Segment Information

3 Months Ended

Mar. 31, 2020

Segment Information

Segment Information

18. Segment Information

The Company’s reportable business segments are based on two distinct lines of business, metallurgical and thermal, and may include a number of mine complexes. The Company manages its coal sales by market, not by individual mining complex. Geology, coal transportation routes to customers, and regulatory environments also have a significant impact on the Company’s marketing and operations management. Mining operations are evaluated based on Adjusted EBITDA, per-ton cash operating costs (defined as including all mining costs except depreciation, depletion, amortization, accretion on asset retirement obligations, and pass-through transportation expenses), and on other non-financial measures, such as safety and environmental performance. Adjusted EBITDA is not a measure of financial performance in accordance with generally accepted accounting principles, and items excluded from Adjusted EBITDA are significant in understanding and assessing the Company’s financial condition. Therefore, Adjusted EBITDA should not be considered in isolation, nor as an alternative to net income (loss), income (loss) from operations, cash flows from operations or as a measure of our profitability, liquidity or performance under generally accepted accounting principles. The Company uses Adjusted EBITDA to measure the operating performance of its segments and allocate resources to the segments. Furthermore, analogous measures are used by industry analysts and investors to evaluate the Company’s operating performance. Investors should be aware that the Company’s presentation of Adjusted EBITDA may not be comparable to similarly titled measures used by other companies. The Company reports its results of operations primarily through the following reportable segments: Powder River Basin (PRB) segment containing the Company’s primary thermal operations in

Wyoming; the Metallurgical (MET) segment, containing the Company’s metallurgical operations in West Virginia, and the Other Thermal segment containing the Company’s supplementary thermal operations in Colorado and Illinois.

On December 13, 2019, the Company closed on its definitive agreement to sell Coal-Mac LLC, an operating mine complex within the Company’s Other Thermal coal segment. Coal-Mac is included in the Other Thermal segment results below up to the date of the divestiture.

Operating segment results for the three months ended March 31, 2020 and 2019, are presented below. The Company measures its segments based on “adjusted earnings before interest, taxes, depreciation, depletion, amortization, accretion on asset retirements obligations, and nonoperating expenses (Adjusted EBITDA).” The Corporate, Other and Eliminations grouping includes these charges, as well as the change in fair value of coal derivatives and coal trading activities, net; corporate overhead; land management activities; other support functions; and the elimination of intercompany transactions.

							Corporate,
					Other		Other and
(In thousands)	PRB		MET		Thermal		Eliminations		Consolidated
Three Months Ended March 31, 2020
Revenues	$	178,460	$	182,654	$	31,736	$	12,382	$	405,232
Adjusted EBITDA		(582)		42,720		(1,320)		(27,903)		12,915
Depreciation, depletion and amortization		5,208		22,517		2,337		1,246		31,308
Accretion on asset retirement obligation		3,495		486		347		678		5,006
Total assets		256,937		693,227		120,869		786,473		1,857,506
Capital expenditures		3,097		78,648		3,616		2,329		87,690
Three Months Ended March 31, 2019
Revenues	$	212,729	$	253,262	$	85,978	$	3,214	$	555,183
Adjusted EBITDA		20,583		91,534		6,119		(10,982)		107,254
Depreciation, depletion and amortization		4,865		16,382		3,435		591		25,273
Accretion on asset retirement obligation		3,135		531		603		868		5,137
Total assets		230,329		568,367		139,306		925,199		1,863,201
Capital expenditures		414		31,224		6,250		1,259		39,147

A reconciliation of net income (loss) to adjusted EBITDA follows:

	Three Months Ended March 31,
(In thousands)	2020		2019
Net income (loss)	$	(25,299)	$	72,741
Provision for (benefit from) income taxes		(1,791)		70
Interest expense, net		2,129		2,289
Depreciation, depletion and amortization		31,308		25,273
Accretion on asset retirement obligations		5,006		5,137
Amortization of sales contracts, net		—		65
Costs related to proposed joint venture with Peabody Energy		3,664		—
Severance costs related to voluntary separation plan		5,828		—
Gain on property insurance recovery related to Mountain Laurel longwall		(9,000)		—
Non-service related pension and postretirement benefit costs		1,096		1,766
Reorganization items, net		(26)		(87)
Adjusted EBITDA	$	12,915	$	107,254