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.



	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

A reconciliation of net income to adjusted EBITDA follows:



	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