Segment Information

9 Months Ended

Sep. 30, 2012

Segment Reporting [Abstract]

Segment Information

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 nine month periods ended September 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.

	PRB			APP			WBIT			Other Operating Segments			Corporate, Other and Eliminations			Consolidated
	(in thousands)
Three Months Ended September 30, 2012
Revenues	$	406,719		$	436,409		$	217,963		$	26,527		$	—		$	1,087,618
Income (loss) from operations	38,873			88,695			40,828			(1,298		)	(31,138		)	135,960
Depreciation, depletion and amortization	43,944			61,596			17,881			2,594			823			126,838
Amortization of acquired sales contracts, net	(589		)	(3,711		)	—			207			—			(4,093		)
Mine closure and asset impairment costs	—			(1,801		)	(50		)	(210		)	(133		)	(2,194		)
Capital expenditures	5,620			77,772			13,510			3,640			1,353			101,895
Three Months Ended September 30, 2011
Revenues	$	394,012		$	611,403		$	168,795		$	24,463		$	—		$	1,198,673
Income (loss) from operations	38,632			63,350			24,653			(1,487		)	(48,892		)	76,256
Depreciation, depletion and amortization	42,676			73,420			19,125			3,674			652			139,547
Amortization of acquired sales contracts, net	3,802			(15,701		)	—			(832		)	33			(12,698		)

Mine closure and asset impairment costs	—			—			—		—			—			—
Capital expenditures	20,937			62,121			16,110		4,705			4,300			108,173
Nine Months Ended September 30, 2012
Revenues	$	1,130,408		$	1,409,776		$	562,074	$	88,549		$	—		$	3,190,807
Income (loss) from operations	94,163			(388,563		)	85,848		(3,757		)	(186,634		)	(398,943		)
Depreciation, depletion and amortization	122,298			210,789			54,935		9,704			1,946			399,672
Amortization of acquired sales contracts, net	(1,374		)	(21,658		)	—		471			—			(22,561		)
Mine closure and asset impairment costs	—			524,115			129		(437		)	(239		)	523,568
Total assets	2,234,941			3,846,136			676,057		454,118			2,724,602			9,935,854
Capital expenditures	15,399			222,177			42,761		8,153			15,478			303,968
Nine Months Ended September 30, 2011
Revenues	$	1,178,537		$	1,336,581		$	513,388	$	28,633		$	—		$	3,057,139
Income (loss) from operations	121,118			205,701			95,217		(1,412		)	(146,776		)	273,848
Depreciation, depletion and amortization	125,532			127,526			61,753		4,210			1,299			320,320
Amortization of acquired sales contracts, net	15,349			(19,907		)	—		(934		)	—			(5,492		)
Mine closure and asset impairment costs	—			7,316			—		—			—			7,316
Total assets	2,240,458			5,241,004			667,658		452,491			1,360,046			9,961,657
Capital expenditures	39,422			108,711			38,003		9,078			20,685			215,899

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

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
	(in thousands)
Income (loss) from operations	$	135,960		$	76,256		$	(398,943	)	$	273,848
Interest expense	(75,710		)	(77,694		)	(229,210		)	(154,523		)
Interest income	1,459			840			3,568			2,341
Other nonoperating expense	—			(1,708		)	(19,042		)	(51,448		)
Income (loss) before income taxes	$	61,709		$	(2,306	)	$	(643,627	)	$	70,218