Segment Information

6 Months Ended

Jun. 30, 2011

Segment Information

Segment Information

18. Segment Information

The Company has three reportable business segments, which are based on the major coal producing basins in which the Company operates. Each of these reportable business segments includes a number of mine complexes. The Company manages its coal sales by coal basin, not by individual mine complex. Geology, coal transportation routes to customers, regulatory environments and coal quality are characteristic to a basin. Accordingly, market and contract pricing have developed by coal basin. Mine operations are evaluated based on their per-ton operating costs (defined as including all mining costs but excluding pass-through transportation expenses), as well as on other non-financial measures, such as safety and environmental performance. The Company's reportable segments are the Powder River Basin (PRB) segment, with operations in Wyoming; the Western Bituminous (WBIT) segment, with operations in Utah, Colorado and southern Wyoming; the Appalachia (APP) segment, with operations in West Virginia, Kentucky, Maryland and Virginia.  The Appalachia segment includes the acquired ICG operations in Appalachia, as well as the Company's previous Central Appalachia segment. The "Other" operating segment represents primarily the Company's Illinois operations and ADDCAR subsidiary, which manufactures and sells its patented highwall mining system.

Operating segment results for the three and six months ended June 30, 2011 and 2010 are presented below. Results for the reportable segments include all direct costs of mining, including all depreciation, depletion and amortization related to the mining operations, even if the assets are not recorded at the operating segment level. See discussion of segment assets below. Corporate, Other and Eliminations includes the change in fair value of coal derivatives and coal trading activities, net; corporate overhead; land management; other support functions; and the elimination of intercompany transactions.

The asset amounts below represent an allocation of assets used in the segments' cash-generating activities. The amounts in Corporate, Other and Eliminations represent primarily corporate assets (cash, receivables, investments, plant, property and equipment) as well as unassigned coal reserves, above-market acquired sales contracts and other unassigned assets.

	PRB		APP			WBIT		OtherOperatingSegments		Corporate,Other andEliminations			Consolidated
	(In thousands)
Three months ended June 30, 2011
Coal sales	$	391,413	$	400,792		$	189,154	$	3,728	$	—		$	985,087
Income from operations	35,615		97,876			43,672		317		(74,663		)	102,817
Depreciation, depletion and amortization	41,165		31,025			22,099		605		289			95,183
Amortization of acquired sales contracts, net	5,603		(4,123		)	—		9		—			1,489
Capital expenditures	15,647		29,288			10,115		4,328		9,636			69,014
Three months ended June 30, 2010
Coal sales	$	370,499	$	261,646		$	132,150	$	—	$	—		$	764,295
Income from operations	33,177		54,079			13,876		—		5,367			106,499
Depreciation, depletion and amortization	44,433		24,581			18,390		—		355			87,759
Amortization of acquired sales contracts, net	5,214		—			—		—		—			5,214
Capital expenditures	3,725		12,972			20,703		—		102,583			139,983
Six months ended June 30, 2011
Coal sales	$	784,526	$	725,178		$	344,593	$	3,728	$	—		$	1,858,025
Income from operations	82,489		152,270			70,564		317		(100,585		)	205,055
Total assets	2,212,818		5,208,551			679,231		217,765		1,833,080			10,151,445
Depreciation, depletion and amortization	82,856		52,041			42,628		605		590			178,720
Amortization of acquired sales contracts, net	11,547		(4,123		)	—		9		—			7,433
Capital expenditures	18,485		46,590			21,892		4,373		16,385			107,725
Six months ended June 30, 2010
Coal sales	$	729,914	$	481,392		$	264,863	$	—	$	—		$	1,476,169
Income from operations	49,738		91,672			26,306		—		(29,017		)	138,699
Total assets	2,331,449		725,588			682,565		—		1,150,938			4,890,540
Depreciation, depletion and amortization	89,054		47,755			38,760		—		709			176,278
Amortization of acquired sales contracts, net	15,967		—			—		—		—			15,967
Capital expenditures	4,450		24,609			33,804		—		109,095			171,958

A reconciliation of segment income from operations to consolidated income before income taxes follows:

	Three Months Ended June 30						Six Months Ended June 30
	2011			2010			2011			2010
	(In thousands)						(In thousands)
Income from operations	$	102,817		$	106,499		$	205,055		$	138,699
Interest expense	(42,249		)	(35,125		)	(76,829		)	(70,208		)
Interest income	755			623			1,501			961
Bridge financing costs related to ICG	(49,490		)	—			(49,490		)	—
Net loss resulting from early retirement of ICG debt	(250		)	—			(250		)	—
Income before income taxes	$	11,583		$	71,997		$	79,987		$	69,452