and any legal challenges to them; impact of competition; availability, cost of and

demand for alternative energy sources and other technologies; technical, start-up and operational difficulties; inability to

commercialize

our

technologies

favorable

terms;

our

inability

ramp

operations

effectively

address

expected

growth

our

target

markets;

additional

risks

Clean

Coal

Solutions,

LLC

including

failure

its

leased

facilities

continue

produce coal which qualifies for IRS Section 45 tax credits, termination of the leases for such facilities, decreases in the production

refined

coal

the

lessees,

seasonality

and

failure

monetize

new

CyClean™

and

M45™

facilities;

our

inability

negotiate,

execute and close on definitive agreements related to the M45 technology license; availability of raw materials and equipment for

our

businesses;

loss

key

personnel;

intellectual

property

infringement

claims

from

third

parties;

and

other

factors

discussed

greater detail in our filings with the Securities and Exchange Commission (SEC). You are cautioned not to place undue reliance on

such statements and to consult our SEC filings for additional risks and uncertainties that may apply to our business and the

ownership of our securities. Our forward-looking statements are presented as of the date made, and we disclaim any duty to

update such statements unless required by law to do so.

Disclaimer

-2-

ADA provides diverse, low-CAPEX technologies to reduce emissions from

coal-fired power plants

Significant revenue growth expected in 2012 and 2013 from Refined Coal (RC)

–

2011,

first

two

facilities

generated

$20

revenue

and

segment

income for ADA

–

26 additional RC facilities placed in service in 2011

–

Several additional facilities expected to come on line throughout 2012 to achieve a

segment income run rate of approximately $50 mm by year-end

–

Remaining RC units expected to be operational in 2013 with opportunity to produce up to

$100 million in segment income annually for 2014 through 2021

EPA’s Mercury and Air Toxics Standard (MATS) became final on April 16, 2012

–

Requires 1200 power plants to reduce emissions of mercury and acid gases by 2015

–

EPA predicts this will create a >$9 billion per year market for emissions control

ADA is the market leader in mercury control technologies

10 million shares outstanding

Investment Highlights

-3-

ADA’s Emissions Solutions

for the Existing Fleet

-4-

Supply emission control technologies based upon minimal

capital cost for new equipment

–

Doesn’t require 10-20 years of extended plant life needed to justify

large equipment costs

Low CAPEX alternatives trade variable operating expenses

for fixed capital costs

–

Allows continued operation of the plants that may otherwise be

considered for closure

Examples for a 250 MW Plant:

–

High CAPEX: Wet Scrubber $100+ mm

–

ADA Low CAPEX alternatives

–

ACI: $1 mm

–

DSI: $3 mm

–

RC: Controls mercury at no cost to utility

–

Enhanced Coal: No capital equipment; $2-$4 mm per year in

increased fuel costs to the power producer

-5-

ACI System

for Mercury

ADA’s Low CAPEX Approach to Emissions

Control Technology

Emission Control Equipment

(NO

, SO

, Particulate)

CyClean Is Added Directly to Coal Belts

CONFIDENTIAL

Coal on belt

CyClean B

added here

(ppm)

CyClean A

added here

(0.1% wt)

Two RC technologies reduce mercury and

NOx emissions and qualify for Section 45

Tax Credits

42.5% stake in Clean Coal Solutions JV

with NexGen & Goldman Sachs

–

2 CyClean facilities produced $20 MM in

revenue, $7 MM in operating income for

ADA in 2011

–

Total RC activities capable of producing

$50-100 MM in Segment Income for ADA ,

2014-2021

ADA Segment Overview

-7-

Emissions Control Systems

Technology

MATS expected to create $1 B market for

low-CapEx Technologies

ACI for control of mercury

DSI for control of acid gases

Enhanced coal treatment technology to

reduce mercury emissions

Developing technology to

capture CO

from flue gas in

coal-fired boilers

Refined Coal

Scrubber

Additive

Filter or ESP

SCR

DeNOx

Air

Preheater

Steam

Generator

Flue Gas Desulfurization

(FGD) Scrubber

Coal

Bunker

Emission Control Solutions

Enhanced Coal

Refined Coal

Flue Gas

Conditioning

Dry Sorbent

Injection (DSI)

Activated

Carbon

Injection

(ACI)

CEMS

Refined Coal is Provided through JV

Clean Coal Solutions, LLC

Clean Coal Solutions (CCS)

Clean Coal Solutions (CCS) : ADA JV with NexGen Refined Coal LLC

–

Goldman Sachs affiliate bought 15% interest in May 2011 for $60 mm. Their investment

will be recorded as Temporary Equity on the balance sheet.

CCS markets two coal pre-combustion technologies developed by ADA that qualify for

IRS Section 45 RC tax credits of $6.47 per ton of RC for ten years

–

Reduces mercury emissions by >40% and NOx emissions by >20%

Third-parties lease RC facilities from CCS converting tax credits to revenues

In 2011, first two RC facilities generated $20mm in revenues and

$7mm in segment

income for ADA

-10-

CCS Project Monetization

Overview

-11-

Tax

benefits

42.5%

15.0%

$6.47/ton tax credit plus

accelerated depreciation

Unprocessed

coal

Refined

coal

$1/ton

produced

CCS, LLC

CCSS, LLC

(50%NG/50% ADA)

not consolidated

Term Sheet:

•

Monetization Rate: $/$ of TC

•

Pre-Paid Rent: $/ton

Tax Financing

Partner

Utility

Plant

Operator

Nex

Gen(NG)

ADA

Goldman

Sachs

In December 2010 Congress extended deadline to install new RC facilities until

year-end 2011

CCS installed and operated 26 new RC facilities ahead of the year-end deadline

New facilities are expected to begin operating full-time in 2012 and 2013 after:

–

Operating permits obtained from each relevant state

–

Contracts negotiated and signed among CCS, financial institutions and power companies

Working with multiple monetizers for new systems

By the end of 2012, new and existing facilities leased to others

are expected to:

–

Create >$100 mm in revenue per year for ADA through 2021

–

Produce up to $50 mm in segment income per year for ADA through 2021

Some facilities will be operated by CCS to reduce tax burden from RC profits

Remaining facilities expected to be put into operation in 2013 that will have the

potential to double RC generated revenues and cash flows from the end of 2012

projections stated above

-12-

2011 Refined Coal Facilities

Currently 7 facilities are in full-time operation, treating coal for 14 boilers that

cumulatively average over 20 million tons per year

–

3 facilities

that

treat

average

million

tons

per

year

are

fully

permitted

and

monetized

–

facilities

treating

million

tons

per

year

are

currently

being

operated

Clean

Coal,

generating tax credits for its own use. In the next few weeks to months, these 3 facilities are

expected to be leased and monetized

•

1 facility is expected to be monetized by existing monetizer

•

2 facilities are expected to be monetized by two new monetizers

–

The 7

facility expected to be operated by Clean Coal for the long-term to generate tax

credits for its own use

An 8

facility treating 3 million tons per year has finalized monetization contracts and

permit has been granted; waiting for PLR and PUC approval before full-time operation

Negotiation on monetization of several other facilities in progress

Progress being made on several fronts that have the potential to

expand the market

–

2 M-45 systems currently in operation on Gulf Coast Lignite

–

1 CyClean system currently in operation on North Dakota Lignite

–

Progress in modifying technology for bituminous coal that could expand market for both M-

45 and CyClean

-13-

Update on RC Activities

During the quarter, Refined Coal was produced at seven facilities now

running full time

Three

facilities

that

are

fully

monetized

produced

$10

million

rent

revenue

–

More than double the 2Q 2011 RC rent revenues

During the quarter, four facilities currently being operated by CCS

generated:

–

~ $7.5 million in Tax Credits that can be used to offset future tax expenses

–

~$38 million in revenues for coal sales (offset by $38 million in coal costs)

–

~ $3.5 million Operating costs

Progress on year-end goal of achieving a run rate of $50 million in RC

segment income

–

By the end of Q3, we expect to have 8 facilities operating, with

7 of them fully

monetized representing approximately 70% of our year-end goal

-14-

Guidance on 2Q 2012

RC Segment Financials

Emissions Control Systems

ADA Commercial ACI Systems

> 20 GW Sold for Mercury Control

Installed/installing ACI systems on 55

boilers at coal-fired power plants

–

Over 35% market share of 159 boilers served

for mercury control from power plants

-16-

Emission Control:

Growth Expected in ACI Equipment

•

MATS is expected to create $500+ MM market for ACI

•

Procurement activities have commenced and ADA is

responding to several fleet bids

-17-

Control of Acid Gases

HCl, SO

, SO

New environmental regulations creating

demand for control of acid gases such

as HCI, SO

, and SO

ADA provides dry sorbent injection (DSI)

systems as a low-cost option to wet

scrubbers

Equipment costs $2-3 mm for average

size plants

EPA predicts over 200 systems will be

needed by 2015

ADA awarded first contract for DSI

in 2012

-18-

Mercury Control: Enhanced Coal

Designed to enable Western coals to burn with lower

emissions of mercury

–

U.S. burns up to 600 MTs of Western Coal per year

$1.00-4.00/ton in benefits to customer

Technology has been licensed to Arch Coal to apply to

their PRB coals at the mine

–

Royalty

agreement

–

payments

ADA

$1.00/ton

based on a portion of the premium paid on Enhanced Coal

sales

ADA maintained rights to apply technology at power

plants

Initial market will be in states with mercury

regulations already in place

Expanded market expected to develop by 2015 as a

result of the MATS

-19-

Technology

Capture

Developing solid sorbent capture technology

to capture CO

from flue gas in conventional

coal-fired boilers

DOE and industry funding:

–

Phase I -

$3.8 mm R&D at 1 KW pilot plant

–

Phase II -

$19 mm, 51-month contract to scale-up

technology to 1 MW

Advantages over competing technologies:

–

For customer: lower cost and less parasitic energy

–

For ADA: continuous revenues from sale of

proprietary chemical sorbents

Financial

Summary of Recent Financial Results

1 Qtr. Ended

3/31/12

1 Qtr. Ended

3/31/11

Year Ended

12/31/11

Year Ended

12/31/10

Total Revenues

$18.2 MM

$8.5 MM

$53.3 MM

$22.3 MM

Gross Margin

22%

85%

46%

61%

Gross Margin

Excluding Rev.

and Cost related

to retained tons

71%

85%

73%

61%

Operating Income

(Loss)*

($1.2)MM

$1.9 MM

$3.0 MM

($21.0) MM

-23-

•

On a simplified basis, the consolidated statement of operations shows an operating loss of $1.2 million for the quarter. Adding back $1 million in depreciation

charges included in that amount results in a deficit of approximately $200,000, which apart from timing considerations with other operating assets and liabilities

is an indication of a “burn-rate” for the first quarter of 2012. We would not expect that “rate” to increase but to decrease as more RC facilities transition to full time

operations. The foregoing non-GAAP financial measure should not be considered as a substitute for any related financial measure under GAAP; however, we

believe that our presentation of this measure provides investors with greater transparency with respect to our results of operations and that it is useful for period-

to-period comparisons of results.

NOTE: We expect that the financial results shown above and on the following page will not be impacted or changed as a result of any restatement.

Balance Sheet Highlights

As of 3/31/12

As of 12/31/11

Cash & Cash Equivalents

$28.3 MM

$40.9 MM

Cash & Cash Equivalents

per Share

$2.83

$4.09

Shares Outstanding

10.0 MM

-24-

Any restatements will have no cash impact to the Company.

The investment by Goldman Sachs for a 15% equity ownership in Clean Coal

Solutions in May 2011 will be reclassified to “Temporary Equity”

Impact on our balance sheet will include new Temporary Equity line that is now

embedded in Non-controlling interest and Stockholders’

Equity.

If conclusion reached that allowances for our net deferred tax assets (DTAs)

should have been provided in 2010 and 2011

Impact on 2010 financials will include a $15.7 million increase in net loss for the

year and corresponding decrease in assets for an allowance.

Impact on 2011 financials will include a $3.0 million increase in net loss for the

year and a corresponding decrease in assets for an additional allowance.

The NOLs and tax credits that comprise the bulk of our DTAs would still be

available for the Company to use in the future. In future periods, the Company

would record a lower tax expense or additional tax benefits related to the

reversal of the allowances on the DTAs that would no longer be required.

-25-

Restatements of 2010

and 2011 Financials

Summary

RC opportunities expected to provide significant growth in

revenues, profits and cash flows in 2012 and 2013

MATS compliance requirements are driving expected >$300

million total equipment revenues for ADA for next 3-4 years

Enhanced coal royalty opportunity expected to add additional

growth in 2013 to 2015 and beyond

Developing solid sorbent capture technology to capture CO

from flue gas in conventional coal-fired boilers

Available cash on balance sheet and expected cash flows from

RC provides us with the resources to execute on future

opportunities

-26-

A Leader in Clean Coal Technology

NASDAQ:ADES

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