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 ý | Accelerated filer o | |
Non-accelerated filer o | Smaller reporting company o | |
Emerging growth company o |
Page | ||
2 |
Arch Coal, Inc. and Subsidiaries Condensed Consolidated Income Statements (in thousands, except per share data) | |||||||
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
(Unaudited) | |||||||
Revenues | $ | 555,183 | $ | 575,295 | |||
Costs, expenses and other operating | |||||||
Cost of sales (exclusive of items shown separately below) | 438,471 | 454,780 | |||||
Depreciation, depletion and amortization | 25,273 | 29,703 | |||||
Accretion on asset retirement obligations | 5,137 | 6,992 | |||||
Amortization of sales contracts, net | 65 | 3,051 | |||||
Change in fair value of coal derivatives and coal trading activities, net | (12,981 | ) | (3,414 | ) | |||
Selling, general and administrative expenses | 24,089 | 25,948 | |||||
Other operating income, net | (1,650 | ) | (6,932 | ) | |||
478,404 | 510,128 | ||||||
Income from operations | 76,779 | 65,167 | |||||
Interest expense, net | |||||||
Interest expense | (4,432 | ) | (5,395 | ) | |||
Interest and investment income | 2,143 | 1,273 | |||||
(2,289 | ) | (4,122 | ) | ||||
Income before nonoperating expenses | 74,490 | 61,045 | |||||
Nonoperating expenses | |||||||
Non-service related pension and postretirement benefit costs | (1,766 | ) | (1,303 | ) | |||
Reorganization items, net | 87 | (301 | ) | ||||
(1,679 | ) | (1,604 | ) | ||||
Income before income taxes | 72,811 | 59,441 | |||||
Provision for (benefit from) income taxes | 70 | (544 | ) | ||||
Net income | $ | 72,741 | $ | 59,985 | |||
Net income per common share | |||||||
Basic earnings per common share | $ | 4.16 | $ | 2.87 | |||
Diluted earnings per common share | $ | 3.91 | $ | 2.74 | |||
Weighted average shares outstanding | |||||||
Basic weighted average shares outstanding | 17,494 | 20,901 | |||||
Diluted weighted average shares outstanding | 18,599 | 21,875 | |||||
Dividends declared per common share | $ | 0.45 | $ | 0.40 |
3 |
Three Months Ended March 31, | ||||||||
2019 | 2018 | |||||||
(Unaudited) | ||||||||
Net income | $ | 72,741 | $ | 59,985 | ||||
Derivative instruments | ||||||||
Comprehensive income (loss) before tax | 2,717 | 6,557 | ||||||
Income tax benefit (provision) | — | — | ||||||
2,717 | 6,557 | |||||||
Pension, postretirement and other post-employment benefits | ||||||||
Comprehensive income (loss) before tax | — | — | ||||||
Income tax benefit (provision) | — | — | ||||||
— | — | |||||||
Available-for-sale securities | ||||||||
Comprehensive income (loss) before tax | 377 | (658 | ) | |||||
Income tax benefit (provision) | — | — | ||||||
377 | (658 | ) | ||||||
Total other comprehensive income (loss) | 3,094 | 5,899 | ||||||
Total comprehensive income | $ | 75,835 | $ | 65,884 |
4 |
March 31, | December 31, | ||||||
2019 | 2018 | ||||||
(Unaudited) | |||||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 218,750 | $ | 264,937 | |||
Short term investments | 164,664 | 162,797 | |||||
Trade accounts receivable | 195,095 | 200,904 | |||||
Other receivables | 44,528 | 48,926 | |||||
Inventories | 145,607 | 125,470 | |||||
Other current assets | 64,192 | 75,749 | |||||
Total current assets | 832,836 | 878,783 | |||||
Property, plant and equipment, net | 848,749 | 834,828 | |||||
Other assets | |||||||
Equity investments | 105,419 | 104,676 | |||||
Other noncurrent assets | 76,197 | 68,773 | |||||
Total other assets | 181,616 | 173,449 | |||||
Total assets | $ | 1,863,201 | $ | 1,887,060 | |||
Liabilities and Stockholders' Equity | |||||||
Current Liabilities | |||||||
Accounts payable | $ | 138,935 | $ | 128,024 | |||
Accrued expenses and other current liabilities | 143,586 | 183,514 | |||||
Current maturities of debt | 15,210 | 17,797 | |||||
Total current liabilities | 297,731 | 329,335 | |||||
Long-term debt | 297,733 | 300,186 | |||||
Asset retirement obligations | 233,614 | 230,304 | |||||
Accrued pension benefits | 15,452 | 16,147 | |||||
Accrued postretirement benefits other than pension | 81,296 | 83,163 | |||||
Accrued workers’ compensation | 168,851 | 174,303 | |||||
Other noncurrent liabilities | 68,577 | 48,801 | |||||
Total liabilities | 1,163,254 | 1,182,239 | |||||
Stockholders' equity | |||||||
Common stock, $0.01 par value, authorized 300,000 shares, issued 25,047 shares at March 31, 2019 and December 31, 2018, respectively | 250 | 250 | |||||
Paid-in capital | 723,143 | 717,492 | |||||
Retained earnings | 592,296 | 527,666 | |||||
Treasury stock, 8,088 shares and 7,216 shares at March 31, 2019 and December 31, 2018, respectively, at cost | (662,132 | ) | (583,883 | ) | |||
Accumulated other comprehensive income | 46,390 | 43,296 | |||||
Total stockholders’ equity | 699,947 | 704,821 | |||||
Total liabilities and stockholders’ equity | $ | 1,863,201 | $ | 1,887,060 |
5 |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
(Unaudited) | |||||||
Operating activities | |||||||
Net income | $ | 72,741 | $ | 59,985 | |||
Adjustments to reconcile to cash provided by operating activities: | |||||||
Depreciation, depletion and amortization | 25,273 | 29,703 | |||||
Accretion on asset retirement obligations | 5,137 | 6,992 | |||||
Amortization of sales contracts, net | 65 | 3,051 | |||||
Deferred income taxes | — | 12,127 | |||||
Employee stock-based compensation expense | 5,651 | 3,845 | |||||
(Gains) losses on disposals and divestitures, net | (475 | ) | 134 | ||||
Amortization relating to financing activities | 907 | 1,080 | |||||
Changes in: | |||||||
Receivables | 7,410 | (28,728 | ) | ||||
Inventories | (20,137 | ) | (14,871 | ) | |||
Accounts payable, accrued expenses and other current liabilities | (17,861 | ) | (26,052 | ) | |||
Income taxes, net | 76 | 11,596 | |||||
Other | 6,197 | 8,005 | |||||
Cash provided by operating activities | 84,984 | 66,867 | |||||
Investing activities | |||||||
Capital expenditures | (39,147 | ) | (9,453 | ) | |||
Minimum royalty payments | (63 | ) | (62 | ) | |||
Proceeds from disposals and divestitures | 608 | 54 | |||||
Purchases of short term investments | (27,902 | ) | (38,458 | ) | |||
Proceeds from sales of short term investments | 26,500 | 49,400 | |||||
Investments in and advances to affiliates, net | (2,196 | ) | — | ||||
Cash provided by (used in) investing activities | (42,200 | ) | 1,481 | ||||
Financing activities | |||||||
Payments on term loan due 2024 | (750 | ) | (750 | ) | |||
Net payments on other debt | (4,633 | ) | (3,431 | ) | |||
Dividends paid | (7,839 | ) | (8,335 | ) | |||
Purchases of treasury stock | (75,749 | ) | (38,186 | ) | |||
Other | — | 10 | |||||
Cash used in financing activities | (88,971 | ) | (50,692 | ) | |||
Increase (decrease) in cash and cash equivalents, including restricted cash | (46,187 | ) | 17,656 | ||||
Cash and cash equivalents, including restricted cash, beginning of period | 264,937 | 273,602 | |||||
Cash and cash equivalents, including restricted cash, end of period | $ | 218,750 | $ | 291,258 | |||
Cash and cash equivalents, including restricted cash, end of period | |||||||
Cash and cash equivalents | $ | 218,750 | $ | 288,332 | |||
Restricted cash | — | 2,926 | |||||
$ | 218,750 | $ | 291,258 | ||||
6 |
Treasury | Accumulated Other | ||||||||||||||||||||||
Common | Paid-In | Retained | Stock at | Comprehensive | |||||||||||||||||||
Stock | Capital | Earnings | Cost | Income | Total | ||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Balances, January 1, 2019 | $ | 250 | $ | 717,492 | $ | 527,666 | $ | (583,883 | ) | $ | 43,296 | $ | 704,821 | ||||||||||
Dividends on common shares ($0.45/share) | — | — | (8,111 | ) | — | — | $ | (8,111 | ) | ||||||||||||||
Total comprehensive income | — | — | 72,741 | — | 3,094 | 75,835 | |||||||||||||||||
Employee stock-based compensation | — | 5,651 | — | — | — | 5,651 | |||||||||||||||||
Purchase of 872,317 shares of common stock under share repurchase program | — | — | — | (78,249 | ) | — | (78,249 | ) | |||||||||||||||
Balances at March 31, 2019 | $ | 250 | $ | 723,143 | $ | 592,296 | $ | (662,132 | ) | $ | 46,390 | $ | 699,947 | ||||||||||
Balances, January 1, 2018 | $ | 250 | $ | 700,125 | $ | 247,232 | $ | (302,109 | ) | $ | 20,367 | $ | 665,865 | ||||||||||
Dividends on common shares ($0.40/share) | — | — | (8,553 | ) | — | — | $ | (8,553 | ) | ||||||||||||||
Total comprehensive income | — | — | 59,985 | — | 5,899 | 65,884 | |||||||||||||||||
Employee stock-based compensation | — | 3,845 | — | — | — | 3,845 | |||||||||||||||||
Purchase of 407,091 shares of common stock under share repurchase program | — | — | — | (38,589 | ) | — | (38,589 | ) | |||||||||||||||
Warrants exercised | — | 10 | — | — | $ | — | 10 | ||||||||||||||||
Balances at March 31, 2018 | $ | 250 | $ | 703,980 | $ | 298,664 | $ | (340,698 | ) | $ | 26,266 | $ | 688,462 |
7 |
8 |
Pension, | |||||||||||||||
Postretirement | |||||||||||||||
and Other | Accumulated | ||||||||||||||
Post- | Other | ||||||||||||||
Derivative | Employment | Available-for- | Comprehensive | ||||||||||||
Instruments | Benefits | Sale Securities | Income | ||||||||||||
(In thousands) | |||||||||||||||
Balance at December 31, 2018 | $ | 3,328 | $ | 40,311 | $ | (343 | ) | $ | 43,296 | ||||||
Unrealized gains | 3,593 | — | 377 | 3,970 | |||||||||||
Amounts reclassified from AOCI | (876 | ) | — | — | (876 | ) | |||||||||
Balance at March 31, 2019 | $ | 6,045 | $ | 40,311 | $ | 34 | $ | 46,390 |
Three Months Ended March 31, | ||||||||||
Details About AOCI Components | 2019 | 2018 | Line Item in the Condensed Consolidated Statement of Operations | |||||||
(In thousands) | ||||||||||
Coal hedges | $ | 361 | $ | — | Revenues | |||||
Interest rate hedges | 515 | 140 | Interest expense | |||||||
— | — | Provision for (benefit from) income taxes | ||||||||
$ | 876 | $ | 140 | Net of tax | ||||||
Available-for-sale securities | $ | — | $ | — | Interest and investment income | |||||
— | — | Provision for (benefit from) income taxes | ||||||||
$ | — | $ | — | Net of tax | ||||||
9 |
March 31, | December 31, | |||||||
2019 | 2018 | |||||||
(In thousands) | ||||||||
Coal | $ | 57,147 | $ | 40,982 | ||||
Repair parts and supplies | 88,460 | 84,488 | ||||||
$ | 145,607 | $ | 125,470 |
March 31, 2019 | |||||||||||||||||||||||
Balance Sheet | |||||||||||||||||||||||
Classification | |||||||||||||||||||||||
Gross Unrealized | Fair | Short-Term | Other | ||||||||||||||||||||
Cost Basis | Gains | Losses | Value | Investments | Assets | ||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Available-for-sale: | |||||||||||||||||||||||
U.S. government and agency securities | $ | 94,586 | $ | 58 | $ | (37 | ) | $ | 94,607 | $ | 94,607 | $ | — | ||||||||||
Corporate notes and bonds | 70,044 | 98 | (85 | ) | 70,057 | 70,057 | — | ||||||||||||||||
Total Investments | $ | 164,630 | $ | 156 | $ | (122 | ) | $ | 164,664 | $ | 164,664 | $ | — | ||||||||||
December 31, 2018 | |||||||||||||||||||||||
Balance Sheet | |||||||||||||||||||||||
Classification | |||||||||||||||||||||||
Gross Unrealized | Fair | Short-Term | Other | ||||||||||||||||||||
Cost Basis | Gains | Losses | Value | Investments | Assets | ||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Available-for-sale: | |||||||||||||||||||||||
U.S. government and agency securities | $ | 100,003 | $ | 11 | $ | (126 | ) | $ | 99,888 | $ | 99,888 | $ | — | ||||||||||
Corporate notes and bonds | 63,137 | 4 | (232 | ) | 62,909 | 62,909 | — | ||||||||||||||||
Total Investments | $ | 163,140 | $ | 15 | $ | (358 | ) | $ | 162,797 | $ | 162,797 | $ | — | ||||||||||
10 |
March 31, 2019 | December 31, 2018 | ||||||||||||||||||||||
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 | (97,051 | ) | (31,098 | ) | (96,812 | ) | (30,924 | ) | |||||||||||||||
Total | $ | 145 | $ | 644 | $ | (499 | ) | $ | 384 | $ | 818 | $ | (434 | ) | |||||||||
Balance Sheet classification: | |||||||||||||||||||||||
Other current | $ | 145 | $ | 425 | $ | 384 | $ | 570 | |||||||||||||||
Other noncurrent | $ | — | $ | 219 | $ | — | $ | 248 |
(Tons in thousands) | 2019 | 2020 | Total | ||||||
Coal sales | 2,196 | 344 | 2,540 | ||||||
Coal purchases | 1,131 | 93 | 1,224 |
11 |
March 31, 2019 | December 31, 2018 | |||||||||||||||||||||||
Fair Value of Derivatives | Asset | Liability | Asset | Liability | ||||||||||||||||||||
(In thousands) | Derivative | Derivative | Derivative | Derivative | ||||||||||||||||||||
Derivatives Designated as Hedging Instruments | ||||||||||||||||||||||||
Coal | $ | 5,461 | $ | (297 | ) | $ | 2,342 | $ | (805 | ) | ||||||||||||||
Derivatives Not Designated as Hedging Instruments | ||||||||||||||||||||||||
Heating oil -- diesel purchases | 1,734 | (228 | ) | 532 | — | |||||||||||||||||||
Coal -- held for trading purposes | 33,091 | (33,932 | ) | 10,329 | (10,701 | ) | ||||||||||||||||||
Coal -- risk management | 22,552 | (23,033 | ) | 5,672 | (19,579 | ) | ||||||||||||||||||
Natural gas | 19 | — | 4 | (4 | ) | |||||||||||||||||||
Total | $ | 57,396 | $ | (57,193 | ) | $ | 16,537 | $ | (30,284 | ) | ||||||||||||||
Total derivatives | $ | 62,857 | $ | (57,490 | ) | $ | 18,879 | $ | (31,089 | ) | ||||||||||||||
Effect of counterparty netting | (57,490 | ) | 57,490 | (17,801 | ) | 17,801 | ||||||||||||||||||
Net derivatives as classified in the balance sheets | $ | 5,367 | $ | — | $ | 5,367 | $ | 1,078 | $ | (13,288 | ) | $ | (12,210 | ) |
March 31, 2019 | December 31, 2018 | |||||||||
Net derivatives as reflected on the balance sheets (in thousands) | ||||||||||
Heating oil and coal | Other current assets | $ | 5,367 | $ | 1,078 | |||||
Coal | Accrued expenses and other current liabilities | — | (13,288 | ) | ||||||
$ | 5,367 | $ | (12,210 | ) |
12 |
Gain (Loss) Recognized in Other Comprehensive Income (Effective Portion) | Gains (Losses) Reclassified from Other Comprehensive Income into Income (Effective Portion) | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Coal sales | (1) | $ | 5,237 | $ | 5,231 | $ | 1,044 | $ | — | |||||||
Coal purchases | (2) | (566 | ) | (542 | ) | (683 | ) | — | ||||||||
Totals | $ | 4,671 | $ | 4,689 | $ | 361 | $ | — |
Gain (Loss) Recognized | ||||||||
2019 | 2018 | |||||||
Coal trading — realized and unrealized | (3) | $ | (383 | ) | $ | 558 | ||
Coal risk management — unrealized | (3) | 13,425 | 2,875 | |||||
Natural gas trading— realized and unrealized | (3) | (61 | ) | (19 | ) | |||
Change in fair value of coal derivatives and coal trading activities, net total | $ | 12,981 | $ | 3,414 | ||||
Coal risk management— realized | (4) | $ | (4,411 | ) | $ | (1,031 | ) | |
Heating oil — diesel purchases | (4) | $ | 637 | $ | 18 |
March 31, | December 31, | |||||||
2019 | 2018 | |||||||
(In thousands) | ||||||||
Payroll and employee benefits | $ | 35,520 | $ | 57,166 | ||||
Taxes other than income taxes | 70,894 | 75,017 | ||||||
Interest | 225 | 156 | ||||||
Acquired sales contracts | 425 | 570 | ||||||
Workers’ compensation | 18,187 | 20,044 | ||||||
Asset retirement obligations | 12,297 | 13,113 | ||||||
Other | 6,038 | 17,448 | ||||||
$ | 143,586 | $ | 183,514 |
13 |
March 31, | December 31, | |||||||
2019 | 2018 | |||||||
(In thousands) | ||||||||
Term loan due 2024 ($294.0 million face value) | $ | 292,924 | $ | 293,626 | ||||
Other | 25,849 | 30,449 | ||||||
Debt issuance costs | (5,830 | ) | (6,092 | ) | ||||
312,943 | 317,983 | |||||||
Less: current maturities of debt | 15,210 | 17,797 | ||||||
Long-term debt | $ | 297,733 | $ | 300,186 |
14 |
15 |
Notional Amount (in millions) | Effective Date | Fixed Rate | Receive Rate | Expiration Date |
$250.0 | June 29, 2018 | 1.662% | 1-month LIBOR | June 28, 2019 |
$250.0 | June 28, 2019 | 2.025% | 1-month LIBOR | June 30, 2020 |
$200.0 | June 30, 2020 | 2.249% | 1-month LIBOR | June 30, 2021 |
$100.0 | June 30, 2021 | 2.315% | 1-month LIBOR | June 30, 2023 |
16 |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
(In thousands) | |||||||
Income tax provision (benefit) at statutory rate | $ | 15,290 | $ | 12,483 | |||
Percentage depletion allowance | (4,307 | ) | (4,607 | ) | |||
State taxes, net of effect of federal taxes | 1,012 | 754 | |||||
Change in valuation allowance | (12,513 | ) | (10,639 | ) | |||
Current expense associated with uncertain tax positions | 593 | 1,389 | |||||
Other, net | (5 | ) | 76 | ||||
Provision for (benefit from) income taxes | $ | 70 | $ | (544 | ) |
March 31, 2019 | ||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||
(In thousands) | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in marketable securities | $ | 164,664 | $ | 94,607 | $ | 70,057 | $ | — | ||||||||
Derivatives | 6,249 | 3,063 | 2,335 | 851 | ||||||||||||
Total assets | $ | 170,913 | $ | 97,670 | $ | 72,392 | $ | 851 | ||||||||
Liabilities: | ||||||||||||||||
Derivatives | $ | — | $ | — | $ | — | $ | — |
17 |
Three Months Ended March 31, 2019 | ||||
(In thousands) | ||||
Balance, beginning of period | $ | 532 | ||
Realized and unrealized gains recognized in earnings, net | (144 | ) | ||
Purchases | 463 | |||
Issuances | — | |||
Settlements | — | |||
Ending balance | $ | 851 |
Three Months Ended March 31, | |||||
2019 | 2018 | ||||
(In thousands) | |||||
Weighted average shares outstanding: | |||||
Basic weighted average shares outstanding | 17,494 | 20,901 | |||
Effect of dilutive securities | 1,105 | 974 | |||
Diluted weighted average shares outstanding | 18,599 | 21,875 |
18 |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
(In thousands) | |||||||
Self-insured occupational disease benefits: | |||||||
Service cost | $ | 1,669 | $ | 1,860 | |||
Interest cost(1) | 1,354 | 1,195 | |||||
Total occupational disease | $ | 3,023 | $ | 3,055 | |||
Traumatic injury claims and assessments | 2,144 | 3,011 | |||||
Total workers’ compensation expense | $ | 5,167 | $ | 6,066 |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
(In thousands) | |||||||
Interest cost(1) | $ | 2,258 | $ | 2,271 | |||
Expected return on plan assets(1) | (2,723 | ) | (3,081 | ) | |||
Net benefit credit | $ | (465 | ) | $ | (810 | ) |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
(In thousands) | |||||||
Service cost | $ | 120 | $ | 140 | |||
Interest cost(1) | 876 | 918 | |||||
Net benefit cost | $ | 996 | $ | 1,058 |
19 |
20 |
PRB | MET | Other Thermal | Corporate, Other and Eliminations | Consolidated | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Three Months Ended March 31, 2019 | ||||||||||||||||||||
Revenues | $ | 212,729 | $ | 253,262 | $ | 85,978 | $ | 3,214 | $ | 555,183 | ||||||||||
Adjusted EBITDA | 20,583 | 91,534 | 6,119 | (10,982 | ) | 107,254 | ||||||||||||||
Depreciation, depletion and amortization | 4,865 | 16,382 | 3,435 | 591 | 25,273 | |||||||||||||||
Accretion on asset retirement obligation | 3,135 | 531 | 603 | 868 | 5,137 | |||||||||||||||
Total assets | 230,329 | 568,367 | 139,306 | 925,199 | 1,863,201 | |||||||||||||||
Capital expenditures | 414 | 31,224 | 6,250 | 1,259 | 39,147 | |||||||||||||||
Three Months Ended March 31, 2018 | ||||||||||||||||||||
Revenues | $ | 245,428 | $ | 238,347 | $ | 91,520 | $ | — | $ | 575,295 | ||||||||||
Adjusted EBITDA | 27,502 | 83,742 | 15,669 | (22,000 | ) | 104,913 | ||||||||||||||
Depreciation, depletion and amortization | 8,423 | 16,986 | 3,835 | 459 | 29,703 | |||||||||||||||
Accretion on asset retirement obligation | 4,885 | 469 | 565 | 1,073 | 6,992 | |||||||||||||||
Total assets | 383,823 | 548,804 | 130,132 | 913,919 | 1,976,678 | |||||||||||||||
Capital expenditures | 698 | 5,829 | 1,206 | 1,720 | 9,453 |
21 |
Three Months Ended March 31, | ||||||||
2019 | 2018 | |||||||
(In thousands) | ||||||||
Net income | $ | 72,741 | $ | 59,985 | ||||
Provision for (benefit from) income taxes | 70 | (544 | ) | |||||
Interest expense, net | 2,289 | 4,122 | ||||||
Depreciation, depletion and amortization | 25,273 | 29,703 | ||||||
Accretion on asset retirement obligations | 5,137 | 6,992 | ||||||
Amortization of sales contracts, net | 65 | 3,051 | ||||||
Non-service related pension and postretirement benefit costs | 1,766 | 1,303 | ||||||
Reorganization items, net | (87 | ) | 301 | |||||
Adjusted EBITDA | $ | 107,254 | $ | 104,913 |
22 |
PRB | MET | Other Thermal | Corporate, Other and Eliminations | Consolidated | |||||||||||
(in thousands) | |||||||||||||||
Three Months Ended March 31, 2019 | |||||||||||||||
North America revenues | $ | 212,729 | $ | 44,666 | $ | 46,529 | $ | 3,214 | $ | 307,138 | |||||
Seaborne revenues | — | 208,596 | 39,449 | — | 248,045 | ||||||||||
Total revenues | $ | 212,729 | $ | 253,262 | $ | 85,978 | $ | 3,214 | $ | 555,183 | |||||
Three Months Ended March 31, 2018 | |||||||||||||||
North America revenues | $ | 244,360 | $ | 29,678 | $ | 43,667 | $ | — | $ | 317,705 | |||||
Seaborne revenues | 1,068 | 208,669 | 47,853 | — | 257,590 | ||||||||||
Total revenues | $ | 245,428 | $ | 238,347 | $ | 91,520 | $ | — | $ | 575,295 |
23 |
Three Months Ended March 31, 2019 | |||
(In thousands) | |||
Operating lease information: | |||
Operating lease cost | $ | 917 | |
Operating cash flows from operating leases | 871 | ||
Weighted average remaining lease term in years | 5.06 | ||
Weighted average discount rate | 5.6 | % |
Year | Amount | ||
(In thousands) | |||
2019 | $ | 2,412 | |
2020 | 2,456 | ||
2021 | 2,207 | ||
2022 | 2,203 | ||
2023 | 2,172 | ||
Thereafter | 7,504 | ||
Total minimum lease payments | $ | 18,954 | |
Less imputed interest | (3,601 | ) | |
Total operating lease liability | $ | 15,353 | |
As reflected on balance sheet: | |||
Accrued expenses and other current liabilities | $ | 2,353 | |
Other noncurrent liabilities | 13,000 | ||
Total operating lease liability | $ | 15,353 |
24 |
25 |
26 |
Three Months Ended March 31, | ||||||||||||
2019 | 2018 | (Decrease) / Increase | ||||||||||
(In thousands) | ||||||||||||
Coal sales | $ | 555,183 | $ | 575,295 | $ | (20,112 | ) | |||||
Tons sold | 20,725 | 23,664 | (2,939 | ) |
Three Months Ended March 31, | |||||||||||
2019 | 2018 | Increase (Decrease) in Net Income | |||||||||
(In thousands) | |||||||||||
Cost of sales (exclusive of items shown separately below) | $ | 438,471 | $ | 454,780 | $ | 16,309 | |||||
Depreciation, depletion and amortization | 25,273 | 29,703 | 4,430 | ||||||||
Accretion on asset retirement obligations | 5,137 | 6,992 | 1,855 | ||||||||
Amortization of sales contracts, net | 65 | 3,051 | 2,986 | ||||||||
Change in fair value of coal derivatives and coal trading activities, net | (12,981 | ) | (3,414 | ) | 9,567 | ||||||
Selling, general and administrative expenses | 24,089 | 25,948 | 1,859 | ||||||||
Other operating income, net | (1,650 | ) | (6,932 | ) | (5,282 | ) | |||||
Total costs, expenses and other | $ | 478,404 | $ | 510,128 | $ | 31,724 |
27 |
Three Months Ended March 31, | |||||||||||
2019 | 2018 | Increase (Decrease) in Net Income | |||||||||
(In thousands) | |||||||||||
Non-service related pension and postretirement benefit costs | $ | (1,766 | ) | $ | (1,303 | ) | $ | (463 | ) | ||
Reorganization items, net | 87 | (301 | ) | 388 | |||||||
Total nonoperating expense | $ | (1,679 | ) | $ | (1,604 | ) | $ | (75 | ) |
Three Months Ended March 31, | |||||||||||
2019 | 2018 | Increase (Decrease) in Net Income | |||||||||
(In thousands) | |||||||||||
Provision for (Benefit from) income taxes | $ | 70 | $ | (544 | ) | $ | (614 | ) |
28 |
Three Months Ended March 31, | |||||||||||
2019 | 2018 | Variance | |||||||||
Powder River Basin | |||||||||||
Tons sold (in thousands) | 17,141 | 19,744 | (2,603 | ) | |||||||
Coal sales per ton sold | $ | 12.18 | $ | 12.15 | $ | 0.03 | |||||
Cash cost per ton sold | $ | 10.98 | $ | 10.77 | $ | (0.21 | ) | ||||
Cash margin per ton sold | $ | 1.20 | $ | 1.38 | $ | (0.18 | ) | ||||
Adjusted EBITDA (in thousands) | $ | 20,583 | $ | 27,502 | $ | (6,919 | ) | ||||
Metallurgical | |||||||||||
Tons sold (in thousands) | 1,793 | 1,754 | 39 | ||||||||
Coal sales per ton sold | $ | 118.22 | $ | 115.97 | $ | 2.25 | |||||
Cash cost per ton sold | $ | 67.27 | $ | 68.33 | $ | 1.06 | |||||
Cash margin per ton sold | $ | 50.95 | $ | 47.64 | $ | 3.31 | |||||
Adjusted EBITDA (in thousands) | $ | 91,534 | $ | 83,742 | $ | 7,792 | |||||
Other Thermal | |||||||||||
Tons sold (in thousands) | 1,686 | 2,166 | (480 | ) | |||||||
Coal sales per ton sold | $ | 38.58 | $ | 35.59 | $ | 2.99 | |||||
Cash cost per ton sold | $ | 35.28 | $ | 28.53 | $ | (6.75 | ) | ||||
Cash margin per ton sold | $ | 3.30 | $ | 7.06 | $ | (3.76 | ) | ||||
Adjusted EBITDA (in thousands) | $ | 6,119 | $ | 15,669 | $ | (9,550 | ) |
29 |
30 |
Three Months Ended March 31, 2019 | Powder River Basin | Metallurgical | Other Thermal | Idle and Other | Consolidated | ||||||||||
(In thousands) | |||||||||||||||
GAAP Revenues in the consolidated statements of operations | $ | 212,729 | $ | 253,262 | $ | 85,978 | $ | 3,214 | $ | 555,183 | |||||
Less: Adjustments to reconcile to Non-GAAP Segment coal sales revenue | |||||||||||||||
Coal risk management derivative settlements classified in "other income" | — | — | 2,044 | — | 2,044 | ||||||||||
Coal sales revenues from idled or otherwise disposed operations and pass through agreements not included in segments | — | — | — | 3,214 | 3,214 | ||||||||||
Transportation costs | 4,006 | 41,298 | 18,882 | — | 64,186 | ||||||||||
Non-GAAP Segment coal sales revenues | $ | 208,723 | $ | 211,964 | $ | 65,052 | $ | — | $ | 485,739 | |||||
Tons sold | 17,141 | 1,793 | 1,686 | ||||||||||||
Coal sales per ton sold | $ | 12.18 | $ | 118.22 | $ | 38.58 | |||||||||
Three Months Ended March 31, 2018 | Powder River Basin | Metallurgical | Other Thermal | Idle and Other | Consolidated | ||||||||||
(In thousands) | |||||||||||||||
GAAP Revenues in the consolidated statements of operations | $ | 245,427 | $ | 238,348 | $ | 91,520 | $ | — | $ | 575,295 | |||||
Less: Adjustments to reconcile to Non-GAAP Segment coal sales revenue | |||||||||||||||
Coal risk management derivative settlements classified in "other income" | — | — | 1,031 | — | 1,031 | ||||||||||
Coal sales revenues from idled or otherwise disposed operations and pass through agreements not included in segments | — | — | — | — | — | ||||||||||
Transportation costs | 5,478 | 34,885 | 13,394 | — | 53,757 | ||||||||||
Non-GAAP Segment coal sales revenues | $ | 239,949 | $ | 203,463 | $ | 77,095 | $ | — | $ | 520,507 | |||||
Tons sold | 19,744 | 1,754 | 2,166 | ||||||||||||
Coal sales per ton sold | $ | 12.15 | $ | 115.97 | $ | 35.59 |
31 |
Three Months Ended March 31, 2019 | Powder River Basin | Metallurgical | Other Thermal | Idle and Other | Consolidated | ||||||||||
(In thousands) | |||||||||||||||
GAAP Cost of sales in the consolidated statements of operations | $ | 191,648 | $ | 161,911 | $ | 78,366 | $ | 6,546 | $ | 438,471 | |||||
Less: Adjustments to reconcile to Non-GAAP Segment cash cost of coal sales | |||||||||||||||
Diesel fuel risk management derivative settlements classified in "other income" | (638 | ) | — | — | — | (638 | ) | ||||||||
Transportation costs | 4,006 | 41,298 | 18,882 | — | 64,186 | ||||||||||
Cost of coal sales from idled or otherwise disposed operations and pass through agreements not included in segments | — | — | — | 4,239 | 4,239 | ||||||||||
Other (operating overhead, certain actuarial, etc.) | — | — | — | 2,307 | 2,307 | ||||||||||
Non-GAAP Segment cash cost of coal sales | 188,280 | 120,613 | 59,484 | — | 368,377 | ||||||||||
Tons sold | 17,141 | 1,793 | 1,686 | ||||||||||||
Cash Cost Per Ton Sold | $ | 10.98 | $ | 67.27 | $ | 35.28 | |||||||||
Three Months Ended March 31, 2018 | Powder River Basin | Metallurgical | Other Thermal | Idle and Other | Consolidated | ||||||||||
(In thousands) | |||||||||||||||
GAAP Cost of sales in the consolidated statements of operations | $ | 218,526 | $ | 154,763 | $ | 75,188 | $ | 6,303 | $ | 454,780 | |||||
Less: Adjustments to reconcile to Non-GAAP Segment cash cost of coal sales | |||||||||||||||
Diesel fuel risk management derivative settlements classified in "other income" | 439 | — | — | — | 439 | ||||||||||
Transportation costs | 5,478 | 34,885 | 13,394 | — | 53,757 | ||||||||||
Cost of coal sales from idled or otherwise disposed operations and pass through agreements not included in segments | — | — | — | 4,232 | 4,232 | ||||||||||
Other (operating overhead, certain actuarial, etc.) | — | — | — | 2,071 | 2,071 | ||||||||||
Non-GAAP Segment cash cost of coal sales | $ | 212,609 | $ | 119,878 | $ | 61,794 | $ | — | $ | 394,281 | |||||
Tons sold | 19,744 | 1,754 | 2,166 | ||||||||||||
Cash Cost Per Ton Sold | $ | 10.77 | $ | 68.33 | $ | 28.53 |
32 |
Three Months Ended March 31, | ||||||||
2019 | 2018 | |||||||
(In thousands) | ||||||||
Net income | $ | 72,741 | $ | 59,985 | ||||
Provision for (benefit from) income taxes | 70 | (544 | ) | |||||
Interest expense, net | 2,289 | 4,122 | ||||||
Depreciation, depletion and amortization | 25,273 | 29,703 | ||||||
Accretion on asset retirement obligations | 5,137 | 6,992 | ||||||
Amortization of sales contracts, net | 65 | 3,051 | ||||||
Non-service related pension and postretirement benefit costs | 1,766 | 1,303 | ||||||
Reorganization items, net | (87 | ) | 301 | |||||
Adjusted EBITDA | 107,254 | 104,913 | ||||||
EBITDA from idled or otherwise disposed operations | (906 | ) | 2,579 | |||||
Selling, general and administrative expenses | 24,089 | 25,948 | ||||||
Other | (12,201 | ) | (6,527 | ) | ||||
Segment Adjusted EBITDA from coal operations | $ | 118,236 | $ | 126,913 |
33 |
34 |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
(In thousands) | |||||||
Cash provided by (used in): | |||||||
Operating activities | $ | 84,984 | $ | 66,867 | |||
Investing activities | (42,200 | ) | 1,481 | ||||
Financing activities | (88,971 | ) | (50,692 | ) |
35 |
2019 | |||||||
Tons | $ per ton | ||||||
Metallurgical | (in millions) | ||||||
Committed, North America Priced Coking | 0.9 | $ | 123.94 | ||||
Committed, North America Unpriced Coking | 0.8 | — | |||||
Committed, Seaborne Priced Coking | 1.6 | 132.25 | |||||
Committed, Seaborne Unpriced Coking | 3.1 | ||||||
Committed, Priced Thermal | 0.9 | 32.97 | |||||
Committed, Unpriced Thermal | — | ||||||
Powder River Basin | |||||||
Committed, Priced | 67.3 | $ | 12.12 | ||||
Committed, Unpriced | 1.4 | ||||||
Other Thermal | |||||||
Committed, Priced | 6.8 | $ | 40.28 | ||||
Committed, Unpriced | 1.0 |
36 |
37 |
Date | Total Number Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plan (in thousands) (1) | ||||||
January 1 through January 31, 2019 | 185,416 | $ | 84.94 | 185,416 | $ | 450,368 | ||||
February 1 through February 28, 2019 | 226,500 | $ | 90.51 | 226,500 | $ | 429,867 | ||||
March 1 through March 31, 2019 | 460,401 | $ | 91.22 | 460,401 | $ | 387,868 | ||||
Total | 872,317 | $ | 89.70 | 872,317 |
38 |
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 |
39 |
10.12 | ||
10.13 | ||
10.14 | ||
10.15 | ||
10.16 | ||
10.17 | 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). | |
10.18 | ||
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 |
40 |
10.33 | ||
10.34* | ||
31.1 | ||
31.2 | ||
32.1 | ||
32.2 | ||
95 | ||
101 | Interactive Data File (Form 10-Q for the three months ended March 31, 2019 filed in XBRL). The financial information contained in the XBRL-related documents is “unaudited” and “unreviewed.” |
41 |
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) | |||
April 23, 2019 |
42 |
(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: April 23, 2019 |
(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: April 23, 2019 |
/s/ John W. Eaves | |
John W. Eaves | |
Chief Executive Officer, Director | |
Date: April 23, 2019 |
/s/ John T. Drexler | |
John T. Drexler | |
Senior Vice President and Chief Financial Officer | |
Date: April 23, 2019 |
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 | ||||||||||||
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 | — | — | — |
Vindex Energy / Frostburg Blend Yard / 18-00709 | — | — | — | — | — | — | — | No | No | — | — | — |
Beckley Pocahontas Mine / 46‑05252 | 14 | — | — | — | — | 98.0 | — | No | No | 7 | 13 | 10 |
Beckley Pocahontas Plant / 46‑09216 | — | — | — | — | — | 0.1 | — | 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 | — | — | — | — | — | 3.3 | — | No | No | — | — | — |
Eastern Birch River Mine / 46-07945 | — | — | — | — | — | — | — | No | No | — | — | — |
Sentinel Mine / 46‑04168 | 12 | — | — | — | — | 13.0 | — | No | No | — | — | — |
Sentinel Prep Plant / 46‑08777 | — | — | — | — | — | 1.0 | — | No | No | — | — | — |
Mingo Logan Mountaineer II / 46‑09029 | 24 | — | — | — | -— | 74.9 | — | No | No | 3 | 2 | 4 |
Mingo Logan Cardinal Prep Plant / 46‑09046 | — | — | — | — | — | 7.5 | — | No | No | — | — | — |
Mingo Logan Daniel Hollow / 46‑09047 | — | — | — | — | — | — | — | No | No | — | — | — |
Leer #1 Mine / 46‑09192 | 12 | — | — | — | — | 45.4 | — | No | No | 3 | 5 | 3 |
Arch of Wyoming Elk Mountain / 48‑01694 | — | — | — | — | — | — | — | No | No | — | — | — |
Black Thunder / 48‑00977 | — | — | — | — | — | 2.4 | — | No | No | — | — | — |
Coal Creek / 48‑01215 | 1 | — | — | — | — | — | — | No | No | — | — | — |
West Elk Mine / 05‑03672 | 12 | — | — | — | — | 15.4 | — | No | No | — | — | — |
Viper Mine / 11‑02664 | 5 | — | — | — | — | 16.3 | — | No | No | — | — | — |
Leer #1 Prep Plant / 46-09191 | — | — | — | — | — | 0.3 | — | 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 March 31, 2019. |
Mine or Operating Name/MSHA Identification Number | Contests of Citations, Orders (as of March 31, 2019) | Contests of Proposed Penalties (as of March 31, 2019) | Complaints for Compensation (as of March 31, 2019) | Complaints of Discharge, Discrimination or Interference (as of March 31, 2019) | Applications for Temporary Relief (as of March 31, 2019) | Appeals of Judges’ Decisions or Orders (as of March 31, 2019) |
Beckley Pocahontas Mine / 46-05252 | 6 | 4 | — | — | — | — |
Mingo Logan Mountaineer II / 46-09029 | — | 4 | — | — | — | — |
Leer #1 / 46‑09192 | — | 3 | — | — | — | — |
Document And Entity Information - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Apr. 19, 2019 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | ARCH COAL INC | |
Entity Central Index Key | 0001037676 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Common Stock, Shares Outstanding | 16,809,849 |
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | ||
Net income | $ 72,741 | $ 59,985 |
Derivative instruments | ||
Comprehensive income (loss) before tax | 2,717 | 6,557 |
Income tax benefit (provision) | 0 | 0 |
Other comprehensive income (loss), derivative instruments, net of tax | 2,717 | 6,557 |
Pension, postretirement and other post-employment benefits | ||
Comprehensive income (loss) before tax | 0 | 0 |
Income tax benefit (provision) | 0 | 0 |
Other comprehensive income (loss), pension, postretirement and other post-employment benefits, net of tax | 0 | 0 |
Available-for-sale securities | ||
Comprehensive income (loss) before tax | 377 | (658) |
Income tax benefit (provision) | 0 | 0 |
Other comprehensive income (loss), available-for-sale securities, net of tax | 377 | (658) |
Total other comprehensive income (loss) | 3,094 | 5,899 |
Total comprehensive income | $ 75,835 | $ 65,884 |
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares issued (in shares) | 25,047,000 | 25,047,000 |
Treasury stock, shares (in shares) | 8,088,000 | 7,216,000 |
Condensed Consolidated Statements of Stockholders' Equity (Deficit) (Parenthetical) - $ / shares shares in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Statement of Stockholders' Equity [Abstract] | ||
Dividends declared per common share (in dollars per share) | $ 0.45 | $ 0.40 |
Purchase of shares of common stock under share repurchase program (in shares) | 872,317 | 407,091 |
Basis of Presentation |
3 Months Ended |
---|---|
Mar. 31, 2019 | |
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. 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 months ended March 31, 2019 are not necessarily indicative of results to be expected for the year ending December 31, 2019. 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, 2018 included in the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission. |
Accounting Policies |
3 Months Ended |
---|---|
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Accounting Policies | Accounting Policies Recently Adopted Accounting Guidance In February 2016, the FASB established Topic 842, Leases, by issuing ASU No. 2016-02, “Leases” which requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. The ASU was subsequently amended by ASU 2018-01, “Land Easements Practical Expedient for Transition to Topic 842;” ASU 2018-10, “Codification Improvements to Topic 842, Leases;” and ASU 2018-11, “Targeted Improvements.” The new standard establishes a right-of-use (“ROU”) model that requires a lessee to recognize an ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. The standard also requires a lessee to recognize a single lease cost, calculated so that the cost of the lease is allocated over the term of the lease, on a generally straight line basis. Leases of mineral reserves and related land leases have been exempted from the standard. The Company adopted ASU 2016-02 effective January 1, 2019 and elected the option to not restate comparative periods in transition and also elected the “package of practical expedients” within the standard which permits the Company not to reassess its prior conclusions about lease identification, lease classification and initial direct costs. Additionally, the Company made an election to not separate lease and non-lease components for all leases, and will not use hindsight. Finally, the Company will continue its current policy for accounting for land easements as executory contracts. The adoption of the standard had no impact on the Company’s consolidated income statement or statement of cash flows. In April 2017, the FASB issued ASU No. 2017-08, “Receivables-Nonrefundable Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities.” The new guidance shortens the amortization period for the premium on certain purchased callable debt securities to the earliest call date. The new guidance does not change the accounting for purchased callable debt securities held at a discount. The Company adopted ASU 2017-08 effective January 1, 2019 with no impact on the Company’s financial statements. In August 2017, the FASB issued ASU No. 2017-12, “Targeted Improvements to Accounting for Hedging Activities.” The new guidance provides targeted improvements to the accounting for hedging activities to better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedging results. The Company adopted ASU 2017-12 effective January 1, 2019 with no impact on the Company’s financial statements. In February 2018, the FASB issued ASU 2018-02, “Income Statement-Reporting Comprehensive Income (Topic 220) Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” ASU 2018-02 provides an option to reclassify stranded tax effects within accumulated other comprehensive income to retained earnings due to the change in the U.S. federal tax rate in the Tax Cuts and Jobs Act of 2017. The Company adopted ASU 2018-02 effective January 1, 2019 with no impact on the Company’s financial statements. In June 2018, the FASB issued ASU 2018-07, “Compensation-Stock Compensation (Topic 718), Improvements to Non-employee Share-Based Payment Accounting.” ASU 2018-07 aligns the measurement and classification guidance for share-based payments to non-employees with the guidance for share-based payments to employees. The Company adopted ASU 2018-07 effective January 1, 2019 with no impact on the Company’s financial statements. In October 2018, the FASB issued ASU 2018-16, “Derivatives and Hedging (Topic 815), Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate of Hedge Accounting Purposes.” The Company adopted ASU 2018-16 effective January 1, 2019 with no impact on the Company’s financial statements. |
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:
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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 $1.2 million at March 31, 2019 and $0.6 million at December 31, 2018. |
Investments in Available-for-Sale Securities |
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Debt Securities, Available-for-sale [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 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 $31.1 million and $115.2 million at March 31, 2019 and December 31, 2018, respectively. The aggregate fair value of investments with unrealized losses that were owned for over a year was $9.0 million and $32.4 million at March 31, 2019 and December 31, 2018, respectively. The unrealized losses in the Company’s portfolio at March 31, 2019 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 March 31, 2019 have maturity dates ranging from the second quarter of 2019 through the third quarter of 2020. 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 Condensed Consolidated Balance Sheets are as follows:
The Company anticipates the majority of the remaining net book value of sale contracts to be amortized in 2019 based upon expected shipments. |
Derivatives |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives | Derivatives Interest rate risk management The Company has entered into interest rate swaps to reduce the variability of cash outflows associated with interest payments on its variable rate term loan. These swaps have been designated as cash flow hedges. For additional information on these arrangements, see Note 9, “Debt and Financing Arrangements,” in the Condensed Consolidated Financial Statements. 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 47 million gallons of diesel fuel for use in its operations annually. 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, purchased heating oil call options and New York Mercantile Exchange (“NYMEX”) gulf coast diesel swaps. At March 31, 2019, the Company had protected the price on the majority of its expected diesel fuel purchases for the remainder of 2019 with approximately 18 million gallons of heating oil call options with an average strike price of $2.33 per gallon and 18 million gallons of NYMEX gulf coast diesel swaps at an average price of approximately $1.91 per gallon. Additionally, the Company has protected approximately 9% of its expected 2020 purchases using heating oil call options with an average strike price of $2.31 per gallon. At March 31, 2019, the Company had outstanding heating oil call options and NYMEX gulf coast swaps of approximately 40 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 March 31, 2019, the Company held derivatives for risk management purposes that are expected to settle in the following years:
The Company has also entered into a minimal 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. 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 $0.6 million of losses during the remainder of 2019 and $0.2 million of losses during 2020. 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 representing cash collateral posted to a margin account for derivative positions primarily related to coal derivatives of $13.1 million and $24.7 million at March 31, 2019 and December 31, 2018, 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 March 31,
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 March 31, 2019 and 2018. Derivatives Not Designated as Hedging Instruments (in thousands) Three Months Ended March 31,
____________________________________________________________ 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 March 31, 2019, 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 gains of approximately $4.1 million. |
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 In 2017, the Company entered into a senior secured term loan credit agreement (the “Credit Agreement”) in an aggregate principal amount of $300 million (the “Term Loan Debt Facility”) with Credit Suisse AG, Cayman Islands Branch, as administrative agent and collateral agent, and the other financial institutions from time to time party thereto (collectively, the “Lenders”). The Term Loan Debt Facility was issued at 99.50% of the face amount and will mature on March 7, 2024. The term loans provided under the Term Loan Debt Facility (the “Term Loans”) are subject to quarterly principal amortization payments in an amount equal to $750,000. During 2018, the Company entered into the Second Amendment (the “Second Amendment”) to its Credit Agreement. The Second Amendment reduced the interest rate on its Term Loan Debt Facility to, at the option of Arch Coal, either (i) the London interbank offered rate (“LIBOR”) plus an applicable margin of 2.75%, subject to a 1.00% LIBOR floor, or (ii) a base rate plus an applicable margin of 1.75%. The Second Amendment also reset the 1.00% call premium to apply to repricing events that occur on or prior to October 3, 2018. The LIBOR floor remains at 1.00%. There is no change to the maturities as a result of the Second Amendment. The 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 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 Term Loan Debt Facility) and (ii) non-ordinary course asset sales or dispositions, subject to customary thresholds, exceptions and reinvestment rights. The Term Loan Debt Facility contains customary affirmative covenants and representations. The 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 Term Loan Debt Facility does not contain any financial maintenance covenant. The 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. Accounts Receivable Securitization Facility In 2018, 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 maintained the $160 million borrowing capacity and extended the maturity date to the date that is three years after the Securitization Facility Closing Date. Additionally, the amendment provided the Company the opportunity to use credit insurance to increase the pool of eligible receivables for borrowing. 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 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 March 31, 2019, letters of credit totaling $15.7 million were outstanding under the facility with $81.5 million available for borrowings. As a result, there was no cash collateral required to be posted in the facility. Inventory-Based Revolving Credit Facility In 2017, the Company and certain subsidiaries of Arch Coal entered into a senior secured inventory-based revolving credit facility in an aggregate principal amount of $40 million (the “Inventory Facility”) with Regions Bank (“Regions”) as administrative agent and collateral agent, as lender and swingline lender (in such capacities, the “Lender”) and as letter of credit issuer. Availability under the 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 Inventory Facility), subject to reduction for reserves imposed by Regions. In 2018, the Company and certain subsidiaries of Arch Coal amended and extended the Inventory Facility by increasing the facility size by $10 million, bringing the total aggregate amount available to $50 million, subject to borrowing base calculations described above. The commitments under the Inventory Facility will terminate on the date that is the earliest to occur of (i) the date, if any, that is 364 days following the first day that Liquidity (defined in the 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 (ii) 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 Inventory Facility bear interest at a per annum rate equal to, at the option of Arch Coal, either the base rate or the London interbank offered rate plus, in each case, a margin ranging from 2.00% to 2.50% (in the case of LIBOR loans) and 1.00% to 1.50% (in the case of base rate loans) determined using a Liquidity-based grid. Letters of credit under the 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 Inventory Facility (collectively with Arch Coal, the “Loan Parties”). The Inventory Facility is secured by first priority security interests in the ABL Priority Collateral (defined in the 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 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 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 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 Inventory Facility also includes a requirement to maintain Liquidity equal to or exceeding $175 million at all times. As of March 31, 2019, letters of credit totaling $35.7 million were outstanding under the facility with $14.3 million available for borrowings. Interest Rate Swaps The Company has 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 is 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 2.75% 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 be 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 March 31, 2019:
The fair value of the interest rate swaps at March 31, 2019 is an asset of $0.9 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 Company realized $0.5 million of gains during the three months ended March 31, 2019 related to settlements of the interest rate swaps which was recorded to interest expense on the Company’s Condensed Consolidated Income Statements. The interest rate swaps are classified as level 2 within the fair value hierarchy. |
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 U.S. Treasury securities, and coal swaps and 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, coal commodity contracts and interest rate swaps 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 March 31, 2019. 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 losses of $0.1 million were recognized in the Condensed Consolidated Income Statements within Other operating income, net during the three months ended March 31, 2019, respectively, related to Level 3 financial instruments held on March 31, 2019. Fair Value of Long-Term Debt At March 31, 2019 and December 31, 2018, the fair value of the Company’s debt, including amounts classified as current, was $319.8 million and $318.6 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 per Common Share |
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Earnings per Common Share | Earnings 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 per share by reconciling the 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 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:
(1) In accordance with the adoption of ASU 2017-07, “Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost,” these costs are recorded within Nonoperating expenses in the Condensed Consolidated Income Statements on the line item “Non-service related pension and postretirement benefit costs.” |
Employee Benefit Plans |
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Employee Benefit Plans | Employee Benefit Plans The following table details the components of pension benefit costs (credits):
The following table details the components of other postretirement benefit costs:
(1) In accordance with the adoption of ASU 2017-07, “Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost,” these costs are recorded within Nonoperating expenses in the Condensed Consolidated Income Statements on the line item “Non-service related pension and postretirement benefit costs.” |
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. 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. The Company believes it has recorded adequate reserves for these matters. |
Segment Information |
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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 EBITDA, per-ton cash operating costs (defined as including all mining costs except depreciation, depletion, amortization, accretion on asset retirement obligations, and pass-through transportation expenses), and on other non-financial measures, such as safety and environmental performance. Adjusted EBITDA is not a measure of financial performance in accordance with generally accepted accounting principles, and items excluded from Adjusted EBITDA are significant in understanding and assessing the Company’s financial condition. Therefore, Adjusted EBITDA should not be considered in isolation, nor as an alternative to net income, 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 EBITDA to measure the operating performance of its segments and allocate resources to the segments. Furthermore, analogous measures are used by industry analysts and investors to evaluate the Company’s operating performance. Investors should be aware that the Company’s presentation of Adjusted EBITDA may not be comparable to similarly titled measures used by other companies. The Company reports its results of operations primarily through the following reportable segments: Powder River Basin (PRB) segment containing the Company’s primary thermal operations in Wyoming; the Metallurgical (MET) segment, containing the Company’s metallurgical operations in West Virginia, and the Other Thermal segment containing the Company’s supplementary thermal operations in Colorado, Illinois, and West Virginia. Operating segment results for the three months ended March 31, 2019 and 2018, are presented below. The Company measures its segments based on “adjusted earnings before interest, taxes, depreciation, depletion, amortization, accretion on asset retirements obligations, and nonoperating expenses (Adjusted EBITDA).” Adjusted EBITDA does not reflect mine closure or impairment costs, since those are not reflected in the operating income reviewed by management. 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 net income to adjusted EBITDA follows:
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Revenue Recognition |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition | Revenue Recognition ASC 606-10-50-5 requires that entities disclose disaggregated revenue information in categories (such as type of good or service, geography, market, type of contract, etc.) that depict how the nature, amount, timing, and uncertainty of revenue and cash flow are affected by economic factors. ASC 606-10-55-89 explains that the extent to which an entity’s revenue is disaggregated depends on the facts and circumstances that pertain to the entity’s contracts with customers and that some entities may need to use more than one type of category to meet the objective for disaggregating revenue. In general, the Company’s business segmentation is aligned according to the nature and economic characteristics of its coal and customer relationships and provides meaningful disaggregation of each segment’s results. The company has further disaggregated revenue between North America and Seaborne revenues which depicts the pricing and contract differences between the two. North America revenue is characterized by contracts with a term of one year or longer and typically the pricing is fixed; whereas Seaborne revenue generally is derived by spot or short term contracts with an indexed based pricing mechanism.
As of March 31, 2019, the Company has outstanding performance obligations for the remainder of 2019 of 59.3 million tons of fixed price contracts and 4.0 million tons of variable price contracts. Additionally, the Company has outstanding performance obligations beyond 2019 of approximately 41.9 million tons of fixed price contracts and 4.6 million tons of variable price contracts. |
Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases The Company has operating leases for mining equipment, office equipment and office space with remaining lease terms ranging from less than 1 year to approximately 8 years. Some of these leases include both lease and non-lease components which are accounted for as a single lease component as the Company has elected the practical expedient to combine these components for all leases. As most of the leases do not provide an implicit rate, the Company calculated the right-of-use assets and lease liabilities using its’ secured incremental borrowing rate at the lease commencement date. The Company currently does not have any finance leases outstanding. Information related to leases was as follows:
Future minimum lease payments under non-cancellable leases as of March 31, 2019 were as follows:
At March 31, 2019, the Company had a $14.7 million right-of-use operating lease asset recorded within “Other noncurrent assets” on the Condensed Consolidated Balance Sheet. |
Subsequent Events |
3 Months Ended |
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Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On April 22, 2019, the board of directors of Arch Coal authorized an incremental $300 million increase to the share repurchase program bringing the total authorization to $1.05 billion. 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, or the Company’s 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 March 31, 2019, the Company had repurchased 8,088,147 shares at an average share price of $81.86 per share for an aggregate purchase price of approximately $662.1 million since inception of the stock repurchase program. At March 31, 2019, with the increase noted above, the Company has $388 million remaining under its existing authorization. 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) |
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Mar. 31, 2019 | |
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 months ended March 31, 2019 are not necessarily indicative of results to be expected for the year ending December 31, 2019. 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, 2018 included in the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission. |
Recently Adopted Accounting Guidance | Recently Adopted Accounting Guidance In February 2016, the FASB established Topic 842, Leases, by issuing ASU No. 2016-02, “Leases” which requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. The ASU was subsequently amended by ASU 2018-01, “Land Easements Practical Expedient for Transition to Topic 842;” ASU 2018-10, “Codification Improvements to Topic 842, Leases;” and ASU 2018-11, “Targeted Improvements.” The new standard establishes a right-of-use (“ROU”) model that requires a lessee to recognize an ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. The standard also requires a lessee to recognize a single lease cost, calculated so that the cost of the lease is allocated over the term of the lease, on a generally straight line basis. Leases of mineral reserves and related land leases have been exempted from the standard. The Company adopted ASU 2016-02 effective January 1, 2019 and elected the option to not restate comparative periods in transition and also elected the “package of practical expedients” within the standard which permits the Company not to reassess its prior conclusions about lease identification, lease classification and initial direct costs. Additionally, the Company made an election to not separate lease and non-lease components for all leases, and will not use hindsight. Finally, the Company will continue its current policy for accounting for land easements as executory contracts. The adoption of the standard had no impact on the Company’s consolidated income statement or statement of cash flows. In April 2017, the FASB issued ASU No. 2017-08, “Receivables-Nonrefundable Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities.” The new guidance shortens the amortization period for the premium on certain purchased callable debt securities to the earliest call date. The new guidance does not change the accounting for purchased callable debt securities held at a discount. The Company adopted ASU 2017-08 effective January 1, 2019 with no impact on the Company’s financial statements. In August 2017, the FASB issued ASU No. 2017-12, “Targeted Improvements to Accounting for Hedging Activities.” The new guidance provides targeted improvements to the accounting for hedging activities to better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedging results. The Company adopted ASU 2017-12 effective January 1, 2019 with no impact on the Company’s financial statements. In February 2018, the FASB issued ASU 2018-02, “Income Statement-Reporting Comprehensive Income (Topic 220) Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” ASU 2018-02 provides an option to reclassify stranded tax effects within accumulated other comprehensive income to retained earnings due to the change in the U.S. federal tax rate in the Tax Cuts and Jobs Act of 2017. The Company adopted ASU 2018-02 effective January 1, 2019 with no impact on the Company’s financial statements. In June 2018, the FASB issued ASU 2018-07, “Compensation-Stock Compensation (Topic 718), Improvements to Non-employee Share-Based Payment Accounting.” ASU 2018-07 aligns the measurement and classification guidance for share-based payments to non-employees with the guidance for share-based payments to employees. The Company adopted ASU 2018-07 effective January 1, 2019 with no impact on the Company’s financial statements. In October 2018, the FASB issued ASU 2018-16, “Derivatives and Hedging (Topic 815), Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate of Hedge Accounting Purposes.” The Company adopted ASU 2018-16 effective January 1, 2019 with no impact on the Company’s financial statements. |
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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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories consist of the following:
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Investments in Available-for-Sale Securities (Tables) |
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Debt Securities, Available-for-sale [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) |
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Acquired Sales Contracts [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Sales Contracts | The sales contracts reflected in the Condensed Consolidated Balance Sheets are as follows:
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Derivatives (Tables) |
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Price Risk Derivatives | At March 31, 2019, 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 March 31,
Derivatives Not Designated as Hedging Instruments (in thousands) Three Months Ended March 31,
____________________________________________________________ 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) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consist of the following:
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Debt and Financing Arrangements (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 March 31, 2019:
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Income Taxes (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 per Common Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Weighted Average Number of Shares | The following table provides the basis for basic and diluted earnings per share by reconciling the denominators of the computations:
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Workers Compensation Expense (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation Related Costs [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Workers' compensation expense | Workers’ compensation expense consists of the following components:
(1) In accordance with the adoption of ASU 2017-07, “Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost,” these costs are recorded within Nonoperating expenses in the Condensed Consolidated Income Statements on the line item “Non-service related pension and postretirement benefit costs.” |
Employee Benefit Plans (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension and Other Postretirement Benefits Cost (Reversal of Cost) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension Benefit Costs | The following table details the components of pension benefit costs (credits):
The following table details the components of other postretirement benefit costs:
(1) In accordance with the adoption of ASU 2017-07, “Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost,” these costs are recorded within Nonoperating expenses in the Condensed Consolidated Income Statements on the line item “Non-service related pension and postretirement benefit costs.” |
Segment Information (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Operating Segment Results |
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Reconciliation Statement of Segment Income from Operations to Consolidated Income Before Income Taxes | A reconciliation of net income to adjusted EBITDA follows:
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Revenue Recognition (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of effects of revenue recognition |
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Leases (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Information related to leases | Information related to leases was as follows:
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Schedule of future minimum lease payments | Future minimum lease payments under non-cancellable leases as of March 31, 2019 were as follows:
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Accumulated Other Comprehensive Income (Schedule of Reclassifications) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Revenues | $ 555,183 | $ 575,295 |
Interest expense | (4,432) | (5,395) |
Interest and investment income | 2,143 | 1,273 |
Provision for (benefit from) income taxes | 70 | (544) |
Net income | 72,741 | 59,985 |
Reclassification out of Accumulated Other Comprehensive Income | Hedges | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Revenues | 361 | 0 |
Interest expense | 515 | 140 |
Provision for (benefit from) income taxes | 0 | 0 |
Net income | 876 | 140 |
Reclassification out of Accumulated Other Comprehensive Income | Available-for-sale securities | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Interest and investment income | 0 | 0 |
Provision for (benefit from) income taxes | 0 | 0 |
Net income | $ 0 | $ 0 |
Inventories (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Coal | $ 57,147 | $ 40,982 |
Repair parts and supplies | 88,460 | 84,488 |
Inventories | 145,607 | 125,470 |
Allowance for slow-moving and obsolete inventories | $ 1,200 | $ 600 |
Investments in Available-for-Sale Securities (Narrative) (Details) - USD ($) $ in Millions |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Debt Securities, Available-for-sale [Abstract] | ||
Unrealized losses owned for less than 12 months | $ 31.1 | $ 115.2 |
Unrealized losses owed for over a year | $ 9.0 | $ 32.4 |
Sales Contracts (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Acquired Finite-Lived Intangible Assets And Liabilities By Major Class [Line Items] | ||
Original fair value, Assets | $ 97,196 | $ 97,196 |
Original fair value, Liabilities | 31,742 | 31,742 |
Accumulated amortization, Asset | (97,051) | (96,812) |
Accumulated amortization, Liabilities | (31,098) | (30,924) |
Total, Assets | 145 | 384 |
Total, Liabilities | 644 | 818 |
Net Total | (499) | (434) |
Liabilities | 425 | 570 |
Other current Assets | ||
Acquired Finite-Lived Intangible Assets And Liabilities By Major Class [Line Items] | ||
Assets | 145 | 384 |
Other Current Liabilities | ||
Acquired Finite-Lived Intangible Assets And Liabilities By Major Class [Line Items] | ||
Liabilities | 425 | 570 |
Other Noncurrent Assets | ||
Acquired Finite-Lived Intangible Assets And Liabilities By Major Class [Line Items] | ||
Assets | 0 | 0 |
Other Noncurrent Liabilities | ||
Acquired Finite-Lived Intangible Assets And Liabilities By Major Class [Line Items] | ||
Liabilities | $ 219 | $ 248 |
Derivatives (Schedule of Price Risk Derivatives) (Details) T in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2019
T
| |
Coal sales | |
Derivative [Line Items] | |
Derivatives held (in tons) | 2,540 |
Coal purchases | |
Derivative [Line Items] | |
Derivatives held (in tons) | 1,224 |
2019 | Coal sales | |
Derivative [Line Items] | |
Derivatives held (in tons) | 2,196 |
2019 | Coal purchases | |
Derivative [Line Items] | |
Derivatives held (in tons) | 1,131 |
2020 | Coal sales | |
Derivative [Line Items] | |
Derivatives held (in tons) | 344 |
2020 | Coal purchases | |
Derivative [Line Items] | |
Derivatives held (in tons) | 93 |
Derivatives (Net Derivatives As Reflected On The Balance Sheets) (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Derivatives, Fair Value [Line Items] | ||
Net derivatives as classified in the balance sheet | $ 5,367 | $ (12,210) |
Accrued expenses and other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Net derivatives as classified in the balance sheet | 0 | (13,288) |
Heating oil and coal | Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Net derivatives as classified in the balance sheet | $ 5,367 | $ 1,078 |
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Payables and Accruals [Abstract] | ||
Payroll and employee benefits | $ 35,520 | $ 57,166 |
Taxes other than income taxes | 70,894 | 75,017 |
Interest | 225 | 156 |
Acquired sales contracts | 425 | 570 |
Workers’ compensation | 18,187 | 20,044 |
Asset retirement obligations | 12,297 | 13,113 |
Other | 6,038 | 17,448 |
Accrued expenses and other current liabilities | $ 143,586 | $ 183,514 |
Debt and Financing Arrangements (Long term Debt) (Details) - USD ($) |
Mar. 31, 2019 |
Dec. 31, 2018 |
Mar. 07, 2017 |
---|---|---|---|
Debt Instrument [Line Items] | |||
Term loan | $ 292,924,000 | $ 293,626,000 | |
Other | 25,849,000 | 30,449,000 | |
Debt issuance costs | (5,830,000) | (6,092,000) | |
Total | 312,943,000 | 317,983,000 | |
Less: current maturities of debt | 15,210,000 | 17,797,000 | |
Long-term debt | 297,733,000 | $ 300,186,000 | |
Senior Notes | New Term Loan Debt Facility | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | $ 294,000,000.0 | $ 300,000,000 |
Debt and Financing Arrangements (Interest rate derivatives) (Details) $ in Millions |
Mar. 31, 2019
USD ($)
|
---|---|
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 | $ 250.0 |
Fixed Rate | 2.025% |
Interest rate swap, effective 2020 | |
Debt Instrument [Line Items] | |
Notional Amount | $ 200.0 |
Fixed Rate | 2.249% |
Interest rate swap, effective 2021 | |
Debt Instrument [Line Items] | |
Notional Amount | $ 100.0 |
Fixed Rate | 2.315% |
Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Income Tax Disclosure [Abstract] | ||
Income tax provision (benefit) at statutory rate | $ 15,290 | $ 12,483 |
Percentage depletion allowance | (4,307) | (4,607) |
State taxes, net of effect of federal taxes | 1,012 | 754 |
Change in valuation allowance | (12,513) | (10,639) |
Current expense associated with uncertain tax positions | 593 | 1,389 |
Other, net | (5) | 76 |
Provision for (benefit from) income taxes | $ (70) | $ 544 |
Fair Value Measurements (Summary Of Financial Assets And Liabilities Accounted For At Fair Value) (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Assets: | ||
Investments in marketable securities | $ 164,664 | $ 162,797 |
Derivatives | 6,249 | |
Total assets | 170,913 | |
Liabilities: | ||
Derivatives | 0 | $ 13,288 |
Level 1 | ||
Assets: | ||
Investments in marketable securities | 94,607 | |
Derivatives | 3,063 | |
Total assets | 97,670 | |
Liabilities: | ||
Derivatives | 0 | |
Level 2 | ||
Assets: | ||
Investments in marketable securities | 70,057 | |
Derivatives | 2,335 | |
Total assets | 72,392 | |
Liabilities: | ||
Derivatives | 0 | |
Level 3 | ||
Assets: | ||
Investments in marketable securities | 0 | |
Derivatives | 851 | |
Total assets | 851 | |
Liabilities: | ||
Derivatives | $ 0 |
Fair Value Measurements (Summary Of Change In The Fair Values Of Financial Instruments Categorized As Level 3) (Details) $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2019
USD ($)
| |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance, beginning of period | $ 532 |
Realized and unrealized gains recognized in earnings, net | (144) |
Purchases | 463 |
Issuances | 0 |
Settlements | 0 |
Ending balance | $ 851 |
Fair Value Measurements (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Dec. 31, 2018 |
|
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 | $ 319.8 | $ 318.6 |
Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Net unrealized gains (losses) related to level 3 financial instruments | $ (0.1) |
Earnings per Common Share (Details) - shares shares in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Weighted average shares outstanding: | ||
Basic weighted average shares outstanding (in shares) | 17,494 | 20,901 |
Effect of dilutive securities (in shares) | 1,105 | 974 |
Diluted weighted average shares outstanding (in shares) | 18,599 | 21,875 |
Workers Compensation Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Occupational disease | ||
Accrued Workers Compensation [Line Items] | ||
Service cost | $ 1,669 | $ 1,860 |
Interest cost | 1,354 | 1,195 |
Net benefit credit | 3,023 | 3,055 |
Traumatic injury claims and assessments | ||
Accrued Workers Compensation [Line Items] | ||
Traumatic injury claims and assessments | 2,144 | 3,011 |
Total workers’ compensation expense | ||
Accrued Workers Compensation [Line Items] | ||
Total workers’ compensation expense | $ 5,167 | $ 6,066 |
Employee Benefit Plans (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Defined benefit pension plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Interest cost | $ 2,258 | $ 2,271 |
Expected return on plan assets | (2,723) | (3,081) |
Net benefit credit | (465) | (810) |
Other postretirement benefits plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 120 | 140 |
Interest cost | 876 | 918 |
Net benefit credit | $ 996 | $ 1,058 |
Segment Information (Reconciliation Statement Of Segment Income from Operations To Consolidated Income Before Income Taxes) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Segment Reporting [Abstract] | ||
Net income | $ 72,741 | $ 59,985 |
Provision for (benefit from) income taxes | 70 | (544) |
Interest expense, net | 2,289 | 4,122 |
Depreciation, depletion and amortization | 25,273 | 29,703 |
Accretion on asset retirement obligations | 5,137 | 6,992 |
Amortization of sales contracts, net | 65 | 3,051 |
Non-service related pension and postretirement benefit costs | 1,766 | 1,303 |
Reorganization items, net | (87) | 301 |
Adjusted EBITDA | $ 107,254 | $ 104,913 |
Leases (Narrative) (Details) $ in Millions |
Mar. 31, 2019
USD ($)
|
---|---|
Lessee, Lease, Description [Line Items] | |
RIght-of-use operating lease asset | $ 14.7 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Operating lease, remaining lease terms | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Operating lease, remaining lease terms | 8 years |
Leases (Information Related to Leases) (Details) $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2019
USD ($)
| |
Operating lease information: | |
Operating lease cost | $ 917 |
Operating cash flows from operating leases | $ 871 |
Weighted average remaining lease term in years | 5 years 22 days |
Weighted average discount rate | 5.60% |
Leases (Future Minimum Lease Payments) (Details) $ in Thousands |
Mar. 31, 2019
USD ($)
|
---|---|
Leases [Abstract] | |
2019 | $ 2,412 |
2020 | 2,456 |
2021 | 2,207 |
2022 | 2,203 |
2023 | 2,172 |
Thereafter | 7,504 |
Total minimum lease payments | 18,954 |
Less imputed interest | (3,601) |
Total operating lease liability | 15,353 |
As reflected on balance sheet: | |
Accrued expenses and other current liabilities | 2,353 |
Other noncurrent liabilities | 13,000 |
Total operating lease liability | $ 15,353 |
Subsequent Events (Details) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Apr. 22, 2019 |
|
Subsequent Event [Line Items] | ||
Shares repurchased (in shares) | 8,088,147 | |
Shares repurchased, average share price (in USD per share) | $ 81.86 | |
Shares repurchased, aggregate purchase price | $ 662,100,000 | |
Amount remaining under existing authorization | $ 388,000,000 | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Incremental increase to share repurchase program | $ 300,000,000 | |
Share repurchase program, total authorization | $ 1,050,000,000.00 |
Label | Element | Value |
---|---|---|
Restricted Cash and Cash Equivalents, Current | us-gaap_RestrictedCashAndCashEquivalentsAtCarryingValue | $ 2,926,000 |
Restricted Cash and Cash Equivalents, Current | us-gaap_RestrictedCashAndCashEquivalentsAtCarryingValue | $ 0 |
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