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Asset Impairments and Mine Closure Costs
9 Months Ended
Sep. 30, 2016
Discontinued Operations and Disposal Groups [Abstract]  
Asset Impairment and Mine Closure Costs
Asset Impairment and Mine Closure Costs

During the third quarter of 2016, the Company recorded an immaterial amount of severance expense to “Asset impairment and mine closure costs” in the Condensed Consolidated Statements of Operations bringing the year-to-date total to $129.3 million. The amount includes the following: a $74.1 million impairment of coal reserves and surface land in Kentucky that are being leased to a mining company that idled its mining operations; a $38.0 million impairment of the Company’s equity investment in a brownfield bulk commodity terminal on the Columbia River in Longview, Washington as the Company relinquished its ownership rights in exchange for future throughput rights; $7.2 million of severance expense related to headcount reductions during the year; a $3.6 million curtailment charge related to the Company’s pension, postretirement health and black lung actuarial liabilities due to headcount reductions in the first half of the year; $3.4 million impairment charge on the portion of an advance royalty balance on a reserve base mined at the Company’s Mountain Laurel operation that will not be recouped; and $2.9 million related to an other-than-temporary-impairment charge on an available-for-sale security.

During the third quarter of 2015, the Company recorded $2,120.3 million of “Asset impairment and mine closure costs” in the Condensed Consolidated Statements of Operations due to the continued deterioration in thermal and metallurgical coal markets and projections for a muted pricing recovery. The Company determined that the further weakening of the pricing environment in the third quarter and the projected operating losses represented indicators of impairment with respect to certain of its long-lived assets or asset groups. Using current pricing expectations which reflected marketplace participant assumptions, life of mine cash flows were used to determine if the undiscounted cash flows exceeded the current asset values for certain operating complexes in the Company’s Appalachia segment. Discounted cash flows were then utilized to reduce the carrying value of those assets to fair value. The discount rate used reflected the current financial difficulties present in the commodities sector in general and coal mining specifically; the perceived risk of financing coal mining in light of industry defaults; and the lack of an active market for buying or selling coal mining assets.  Additionally, the Company determined that the current market conditions represented an indicator of impairment for certain undeveloped coal properties that were acquired in times of significantly higher coal prices. Current prices and the significant capital outlay that would be required to develop these reserves indicated that the carrying value was not recoverable.