XML 56 R35.htm IDEA: XBRL DOCUMENT v2.4.0.8
Coal Trading (Tables) (Coal Trading [Member])
 9 Months Ended
Sep. 30, 2014
Coal Trading [Member]
  
Coal Trading [Line Items]  
Trading revenue by type of instrument
Trading revenues recognized during the three and nine months ended September 30, 2014 and 2013 were as follows:
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 30,
 
September 30,
Trading Revenues by Type of Instrument
 
2014
 
2013
 
2014
 
2013
 
 
(Dollars in millions)
Commodity futures, swaps and options
 
$
10.7

 
$
59.3

 
$
69.0

 
$
145.2

Physical commodity purchase/sale contracts
 
4.3

 
(27.2
)
 
(22.7
)
 
(90.6
)
Total trading revenues
 
$
15.0

 
$
32.1

 
$
46.3

 
$
54.6
Fair value of assets and liabilities from coal trading activities and related balance sheet offsetting
The fair value of assets and liabilities from coal trading activities presented on a gross and net basis as of September 30, 2014 and December 31, 2013 is set forth below:
Affected line item in the condensed consolidated balance sheets
 
Gross Amounts of Recognized Assets (Liabilities)
 
Gross Amounts Offset in the Condensed Consolidated Balance Sheets
 
Variation margin (held) posted (1)
 
Net Amounts of Assets (Liabilities) Presented in the Condensed Consolidated Balance Sheets
 
 
(Dollars in millions)
 
 
Fair Value as of September 30, 2014
Assets from coal trading activities, net
 
$
381.5

 
$
(296.4
)
 
$
(32.4
)
 
$
52.7

Liabilities from coal trading activities, net
 
(320.1
)
 
296.4

 
1.3

 
(22.4
)
Total, Net
 
$
61.4

 
$
—

 
$
(31.1
)
 
$
30.3

 
 
 
 
 
 
 
 
 
 
 
Fair Value as of December 31, 2013
Assets from coal trading activities, net
 
$
418.8

 
$
(324.7
)
 
$
(58.0
)
 
$
36.1

Liabilities from coal trading activities, net
 
(332.7
)
 
324.7

 
1.9

 
(6.1
)
Total, Net
 
$
86.1

 
$
—

 
$
(56.1
)
 
$
30.0

(1) 
Approximately $8 million and $42 million of the net variation margin held at September 30, 2014 and December 31, 2013, respectively, related to cash flow hedges.
Fair value coal trading net assets (liabilities) measured on recurring basis
The following tables set forth the hierarchy of the Company’s net financial asset (liability) coal trading positions for which fair value is measured on a recurring basis as of September 30, 2014 and December 31, 2013:
 
September 30, 2014
 
Level 1
 
Level 2
 
Level 3
 
Total
 
(Dollars in millions)
Commodity futures, swaps and options
$
—

 
$
35.2

 
$
—

 
$
35.2

Physical commodity purchase/sale contracts
—

 
(7.2
)
 
2.3

 
(4.9
)
Total net financial assets
$
—

 
$
28.0

 
$
2.3

 
$
30.3

 
December 31, 2013
 
Level 1
 
Level 2
 
Level 3
 
Total
 
(Dollars in millions)
Commodity futures, swaps and options
$
—

 
$
26.4

 
$
—

 
$
26.4

Physical commodity purchase/sale contracts
—

 
1.5

 
2.1

 
3.6

Total net financial assets
$
—

 
$
27.9

 
$
2.1

 
$
30.0
Schedule of quantitative unobservable inputs, physical commodity purchase/sale contracts
The following table summarizes the quantitative unobservable inputs utilized in the Company's internally-developed valuation models for physical commodity purchase/sale contracts classified as Level 3 as of September 30, 2014:
 
 
Range
 
Weighted
Input
 
Low
 
High
 
Average
Quality adjustments
 
1
%
 
9
%
 
7
%
Location differentials
 
18
%
 
66
%
 
29
%
Change in the Company's recurring Level 3 net financial assets
The following table summarizes the changes in the Company’s recurring Level 3 net financial assets:
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 30,
 
September 30,
 
 
2014
 
2013
 
2014
 
2013
 
 
(Dollars in millions)
Beginning of period
 
$
2.6

 
$
1.3

 
$
2.1

 
$
5.2

Total net gains (losses) realized/unrealized:
 
 
 
 
 
 
 
 
Included in earnings
 
2.0

 
(2.7
)
 
5.3

 
(7.1
)
Settlements
 
(2.3
)
 
1.8

 
(5.1
)
 
2.3

End of period
 
$
2.3

 
$
0.4

 
$
2.3

 
$
0.4
Changes in unrealized gains (losses) relating to Level 3 net financial assets
The following table summarizes the changes in net unrealized gains (losses) relating to Level 3 net financial assets held both as of the beginning and the end of the period:
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 30,
 
September 30,
 
 
2014
 
2013
 
2014
 
2013
 
 
(Dollars in millions)
Changes in net unrealized gains (losses) (1)
 
$
1.1

 
$
(3.0
)
 
$
1.6

 
$
(2.9
)
(1) 
Within the unaudited condensed consolidated statements of operations and unaudited condensed consolidated statements of comprehensive income for the periods presented, unrealized gains and losses from Level 3 items are combined with unrealized gains and losses on positions classified in Level 1 or 2, as well as other positions that have been realized during the applicable periods.
Schedule of future realization of the Company's trading portfolio
As of September 30, 2014, the timing of the estimated future realization of the value of the Company’s trading portfolio was as follows:
 
 
Percentage of
Year of Expiration
 
Portfolio Total
2014
 
25
%
2015
 
56
%
2016
 
14
%
2017
 
3
%
2018
 
2
%
 
 
100
%