Segment Information

12 Months Ended

Dec. 31, 2019

The Company’s reportable business segments are based on two distinct lines of business, metallurgical coal and thermal coal, and may include a number of mine complexes. The Company manages its coal sales by market, not by individual mining complex. Geology, coal transportation routes to customers, and regulatory environments also have a significant impact on the Company’s marketing and operations management. Mining operations are evaluated based on Adjusted 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 our 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 and Illinois. Periods presented in this note have been recast for comparability.

On December 13, 2019, the Company closed on its’ definitive agreement to sell Coal-Mac LLC, an operating mine complex within the Company’s other thermal coal segment. Coal-Mac is included in the Other Thermal segment results below up to the date of divestiture. For further information on the divestiture, please see Note 5, “Divestitures” to the Consolidated Financial Statements.

On September 14, 2017, the Company closed on its’ definitive agreement to sell Lone Mountain Processing LLC, an operating mine complex within the Company’s Metallurgical coal segment. Through this transaction the Company divested all active operations in the states of Kentucky and Virginia. Lone Mountain is included in the MET segment results below up to the date of divestiture. For further information on the divestiture, please see Note 5, “Divestitures” to the Consolidated Financial Statements.

Operating segment results for the year ended December 31, 2019, the year ended December 31, 2018, and the year ended December 31, 2017 are presented below. The Company measures its segments based on “adjusted earnings before interest, taxes, depreciation, depletion, amortization, and accretion on asset retirements obligations (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.



(In thousands)	PRB		MET		Other Thermal		Corporate, Other and Eliminations			Consolidated
Year Ended December 31, 2019
Revenues	$	915,750	$	990,550	$	377,202	10,850			$	2,294,352
Adjusted EBITDA	110,528		305,363		41,495		(94,219		)	363,167
Depreciation, depletion and amortization	20,810		74,211		14,414		2,620			112,055
Accretion on asset retirement obligation	12,542		2,123		2,413		3,470			20,548
Total Assets	256,460		625,134		105,411		880,751			1,867,756
Capital expenditures	29,420		211,718		20,088		5,130			266,356
Year Ended December 31, 2018
Revenues	$	973,248	$	1,036,621	$	428,884	$	13,034		$	2,451,787
Adjusted EBITDA	126,525		349,524		68,620		(106,891		)	437,778
Depreciation, depletion and amortization	33,120		69,560		14,699		2,184			119,563
Accretion on asset retirement obligation	19,541		1,874		2,261		4,294			27,970
Total assets	278,314		545,061		125,333		938,352			1,887,060
Capital expenditures	12,140		64,307		11,999		6,826			95,272
Year Ended December 31, 2017
Revenues	$	1,024,197	$	887,839	$	396,504	$	16,083		$	2,324,623
Adjusted EBITDA	158,882		243,616		102,006		(84,807		)	419,697
Depreciation, depletion and amortization	36,349		70,896		13,588		1,631			122,464
Accretion on asset retirement obligation	20,160		2,000		2,161		5,888			30,209
Total assets	390,665		548,476		134,397		906,094			1,979,632
Capital expenditures	6,212		32,678		11,901		8,414			59,205

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



(In thousands)	Year Ended December 31, 2019			Year Ended December 31, 2018		Year Ended December 31, 2017

Income before income taxes	$	234,047		$	260,101	$	203,195
Interest expense, net	6,794			13,689		24,256
Depreciation, depletion and amortization	112,055			119,563		122,464
Accretion on asset retirement obligations	20,548			27,970		30,209
Amortization of sales contracts, net	(434		)	11,107		53,985
Costs related to proposed joint venture with Peabody Energy	13,816			—		—
Loss on sale of Coal-Mac LLC	9,008			—		—
Preference Rights Lease Application settlement income	(39,000		)	—		—
Loss (gain) on sale of Lone Mountain Processing, Inc.	4,304			—		(21,297		)
Net loss resulting from early retirement of debt and debt restructuring	—			485		2,547
Non-service related postretirement benefit costs	2,053			3,202		1,940
Reorganization items, net	(24		)	1,661		2,398
Adjusted EBITDA	$	363,167		$	437,778	$	419,697