Impairment Charges

9 Months Ended

Sep. 30, 2013

Impairment charges [Abstract]

Asset Impairment Charges [Text Block]

Impairment charges

Weak thermal coal markets in Appalachia are expected to persist longer than the Company previously anticipated, which caused the Company to assess in the third quarter of 2013 whether the carrying values of certain assets were recoverable through future cash flows. The Company determined that the carrying amounts of certain assets associated with the Hazard mining complex in Kentucky and the Company's ADDCAR subsidiary, which manufactures and sells its patented highwall mining system, could not be recovered through future cash flows expected to be generated from use of the assets and their ultimate disposal.

The assets' fair values were determined based on projections of cash flows to be generated from use of the assets and their ultimate disposal including estimates relating to market demand, coal prices, production costs and mine plans, and recovery value of the assets. An impairment loss of $142.8 million was recognized to write the carrying value of the assets to their fair value of $71.3 million. These losses are reflected on the line "Asset impairment and mine closure costs" in the condensed consolidated statements of operations.

During the third quarter of 2013, the Company also recognized an other-than-temporary impairment of an equity method investment. See further discussion in Note 8, "Equity Method Investments and Membership Interests in Joint Ventures."

In the second quarter of 2012, the closure and idling of mines in Appalachia discussed in Note 1, "Basis of Presentation" resulted in closure costs and impairment charges of $523.4 million that are reflected on the line "Asset impairment and mine closures costs" in the condensed consolidated statements of operations.