Segment Information

9 Months Ended

Sep. 30, 2020

Segment Information

Segment Information

21. 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 nine months ended September 30, 2020 and 2019, are presented below. The Corporate, Other and Eliminations grouping includes these charges: idle operations; 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 September 30, 2020
Revenues	$	180,850	$	168,054	$	32,449	$	908	$	382,261
Adjusted EBITDA		34,486		12,407		(2,870)		(26,597)		17,426
Depreciation, depletion and amortization		5,847		24,221		2,303		259		32,630
Accretion on asset retirement obligation		3,495		486		347		619		4,947
Total assets		189,942		759,202		26,766		677,427		1,653,337
Capital expenditures		26		57,424		542		(892)		57,100
Three Months Ended September 30, 2019
Revenues	$	269,968	$	254,493	$	94,052	$	954	$	619,467
Adjusted EBITDA		50,153		70,814		16,659		(31,005)		106,621
Depreciation, depletion and amortization		5,956		19,962		3,852		479		30,249
Accretion on asset retirement obligation		3,135		531		603		868		5,137
Total assets		236,656		609,378		148,994		939,572		1,934,600
Capital expenditures		5,402		36,475		6,837		738		49,452
Nine Months Ended September 30, 2020
Revenues	$	492,406	$	489,660	$	105,481	$	19,467	$	1,107,014
Adjusted EBITDA		28,542		76,037		(8,942)		(76,028)		19,609
Depreciation, depletion and amortization		16,337		69,028		6,973		1,767		94,105
Accretion on asset retirement obligation		10,484		1,458		1,042		1,955		14,939
Total assets		189,942		759,202		26,766		677,427		1,653,337
Capital expenditures		4,268		193,586		5,113		2,694		205,661
Nine Months Ended September 30, 2019
Revenues	$	692,845	$	769,000	$	278,235	$	4,792	$	1,744,872
Adjusted EBITDA		85,433		264,284		33,699		(63,977)		319,439
Depreciation, depletion and amortization		15,702		53,687		10,976		1,757		82,122
Accretion on asset retirement obligation		9,406		1,592		1,810		2,603		15,411
Total assets		236,656		609,378		148,994		939,572		1,934,600
Capital expenditures		19,026		98,849		16,299		3,222		137,396

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

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2020		2019		2020		2019
Net income (loss)	$	(191,467)	$	106,769	$	(266,090)	$	242,350
Provision for (benefit from) income taxes		379		347		(206)		508
Interest expense, net		2,530		340		6,389		4,916
Depreciation, depletion and amortization		32,630		30,249		94,105		82,122
Accretion on asset retirement obligations		4,947		5,137		14,939		15,411
Costs related to proposed joint venture with Peabody Energy		4,423		3,754		15,938		6,772
Asset impairment		163,088		—		163,088		—
Severance costs related to voluntary separation plan		18		—		13,283		—
Gain on property insurance recovery related to Mountain Laurel longwall		—		—		(23,518)		—
(Gain) loss on divestitures		—		—		(1,369)		4,304
Preference Rights Lease Application settlement income		—		(39,000)		—		(39,000)
Non-service related pension and postretirement benefit costs		878		(975)		3,076		2,127
Reorganization items, net		—		—		(26)		(71)
Adjusted EBITDA	$	17,426	$	106,621	$	19,609	$	319,439