Segment Information

6 Months Ended

Jun. 30, 2012

Segment Information [Abstract]

Segment Information

16. 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 month periods ended June 30, 2012 and 2011 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 consistent with the Company’s incentive compensation plans. 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. Goodwill is allocated to the respective reporting units, even though it may not be reflected in the subsidiaries’ financial statements.

				Other	Corporate,
				Operating	Other and
	PRB	APP	WBIT	Segments	Eliminations	Consolidated
	(in thousands)
Three months ended June 30, 2012
Revenues	$        322,512	$         504,309	$        199,552	$       37,165	$                    -	$        1,063,538
Income (loss) from operations	22,747	(493,093)	13,779	1,291	(133,708)	(588,984)
Depreciation, depletion and amortization	37,131	73,176	18,454	3,423	684	132,868
Amortization of acquired sales contracts, net	31	(4,859)	-	377	-	(4,451)
Mine closure and asset impairment costs	-	525,916	179	(227)	(106)	525,762
Capital expenditures	5,793	78,102	14,114	(1,131)	11,924	108,802
Three months ended June 30, 2011
Revenues	$        391,413	$         400,795	$        189,154	$         4,169	$                  (3)	$           985,528
Income from operations	35,615	87,961	43,673	113	(72,008)	95,354
Depreciation, depletion and amortization	41,165	33,091	22,099	536	345	97,236
Amortization of acquired sales contracts, net	5,603	(4,206)	-	(135)	-	1,262
Capital expenditures	15,647	29,288	10,115	4,373	9,591	69,014
Six months ended June 30, 2012
Revenues	$        723,689	$         973,367	$        344,111	$       62,022	$                    -	$        2,103,189
Income (loss) from operations	55,290	(477,258)	45,020	(2,459)	(155,496)	(534,903)
Depreciation, depletion and amortization	78,354	149,193	37,054	7,110	1,123	272,834
Amortization of acquired sales contracts, net	(785)	(17,947)	-	264	-	(18,468)
Mine closure and asset impairment costs	-	525,916	179	(227)	(106)	525,762
Total assets	2,044,743	3,870,734	715,362	580,272	2,742,827	9,953,938
Capital expenditures	9,779	144,405	29,251	4,513	14,125	202,073
Six months ended June 30, 2011
Revenues	$        784,526	$         725,181	$        344,593	$         4,166	$                    -	$        1,858,466
Income from operations	82,489	142,356	70,564	705	(98,522)	197,592
Depreciation, depletion and amortization	82,856	54,107	42,628	357	825	180,773
Amortization of acquired sales contracts, net	11,547	(4,206)	-	(135)	-	7,206
Total assets	2,231,636	4,694,368	674,765	562,291	2,093,488	10,256,548
Capital expenditures	18,485	46,590	21,892	4,373	16,385	107,725

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

	Three Months Ended June 30,		Six Months Ended June 30,
	2012	2011	2012	2011
	(in thousands)
Income (loss) from operations	$        (588,984)	$          95,354	$       (534,903)	$       197,592
Interest expense	(78,728)	(42,249)	(153,500)	(76,829)
Interest income	1,088	755	2,109	1,501
Other nonoperating expenses	(19,042)	(49,740)	(19,042)	(49,740)
Income (loss) before income taxes	$        (685,666)	$            4,120	$       (705,336)	$         72,524