Segment Information

6 Months Ended

Jun. 30, 2020

Segment Information

Segment Information

19. 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 and six months ended June 30, 2020 and 2019, are presented below. 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 June 30, 2020
Revenues	$	133,096	$	138,951	$	41,297	$	6,177	$	319,521
Adjusted EBITDA		(5,362)		20,910		(4,752)		(21,528)		(10,732)
Depreciation, depletion and amortization		5,283		22,289		2,333		262		30,167
Accretion on asset retirement obligation		3,495		486		347		658		4,986
Total assets		247,990		740,451		108,238		705,710		1,802,389
Capital expenditures		1,145		57,514		955		1,258		60,872
Three Months Ended June 30, 2019
Revenues	$	210,149	$	261,245	$	98,205	$	623	$	570,222
Adjusted EBITDA		14,696		101,936		10,922		(21,990)		105,564
Depreciation, depletion and amortization		4,880		17,343		3,689		623		26,535
Accretion on asset retirement obligation		3,135		531		603		868		5,137
Total assets		236,527		605,657		136,899		910,447		1,889,530
Capital expenditures		13,209		31,150		3,211		1,138		48,708
Six Months Ended June 30, 2020
Revenues	$	311,556	$	321,605	$	73,033	$	18,559	$	724,753
Adjusted EBITDA		(5,944)		63,630		(6,072)		(49,431)		2,183
Depreciation, depletion and amortization		10,491		44,807		4,670		1,507		61,475
Accretion on asset retirement obligation		6,990		972		695		1,335		9,992
Total assets		247,990		740,451		108,238		705,710		1,802,389
Capital expenditures		4,242		136,162		4,571		3,586		148,561
Six Months Ended June 30, 2019
Revenues	$	422,878	$	514,507	$	184,183	$	3,837	$	1,125,405
Adjusted EBITDA		35,279		193,470		17,041		(32,972)		212,818
Depreciation, depletion and amortization		9,745		33,725		7,124		1,279		51,873
Accretion on asset retirement obligation		6,271		1,061		1,207		1,735		10,274
Total assets		236,527		605,657		136,899		910,447		1,889,530
Capital expenditures		13,623		62,374		9,461		2,396		87,854

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

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2020		2019		2020		2019
Net income (loss)	$	(49,324)	$	62,840	$	(74,623)	$	135,581
Provision for (benefit from) income taxes		1,206		91		(585)		161
Interest expense, net		1,730		2,287		3,859		4,576
Depreciation, depletion and amortization		30,167		26,535		61,475		51,873
Accretion on asset retirement obligations		4,986		5,137		9,992		10,274
Costs related to proposed joint venture with Peabody Energy		7,851		3,018		11,515		3,018
Severance costs related to voluntary separation plan		7,437		—		13,265		—
Gain on property insurance recovery related to Mountain Laurel longwall		(14,518)		—		(23,518)		—
(Gain) loss on divestitures		(1,369)		4,304		(1,369)		4,304
Non-service related pension and postretirement benefit costs		1,102		1,336		2,198		3,102
Reorganization items, net		—		16		(26)		(71)
Adjusted EBITDA	$	(10,732)	$	105,564	$	2,183	$	212,818