Delaware | 43-0921172 | |
(State or other jurisdiction | (I.R.S. Employer | |
of incorporation or organization) | Identification Number) |
One CityPlace Drive, Suite 300, St. Louis, Missouri | 63141 | |
(Address of principal executive offices) | (Zip code) |
Large accelerated filer o | Accelerated filer o | |
Non-accelerated filer ý | Smaller reporting company o | |
(Do not check if a smaller reporting company) | ||
Emerging growth company o |
Page | ||
2 |
Arch Coal, Inc. and Subsidiaries Condensed Consolidated Statements of Operations (in thousands, except per share data) | |||||||||||||
Successor | Predecessor | Successor | Predecessor | ||||||||||
Three Months Ended September 30, 2017 | Three Months Ended September 30, 2016 | Nine Months Ended September 30, 2017 | Nine Months Ended September 30, 2016 | ||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||
Revenues | $ | 613,538 | $ | 550,305 | $ | 1,764,379 | $ | 1,398,709 | |||||
Costs, expenses and other operating | |||||||||||||
Cost of sales (exclusive of items shown separately below) | 495,424 | 442,462 | 1,391,872 | 1,264,464 | |||||||||
Depreciation, depletion and amortization | 31,914 | 69,423 | 94,536 | 191,581 | |||||||||
Accretion on asset retirement obligations | 7,580 | 7,965 | 22,826 | 24,321 | |||||||||
Amortization of sales contracts, net | 13,861 | 104 | 42,903 | (728 | ) | ||||||||
Change in fair value of coal derivatives and coal trading activities, net | 1,028 | 488 | 2,745 | 2,856 | |||||||||
Asset impairment and mine closure costs | — | 46 | — | 129,267 | |||||||||
Selling, general and administrative expenses | 21,052 | 20,498 | 63,721 | 59,343 | |||||||||
Gain on sale of Lone Mountain Processing, Inc. | (21,574 | ) | — | (21,574 | ) | — | |||||||
Other operating income, net | (8,236 | ) | (2,476 | ) | (14,095 | ) | (15,257 | ) | |||||
541,049 | 538,510 | 1,582,934 | 1,655,847 | ||||||||||
Income (loss) from operations | 72,489 | 11,795 | 181,445 | (257,138 | ) | ||||||||
Interest expense, net | |||||||||||||
Interest expense | (5,972 | ) | (46,164 | ) | (21,400 | ) | (135,888 | ) | |||||
Interest and investment income | 720 | 582 | 2,089 | 2,653 | |||||||||
(5,252 | ) | (45,582 | ) | (19,311 | ) | (133,235 | ) | ||||||
Income (loss) before nonoperating expenses | 67,237 | (33,787 | ) | 162,134 | (390,373 | ) | |||||||
Nonoperating expenses | |||||||||||||
Net loss resulting from early retirement of debt and debt restructuring | (486 | ) | — | (2,547 | ) | (2,213 | ) | ||||||
Reorganization items, net | (43 | ) | (20,904 | ) | (2,892 | ) | (46,050 | ) | |||||
(529 | ) | (20,904 | ) | (5,439 | ) | (48,263 | ) | ||||||
Income (loss) before income taxes | 66,708 | (54,691 | ) | 156,695 | (438,636 | ) | |||||||
Benefit from income taxes | (1,643 | ) | (3,270 | ) | (484 | ) | (4,626 | ) | |||||
Net income (loss) | $ | 68,351 | $ | (51,421 | ) | $ | 157,179 | $ | (434,010 | ) | |||
Net income (loss) per common share | |||||||||||||
Basic earnings (loss) per common share | $ | 2.90 | $ | (2.41 | ) | $ | 6.44 | $ | (20.38 | ) | |||
Diluted earnings (loss) per common share | $ | 2.83 | $ | (2.41 | ) | $ | 6.32 | $ | (20.38 | ) | |||
Weighted average shares outstanding | |||||||||||||
Basic weighted average shares outstanding | 23,580 | 21,293 | 24,416 | 21,293 | |||||||||
Diluted weighted average shares outstanding | 24,135 | 21,293 | 24,875 | 21,293 | |||||||||
Dividends declared per common share | $ | 0.35 | $ | — | $ | 0.70 | $ | — |
3 |
Successor | Predecessor | Successor | Predecessor | |||||||||||
Three Months Ended September 30, 2017 | Three Months Ended September 30, 2016 | Nine Months Ended September 30, 2017 | Nine Months Ended September 30, 2016 | |||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||
Net income (loss) | $ | 68,351 | $ | (51,421 | ) | $ | 157,179 | $ | (434,010 | ) | ||||
Derivative instruments | ||||||||||||||
Comprehensive income (loss) before tax | (19 | ) | (149 | ) | 257 | (535 | ) | |||||||
Income tax benefit (provision) | — | — | — | 81 | ||||||||||
(19 | ) | (149 | ) | 257 | (454 | ) | ||||||||
Pension, postretirement and other post-employment benefits | ||||||||||||||
Comprehensive income (loss) before tax | (8,521 | ) | 2,243 | (5,367 | ) | (1,844 | ) | |||||||
Income tax benefit (provision) | — | — | — | 481 | ||||||||||
(8,521 | ) | 2,243 | (5,367 | ) | (1,363 | ) | ||||||||
Available-for-sale securities | ||||||||||||||
Comprehensive income (loss) before tax | — | (438 | ) | (387 | ) | 2,969 | ||||||||
Income tax benefit (provision) | — | — | — | (1,043 | ) | |||||||||
— | (438 | ) | (387 | ) | 1,926 | |||||||||
Total other comprehensive income (loss) | (8,540 | ) | 1,656 | (5,497 | ) | 109 | ||||||||
Total comprehensive income (loss) | $ | 59,811 | $ | (49,765 | ) | $ | 151,682 | $ | (433,901 | ) |
4 |
September 30, | December 31, | ||||||
2017 | 2016 | ||||||
(Unaudited) | |||||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 298,337 | $ | 305,372 | |||
Short term investments | 154,629 | 88,072 | |||||
Restricted cash | — | 71,050 | |||||
Trade accounts receivable | 207,059 | 184,483 | |||||
Other receivables | 23,473 | 19,877 | |||||
Inventories | 122,436 | 113,462 | |||||
Other current assets | 63,685 | 96,306 | |||||
Total current assets | 869,619 | 878,622 | |||||
Property, plant and equipment, net | 980,801 | 1,053,603 | |||||
Other assets | |||||||
Equity investments | 106,179 | 96,074 | |||||
Other noncurrent assets | 65,934 | 108,298 | |||||
Total other assets | 172,113 | 204,372 | |||||
Total assets | $ | 2,022,533 | $ | 2,136,597 | |||
Liabilities and Stockholders' Equity | |||||||
Current Liabilities | |||||||
Accounts payable | $ | 137,664 | $ | 95,953 | |||
Accrued expenses and other current liabilities | 164,939 | 205,240 | |||||
Current maturities of debt | 8,566 | 11,038 | |||||
Total current liabilities | 311,169 | 312,231 | |||||
Long-term debt | 312,604 | 351,841 | |||||
Asset retirement obligations | 334,479 | 337,227 | |||||
Accrued pension benefits | 17,884 | 38,884 | |||||
Accrued postretirement benefits other than pension | 104,733 | 101,445 | |||||
Accrued workers’ compensation | 192,262 | 184,568 | |||||
Other noncurrent liabilities | 76,923 | 63,824 | |||||
Total liabilities | 1,350,054 | 1,390,020 | |||||
Stockholders' equity | |||||||
Common stock, $0.01 par value, authorized 300,000 shares, issued 25,038 shares and 25,002 shares at September 30, 2017 and December 31, 2016, respectively | 250 | 250 | |||||
Paid-in capital | 697,324 | 688,424 | |||||
Retained earnings | 173,676 | 33,449 | |||||
Treasury stock, 2,919 shares at September 30, 2017, at cost | (217,728 | ) | — | ||||
Accumulated other comprehensive income | 18,957 | 24,454 | |||||
Total stockholders’ equity | 672,479 | 746,577 | |||||
Total liabilities and stockholders’ equity | $ | 2,022,533 | $ | 2,136,597 |
5 |
Successor | Predecessor | |||||
Nine Months Ended September 30, 2017 | Nine Months Ended September 30, 2016 | |||||
(Unaudited) | (Unaudited) | |||||
Operating activities | ||||||
Net income (loss) | $ | 157,179 | $ | (434,010 | ) | |
Adjustments to reconcile to cash provided by operating activities: | ||||||
Depreciation, depletion and amortization | 94,536 | 191,581 | ||||
Accretion on asset retirement obligations | 22,826 | 24,321 | ||||
Amortization of sales contracts, net | 42,903 | (728 | ) | |||
Prepaid royalties expensed | 2,905 | 4,791 | ||||
Deferred income taxes | 6,069 | (419 | ) | |||
Employee stock-based compensation expense | 7,485 | 2,096 | ||||
Gains on disposals and divestitures, net | (23,006 | ) | (6,628 | ) | ||
Asset impairment and non-cash mine closure costs | — | 119,194 | ||||
Net loss resulting from early retirement of debt and debt restructuring | 2,547 | 2,213 | ||||
Non-cash bankruptcy reorganization items | — | (16,634 | ) | |||
Amortization relating to financing activities | 2,628 | 12,800 | ||||
Changes in: | ||||||
Receivables | (24,110 | ) | (42,787 | ) | ||
Inventories | (13,102 | ) | 34,604 | |||
Accounts payable, accrued expenses and other current liabilities | 5,103 | 90,920 | ||||
Income taxes, net | (2,430 | ) | (4,217 | ) | ||
Other | 20,612 | (8,331 | ) | |||
Cash provided by (used in) operating activities | 302,145 | (31,234 | ) | |||
Investing activities | ||||||
Capital expenditures | (30,503 | ) | (82,434 | ) | ||
Minimum royalty payments | (5,033 | ) | (305 | ) | ||
Proceeds from (consideration paid for) disposals and divestitures | 11,432 | (2,921 | ) | |||
Purchases of short term investments | (191,327 | ) | (98,750 | ) | ||
Proceeds from sales of short term investments | 123,996 | 187,006 | ||||
Investments in and advances to affiliates, net | (9,216 | ) | (3,440 | ) | ||
Withdrawals of restricted cash | 71,048 | 15,979 | ||||
Cash provided by (used in) investing activities | (29,603 | ) | 15,135 | |||
Financing activities | ||||||
Proceeds from issuance of term loan due 2024 | 298,500 | — | ||||
Payments to extinguish term loan due 2021 | (325,684 | ) | — | |||
Payments on term loan due 2024 | (1,500 | ) | — | |||
Net payments on other debt | (5,992 | ) | (12,083 | ) | ||
Debt financing costs | (10,043 | ) | (20,181 | ) | ||
Net loss resulting from early retirement of debt and debt restructuring | (2,360 | ) | (2,213 | ) | ||
Dividends paid | (16,763 | ) | — | |||
Purchases of treasury stock | (215,735 | ) | — | |||
Cash used in financing activities | (279,577 | ) | (34,477 | ) | ||
Decrease in cash and cash equivalents | (7,035 | ) | (50,576 | ) | ||
Cash and cash equivalents, beginning of period | 305,372 | 450,781 | ||||
Cash and cash equivalents, end of period | $ | 298,337 | $ | 400,205 |
6 |
7 |
Pension, | |||||||||||||||
Postretirement | |||||||||||||||
and Other | Accumulated | ||||||||||||||
Post- | Other | ||||||||||||||
Derivative | Employment | Available-for- | Comprehensive | ||||||||||||
Instruments | Benefits | Sale Securities | Income | ||||||||||||
(In thousands) | |||||||||||||||
Balance at December 31, 2016 | $ | — | $ | 24,067 | $ | 387 | $ | 24,454 | |||||||
Unrealized gains (losses) | 168 | (5,784 | ) | (55 | ) | (5,671 | ) | ||||||||
Amounts reclassified from AOCI | 88 | 418 | (332 | ) | 174 | ||||||||||
Balance at September 30, 2017 | $ | 256 | $ | 18,701 | $ | — | $ | 18,957 |
8 |
Successor | Predecessor | Successor | Predecessor | Line Item in the Condensed Consolidated Statement of Operations | ||||||||||||
Details About AOCI Components | Three Months Ended September 30, 2017 | Three Months Ended September 30, 2016 | Nine Months Ended September 30, 2017 | Nine Months Ended September 30, 2016 | ||||||||||||
(In thousands) | ||||||||||||||||
Derivative instruments | $ | (88 | ) | $ | 76 | $ | (88 | ) | $ | 397 | Revenues | |||||
— | — | — | (81 | ) | Benefit from income taxes | |||||||||||
$ | (88 | ) | $ | 76 | $ | (88 | ) | $ | 316 | Net of tax | ||||||
Pension, postretirement and other post-employment benefits | ||||||||||||||||
Amortization of prior service credits | $ | — | $ | 2,510 | $ | — | $ | 7,854 | ||||||||
Amortization of actuarial gains (losses), net | — | (4,753 | ) | — | (6,010 | ) | ||||||||||
Pension settlement | 228 | — | 715 | — | ||||||||||||
Actuarial curtailments | (773 | ) | — | (773 | ) | — | ||||||||||
Sale of Cumberland River pension plan | (360 | ) | — | (360 | ) | — | ||||||||||
(905 | ) | (2,243 | ) | (418 | ) | 1,844 | ||||||||||
— | — | — | (481 | ) | Benefit from income taxes | |||||||||||
$ | (905 | ) | $ | (2,243 | ) | $ | (418 | ) | $ | 1,363 | Net of tax | |||||
Available-for-sale securities | $ | — | $ | 632 | $ | 332 | $ | (2,263 | ) | Interest and investment income | ||||||
— | — | — | 1,038 | Benefit from income taxes | ||||||||||||
$ | — | $ | 632 | $ | 332 | $ | (1,225 | ) | Net of tax | |||||||
9 |
September 30, | December 31, | |||||||
2017 | 2016 | |||||||
(In thousands) | ||||||||
Coal | $ | 48,753 | $ | 37,268 | ||||
Repair parts and supplies | 73,683 | 76,194 | ||||||
$ | 122,436 | $ | 113,462 |
10 |
September 30, 2017 | |||||||||||||||||||||||
Balance Sheet | |||||||||||||||||||||||
Classification | |||||||||||||||||||||||
Gross Unrealized | Fair | Short-Term | Other | ||||||||||||||||||||
Cost Basis | Gains | Losses | Value | Investments | Assets | ||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Available-for-sale: | |||||||||||||||||||||||
U.S. treasury securities | $ | 60,870 | $ | 41 | $ | (15 | ) | $ | 60,896 | $ | 60,896 | $ | — | ||||||||||
Corporate notes and bonds | 93,753 | 17 | (37 | ) | 93,733 | 93,733 | — | ||||||||||||||||
Total Investments | $ | 154,623 | $ | 58 | $ | (52 | ) | $ | 154,629 | $ | 154,629 | $ | — | ||||||||||
December 31, 2016 | |||||||||||||||||||||||
Balance Sheet | |||||||||||||||||||||||
Classification | |||||||||||||||||||||||
Gross Unrealized | Fair | Short-Term | Other | ||||||||||||||||||||
Cost Basis | Gains | Losses | Value | Investments | Assets | ||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Available-for-sale: | |||||||||||||||||||||||
Corporate notes and bonds | $ | 88,161 | $ | — | $ | (89 | ) | $ | 88,072 | $ | 88,072 | $ | — | ||||||||||
Equity securities | 1,749 | 388 | — | 2,137 | — | 2,137 | |||||||||||||||||
Total Investments | $ | 89,910 | $ | 388 | $ | (89 | ) | $ | 90,209 | $ | 88,072 | $ | 2,137 | ||||||||||
September 30, 2017 | December 31, 2016 | ||||||||||||||||||||||
Assets | Liabilities | Net Total | Assets | Liabilities | Net Total | ||||||||||||||||||
(In thousands) | (In thousands) | ||||||||||||||||||||||
Original fair value | $ | 97,196 | $ | 31,742 | $ | 97,196 | $ | 31,742 | |||||||||||||||
Accumulated amortization | (73,482 | ) | (29,782 | ) | (25,625 | ) | (24,829 | ) | |||||||||||||||
Total | $ | 23,714 | $ | 1,960 | $ | 21,754 | $ | 71,571 | $ | 6,913 | $ | 64,658 | |||||||||||
Balance Sheet classification: | |||||||||||||||||||||||
Other current | $ | 23,714 | $ | 856 | $ | 59,702 | $ | 5,114 | |||||||||||||||
Other noncurrent | $ | — | $ | 1,104 | $ | 11,869 | $ | 1,799 |
11 |
(Tons in thousands) | 2017 | 2018 | Total | ||||||
Coal sales | 267 | 546 | 813 | ||||||
Coal purchases | 252 | 185 | 437 |
12 |
September 30, 2017 | December 31, 2016 | |||||||||||||||||||||||
Fair Value of Derivatives | Asset | Liability | Asset | Liability | ||||||||||||||||||||
(In thousands) | Derivative | Derivative | Derivative | Derivative | ||||||||||||||||||||
Derivatives Designated as Hedging Instruments | ||||||||||||||||||||||||
Coal | $ | 3 | $ | — | $ | — | $ | (15 | ) | |||||||||||||||
Derivatives Not Designated as Hedging Instruments | ||||||||||||||||||||||||
Heating oil -- diesel purchases | 2,006 | — | 4,646 | — | ||||||||||||||||||||
Coal -- held for trading purposes | 42,203 | (44,211 | ) | 68,948 | (68,740 | ) | ||||||||||||||||||
Coal -- risk management | 1,624 | (1,915 | ) | 475 | (580 | ) | ||||||||||||||||||
Natural gas | 25 | — | 86 | (13 | ) | |||||||||||||||||||
Total | 45,858 | (46,126 | ) | 74,155 | (69,333 | ) | ||||||||||||||||||
Total derivatives | 45,861 | (46,126 | ) | 74,155 | (69,348 | ) | ||||||||||||||||||
Effect of counterparty netting | (43,830 | ) | 43,830 | (69,247 | ) | 69,247 | ||||||||||||||||||
Net derivatives as classified in the balance sheets | $ | 2,031 | $ | (2,296 | ) | $ | (265 | ) | $ | 4,908 | $ | (101 | ) | $ | 4,807 |
September 30, 2017 | December 31, 2016 | |||||||||
Net derivatives as reflected on the balance sheets (in thousands) | ||||||||||
Heating oil and coal | Other current assets | $ | 2,031 | $ | 4,908 | |||||
Coal | Accrued expenses and other current liabilities | (2,296 | ) | (101 | ) | |||||
$ | (265 | ) | $ | 4,807 |
Gain (Loss) Recognized in Other Comprehensive Income (Effective Portion) | Gains (Losses) Reclassified from Other Comprehensive Income into Income (Effective Portion) | |||||||||||||
Successor | Predecessor | Successor | Predecessor | |||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||
Coal sales | (1) | $ | (169 | ) | $ | (612 | ) | $ | — | $ | 108 | |||
Coal purchases | (2) | 152 | 541 | — | (32 | ) | ||||||||
Totals | $ | (17 | ) | $ | (71 | ) | $ | — | $ | 76 |
13 |
Gain (Loss) Recognized | |||||||
Successor | Predecessor | ||||||
2017 | 2016 | ||||||
Coal — unrealized | (3) | $ | (212 | ) | $ | (566 | ) |
Coal — realized | (4) | $ | — | $ | (133 | ) | |
Natural gas — unrealized | (3) | $ | (120 | ) | $ | (79 | ) |
Heating oil — diesel purchases | (4) | $ | 822 | $ | (770 | ) | |
Foreign currency | (4) | $ | — | $ | (314 | ) |
Gain (Loss) Recognized in Other Comprehensive Income (Effective Portion) | Gains (Losses) Reclassified from Other Comprehensive Income into Income (Effective Portion) | |||||||||||||
Successor | Predecessor | Successor | Predecessor | |||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||
Coal sales | (1) | $ | 100 | $ | (672 | ) | $ | — | $ | 1,634 | ||||
Coal purchases | (2) | (82 | ) | 536 | — | (1,237 | ) | |||||||
Totals | $ | 18 | $ | (136 | ) | $ | — | $ | 397 |
Gain (Loss) Recognized | |||||||
Successor | Predecessor | ||||||
2017 | 2016 | ||||||
Coal — unrealized | (3) | $ | (186 | ) | $ | (1,662 | ) |
Coal — realized | (4) | $ | — | $ | (476 | ) | |
Natural gas — unrealized | (3) | $ | (616 | ) | $ | (463 | ) |
Heating oil — diesel purchases | (4) | $ | (3,903 | ) | $ | 826 | |
Foreign currency | (4) | $ | — | $ | (451 | ) |
14 |
September 30, | December 31, | |||||||
2017 | 2016 | |||||||
(In thousands) | ||||||||
Payroll and employee benefits | $ | 47,251 | $ | 58,468 | ||||
Taxes other than income taxes | 74,909 | 92,733 | ||||||
Interest | 156 | 8,032 | ||||||
Acquired sales contracts | 856 | 5,114 | ||||||
Workers’ compensation | 15,961 | 15,184 | ||||||
Asset retirement obligations | 16,760 | 19,515 | ||||||
Other | 9,046 | 6,194 | ||||||
$ | 164,939 | $ | 205,240 |
September 30, | December 31, | |||||||
2017 | 2016 | |||||||
(In thousands) | ||||||||
Term loan due 2024 ($298.5 million face value) | $ | 297,137 | $ | — | ||||
Term loan due 2021 ($325.7 million face value) | — | 325,684 | ||||||
Other | 31,319 | 37,195 | ||||||
Debt issuance costs | (7,286 | ) | — | |||||
321,170 | 362,879 | |||||||
Less: current maturities of debt | 8,566 | 11,038 | ||||||
Long-term debt | $ | 312,604 | $ | 351,841 |
15 |
16 |
17 |
Notional Amount (in millions) | Effective Date | Fixed Rate | Receive Rate | Expiration Date |
$250.0 | June 30, 2017 | 1.372% | 1-month LIBOR | June 29, 2018 |
$250.0 | June 29, 2018 | 1.662% | 1-month LIBOR | June 28, 2019 |
$200.0 | June 28, 2019 | 1.952% | 1-month LIBOR | June 30, 2020 |
$100.0 | June 30, 2020 | 2.182% | 1-month LIBOR | June 30, 2021 |
18 |
Successor | Predecessor | Successor | Predecessor | ||||||||||
Three Months Ended September 30, 2017 | Three Months Ended September 30, 2016 | Nine Months Ended September 30, 2017 | Nine Months Ended September 30, 2016 | ||||||||||
(In thousands) | |||||||||||||
Income tax provision (benefit) at statutory rate | $ | 23,347 | $ | (19,143 | ) | $ | 54,843 | $ | (153,523 | ) | |||
Percentage depletion allowance | (7,708 | ) | (11,041 | ) | (20,439 | ) | (30,799 | ) | |||||
State taxes, net of effect of federal taxes | 728 | (2,195 | ) | 1,619 | (9,256 | ) | |||||||
Change in valuation allowance | (19,118 | ) | 31,955 | (39,336 | ) | 191,182 | |||||||
Other, net | 1,108 | (2,846 | ) | 2,829 | (2,230 | ) | |||||||
$ | (1,643 | ) | $ | (3,270 | ) | $ | (484 | ) | $ | (4,626 | ) |
September 30, 2017 | ||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||
(In thousands) | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in marketable securities | $ | 154,629 | $ | 60,896 | $ | 93,733 | $ | — | ||||||||
Derivatives | 2,268 | — | 237 | 2,031 | ||||||||||||
Total assets | $ | 156,897 | $ | 60,896 | $ | 93,970 | $ | 2,031 | ||||||||
Liabilities: | ||||||||||||||||
Derivatives | $ | 2,296 | $ | 2,305 | $ | 34 | $ | (43 | ) |
19 |
Three Months Ended September 30, 2017 | Nine Months Ended September 30, 2017 | |||||||
(In thousands) | ||||||||
Balance, beginning of period | $ | 698 | $ | 4,537 | ||||
Realized and unrealized gains recognized in earnings, net | 644 | (4,756 | ) | |||||
Purchases | 891 | 3,444 | ||||||
Issuances | (16 | ) | (515 | ) | ||||
Settlements | (143 | ) | (636 | ) | ||||
Ending balance | $ | 2,074 | $ | 2,074 |
Successor | Predecessor | Successor | Predecessor | ||||||
Three Months Ended September 30, 2017 | Three Months Ended September 30, 2016 | Nine Months Ended September 30, 2017 | Nine Months Ended September 30, 2016 | ||||||
(In Thousands) | |||||||||
Weighted average shares outstanding: | |||||||||
Basic weighted average shares outstanding | 23,580 | 21,293 | 24,416 | 21,293 | |||||
Effect of dilutive securities | 555 | — | 459 | — | |||||
Diluted weighted average shares outstanding | 24,135 | 21,293 | 24,875 | 21,293 |
20 |
Successor | Predecessor | Successor | Predecessor | ||||||||||
Three Months Ended September 30, 2017 | Three Months Ended September 30, 2016 | Nine Months Ended September 30, 2017 | Nine Months Ended September 30, 2016 | ||||||||||
(In thousands) | |||||||||||||
Self-insured occupational disease benefits: | |||||||||||||
Service cost | $ | 1,558 | $ | 1,051 | $ | 4,675 | $ | 3,466 | |||||
Interest cost | 1,169 | 1,098 | 3,506 | 3,184 | |||||||||
Net amortization | — | 2,178 | — | 4,325 | |||||||||
Curtailments | $ | (4,660 | ) | $ | — | $ | (4,660 | ) | $ | 4,156 | |||
Total occupational disease | $ | (1,933 | ) | $ | 4,327 | $ | 3,521 | $ | 15,131 | ||||
Traumatic injury claims and assessments | 3,077 | 2,415 | 8,487 | 6,628 | |||||||||
Total workers’ compensation expense | $ | 1,144 | $ | 6,742 | $ | 12,008 | $ | 21,759 |
Successor | Predecessor | Successor | Predecessor | ||||||||||
Three Months Ended September 30, 2017 | Three Months Ended September 30, 2016 | Nine Months Ended September 30, 2017 | Nine Months Ended September 30, 2016 | ||||||||||
(In thousands) | |||||||||||||
Interest cost | $ | 2,736 | $ | 2,803 | $ | 8,718 | $ | 9,338 | |||||
Expected return on plan assets | (3,913 | ) | (4,641 | ) | (12,909 | ) | (13,623 | ) | |||||
Pension settlement | (229 | ) | — | (716 | ) | 454 | |||||||
Amortization of other actuarial losses | — | 2,292 | — | 3,973 | |||||||||
Net benefit cost (credit) | $ | (1,406 | ) | $ | 454 | $ | (4,907 | ) | $ | 142 |
21 |
Successor | Predecessor | Successor | Predecessor | ||||||||||
Three Months Ended September 30, 2017 | Three Months Ended September 30, 2016 | Nine Months Ended September 30, 2017 | Nine Months Ended September 30, 2016 | ||||||||||
(In thousands) | |||||||||||||
Service cost | $ | 170 | $ | 128 | $ | 511 | $ | 393 | |||||
Interest cost | 1,058 | 951 | 3,175 | 3,223 | |||||||||
Curtailments | (520 | ) | — | (520 | ) | (970 | ) | ||||||
Amortization of prior service credits | — | (2,509 | ) | — | (7,854 | ) | |||||||
Amortization of other actuarial losses (gains) | — | 283 | — | (849 | ) | ||||||||
Net benefit cost (credit) | $ | 708 | $ | (1,147 | ) | $ | 3,166 | $ | (6,057 | ) |
22 |
23 |
PRB | MET | Other Thermal | Corporate, Other and Eliminations | Consolidated | ||||||||||||||||
Successor Periods | (in thousands) | |||||||||||||||||||
Three Months Ended September 30, 2017 | ||||||||||||||||||||
Revenues | $ | 275,999 | $ | 238,946 | $ | 93,859 | $ | 4,734 | $ | 613,538 | ||||||||||
Adjusted EBITDAR | 48,768 | 53,346 | 21,217 | (19,061 | ) | 104,270 | ||||||||||||||
Depreciation, depletion and amortization | 9,577 | 18,479 | 3,465 | 393 | 31,914 | |||||||||||||||
Accretion on asset retirement obligation | 5,040 | 511 | 540 | 1,489 | 7,580 | |||||||||||||||
Capital expenditures | 2,047 | 4,597 | 4,013 | 2,924 | 13,581 | |||||||||||||||
Nine Months Ended September 30, 2017 | ||||||||||||||||||||
Revenues | $ | 780,006 | $ | 692,178 | $ | 287,404 | $ | 4,791 | $ | 1,764,379 | ||||||||||
Adjusted EBITDAR | 128,562 | 184,208 | 75,369 | (68,003 | ) | 320,136 | ||||||||||||||
Depreciation, depletion and amortization | 27,661 | 55,629 | 9,950 | 1,296 | 94,536 | |||||||||||||||
Accretion on asset retirement obligation | 15,120 | 1,568 | 1,621 | 4,517 | 22,826 | |||||||||||||||
Capital expenditures | 2,997 | 16,032 | 6,653 | 4,821 | 30,503 | |||||||||||||||
Predecessor Periods | ||||||||||||||||||||
Three Months Ended September 30, 2016 | ||||||||||||||||||||
Revenues | $ | 295,891 | $ | 152,986 | $ | 96,889 | $ | 4,539 | $ | 550,305 | ||||||||||
Adjusted EBITDAR | 78,880 | 9,092 | 28,704 | (27,343 | ) | 89,333 | ||||||||||||||
Depreciation, depletion and amortization | 37,246 | 18,636 | 12,513 | 1,028 | 69,423 | |||||||||||||||
Accretion on asset retirement obligation | 5,647 | 588 | 663 | 1,067 | 7,965 | |||||||||||||||
Capital expenditures | 113 | 6,966 | 1,001 | 216 | 8,296 | |||||||||||||||
Nine Months Ended September 30, 2016 | ||||||||||||||||||||
Revenues | $ | 726,747 | $ | 437,069 | $ | 213,052 | $ | 21,841 | $ | 1,398,709 | ||||||||||
Adjusted EBITDAR | 113,185 | 11,851 | 31,448 | (69,181 | ) | 87,303 | ||||||||||||||
Depreciation, depletion and amortization | 100,151 | 55,311 | 32,310 | 3,809 | 191,581 | |||||||||||||||
Accretion on asset retirement obligation | 16,940 | 1,765 | 1,988 | 3,628 | 24,321 | |||||||||||||||
Capital expenditures | 612 | 17,296 | 3,895 | 60,631 | 82,434 |
24 |
Successor | Predecessor | Successor | Predecessor | |||||||||||
Three Months Ended September 30, | Three Months Ended September 30, | Nine Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||
(In thousands) | ||||||||||||||
Adjusted EBITDAR | $ | 104,270 | $ | 89,333 | $ | 320,136 | $ | 87,303 | ||||||
Depreciation, depletion and amortization | (31,914 | ) | (69,423 | ) | (94,536 | ) | (191,581 | ) | ||||||
Accretion on asset retirement obligations | (7,580 | ) | (7,965 | ) | (22,826 | ) | (24,321 | ) | ||||||
Amortization of sales contracts, net | (13,861 | ) | (104 | ) | (42,903 | ) | 728 | |||||||
Asset impairment and mine closure costs | — | (46 | ) | — | (129,267 | ) | ||||||||
Gain on sale of Lone Mountain Processing, Inc. | 21,574 | — | 21,574 | — | ||||||||||
Interest expense, net | (5,252 | ) | (45,582 | ) | (19,311 | ) | (133,235 | ) | ||||||
Net loss resulting from early retirement of debt and debt restructuring | (486 | ) | — | (2,547 | ) | (2,213 | ) | |||||||
Reorganization items, net | (43 | ) | (20,904 | ) | (2,892 | ) | (46,050 | ) | ||||||
Income (loss) before income taxes | $ | 66,708 | $ | (54,691 | ) | $ | 156,695 | $ | (438,636 | ) |
25 |
26 |
Successor | ||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||
2017 | 2017 | |||||||
(In thousands) | ||||||||
Coal sales | $ | 613,538 | $ | 1,764,379 | ||||
Tons sold | 26,307 | 74,506 |
Successor | |||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
2017 | 2017 | ||||||
(In thousands) | |||||||
Cost of sales (exclusive of items shown separately below) | $ | 495,424 | $ | 1,391,872 | |||
Depreciation, depletion and amortization | 31,914 | 94,536 | |||||
Accretion on asset retirement obligations | 7,580 | 22,826 | |||||
Amortization of sales contracts, net | 13,861 | 42,903 | |||||
Change in fair value of coal derivatives and coal trading activities, net | 1,028 | 2,745 | |||||
Selling, general and administrative expenses | 21,052 | 63,721 | |||||
Gain on sale of Lone Mountain Processing, Inc. | (21,574 | ) | (21,574 | ) | |||
Other operating income, net | (8,236 | ) | (14,095 | ) | |||
Total costs, expenses and other | $ | 541,049 | $ | 1,582,934 |
27 |
Successor | |||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
2017 | 2017 | ||||||
(In thousands) | |||||||
Net loss resulting from early retirement of debt and debt restructuring | $ | (486 | ) | $ | (2,547 | ) | |
Reorganization items, net | (43 | ) | (2,892 | ) | |||
Total nonoperating expense | $ | (529 | ) | $ | (5,439 | ) |
Successor | |||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
2017 | 2017 | ||||||
(In thousands) | |||||||
Benefit from income taxes | $ | (1,643 | ) | $ | (484 | ) |
28 |
Successor | |||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
2017 | 2017 | ||||||
Powder River Basin | |||||||
Tons sold (in thousands) | 21,713 | 61,131 | |||||
Coal sales per ton sold | $ | 12.51 | $ | 12.54 | |||
Cash cost per ton sold | $ | 10.27 | $ | 10.45 | |||
Cash operating margin per ton sold | $ | 2.24 | $ | 2.09 | |||
Adjusted EBITDAR (in thousands) | $ | 48,768 | $ | 128,562 | |||
Metallurgical | |||||||
Tons sold (in thousands) | 2,221 | 6,385 | |||||
Coal sales per ton sold | $ | 88.60 | $ | 89.98 | |||
Cash cost per ton sold | $ | 64.46 | $ | 61.11 | |||
Cash operating margin per ton sold | $ | 24.14 | $ | 28.87 | |||
Adjusted EBITDAR (in thousands) | $ | 53,346 | $ | 184,208 | |||
Other Thermal | |||||||
Tons sold (in thousands) | 2,326 | 6,943 | |||||
Coal sales per ton sold | $ | 35.08 | $ | 34.67 | |||
Cash cost per ton sold | $ | 26.05 | $ | 23.98 | |||
Cash operating margin per ton sold | $ | 9.03 | $ | 10.69 | |||
Adjusted EBITDAR (in thousands) | $ | 21,217 | $ | 75,369 |
29 |
30 |
Predecessor | ||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||
2016 | 2016 | |||||||
(In thousands) | ||||||||
Coal sales | $ | 550,305 | $ | 1,398,709 | ||||
Tons sold | 27,525 | 67,128 |
Predecessor | |||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
2016 | 2016 | ||||||
(In thousands) | |||||||
Cost of sales (exclusive of items shown separately below) | $ | 442,462 | $ | 1,264,464 | |||
Depreciation, depletion and amortization | 69,423 | 191,581 | |||||
Accretion on asset retirement obligations | 7,965 | 24,321 | |||||
Amortization of sales contracts, net | 104 | (728 | ) | ||||
Change in fair value of coal derivatives and coal trading activities, net | 488 | 2,856 | |||||
Asset impairment and mine closure costs | 46 | 129,267 | |||||
Selling, general and administrative expenses | 20,498 | 59,343 | |||||
Other operating income, net | (2,476 | ) | (15,257 | ) | |||
Total costs, expenses and other | $ | 538,510 | $ | 1,655,847 |
31 |
Predecessor | |||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
2016 | 2016 | ||||||
(In thousands) | |||||||
Net loss resulting from early retirement of debt and debt restructuring | $ | — | $ | (2,213 | ) | ||
Reorganization items, net | (20,904 | ) | (46,050 | ) | |||
Total nonoperating expense | $ | (20,904 | ) | $ | (48,263 | ) |
Predecessor | |||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
2016 | 2016 | ||||||
(In thousands) | |||||||
Benefit from income taxes | $ | (3,270 | ) | $ | (4,626 | ) |
32 |
Predecessor | |||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
2016 | 2016 | ||||||
Powder River Basin | |||||||
Tons sold (in thousands) | 22,767 | 54,911 | |||||
Coal sales per ton sold | $ | 12.79 | $ | 13.01 | |||
Cash cost per ton sold | $ | 9.34 | $ | 10.95 | |||
Cash operating margin per ton sold | $ | 3.45 | $ | 2.06 | |||
Adjusted EBITDAR (in thousands) | $ | 78,880 | $ | 113,185 | |||
Metallurgical | |||||||
Tons sold (in thousands) | 2,220 | 6,692 | |||||
Coal sales per ton sold | $ | 55.37 | $ | 53.15 | |||
Cash cost per ton sold | $ | 51.29 | $ | 51.40 | |||
Cash operating margin per ton sold | $ | 4.08 | $ | 1.75 | |||
Adjusted EBITDAR (in thousands) | $ | 9,092 | $ | 11,851 | |||
Other Thermal | |||||||
Tons sold (in thousands) | 2,468 | 5,181 | |||||
Coal sales per ton sold | $ | 34.52 | $ | 36.16 | |||
Cash cost per ton sold | $ | 23.10 | $ | 30.28 | |||
Cash operating margin per ton sold | $ | 11.42 | $ | 5.88 | |||
Adjusted EBITDAR (in thousands) | $ | 28,704 | $ | 31,448 |
33 |
34 |
Successor | Predecessor | Successor | Predecessor | ||||||||||
Three Months Ended September 30, | Three Months Ended September 30, | Nine Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||
(In thousands) | |||||||||||||
Reported segment coal sales revenues | $ | 550,086 | $ | 499,339 | $ | 1,582,051 | $ | 1,257,219 | |||||
Coal risk management derivative settlements classified in “other (income) expense, net” | 19 | 117 | 19 | 448 | |||||||||
Coal sales revenues from idled or otherwise disposed operations not included in segments | 3,719 | 4,513 | 3,769 | 19,368 | |||||||||
Transportation costs | 59,714 | 46,336 | 178,540 | 121,674 | |||||||||
Revenues in the condensed consolidated statements of operations | $ | 613,538 | $ | 550,305 | $ | 1,764,379 | $ | 1,398,709 |
Successor | Predecessor | Successor | Predecessor | ||||||||||
Three Months Ended September 30, | Three Months Ended September 30, | Nine Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||
(In thousands) | |||||||||||||
Reported segment cash cost of tons sold | $ | 426,822 | $ | 383,511 | $ | 1,195,770 | $ | 1,102,386 | |||||
Diesel fuel risk management derivative settlements classified in “other (income) expense, net” | (921 | ) | (1,154 | ) | (2,416 | ) | (3,696 | ) | |||||
Transportation costs | 59,714 | 46,336 | 178,540 | 121,674 | |||||||||
Cash cost of coal sold from idled or otherwise disposed operations not included in segments | 7,979 | 13,018 | 16,660 | 42,513 | |||||||||
Other (operating overhead, certain actuarials, etc.) | 1,830 | 751 | 3,318 | 1,587 | |||||||||
Cost of sales in the condensed consolidated statements of operations | $ | 495,424 | $ | 442,462 | $ | 1,391,872 | $ | 1,264,464 |
35 |
Successor | Predecessor | Successor | Predecessor | ||||||||||
Three Months Ended September 30, | Three Months Ended September 30, | Nine Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||
(In thousands) | |||||||||||||
Reported Segment Adjusted EBITDAR | $ | 123,331 | $ | 116,676 | $ | 388,139 | $ | 156,484 | |||||
EBITDA from idled or otherwise disposed operations | (3,824 | ) | (7,674 | ) | (10,758 | ) | (14,514 | ) | |||||
Selling, general, and administrative expenses | (21,052 | ) | (20,498 | ) | (63,721 | ) | (59,343 | ) | |||||
Other | 5,815 | 829 | 6,476 | 4,676 | |||||||||
Adjusted EBITDAR | 104,270 | 89,333 | 320,136 | 87,303 | |||||||||
Benefit from income taxes | 1,643 | 3,270 | 484 | 4,626 | |||||||||
Interest expense, net | (5,252 | ) | (45,582 | ) | (19,311 | ) | (133,235 | ) | |||||
Depreciation, depletion and amortization | (31,914 | ) | (69,423 | ) | (94,536 | ) | (191,581 | ) | |||||
Accretion on asset retirement obligations | (7,580 | ) | (7,965 | ) | (22,826 | ) | (24,321 | ) | |||||
Amortization of sales contracts, net | (13,861 | ) | (104 | ) | (42,903 | ) | 728 | ||||||
Asset impairment and mine closure costs | — | (46 | ) | — | (129,267 | ) | |||||||
Gain on sale of Lone Mountain Processing, Inc. | 21,574 | — | 21,574 | — | |||||||||
Net loss resulting from early retirement of debt and debt restructuring | (486 | ) | — | (2,547 | ) | (2,213 | ) | ||||||
Reorganization items, net | (43 | ) | (20,904 | ) | (2,892 | ) | (46,050 | ) | |||||
Net income (loss) | $ | 68,351 | $ | (51,421 | ) | $ | 157,179 | $ | (434,010 | ) |
36 |
37 |
Successor | Predecessor | ||||||
Nine Months Ended September 30, | Nine Months Ended September 30, | ||||||
2017 | 2016 | ||||||
(In thousands) | |||||||
Cash provided by (used in): | |||||||
Operating activities | $ | 302,145 | $ | (31,234 | ) | ||
Investing activities | (29,603 | ) | 15,135 | ||||
Financing activities | (279,577 | ) | (34,477 | ) |
38 |
39 |
2017 | 2018 | |||||||||||||
Tons | $ per ton | Tons | $ per ton | |||||||||||
Metallurgical | (in millions) | (in millions) | ||||||||||||
Committed, Priced Coking | 6.0 | $ | 100.20 | 0.5 | $ | 105.00 | ||||||||
Committed, Unpriced Coking | 0.6 | 2.4 | ||||||||||||
Committed, Priced Thermal | 0.9 | $ | 24.86 | 0.4 | $ | 30.45 | ||||||||
Committed, Unpriced Thermal | — | — | ||||||||||||
Powder River Basin | ||||||||||||||
Committed, Priced | 81.1 | $ | 12.47 | 47.5 | $ | 12.05 | ||||||||
Committed, Unpriced | 0.9 | 2.8 | ||||||||||||
Other Thermal | ||||||||||||||
Committed, Priced | 9.3 | $ | 34.74 | 5.0 | $ | 35.26 | ||||||||
Committed, Unpriced | — | — |
40 |
41 |
Date | Total Number Shares Purchased(1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans(2) | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plan (in thousands)(3) | ||||||
July 1 through July 31, 2017 | 39,800 | $ | 75.33 | 39,800 | $ | 445,959 | ||||
August 1 through August 31, 2017 | 940,833 | $ | 76.15 | 940,833 | $ | 374,318 | ||||
September 1 through September 30, 2017 | 1,227,500 | $ | 74.99 | 1,227,500 | $ | 282,272 | ||||
Total | 2,208,133 | $ | 75.49 | 2,208,133 |
42 |
43 |
2.1 | ||
2.2 | ||
3.1 | ||
3.2 | ||
4.1 | ||
4.2 | ||
4.3 | ||
10.1 | ||
10.2 | ||
10.3 | ||
10.4 | ||
10.5 | ||
10.6 | ||
10.7 | ||
10.8 | ||
10.9 | ||
10.10 | ||
10.11 | ||
10.12 |
44 |
10.13 | ||
10.14 | Coal Lease Agreement dated as of March 31, 1992, among Allegheny Land Company, as lessee, and UAC and Phoenix Coal Corporation, as lessors, and related guarantee (incorporated herein by reference to the Current Report on Form 8-K filed by Ashland Coal, Inc. on April 6, 1992). | |
10.15 | Federal Coal Lease dated as of January 24, 1996 between the U.S. Department of the Interior and the Thunder Basin Coal Company (incorporated herein by reference to Exhibit 10.20 to Arch Coal’s Annual Report on Form 10-K for the year ended December 31, 1998). | |
10.16 | Federal Coal Lease Readjustment dated as of November 1, 1967 between the U.S. Department of the Interior and the Thunder Basin Coal Company (incorporated herein by reference to Exhibit 10.21 to Arch Coal’s Annual Report on Form 10-K for the year ended December 31, 1998). | |
10.17 | Federal Coal Lease effective as of May 1, 1995 between the U.S. Department of the Interior and Mountain Coal Company (incorporated herein by reference to Exhibit 10.22 to Arch Coal’s Annual Report on Form 10-K for the year ended December 31, 1998). | |
10.18 | Federal Coal Lease dated as of January 1, 1999 between the Department of the Interior and Ark Land Company (incorporated herein by reference to Exhibit 10.23 to Arch Coal’s Annual Report on Form 10-K for the year ended December 31, 1998). | |
10.19 | ||
10.20 | ||
10.21 | ||
10.22 | ||
10.23 | ||
10.24 | ||
10.25 | ||
10.26 | ||
10.27 | ||
10.28 | ||
10.29 | ||
10.30 | ||
10.31 | ||
10.32 | ||
31.1 | ||
31.2 | ||
32.1 | ||
32.2 | ||
95 |
45 |
101 | Interactive Data File (Form 10-Q for the three and six months ended September 30, 2017 filed in XBRL). The financial information contained in the XBRL-related documents is “unaudited” and “unreviewed.” | |
46 |
Arch Coal, Inc. | |||
By: | /s/ John T. Drexler | ||
John T. Drexler | |||
Senior Vice President and Chief Financial Officer (On behalf of the registrant and as Principal Financial Officer) | |||
October 31, 2017 |
47 |
2 |
3 |
4 |
5 |
Schedule I-1 |
Originator | Location |
Arch Coal Sales Company, Inc. | Delaware |
Arch Energy Resources, LLC | Delaware |
Arch Western Resources, LLC | Delaware |
Coal-Mac LLC | Kentucky |
Cumberland River Coal LLC | Delaware |
Lone Mountain Processing LLC | Delaware |
Mingo Logan Coal LLC | Delaware |
Mountain Coal Company, L.L.C. | Delaware |
Thunder Basin Coal Company, L.L.C. | Delaware |
Bronco Mining Company LLC | West Virginia |
CoalQuest Development LLC | Delaware |
Hawthorne Coal Company LLC | West Virginia |
Hunter Ridge Coal LLC | Delaware |
Hunter Ridge Holdings, Inc. | Delaware |
Hunter Ridge LLC | Delaware |
ICG Beckley, LLC | Delaware |
ICG East Kentucky, LLC | Delaware |
ICG Illinois, LLC | Delaware |
Arch Coal Group, LLC | Delaware |
ICG, LLC | Delaware |
ICG Natural Resources, LLC | Delaware |
ICG Tygart Valley, LLC | Delaware |
International Energy Group, LLC | Delaware |
Schedule II-1 |
King Knob Coal Co., Inc. | West Virginia |
Marine Coal Sales LLC | Delaware |
Melrose Coal Company LLC | West Virginia |
Patriot Mining Company LLC | West Virginia |
Simba Group LLC | Delaware |
Upshur Property LLC | Delaware |
Vindex Energy LLC | West Virginia |
White Wolf Energy LLC | Virginia |
Wolf Run Mining LLC | West Virginia |
Schedule II-2 |
Legal Name | Trade Names |
Arch Coal Sales Company, Inc. | |
Arch Energy Resources, LLC | |
Arch Western Resources, LLC | |
Coal-Mac LLC | Phoenix Coal-Mac Mining, LLC |
Cumberland River Coal LLC | Arch of the North Fork |
Lone Mountain Processing LLC | |
Mingo Logan Coal LLC | |
Mountain Coal Company, L.L.C. | |
Thunder Basin Coal Company, L.L.C. | |
Bronco Mining Company LLC | |
CoalQuest Development LLC | |
Hawthorne Coal Company LLC | |
Hunter Ridge Coal LLC | |
Hunter Ridge Holdings, Inc. | |
Hunter Ridge LLC | |
ICG Beckley, LLC | ACI Beckley, LLC ACI Beckley |
ICG East Kentucky, LLC | |
ICG Illinois, LLC | ACI Illinois, LLC |
Arch Coal Group, LLC | |
ICG, LLC | ICG Coal, LLC |
ICG Natural Resources, LLC | ACI Natural Resources, LLC ACI Natural Resources |
ICG Tygart Valley, LLC | ACI Tygart Valley, LLC |
International Energy Group, LLC |
Schedule IV-1 |
King Knob Coal Co., Inc | |
Marine Coal Sales LLC | |
Melrose Coal Company LLC | |
Patriot Mining Company LLC | |
Simba Group LLC | |
Upshur Property LLC | |
Vindex Energy LLC | |
White Wolf Energy LLC | |
Wolf Run Mining LLC |
Schedule IV-2 |
ORIGINATORS | MINEHEAD | STATE | COUNTY |
Arch Coal Sales Company, Inc. | N/A | ||
Arch Energy Resources, LLC | N/A | ||
Arch Western Resources, LLC | N/A | ||
Coal-Mac LLC | Holden Ragland / Phoenix | West Virginia West Virginia | Logan Mingo |
Cumberland River Coal LLC | Cumberland River (aka Pardee) Cumberland River (aka Pardee) | Kentucky Virginia | Letcher Wise |
Lone Mountain Processing LLC | Lone Mountain Lone Mountain | Kentucky Virginia | Harlan Lee |
Mingo Logan Coal LLC | Mountain Laurel | West Virginia | Logan |
Mountain Coal Company, L.L.C. | West Elk | Colorado | Gunnison |
Thunder Basin Coal Company, L.L.C. | Black Thunder Coal Creek | Wyoming Wyoming | Campbell Campbell |
Bronco Mining Company LLC | N/A | ||
CoalQuest Development LLC | N/A | ||
Hawthorne Coal Company LLC | N/A | ||
Hunter Ridge Coal LLC | N/A | ||
Hunter Ridge Holdings, Inc. | N/A | ||
Hunter Ridge LLC | N/A | ||
ICG Beckley, LLC | Beckley | West Virginia | Raleigh |
ICG East Kentucky, LLC | East Kentucky | Kentucky | Pike |
ICG Illinois, LLC | Viper | Illinois | Sangamon |
Arch Coal Group, LLC | N/A |
Schedule V-1 |
ORIGINATORS | MINEHEAD | STATE | COUNTY |
ICG, LLC | N/A | ||
ICG Natural Resources, LLC | N/A | ||
ICG Tygart Valley, LLC | Tygart Valley | West Virginia | Taylor |
International Energy Group, LLC | N/A | ||
King Knob Coal Co., Inc. | N/A | ||
Marine Coal Sales LLC | N/A | ||
Melrose Coal Company LLC | N/A | ||
Patriot Mining Company LLC | Patriot Mining | West Virginia | Monogalia |
Simba Group LLC | N/A | ||
Upshur Property LLC | N/A | ||
Vindex Energy LLC | Jackson Mountain Mine Vindex Energy Vindex Energy | Maryland Maryland West Virginia | Allegany Garrett Grant |
White Wolf Energy LLC | N/A | ||
Wolf Run Mining LLC | Buckhannon Harrison Buckhannon Harrison Sentinel | West Virginia West Virginia West Virginia | Upshur Harrison Barbour |
Schedule V-2 |
Subject Originators | Location | Converted Originators | Location | |
Lone Mountain Processing, Inc. | Delaware | Lone Mountain Processing LLC | Delaware | |
Cumberland River Coal Company | Delaware | Cumberland River Coal LLC | Delaware | |
Coal-Mac, Inc. | Kentucky | Coal-Mac LLC | Kentucky | |
Mingo Logan Coal Company | Delaware | Mingo Logan Coal LLC | Delaware | |
Simba Group, Inc. | Delaware | Simba Group LLC | Delaware | |
Hawthorne Coal Company, Inc. | West Virginia | Hawthorne Coal Company LLC | West Virginia | |
Hunter Ridge Coal Company | Delaware | Hunter Ridge Coal LLC | Delaware | |
White Wolf Energy, Inc. | Virginia | White Wolf Energy LLC | Virginia | |
Bronco Mining Company, Inc. | West Virginia | Bronco Mining Company LLC | West Virginia | |
Upshur Property, Inc. | Delaware | Upshur Property LLC | Delaware | |
Marine Coal Sales Company | Delaware | Marine Coal Sales LLC | Delaware | |
Wolf Run Mining Company | West Virginia | Wolf Run Mining LLC | West Virginia | |
Patriot Mining Company, Inc. | West Virginia | Patriot Mining Company LLC | West Virginia | |
Melrose Coal Company, Inc. | West Virginia | Melrose Coal Company LLC | West Virginia | |
Vindex Energy Corporation | West Virginia | Vindex Energy LLC | West Virginia | |
Hunter Ridge, Inc. | Delaware | Hunter Ridge LLC | Delaware |
Exhibit A | First Amendment to Second A&R PSA (Arch Coal) |
Exhibit B | First Amendment to Second A&R PSA (Arch Coal) |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
(e) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(f) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ John W. Eaves | |
John W. Eaves | |
Chief Executive Officer, Director | |
Date: October 31, 2017 |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ John T. Drexler | |
John T. Drexler | |
Senior Vice President and Chief Financial Officer | |
Date: October 31, 2017 |
/s/ John W. Eaves | |
John W. Eaves | |
Chief Executive Officer, Director | |
Date: October 31, 2017 |
/s/ John T. Drexler | |
John T. Drexler | |
Senior Vice President and Chief Financial Officer | |
Date: October 31, 2017 |
Mine or Operating Name / MSHA Identification Number | Section 104 S&S Citations (#) | Section 104(b) Orders (#) | Section 104(d) Citations and Orders (#) | Section 110(b)(2) Violations (#) | Section 107(a) Orders (#) | Total Dollar Value of MSHA Assessments Proposed (in thousands) ($) | Total Number of Mining Related Fatalities (#) | Received Notice of Pattern of Violations Under Section 104(e) (Yes/No) | Received Notice of Potential to Have Pattern of Violations Under Section 104(e) (Yes/No) | Legal Actions Initiated During Period (#) | Legal Actions Resolved During Period (#) | Legal Actions Pending as of Last Day of Period(1) (#) |
Active Operations | ||||||||||||
*Lone Mountain Darby Fork / 15‑02263 | 2 | — | 1 | — | — | 5.5 | — | No | No | — | — | — |
*Lone Mountain Clover Fork / 15‑18647 | 6 | 1 | — | — | — | 13.1 | — | No | No | 1 | — | 1 |
*Lone Mountain Huff Creek / 15‑17234 | 9 | 1 | 1 | — | — | 39.8 | — | No | No | — | — | 3 |
*Lone Mountain 6C Mine / 44‑06782 | — | — | — | — | — | 0.1 | — | No | No | — | — | — |
*Lone Mountain Processing / 44‑05898 | — | — | — | — | — | 1.0 | — | No | No | — | — | — |
*Lone Mountain Processing / Mayflower Prep Plant / 44-05605 | — | — | — | — | — | — | — | No | No | — | — | — |
*Lone Mountain Days Creek / 15‑17971 | — | — | — | — | — | — | — | No | No | — | — | — |
*Powell Mt. Mine #1 / 15‑18734 | — | — | — | — | — | — | — | No | No | — | — | — |
*Powell Mt. Middle Splint / 44‑07207 | — | — | — | — | — | — | — | No | No | — | — | — |
Vindex Cabin Run / 18‑00133 | — | — | — | — | — | — | — | No | No | — | — | — |
Vindex Bismarck / 46‑09369 | — | — | — | — | — | — | — | No | No | — | — | — |
Vindex Jackson Mt. / 18-00170 | — | — | — | — | — | — | — | No | No | — | — | — |
Vindex Wolf Den Run / 18-00790 | — | — | — | — | — | — | — | No | No | — | — | — |
Vindex Energy / Vindex / 46-02151 | — | — | — | — | — | — | — | No | No | — | — | — |
Vidnex Energy / Carlos Surface / 18-00769 | — | — | — | — | — | — | — | No | No | — | — | — |
Vindex Energy / Douglas Island / 18-00749 | — | — | — | — | — | — | — | No | No | — | — | — |
Vindex Energy / Dobbin Ridge Prep Plant / 46-07837 | — | — | — | — | — | — | — | No | No | — | — | — |
*Cumberland River Pardee Plant / 44‑05014 | — | — | — | — | — | — | — | No | No | — | — | — |
*Cumberland River Band Mill Mine / 44‑06816 | — | — | — | — | — | — | — | No | No | — | — | — |
*Cumberland River Pine Branch #1 / 44‑07224 | — | — | — | — | — | — | — | No | No | — | — | — |
*Cumberland River Trace Fork #1 / 15‑19533 | — | — | — | — | — | — | — | No | No | — | — | — |
Beckley Pocahontas Mine / 46‑05252 | 33 | — | 2 | — | — | 71.2 | — | No | No | 1 | 5 | 4 |
Beckley Pocahontas Plant / 46‑09216 | — | — | — | — | — | — | — | No | No | — | — | — |
Coal Mac Holden #22 Prep Plant / 46‑05909 | — | — | — | — | — | — | — | No | No | — | — | — |
Coal Mac Ragland Loadout / 46‑08563 | — | — | — | — | 0.1 | — | — | No | No | — | — | — |
Coal Mac Holden #22 Surface / 46‑08984 | 1 | — | — | — | — | 0.1 | — | No | No | — | — | — |
Eastern Birch River Mine / 46-07945 | — | — | — | — | — | — | — | No | No | — | — | — |
Sentinel Mine / 46‑04168 | 13 | — | — | — | — | 14.4 | — | No | No | — | 1 | — |
Sentinel Prep Plant / 46‑08777 | — | — | — | — | — | 0.3 | — | No | No | — | — | — |
Mingo Logan Mountaineer II / 46‑09029 | 20 | — | — | — | -— | 25.2 | — | No | No | 2 | 6 | 3 |
Mingo Logan Cardinal Prep Plant / 46‑09046 | 1 | — | — | — | — | — | — | No | No | — | — | — |
Mingo Logan Daniel Hollow / 46‑09047 | — | — | — | — | — | — | — | No | No | — | — | — |
Leer #1 Mine / 46‑09192 | 26 | — | — | — | — | 23.7 | — | No | No | — | 3 | 4 |
Arch of Wyoming Elk Mountain / 48‑01694 | — | — | — | — | — | — | — | No | No | — | — | — |
Black Thunder / 48‑00977 | 2 | — | — | — | — | 4.1 | — | No | No | — | — | — |
Coal Creek / 48‑01215 | 1 | — | — | — | — | 1.4 | — | No | No | — | — | — |
West Elk Mine / 05‑03672 | 3 | — | — | — | — | 13.2 | — | No | No | — | — | — |
Viper Mine / 11‑02664 | 3 | — | — | — | — | 12.8 | — | No | No | — | — | — |
Leer #1 Prep Plant / 46-09191 | — | — | — | — | — | — | — | No | No | — | — | — |
Wolf Run Mining – Sawmill Run Prep Plant / 46-05544 | — | — | — | — | — | — | — | No | No | — | — | — |
Wolf Run Mining / Imperial / 46-09115 | — | — | — | — | — | — | — | No | No | — | — | — |
Wolf Run Mining / Upshur / 46-05823 | — | — | — | — | — | — | — | No | No | — | — | — |
(1) | See table below for additional details regarding Legal Actions Pending as of September 30, 2017. |
Mine or Operating Name/MSHA Identification Number | Contests of Citations, Orders (as of September 30, 2017) | Contests of Proposed Penalties (as of September 30, 2017) | Complaints for Compensation (as of September 30, 2017) | Complaints of Discharge, Discrimination or Interference (as of September 30, 2017) | Applications for Temporary Relief (as of September 30, 2017) | Appeals of Judges’ Decisions or Orders (as of September 30, 2017) |
Beckley Pocahontas Mine / 46-05252 | 1 | 3 | — | — | — | — |
Mingo Logan Mountaineer II / 46-09029 | — | 3 | — | — | — | — |
Leer #1 / 46‑09192 | — | 4 | — | — | — | — |
*Lone Mountain Huff Creek / 15-17234 | — | 3 | — | — | — | — |
*Lone Mountain / Clover Fork #1 / 15-18647 | — | 1 | — | — | — | — |
Document And Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Oct. 24, 2017 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | ARCH COAL INC | |
Entity Central Index Key | 0001037676 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q3 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 21,934,787 |
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 25,038,000 | 25,002,000 |
Treasury stock, shares | 2,919,000 |
Basis of Presentation |
9 Months Ended |
---|---|
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of Arch Coal, Inc. ("Arch Coal") and its subsidiaries (the “Company”). Unless the context indicates otherwise, the terms “Arch” and the “Company” are used interchangeably in this Quarterly Report on Form 10-Q and refer to both the Predecessor and Successor Company. The Company’s primary business is the production of thermal and metallurgical coal from surface and underground mines located throughout the United States, for sale to utility, industrial and steel producers both in the United States and around the world. The Company currently operates mining complexes in West Virginia, Illinois, Wyoming and Colorado. All subsidiaries are wholly-owned. Intercompany transactions and accounts have been eliminated in consolidation. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial reporting and U.S. Securities and Exchange Commission regulations. In the opinion of management, all adjustments, consisting of normal, recurring accruals considered necessary for a fair presentation, have been included. Results of operations for the three and nine months ended September 30, 2017 are not necessarily indicative of results to be expected for the year ending December 31, 2017. These financial statements should be read in conjunction with the audited financial statements and related notes as of and for the year ended December 31, 2016 included in the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission. On January 11, 2016 (the “Petition Date”), Arch Coal and substantially all of its wholly owned domestic subsidiaries (the “Filing Subsidiaries” and, together with Arch Coal, the “Debtors”; the Debtors, solely following the effective date of the Plan, the “Reorganized Debtors”) filed voluntary petitions for reorganization (collectively, the “Bankruptcy Petitions”) under Chapter 11 of Title 11 of the U.S. Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Eastern District of Missouri (the “Court”). The Debtors’ Chapter 11 Cases (collectively, the “Chapter 11 Cases”) were jointly administered under the caption In re Arch Coal, Inc., et al. Case No. 16-40120 (lead case). During the Chapter 11 Cases, each Debtor operated its business as a “debtor in possession” under the jurisdiction of the Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Court. Upon emergence from bankruptcy on October 5, 2016, Arch Coal applied the provisions of fresh start accounting effective October 1, 2016 which resulted in Arch becoming a new entity for financial reporting purposes. Accordingly, the consolidated financial statements and accompanying footnotes on or after October 1, 2016 are not comparable to the consolidated financial statements prior to that date. References to “Successor” in the consolidated financial statements and footnotes are in reference to reporting dates on or after October 2, 2016; references to “Predecessor” in the consolidated financial statements and footnotes are in reference to reporting dates through October 1, 2016 which includes the impact of the Plan provisions and the application of fresh start accounting. |
Accounting Policies |
9 Months Ended |
---|---|
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Accounting Policies | Accounting Policies Recently Adopted Accounting Guidance In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Compensation – Stock Compensation (Topic 718) ("ASU 2016-09"). ASU 2016-09 identifies areas for simplification involving several aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. The Company adopted all provisions of this new accounting standard in the first quarter of 2017 and changed its forfeiture policy to recognize the impact of forfeitures when they occur from estimating expected forfeitures in determining stock-based compensation expense. There was no material impact to the Company's financial statements. Recent Accounting Guidance Issued Not Yet Effective In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers.” ASU 2014-09 is a comprehensive revenue recognition standard that will supersede nearly all existing revenue recognition guidance under current U.S. GAAP and replace it with a principle based approach for determining revenue recognition. ASU 2014-09 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract. The ASU also will require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 is effective for interim and annual periods beginning after December 15, 2017. Early adoption is permitted only in annual reporting periods beginning after December 15, 2016, including interim periods therein. Entities will be able to transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. The Company’s primary source of revenue is from the sale of coal through both short-term and long-term contracts with utilities, industrial customers and steel producers whereby revenue is currently recognized when risk of loss has passed to the customer. Upon adoption of this new standard, the Company believes that the timing of revenue recognition related to its coal sales will remain consistent with its current practice. The Company is in the process of reviewing its portfolio of coal sales contracts and the various terms and clauses within each contract. Additionally, the Company is evaluating other revenue streams to determine the potential impact related to the adoption of the standard, as well as potential disclosures required by the standard. The Company will be adopting the standard under the modified retrospective approach. In March 2017, the FASB issued ASU 2017-07, Compensation-Retirement Benefits (Topic 715) Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. ASU 2017-07 changes the income statement presentation of defined benefit plan expense by requiring separation between operating expense (service cost component) and non-operating expense (all other components, including interest cost, amortization of prior service cost, curtailments and settlements, etc.). The operating expense component is reported with similar compensation costs while the non-operating components are reported in Nonoperating expense. In addition, only the service cost component is eligible for capitalization as part of an asset such as inventory or property, plant and equipment. The Company is currently assessing the impact that adopting this new accounting standard will have on its consolidated financial statements. The ASU is effective for public companies for fiscal years beginning after December 15, 2017, and interim periods therein; early adoption is permitted. |
Accumulated Other Comprehensive Income |
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Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income | Accumulated Other Comprehensive Income The following items are included in accumulated other comprehensive income ("AOCI"):
The following amounts were reclassified out of AOCI:
|
Divestitures |
9 Months Ended |
---|---|
Sep. 30, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Divestitures | Divestitures On September 14, 2017, the Company closed on its’ definitive agreement to sell Lone Mountain Processing LLC, an operating mine complex within the Company’s metallurgical coal segment, and two idled mining companies, Cumberland River Coal LLC and Powell Mountain Energy LLC to Revelation Energy LLC. The Company received $8.3 million of proceeds offset by $1.3 million in disbursements related to landholder consent fees and professional fees; and recorded a gain of $21.6 million which is reflected as a separate line, “Gain on sale of Lone Mountain Processing, Inc.,” within the Condensed Consolidated Statement of Operations. The gain included a $4.7 million curtailment gain related to black lung liabilities accrued for active employees at these operations, $0.5 million curtailment gain related to postretirement medical claims. |
Reorganization items, net |
9 Months Ended |
---|---|
Sep. 30, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Reorganization items, net | Reorganization items, net In accordance with Accounting Codification Standard 852, “Reorganizations,” the statement of operations shall portray the results of operations of the reporting entity while it is in Chapter 11. Revenues, expenses (including professional fees), realized gains and losses, and provisions for losses resulting from reorganization and restructuring of the business shall be reported separately as reorganization items. During the three months ended September 30, 2017 and 2016, the Company recorded a minimal charge and $20.9 million, respectively in “Reorganization items, net” primarily comprised of professional fee expenses. Net cash paid for “Reorganization items, net” totaled $0.2 million and $16.0 million during the three months ended September 30, 2017 and 2016, respectively. During the nine months ended September 30, 2017 and 2016, the Company recorded a charge of $2.9 million and $46.1 million, respectively, in “Reorganization items, net.” The 2017 amount is primarily comprised of professional fees and 2016 is comprised of $62.7 million in professional fees, partially offset by non-cash gains on rejected contracts of $16.6 million. Net cash paid for “Reorganization items, net” totaled $4.8 million and $31.1 million during the nine months ended September 30, 2017 and 2016, respectively. |
Asset Impairments and Mine Closure Costs |
9 Months Ended |
---|---|
Sep. 30, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Asset Impairment and Mine Closure Costs | Asset Impairment and Mine Closure Costs During the second quarter of 2016, the Company recorded $43.7 million of “Asset impairment and mine closure costs” in the Condensed Consolidated Statements of Operations. The amount included the following: 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; $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 2016; and $2.1 million of severance expense related to headcount reductions during the quarter. During the first quarter of 2016, the Company recorded $85.5 million of “Asset impairment and mine closure costs” in the Condensed Consolidated Statements of Operations. The amount included 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 related to those reserves during the quarter; $5.1 million of severance expense related to headcount reductions at Company operations; $3.4 million related to an impairment charge on the portion of an advance royalty balance on a reserve base mined at the Company’s Mountain Laurel operation that was no longer deemed recoupable; and $2.9 million related to an other-than-temporary-impairment charge on an available-for-sale security. |
Inventories |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories Inventories consist of the following:
The repair parts and supplies are stated net of an allowance for slow-moving and obsolete inventories of $0.2 million at September 30, 2017 and $0.0 million at December 31, 2016. |
Investments in Available-for-Sale Securities |
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Available-for-sale Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments in Available-for-Sale Securities | Investments in Available-for-Sale Securities The Company has invested in marketable debt securities, primarily highly liquid U.S. Treasury securities and investment grade corporate bonds. These investments are held in the custody of a major financial institution. These securities, along with the Company’s investments in marketable equity securities, are classified as available-for-sale securities and, accordingly, the unrealized gains and losses are recorded through other comprehensive income. The Company’s investments in available-for-sale marketable securities are as follows:
The aggregate fair value of investments with unrealized losses that were owned for less than a year was $82.2 million and $47.6 million at September 30, 2017 and December 31, 2016, respectively. The aggregate fair value of investments with unrealized losses that were owned for over a year was $8.1 million and $40.4 million at September 30, 2017 and December 31, 2016, respectively. The unrealized losses in the Company’s portfolio at September 30, 2017 are the result of normal market fluctuations. The Company does not currently intend to sell these investments before recovery of their amortized cost base. The debt securities outstanding at September 30, 2017 have maturity dates ranging from the fourth quarter of 2017 through the first quarter of 2019. The Company classifies its investments as current based on the nature of the investments and their availability to provide cash for use in current operations. |
Sales Contracts |
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Acquired Sales Contracts [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sales Contracts | Sales Contracts The sales contracts reflected in the consolidated balance sheets are as follows:
The Company anticipates amortization of sales contracts, based upon expected shipments in the next five years, to be an expense of approximately $11.4 million for the remainder of 2017, $10.7 million in 2018, and income of $0.1 million in each of 2019, 2020 and 2021. |
Derivatives |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives | Derivatives Diesel fuel price risk management The Company is exposed to price risk with respect to diesel fuel purchased for use in its operations. The Company anticipates purchasing approximately 40 to 42 million gallons of diesel fuel for use in its operations during 2017 and 2018. To protect the Company’s cash flows from increases in the price of diesel fuel for its operations, the Company uses forward physical diesel purchase contracts and purchased heating oil call options. At September 30, 2017, the Company had protected the price of approximately 83% of its expected diesel fuel purchases for the remainder of 2017 at an average strike price of $1.86 per gallon. Additionally, the Company has protected approximately 40% of its expected 2018 purchases with call options with an average strike price of $1.81 per gallon. At September 30, 2017, the Company had outstanding heating oil call options for approximately 25 million gallons for the purpose of managing the price risk associated with future diesel purchases. These positions are not designated as hedges for accounting purposes, and therefore, changes in the fair value are recorded immediately to earnings. Coal price risk management positions The Company may sell or purchase forward contracts, swaps and options in the over-the-counter coal market in order to manage its exposure to coal prices. The Company has exposure to the risk of fluctuating coal prices related to forecasted, index-priced sales or purchases of coal or to the risk of changes in the fair value of a fixed price physical sales contract. Certain derivative contracts may be designated as hedges of these risks. At September 30, 2017, the Company held derivatives for risk management purposes that are expected to settle in the following years:
The Company has also entered into a nominal quantity of natural gas put options to protect the Company from decreases in natural gas prices, which could impact thermal coal demand. These options are not designated as hedges. Additionally, the Company has also entered into a nominal quantity of foreign currency put options protecting for decreases in the Australian to United States dollar exchange rate, which could impact metallurgical coal demand. These options are not designated as hedges. Coal trading positions The Company may sell or purchase forward contracts, swaps and options in the over-the-counter coal market for trading purposes. The Company is exposed to the risk of changes in coal prices on the value of its coal trading portfolio. The estimated future realization of the value of the trading portfolio is $0.5 million of losses during the remainder of 2017 and $1.5 million of losses during 2018. Tabular derivatives disclosures The Company has master netting agreements with all of its counterparties which allow for the settlement of contracts in an asset position with contracts in a liability position in the event of default or termination. Such netting arrangements reduce the Company’s credit exposure related to these counterparties. For classification purposes, the Company records the net fair value of all the positions with a given counterparty as a net asset or liability in the Condensed Consolidated Balance Sheets. The amounts shown in the table below represent the fair value position of individual contracts, and not the net position presented in the accompanying Condensed Consolidated Balance Sheets. The fair value and location of derivatives reflected in the accompanying Condensed Consolidated Balance Sheets are as follows:
The Company had a current asset for the right to reclaim cash collateral of $9.3 million at September 30, 2017 and $2.8 million at December 31, 2016, respectively. These amounts are not included with the derivatives presented in the table above and are included in “other current assets” in the accompanying Condensed Consolidated Balance Sheets. The effects of derivatives on measures of financial performance are as follows: Derivatives used in Cash Flow Hedging Relationships (in thousands) Three Months Ended September 30,
No ineffectiveness or amounts excluded from effectiveness testing relating to the Company’s cash flow hedging relationships were recognized in the results of operations in the three month periods ended September 30, 2017 and 2016. Derivatives Not Designated as Hedging Instruments (in thousands) Three Months Ended September 30,
____________________________________________________________ Location in statement of operations: (1) — Revenues (2) — Cost of sales (3) — Change in fair value of coal derivatives and coal trading activities, net (4) — Other operating (income) expense, net Derivatives used in Cash Flow Hedging Relationships (in thousands) Nine Months Ended September 30,
No ineffectiveness or amounts excluded from effectiveness testing relating to the Company’s cash flow hedging relationships were recognized in the results of operations in the nine month periods ended September 30, 2017 and 2016. Derivatives Not Designated as Hedging Instruments (in thousands) Nine Months Ended September 30,
____________________________________________________________ Location in statement of operations: (1) — Revenues (2) — Cost of sales (3) — Change in fair value of coal derivatives and coal trading activities, net (4) — Other operating (income) expense, net Based on fair values at September 30, 2017, amounts on derivative contracts designated as hedge instruments in cash flow hedges to be reclassified from other comprehensive income into earnings during the next twelve months are immaterial. Related to its trading portfolio, the Company recognized net unrealized and realized losses of $0.7 million and net unrealized and realized gains $0.1 million during the three months ended September 30, 2017 and 2016, respectively; and net unrealized and realized losses of $2.2 million and $0.9 million during the nine months ended September 30, 2017 and 2016, respectively. Gains and losses from trading activities are included in the caption “Change in fair value of coal derivatives and coal trading activities, net” in the accompanying Condensed Consolidated Statements of Operations, and are not included in the previous tables reflecting the effects of derivatives on measures of financial performance. |
Accrued Expenses and Other Current Liabilities |
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Payables and Accruals [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Expenses and Other Current Liabilities | Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consist of the following:
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Debt and Financing Arrangements |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt and Financing Arrangements | Debt and Financing Arrangements
Term Loan Facility On March 7, 2017, the Company entered into a new senior secured term loan credit agreement in an aggregate principal amount of $300 million (the “New Term Loan Debt Facility) with Credit Suisse AG, Cayman Islands Branch, as administrative agent and collateral agent (in such capacities, the “Agent”), and the other financial institutions from time to time party thereto (collectively, the “Lenders”). The New Term Loan Debt Facility was issued at 99.50% of the face amount and will mature on March 7, 2024. Borrowings under the New Term Loan Debt Facility bear interest at a per annum rate equal to, at the Company’s option, either (i) a London interbank offered rate plus an applicable margin of 4%, subject to a 1% LIBOR floor (the “LIBOR Rate”), or (ii) a base rate plus an applicable margin of 3%. The term loans provided under the New Term Loan Debt Facility (the “Term Loans”) are subject to quarterly principal amortization payments in an amount equal to $750,000. The New Term Loan Debt Facility is guaranteed by all existing and future wholly owned domestic subsidiaries of the Company (collectively, the “Subsidiary Guarantors” and, together with Arch Coal, the “Loan Parties”), subject to customary exceptions, and is secured by first priority security interests on substantially all assets of the Loan Parties, including 100% of the voting equity interests of directly owned domestic subsidiaries and 65% of the voting equity interests of directly owned foreign subsidiaries, subject to customary exceptions. The Company has the right to prepay Term Loans at any time and from time to time in whole or in part without premium or penalty, upon written notice, except that any prepayment of Term Loans that bear interest at the LIBOR Rate other than at the end of the applicable interest periods therefor shall be made with reimbursement for any funding losses and redeployment costs of the Lenders resulting therefrom. The New Term Loan Debt Facility is subject to certain usual and customary mandatory prepayment events, including 100% of net cash proceeds of (i) debt issuances (other than debt permitted to be incurred under the terms of the New Term Loan Debt Facility) and (ii) non-ordinary course asset sales or dispositions, subject to customary thresholds, exceptions and reinvestment rights. The New Term Loan Debt Facility contains customary affirmative covenants and representations. The New Term Loan Debt Facility also contains customary negative covenants, which, among other things, and subject to certain exceptions, include restrictions on (i) indebtedness, (ii) liens, (iii) liquidations, mergers, consolidations and acquisitions, (iv) disposition of assets or subsidiaries, (v) affiliate transactions, (vi) creation or ownership of certain subsidiaries, partnerships and joint ventures, (vii) continuation of or change in business, (viii) restricted payments, (ix) prepayment of subordinated and junior lien indebtedness, (x) restrictions in agreements on dividends, intercompany loans and granting liens on the collateral, (xi) loans and investments, (xii) sale and leaseback transactions, (xiii) changes in organizational documents and fiscal year and (xiv) transactions with respect to bonding subsidiaries. The New Term Loan Debt Facility does not contain any financial maintenance covenant. The New Term Loan Debt Facility contains customary events of default, subject to customary thresholds and exceptions, including, among other things, (i) nonpayment of principal and nonpayment of interest and fees, (ii) a material inaccuracy of a representation or warranty at the time made, (iii) a failure to comply with any covenant, subject to customary grace periods in the case of certain affirmative covenants, (iv) cross-events of default to indebtedness of at least $50 million, (v) cross-events of default to surety, reclamation or similar bonds securing obligations with an aggregate face amount of at least $50 million, (vi) uninsured judgments in excess of $50 million, (vii) any loan document shall cease to be a legal, valid and binding agreement, (viii) uninsured losses or proceedings against assets with a value in excess of $50 million, (ix) certain ERISA events, (x) a change of control or (xi) bankruptcy or insolvency proceedings relating to the Company or any material subsidiary of the Company. On the effective date of the New Term Loan Debt Facility, all outstanding obligations under the Company’s previously existing term loan credit agreement, dated as of October 5, 2016, among the Company, as borrower, the lender party thereto and Wilmington Trust, National Association, as administrative agent and collateral agent (the “Previous First Lien Debt Facility”), other than indemnification and other contingent obligations, were paid in cash in full and the related transaction documents were terminated (other than with respect to certain provisions that customarily survive termination); there was no gain or loss recognized on the extinguishment of the previously existing term loan credit agreement. All liens on property of the Company and the guarantors thereunder arising out of or related to the Previous First Lien Debt Facility were terminated. First Amendment to Term Loan Facility On September 25, 2017, the Company entered into the First Amendment (the “Amendment”) to its Credit Agreement, dated as of March 7, 2017, among Arch Coal as borrower, the lenders from time to time party thereto, and Credit Suisse AG, Cayman Islands Branch, as administrative agent and collateral agent. The Amendment reduces the interest rate on the $300 million term loan facility to, at the option of Arch Coal, either (i) the London interbank offered rate (“LIBOR”) plus an applicable margin of 3.25%, subject to a 1.00% LIBOR floor, or (ii) a base rate plus an applicable margin of 2.25%. The Amendment also resets the 1.00% call premium to apply to repricing events that occur on or prior to March 26, 2018. Inventory-Based Revolving Credit Facility On April 27, 2017, the Company and certain subsidiaries of Arch Coal entered into a new senior secured inventory-based revolving credit facility in an aggregate principal amount of $40 million (the “New Inventory Facility”) with Regions Bank (“Regions”) as administrative agent and collateral agent (in such capacities, the “Agent”), as lender and swingline lender (in such capacities, the “Lender”) and as letter of credit issuer. Availability under the New Inventory Facility is subject to a borrowing base consisting of (i) 85% of the net orderly liquidation value of eligible coal inventory, (ii) the lesser of (x) 85% of the net orderly liquidation value of eligible parts and supplies inventory and (y) 35% of the amount determined pursuant to clause (i), and (iii) 100% of Arch Coal’s Eligible Cash (defined in the New Inventory Facility), subject to reduction for reserves imposed by Regions. The commitments under the New Inventory Facility will terminate on the date that is the earliest to occur of (i) the third anniversary of the Inventory Facility Closing Date, (ii) the date, if any, that is 364 days following the first day that Liquidity (defined in the New Inventory Facility and consistent with the definition in the Extended Securitization Facility (as defined below)) is less than $250 million for a period of 60 consecutive days and (iii) the date, if any, that is 60 days following the maturity, termination or repayment in full of the Extended Securitization Facility. Revolving loan borrowings under the New Inventory Facility bear interest at a per annum rate equal to, at the option of Arch Coal, either at the base rate or the London interbank offered rate plus, in each case, a margin ranging from 2.25% to 2.50% (in the case of LIBOR loans) and 1.25% to 1.50% (in the case of base rate loans) determined using a Liquidity-based grid. Letters of credit under the New Inventory Facility are subject to a fee in an amount equal to the applicable margin for LIBOR loans, plus customary fronting and issuance fees. All existing and future direct and indirect domestic subsidiaries of Arch Coal, subject to customary exceptions, will either constitute co-borrowers under or guarantors of the New Inventory Facility (collectively with Arch Coal, the “Loan Parties”). The New Inventory Facility is secured by first priority security interests in the ABL Priority Collateral (defined in the New Inventory Facility) of the Loan Parties and second priority security interests in substantially all other assets of the Loan Parties, subject to customary exceptions (including an exception for the collateral that secures the Extended Securitization Facility). Arch Coal has the right to prepay borrowings under the New Inventory Facility at any time and from time to time in whole or in part without premium or penalty, upon written notice, except that any prepayment of such borrowings that bear interest at the LIBOR rate other than at the end of the applicable interest periods therefore shall be made with reimbursement for any funding losses and redeployment costs of the Lender resulting therefrom. The New Inventory Facility is subject to certain usual and customary mandatory prepayment events, including non-ordinary course asset sales or dispositions, subject to customary thresholds, exceptions (including exceptions for required prepayments under Arch Coal’s term loan facility) and reinvestment rights. The New Inventory Facility contains certain customary affirmative and negative covenants; events of default, subject to customary thresholds and exceptions; and representations, including certain cash management and reporting requirements that are customary for asset-based credit facilities. The New Inventory Facility also includes a requirement to maintain Liquidity equal to or exceeding $175 million at all times. As of September 30, 2017, letters of credit totaling $28.9 million were outstanding under the facility with no additional availability for borrowings. Accounts Receivable Securitization Facility On April 27, 2017, the Company extended and amended its existing trade accounts receivable securitization facility provided to Arch Receivable Company, LLC, a special-purpose entity that is a wholly owned subsidiary of Arch Coal (“Arch Receivable”) (the “Extended Securitization Facility”), which supports the issuance of letters of credit and requests for cash advances. The amendment to the Extended Securitization Facility decreases the borrowing capacity from $200 million to $160 million and extends the maturity date to the date that is three years after the Securitization Facility Closing Date. Pursuant to the Extended Securitization Facility, Arch Receivable also agreed to a revised schedule of fees payable to the administrator and the providers of the Extended Securitization Facility. The Extended Securitization Facility will terminate at the earliest of (i) three years from the Securitization Facility Closing Date, (ii) if the Liquidity (defined in the Extended Securitization Facility and consistent with the definition in the New Inventory Facility) is less than $175 million for a period of 60 consecutive days, the date that is the 364th day after the first day of such 60 consecutive day period and (iii) the occurrence of certain predefined events substantially consistent with the existing transaction documents. Under the Extended Securitization Facility, Arch Receivable, Arch Coal and certain of Arch Coal’s subsidiaries party to the Extended Securitization Facility have granted to the administrator of the Extended Securitization Facility a first priority security interest in eligible trade accounts receivable generated by such parties from the sale of coal and all proceeds thereof. As of September 30, 2017, letters of credit totaling $89.3 million were outstanding under the facility which had a borrowing base of $102.3 million. As a result, there was no cash collateral required to be posted in the facility. Interest Rate Swaps During the second quarter of 2017, the Company entered into a series of interest rate swaps to fix a portion of the LIBOR interest rate within the term loan. The interest rate swaps qualify for cash flow hedge accounting treatment and as such, the change in the fair value of the interest rate swaps are recorded on the Company’s Condensed Consolidated Balance Sheet as an asset or liability with the effective portion of the gains or losses reported as a component of accumulated other comprehensive income and the ineffective portion reported in earnings. As interest payments are made on the term loan, amounts in accumulated other comprehensive income will be reclassified into earnings through interest expense to reflect a net interest on the term loan equal to the effective yield of the fixed rate of the swap plus 3.25% which is the spread on the revised LIBOR term loan. In the event that an interest rate swap is terminated prior to maturity, gains or losses in accumulated other comprehensive income will remain deferred and reclassified into earnings in the periods which the hedged forecasted transaction affects earnings. Below is a summary of the Company’s outstanding interest rate swap agreements designated as hedges as of September 30, 2017:
The fair value of the interest rate swaps at September 30, 2017 is an asset of $0.2 million which is recorded within Other noncurrent assets with the offset to accumulated other comprehensive income on the Company’s Condensed Consolidated Balance Sheet. The interest rate swaps are classified as level 2 within the fair value hierarchy. Financing Costs The Company paid financing costs of $10.0 million during the nine months ended September 30, 2017; $7.1 million of which related to the issuance of the New Term Loan Debt facility on March 7, 2017 as noted above. These issuance costs were capitalized during the first quarter and were being amortized using the effective interest method over the term of the facility. An additional $0.8 million was paid related to the Amendment to the term loan facility on September 25, 2017 as discussed above. The remaining $2.1 million is related to the inventory-based revolving credit facility and accounts receivable securitization facility. These issuance costs will be amortized on a straight-line basis over the term of the facility. During the nine months ended September 30, 2016, the Company paid $20.2 million primarily related to the Superpriority Secured Debtor-in-Possession Credit Agreement related to the Company’s bankruptcy filing. The Company incurred $2.4 million of legal and financial advisory fees associated with debt refinancing activities during the nine months ended September 30, 2017; $1.3 million relates to fees associated with the extinguishment of the “Previous First Lien Debt Facility” and the Amendment to the term loan facility dated September 25, 2017, while the remaining amount relates to financing fees incurred from initial efforts to replace the existing accounts receivable securitization facility. The Company also incurred $2.2 million in debt restructuring costs during the nine months ended September 30, 2016 related to debt restructuring activities prior to the Company’s Chapter 11 filing. Contractual Interest Expense During Bankruptcy Upon the filing of bankruptcy, the Company discontinued recording interest expense on unsecured debt that was classified as a liability subject to compromise. Contractual interest expense during the three and nine months ended September 30, 2016 was $101.5 million and $300.9 million, respectively. |
Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes A reconciliation of the statutory federal income tax provision (benefit) at the statutory rate to the actual provision for (benefit from) income taxes follows:
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements The hierarchy of fair value measurements assigns a level to fair value measurements based on the inputs used in the respective valuation techniques. The levels of the hierarchy, as defined below, give the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. · Level 1 is defined as observable inputs such as quoted prices in active markets for identical assets. Level 1 assets include available-for-sale equity securities, U.S. Treasury securities, and coal futures that are submitted for clearing on the New York Mercantile Exchange. · Level 2 is defined as observable inputs other than Level 1 prices. These include quoted prices for similar assets or liabilities in an active market, quoted prices for identical assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. The Company’s level 2 assets and liabilities include U.S. government agency securities, interest rate swaps and commodity contracts (coal and heating oil) with fair values derived from quoted prices in over-the-counter markets or from prices received from direct broker quotes. · Level 3 is defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. These include the Company’s commodity option contracts (coal, natural gas and heating oil) valued using modeling techniques, such as Black-Scholes, that require the use of inputs, particularly volatility, that are rarely observable. Changes in the unobservable inputs would not have a significant impact on the reported Level 3 fair values at September 30, 2017. The table below sets forth, by level, the Company’s financial assets and liabilities that are recorded at fair value in the accompanying condensed consolidated balance sheet:
The Company’s contracts with its counterparties allow for the settlement of contracts in an asset position with contracts in a liability position in the event of default or termination. For classification purposes, the Company records the net fair value of all the positions with these counterparties as a net asset or liability. Each level in the table above displays the underlying contracts according to their classification in the accompanying Condensed Consolidated Balance Sheet, based on this counterparty netting. The following table summarizes the change in the fair values of financial instruments categorized as Level 3.
Net unrealized gains of $0.7 million and net unrealized losses of $0.5 million were recognized in the Condensed Consolidated Statement of Operations within Other operating income, net during the three and nine months ended September 30, 2017 related to Level 3 financial instruments held on September 30, 2017. Fair Value of Long-Term Debt At September 30, 2017 and December 31, 2016, the fair value of the Company’s debt, including amounts classified as current, was $332.1 million and $362.9 million, respectively. Fair values are based upon observed prices in an active market, when available, or from valuation models using market information, which fall into Level 2 in the fair value hierarchy. |
Earnings (loss) per common share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings (loss) per common share | Earnings (loss) per Common Share The Company computes basic net income per share using the weighted average number of common shares outstanding during the period. Diluted net income per share is computed using the weighted average number of common shares and the effect of potentially dilutive securities outstanding during the period. Potentially dilutive securities may consist of warrants, restricted stock units or other contingently issuable shares. The dilutive effect of outstanding warrants, restricted stock units and other contingently issuable shares is reflected in diluted earnings per share by application of the treasury stock method. The following table provides the basis for basic and diluted earnings (loss) per share by reconciling the numerators and denominators of the computations:
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Workers' Compensation Expense |
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Workers' Compensation Expense | Workers Compensation Expense The Company is liable under the Federal Mine Safety and Health Act of 1969, as subsequently amended, to provide for pneumoconiosis (occupational disease) benefits to eligible employees, former employees and dependents. The Company currently provides for federal claims principally through a self-insurance program. The Company is also liable under various state workers’ compensation statutes for occupational disease benefits. The occupational disease benefit obligation represents the present value of the of the actuarially computed present and future liabilities for such benefits over the employees’ applicable years of service. In addition, the Company is liable for workers’ compensation benefits for traumatic injuries which are calculated using actuarially-based loss rates, loss development factors and discounted based on a risk free rate. Traumatic workers’ compensation claims are insured with varying retentions/deductibles, or through state-sponsored workers’ compensation programs. Workers’ compensation expense consists of the following components:
The curtailment reflected in three and nine months ended September 30, 2017 was related to the divestiture during the quarter and therefore was included in the line item, “Gain on sale of Lone Mountain Processing, Inc.,” within the Condensed Consolidated Statement of Operations. For additional information on the sale, please see Note 4, “Divestitures,” to the Condensed Consolidated Financial Statements. Additionally, due to the curtailment discussed above, the Company revalued the occupational disease liability which increased the liability by approximately $10.0 million with the offset to accumulated other comprehensive income. The discount rate used for the revaluation was 3.86%. |
Employee Benefit Plans |
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Employee Benefit Plans | Employee Benefit Plans The following table details the components of pension benefit costs (credits):
During the third quarter of 2017 the Company recorded a pension settlement related to its cash balance pension plan as the qualifying distributions from the plan exceeded the annual service and interest costs of the plan. Additionally, due to the pension settlement, the Company revalued the cash balance pension liability which reduced the liability by approximately $4.3 million with the offset to accumulated other comprehensive income. The discount rate used for the revaluation was 3.60%. The following table details the components of other postretirement benefit costs (credits):
The curtailment reflected in three and nine months ended September 30, 2017 was related to the divestiture during the quarter and therefore was included in the line item, “Gain on sale of Lone Mountain Processing, Inc.,” within the Condensed Consolidated Statement of Operations. For additional information on the sale, please see Note 4, “Divestitures,” to the Condensed Consolidated Financial Statements. Additionally, due to the curtailment discussed above, the Company revalued the postretirement health benefit liability which increased the liability by approximately $3.8 million with the offset to accumulated other comprehensive income. The discount rate used for the revaluation was 3.59%. |
Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The Company accrues for costs related to contingencies when a loss is probable and the amount is reasonably determinable. Disclosure of contingencies is included in the financial statements when it is at least reasonably possible that a material loss or an additional material loss in excess of amounts already accrued may be incurred. In addition, the Company is a party to numerous other claims and lawsuits with respect to various matters. As of September 30, 2017 and December 31, 2016, the Company had accrued $0.2 million and $2.2 million, respectively, for all legal matters, of which all amounts are classified as current. The ultimate resolution of any such legal matter could result in outcomes which may be materially different from amounts the Company has accrued for such matters. |
Segment Information |
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | 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 EBITDAR, 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 EBITDAR is not a measure of financial performance in accordance with generally accepted accounting principles, and items excluded from Adjusted EBITDAR are significant in understanding and assessing our financial condition. Therefore, Adjusted EBITDAR should not be considered in isolation, nor as an alternative to net income, income 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 EBITDAR 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 EBITDAR 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, Kentucky, and Virginia, and the Other Thermal segment containing the Company’s supplementary thermal operations in Colorado, Illinois, and West Virginia. Periods presented in this note have been recast for comparability. On September 14, 2017, the Company closed on its’ definitive agreement to sell Lone Mountain Processing LLC, an operating mine complex within the Company’s metallurgical coal segment. Through this transaction the Company divested all active operations in the states of Kentucky and Virginia. For further information on the divestiture, please see Note 4 to the Condensed Consolidated Financial Statements, “Divestitures.” Operating segment results for the Successor period, the three and nine months ended September 30, 2017, and the Predecessor period, the three and nine months ended September 30, 2016, are presented below. The Company measures its segments based on “adjusted earnings before interest, taxes, depreciation, depletion, amortization, accretion on asset retirements obligations, and reorganization items, net (Adjusted EBITDAR).” Adjusted EBITDAR does not reflect mine closure or impairment costs, since those are not reflected in the operating income reviewed by management. See Note 6, “Asset Impairment and Mine Closure Costs” to the Condensed Consolidated Financial Statements for discussion of these costs. 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.
A reconciliation of adjusted EBITDAR to consolidated income (loss) before income taxes follows:
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Subsequent Events |
9 Months Ended |
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Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On October 26, 2017, the board of directors of Arch Coal authorized an incremental $200 million increase to the share repurchase program bringing the total authorization to $500 million. The timing of any future share purchases, and the ultimate number of shares to be purchased, will depend on a number of factors, including business and market conditions, our future financial performance, and other capital priorities. The shares will be acquired in the open market or through private transactions in accordance with Securities and Exchange Commission requirements. As of September 30, 2017, we had repurchased 2,918,834 shares at an average share price of $74.59 per share for an aggregate purchase price of approximately $218 million since inception of the stock repurchase program. The Company had 21,934,787 common shares outstanding as of October 24, 2017. The purchases under the share repurchase program may be made in the open market or through privately negotiated transactions from time to time and in accordance with applicable laws, rules and regulations. Repurchases may also be made pursuant to a Rule 10b5-1 plan, which permits shares to be repurchased in accordance with pre-determined criteria when the Company might otherwise be prohibited from doing so under insider trading laws or because of self-imposed trading blackout periods. The share repurchase program may be amended, suspended or discontinued at any time and does not commit the Company to repurchase shares of its common stock. The actual number and value of the shares to be purchased will depend on the performance of the Company’s stock price and other market conditions. |
Basis of Presentation (Policies) |
9 Months Ended |
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Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial reporting and U.S. Securities and Exchange Commission regulations. In the opinion of management, all adjustments, consisting of normal, recurring accruals considered necessary for a fair presentation, have been included. Results of operations for the three and nine months ended September 30, 2017 are not necessarily indicative of results to be expected for the year ending December 31, 2017. These financial statements should be read in conjunction with the audited financial statements and related notes as of and for the year ended December 31, 2016 included in the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission. On January 11, 2016 (the “Petition Date”), Arch Coal and substantially all of its wholly owned domestic subsidiaries (the “Filing Subsidiaries” and, together with Arch Coal, the “Debtors”; the Debtors, solely following the effective date of the Plan, the “Reorganized Debtors”) filed voluntary petitions for reorganization (collectively, the “Bankruptcy Petitions”) under Chapter 11 of Title 11 of the U.S. Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Eastern District of Missouri (the “Court”). The Debtors’ Chapter 11 Cases (collectively, the “Chapter 11 Cases”) were jointly administered under the caption In re Arch Coal, Inc., et al. Case No. 16-40120 (lead case). During the Chapter 11 Cases, each Debtor operated its business as a “debtor in possession” under the jurisdiction of the Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Court. Upon emergence from bankruptcy on October 5, 2016, Arch Coal applied the provisions of fresh start accounting effective October 1, 2016 which resulted in Arch becoming a new entity for financial reporting purposes. Accordingly, the consolidated financial statements and accompanying footnotes on or after October 1, 2016 are not comparable to the consolidated financial statements prior to that date. References to “Successor” in the consolidated financial statements and footnotes are in reference to reporting dates on or after October 2, 2016; references to “Predecessor” in the consolidated financial statements and footnotes are in reference to reporting dates through October 1, 2016 which includes the impact of the Plan provisions and the application of fresh start accounting. |
Recently Adopted Accounting Guidance and Recent Accounting Guidance Issued Not Yet Effective | Recently Adopted Accounting Guidance In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Compensation – Stock Compensation (Topic 718) ("ASU 2016-09"). ASU 2016-09 identifies areas for simplification involving several aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. The Company adopted all provisions of this new accounting standard in the first quarter of 2017 and changed its forfeiture policy to recognize the impact of forfeitures when they occur from estimating expected forfeitures in determining stock-based compensation expense. There was no material impact to the Company's financial statements. Recent Accounting Guidance Issued Not Yet Effective In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers.” ASU 2014-09 is a comprehensive revenue recognition standard that will supersede nearly all existing revenue recognition guidance under current U.S. GAAP and replace it with a principle based approach for determining revenue recognition. ASU 2014-09 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract. The ASU also will require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 is effective for interim and annual periods beginning after December 15, 2017. Early adoption is permitted only in annual reporting periods beginning after December 15, 2016, including interim periods therein. Entities will be able to transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. The Company’s primary source of revenue is from the sale of coal through both short-term and long-term contracts with utilities, industrial customers and steel producers whereby revenue is currently recognized when risk of loss has passed to the customer. Upon adoption of this new standard, the Company believes that the timing of revenue recognition related to its coal sales will remain consistent with its current practice. The Company is in the process of reviewing its portfolio of coal sales contracts and the various terms and clauses within each contract. Additionally, the Company is evaluating other revenue streams to determine the potential impact related to the adoption of the standard, as well as potential disclosures required by the standard. The Company will be adopting the standard under the modified retrospective approach. In March 2017, the FASB issued ASU 2017-07, Compensation-Retirement Benefits (Topic 715) Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. ASU 2017-07 changes the income statement presentation of defined benefit plan expense by requiring separation between operating expense (service cost component) and non-operating expense (all other components, including interest cost, amortization of prior service cost, curtailments and settlements, etc.). The operating expense component is reported with similar compensation costs while the non-operating components are reported in Nonoperating expense. In addition, only the service cost component is eligible for capitalization as part of an asset such as inventory or property, plant and equipment. The Company is currently assessing the impact that adopting this new accounting standard will have on its consolidated financial statements. The ASU is effective for public companies for fiscal years beginning after December 15, 2017, and interim periods therein; early adoption is permitted. |
Accumulated Other Comprehensive Income (Tables) |
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Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | The following items are included in accumulated other comprehensive income ("AOCI"):
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Schedule of Comprehensive Income Reclassifications | The following amounts were reclassified out of AOCI:
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Inventories (Tables) |
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories consist of the following:
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Investments in Available-for-Sale Securities (Tables) |
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Available-for-sale Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Available-for-sale Securities | The Company’s investments in available-for-sale marketable securities are as follows:
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Sales Contracts (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquired Sales Contracts [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Sales Contracts | The sales contracts reflected in the consolidated balance sheets are as follows:
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Derivatives (Tables) |
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Price Risk Derivatives | At September 30, 2017, the Company held derivatives for risk management purposes that are expected to settle in the following years:
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Disclosure of Fair Value of Derivatives | The fair value and location of derivatives reflected in the accompanying Condensed Consolidated Balance Sheets are as follows:
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Effects of Derivatives on Measures of Financial Performance | The effects of derivatives on measures of financial performance are as follows: Derivatives used in Cash Flow Hedging Relationships (in thousands) Three Months Ended September 30,
No ineffectiveness or amounts excluded from effectiveness testing relating to the Company’s cash flow hedging relationships were recognized in the results of operations in the three month periods ended September 30, 2017 and 2016. Derivatives Not Designated as Hedging Instruments (in thousands) Three Months Ended September 30,
____________________________________________________________ Location in statement of operations: (1) — Revenues (2) — Cost of sales (3) — Change in fair value of coal derivatives and coal trading activities, net (4) — Other operating (income) expense, net Derivatives used in Cash Flow Hedging Relationships (in thousands) Nine Months Ended September 30,
No ineffectiveness or amounts excluded from effectiveness testing relating to the Company’s cash flow hedging relationships were recognized in the results of operations in the nine month periods ended September 30, 2017 and 2016. Derivatives Not Designated as Hedging Instruments (in thousands) Nine Months Ended September 30,
____________________________________________________________ Location in statement of operations: (1) — Revenues (2) — Cost of sales (3) — Change in fair value of coal derivatives and coal trading activities, net (4) — Other operating (income) expense, net |
Accrued Expenses and Other Current Liabilities (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Liabilities | Accrued expenses and other current liabilities consist of the following:
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Debt and Financing Arrangements (Tables) |
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt |
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Schedule of Interest Rate Derivatives | Below is a summary of the Company’s outstanding interest rate swap agreements designated as hedges as of September 30, 2017:
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Income Taxes (Tables) |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Income Tax Expense (Benefit) | A reconciliation of the statutory federal income tax provision (benefit) at the statutory rate to the actual provision for (benefit from) income taxes follows:
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Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Financial Assets and Liabilities Accounted for at Fair Value | The table below sets forth, by level, the Company’s financial assets and liabilities that are recorded at fair value in the accompanying condensed consolidated balance sheet:
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Summary of Change in the Fair Values of Financial Instruments Categorized as Level 3 | The following table summarizes the change in the fair values of financial instruments categorized as Level 3.
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Earnings (loss) per common share (Tables) |
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Weighted Average Number of Shares | The following table provides the basis for basic and diluted earnings (loss) per share by reconciling the numerators and denominators of the computations:
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Workers' Compensation Expense (Tables) |
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Compensation Related Costs [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Workers' compensation expense | Workers’ compensation expense consists of the following components:
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Employee Benefit Plans (Tables) |
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Pension and Other Postretirement Benefits Cost (Reversal of Cost) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension Benefit Costs | The following table details the components of other postretirement benefit costs (credits):
The following table details the components of pension benefit costs (credits):
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Segment Information (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Operating Segment Results | 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.
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Reconciliation Statement of Segment Income from Operations to Consolidated Income Before Income Taxes | A reconciliation of adjusted EBITDAR to consolidated income (loss) before income taxes follows:
|
Divestitures (Narrative) (Details) - Discontinued operations, disposed of by sale - Lone Mountain Processing LLC $ in Millions |
Sep. 14, 2017
USD ($)
company
|
---|---|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Number of mining companies | company | 2 |
Net cash received in sale | $ 8.3 |
Proceeds offset by disbursements | 1.3 |
Gain on sale of Lone Mountain Processing, Inc. | 21.6 |
Defined benefit pension plan | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Curtailments | 4.7 |
Postretirement medical claims | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Curtailments | $ 0.5 |
Reorganization items, net (Narrative) (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Predecessor | ||||
Fresh-Start Adjustment [Line Items] | ||||
Reorganization items, net | $ (20,904) | $ (46,050) | ||
Payments for reorganization items | $ 16,000 | 31,100 | ||
Professional fee expense | 62,700 | |||
Non-cash gains on rejected contracts | $ 16,600 | |||
Successor | ||||
Fresh-Start Adjustment [Line Items] | ||||
Reorganization items, net | $ (43) | $ (2,892) | ||
Payments for reorganization items | $ 200 | $ 4,800 |
Asset Impairments and Mine Closure Costs (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |
---|---|---|---|
Jun. 30, 2016 |
Mar. 31, 2016 |
Jun. 30, 2016 |
|
Restructuring Cost and Reserve [Line Items] | |||
Asset impairment and mine closure costs | $ 43.7 | $ 85.5 | |
Impairment charge on investment | 2.9 | ||
Curtailments | $ 3.6 | ||
Severance expense | 2.1 | ||
Royalty Agreements | |||
Restructuring Cost and Reserve [Line Items] | |||
Impairment charge | 3.4 | ||
Longview, Washington | |||
Restructuring Cost and Reserve [Line Items] | |||
Impairment charge on investment | $ 38.0 | ||
Kentucky | |||
Restructuring Cost and Reserve [Line Items] | |||
Severance expense | 5.1 | ||
Impaired coal reserves and surface land | $ 74.1 |
Inventories (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Coal | $ 48,753 | $ 37,268 |
Repair parts and supplies | 73,683 | 76,194 |
Inventories | 122,436 | 113,462 |
Allowance for slow-moving and obsolete inventories | $ (200) | $ 0 |
Investments in Available-for-Sale Securities (Narrative) (Details) - USD ($) $ in Millions |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Available-for-sale Securities [Abstract] | ||
Unrealized losses owned for less than 12 months | $ 82.2 | $ 47.6 |
Unrealized losses owned for greater than 12 months | $ 8.1 | $ 40.4 |
Sales Contracts (Narrative) (Details) $ in Millions |
Sep. 30, 2017
USD ($)
|
---|---|
Acquired Sales Contracts [Abstract] | |
2017 | $ 11.4 |
2018 | 10.7 |
2019 | (0.1) |
2020 | (0.1) |
2021 | $ (0.1) |
Derivatives (Schedule of Price Risk Derivatives) (Details) T in Thousands |
9 Months Ended |
---|---|
Sep. 30, 2017
T
| |
Coal sales | |
Derivative [Line Items] | |
Derivatives held (in tons) | 813 |
Coal purchases | |
Derivative [Line Items] | |
Derivatives held (in tons) | 437 |
2017 | Coal sales | |
Derivative [Line Items] | |
Derivatives held (in tons) | 267 |
2017 | Coal purchases | |
Derivative [Line Items] | |
Derivatives held (in tons) | 252 |
2018 | Coal sales | |
Derivative [Line Items] | |
Derivatives held (in tons) | 546 |
2018 | Coal purchases | |
Derivative [Line Items] | |
Derivatives held (in tons) | 185 |
Derivatives (Net Derivatives As Reflected On The Balance Sheets) (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Derivatives, Fair Value [Line Items] | ||
Net derivatives as classified in the balance sheet | $ (265) | $ 4,807 |
Accrued expenses and other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Net derivatives as classified in the balance sheet | (2,296) | (101) |
Heating oil and coal | Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Net derivatives as classified in the balance sheet | $ 2,031 | $ 4,908 |
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Payables and Accruals [Abstract] | ||
Payroll and employee benefits | $ 47,251 | $ 58,468 |
Taxes other than income taxes | 74,909 | 92,733 |
Interest | 156 | 8,032 |
Acquired sales contracts | 856 | 5,114 |
Workers’ compensation | 15,961 | 15,184 |
Asset retirement obligations | 16,760 | 19,515 |
Other | 9,046 | 6,194 |
Accrued expenses and other current liabilities | $ 164,939 | $ 205,240 |
Debt and Financing Arrangements (Long term Debt) (Details) - USD ($) |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Debt Instrument [Line Items] | ||
Other | $ 31,319,000 | $ 37,195,000 |
Debt issuance costs | (7,286,000) | 0 |
Total | 321,170,000 | 362,879,000 |
Less: current maturities of debt | 8,566,000 | 11,038,000 |
Long-term debt | 312,604,000 | 351,841,000 |
Term loan | Term loan due 2024 ($298.5 million face value) | ||
Debt Instrument [Line Items] | ||
Term loan | 297,137,000 | 0 |
Debt instrument, face amount | 298,500,000.0 | |
Term loan | Term loan due 2021 ($325.7 million face value) | ||
Debt Instrument [Line Items] | ||
Term loan | $ 0 | 325,684,000 |
Debt instrument, face amount | $ 325,700,000.0 |
Debt and Financing Arrangements (Interest rate derivatives) (Details) $ in Millions |
Sep. 30, 2017
USD ($)
|
---|---|
Interest rate swap, effective 2017 | |
Debt Instrument [Line Items] | |
Notional Amount | $ 250.0 |
Fixed Rate | 1.372% |
Interest rate swap, effective 2018 | |
Debt Instrument [Line Items] | |
Notional Amount | $ 250.0 |
Fixed Rate | 1.662% |
Interest rate swap, effective 2019 | |
Debt Instrument [Line Items] | |
Notional Amount | $ 200.0 |
Fixed Rate | 1.952% |
Interest rate swap, effective 2020 | |
Debt Instrument [Line Items] | |
Notional Amount | $ 100.0 |
Fixed Rate | 2.182% |
Income Taxes (Income Tax Expense (Benefit)) (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Successor | ||||
Income Tax Examination [Line Items] | ||||
Income tax provision (benefit) at statutory rate | $ 23,347 | $ 54,843 | ||
Percentage depletion allowance | (7,708) | (20,439) | ||
State taxes, net of effect of federal taxes | 728 | 1,619 | ||
Change in valuation allowance | (19,118) | (39,336) | ||
Other, net | 1,108 | 2,829 | ||
Income Tax Expense (Benefit) | $ (1,643) | $ (484) | ||
Predecessor | ||||
Income Tax Examination [Line Items] | ||||
Income tax provision (benefit) at statutory rate | $ (19,143) | $ (153,523) | ||
Percentage depletion allowance | (11,041) | (30,799) | ||
State taxes, net of effect of federal taxes | (2,195) | (9,256) | ||
Change in valuation allowance | 31,955 | 191,182 | ||
Other, net | (2,846) | (2,230) | ||
Income Tax Expense (Benefit) | $ (3,270) | $ (4,626) |
Fair Value Measurements (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |
---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2017 |
Dec. 31, 2016 |
|
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Fair value of senior notes and other long-term debt, including amounts classified as current | $ 332.1 | $ 332.1 | $ 362.9 |
Level 3 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Net unrealized gains (losses) related to level 3 financial instruments | $ 0.7 | $ (0.5) |
Fair Value Measurements (Summary Of Financial Assets And Liabilities Accounted For At Fair Value) (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Assets: | ||
Investments in marketable securities | $ 154,629 | $ 90,209 |
Derivatives | 2,268 | |
Total assets | 156,897 | |
Liabilities: | ||
Derivatives | 2,296 | $ 101 |
Level 1 | ||
Assets: | ||
Investments in marketable securities | 60,896 | |
Derivatives | 0 | |
Total assets | 60,896 | |
Liabilities: | ||
Derivatives | 2,305 | |
Level 2 | ||
Assets: | ||
Investments in marketable securities | 93,733 | |
Derivatives | 237 | |
Total assets | 93,970 | |
Liabilities: | ||
Derivatives | 34 | |
Level 3 | ||
Assets: | ||
Investments in marketable securities | 0 | |
Derivatives | 2,031 | |
Total assets | 2,031 | |
Liabilities: | ||
Derivatives | $ (43) |
Fair Value Measurements (Summary Of Change In The Fair Values Of Financial Instruments Categorized As Level 3) (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended |
---|---|---|
Sep. 30, 2017 |
Sep. 30, 2017 |
|
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance, beginning of period | $ 698 | $ 4,537 |
Realized and unrealized gains recognized in earnings, net | 644 | (4,756) |
Purchases | 891 | 3,444 |
Issuances | (16) | (515) |
Settlements | (143) | (636) |
Ending balance | $ 2,074 | $ 2,074 |
Earnings (loss) per common share (Weighted-Average Number of Shares) (Details) - shares shares in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Successor | ||||
Weighted average shares outstanding: | ||||
Basic weighted average shares outstanding (shares) | 23,580 | 24,416 | ||
Effect of dilutive securities (shares) | 555 | 459 | ||
Diluted weighted average shares outstanding (shares) | 24,135 | 24,875 | ||
Predecessor | ||||
Weighted average shares outstanding: | ||||
Basic weighted average shares outstanding (shares) | 21,293 | 21,293 | ||
Effect of dilutive securities (shares) | 0 | 0 | ||
Diluted weighted average shares outstanding (shares) | 21,293 | 21,293 |
Employee Benefit Plans (Narrative) (Details) $ in Millions |
9 Months Ended |
---|---|
Sep. 30, 2017
USD ($)
| |
Defined benefit pension plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Cash balance pension revaluation adjustment | $ 4.3 |
Revaluation discount rate | 3.60% |
Other Comprehensive Income (Loss) | |
Defined Benefit Plan Disclosure [Line Items] | |
Benefit plan revaluation adjustment | $ (3.8) |
Revaluation adjustment discount rate | 3.59% |
Commitments and Contingencies (Narrative) (Details) - USD ($) $ in Millions |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Commitments and Contingencies Disclosure [Abstract] | ||
Amount accrued | $ 0.2 | $ 2.2 |
Subsequent Events (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions |
9 Months Ended | ||
---|---|---|---|
Sep. 30, 2017 |
Oct. 24, 2017 |
May 26, 2017 |
|
Subsequent Event [Line Items] | |||
Share repurchase program, increase in authorized amount | $ 200 | ||
Share repurchase program, authorized amount | $ 500 | ||
Shares repurchased | 2,918,834 | ||
Average price per share of repurchased shares (in USD per share) | $ 74.59 | ||
Value of repurchased shares | $ 218 | ||
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Common stock, shares outstanding | 21,934,787 |
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