Equity Method Investments and Membership Interests in Joint Ventures |
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Equity Method Investments and Membership Interests in Joint Ventures | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Method Investments and Membership Interests in Joint Ventures | 11. Equity Method Investments and Membership Interests in Joint Ventures The Company accounts for its investments and membership interests in joint ventures under the equity method of accounting if the Company has the ability to exercise significant influence, but not control, over the entity. Equity method investments are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the investments may not be recoverable. Below are the equity method investments reflected in the consolidated balance sheets:
In November 2021, the Company sold its 49.5% ownership in Knight Hawk Holdings, LLC (Knight Hawk”) to CBR, LLC. The Company received total proceeds of $38 million which consist of $20 million in the fourth quarter of 2021 and a three year note receivable for $18 million with monthly payments of $0.5 million (the first monthly installment was received in the fourth quarter of 2021). The sale resulted in a non-cash loss of $24.2 million that was recorded in “Loss (Gain) on divestitures” as of December 31, 2021. In December 2020, the Company sold its Viper mine to Knight Hawk Holdings, LLC (“Knight Hawk”) in exchange for an additional 1.5% ownership interest in Knight Hawk. The sale resulted in an increase in the Company’s ownership to 49.5%. The Company holds a 35% general partnership interest in Dominion Terminal Associates LLP (“DTA”), which is accounted for under the equity method. DTA operates a ground storage-to-vessel coal transloading facility in Newport News, Virginia for use by the partners. Under the terms of a throughput and handling agreement with DTA, each partner is charged its share of cash operating and debt-service costs in exchange for the right to use the facility’s loading capacity and is required to make periodic cash advances to DTA to fund such costs. The Company is not required to make any future contingent payments related to development financing for any of its equity investees. |