Segment Information

The Company’s reportable business segments are based on two distinct lines of business, metallurgical coal and thermal coal, 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 5 to the Consolidated Financial Statements, “Divestitures.”

Operating segment results for the year ended December 31, 2017, the Successor period October 2 through December 31, 2016 and the Predecessor periods January 1 through October 1, 2016 and the year ended December 31, 2015 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, “Impairment Charges and Mine Closure Costs” 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.



(In thousands)		PRB		MET		Other Thermal		Corporate, Other and Eliminations			Consolidated
Successor Year Ended	December 31, 2017
Revenues		$	1,024,197	$	887,839	$	396,504	$	16,083		$2,324,623
Adjusted EBITDAR		158,882		243,616		102,006		(86,747		)	417,757
Depreciation, depletion and amortization		36,349		70,896		13,588		1,631			122,464
Accretion on asset retirement obligation		20,160		2,000		2,161		5,888			30,209
Total Assets		390,665		548,476		134,397		906,094			1,979,632
Capital expenditures		6,212		32,678		11,901		8,414			59,205
Successor Period	October 2 through December 31, 2016
Revenues		$	275,703	$	200,377	$	97,382	$	2,226		$575,688
Adjusted EBITDAR		55,765		30,819		31,159		(23,246		)	94,497
Depreciation, depletion and amortization		9,949		18,287		3,911		457			32,604
Accretion on asset retirement obligation		5,049		528		540		1,517			7,634
Total assets		446,775		576,793		129,602		983,427			2,136,597
Capital expenditures		934		13,329		684		267			15,214
Predecessor Period	January 1 through October 1, 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
Total assets		456,711		619,154		131,173		916,791			2,123,829
Capital expenditures		612		17,296		3,895		60,631			82,434
Predecessor Year Ended	December 31, 2015
Revenues		$	1,448,440	$	637,941	$	428,809	$	58,070		$	2,573,260
Adjusted EBITDAR		281,039		70,450		42,734		(110,426		)	283,797
Depreciation, depletion and amortization		176,257		133,463		47,786		21,839			379,345
Accretion on asset retirement obligation		22,156		2,267		2,658		6,599			33,680
Total assets		1,648,916		772,439		366,610		2,253,916			5,041,881
Capital expenditures		21,228		24,787		11,277		61,732			119,024

A reconciliation of segment Adjusted EBITDAR to consolidated income (loss) from continuing operations before income taxes follows:



	Successor					Predecessor
(In thousands)	Year Ended December 31, 2017			October 2 through December 31, 2016		January 1 through October 1, 2016			Year Ended December 31, 2015

Income (loss) before income taxes	$	203,195		$	34,605	$	1,237,455		$	(3,286,522	)
Interest expense, net	24,256			10,754		133,235			393,549
Depreciation, depletion and amortization	122,464			32,604		191,581			379,345
Accretion on asset retirement obligations	30,209			7,634		24,321			33,680
Amortization of sales contracts, net	53,985			796		(728		)	(8,811		)
Asset impairment and mine closure costs	—			—		129,267			2,628,303
Losses from disposed operations resulting from Patriot Coal bankruptcy	—			—		—			116,343
Gain on sale of Lone Mountain Processing, Inc.	(21,297		)	—		—			—
Net loss resulting from early retirement of debt and debt restructuring	2,547			—		2,213			27,910
Reorganization items, net	2,398			759		(1,630,041		)	—
Fresh start coal inventory fair value adjustment	—			7,345		—			—
Adjusted EBITDAR	$	417,757		$	94,497	$	87,303		$	283,797