10-Q

United States

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________________________________ 

FORM 10-Q

______________________________________  

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2015

or

¨ TRANSITION REPORT PURSUANT TO 13 OR 15(d) OF THE EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 000-54992

______________________________________  

Advanced Emissions Solutions, Inc.

(Exact name of registrant as specified in its charter)

______________________________________  

Delaware	27-5472457
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

9135 South Ridgeline Boulevard, Suite 200, Highlands Ranch CO,	000-54992
(Address of principal executive offices)	(Zip Code)

(720) 598-3500
(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

______________________________________ 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ¨   No  x

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ¨    No  x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one): 

Large accelerated filer	o	Accelerated filer	x
Non-accelerated filer	o	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act. (Check one):    Yes  ¨    No  x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. 

Class	Outstanding at April 14, 2016
Common stock, par value $0.001 per share	22,011,494

INDEX

		PAGE
PART I. - FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited):
	Condensed Consolidated Balance Sheets as of June 30, 2015 and December 31, 2014	1
	Condensed Consolidated Statements of Operations for the Three and Six Months ended June 30, 2015 and June 30, 2014	2
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2015 and June 30, 2014	3
	Notes to Condensed Consolidated Financial Statements	5
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3.	Quantitative and Qualitative Disclosures About Market Risks	49
Item 4.	Controls and Procedures	50
PART II. - OTHER INFORMATION
Item 1.	Legal Proceedings	51
Item 1a.	Risk Factors	51
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	51
Item 3.	Defaults Upon Senior Securities	51
Item 4.	Mine Safety Disclosures	51
Item 5.	Other Information	51
Item 6.	Exhibits	52
	Signatures	53

Part I. – FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

Advanced Emissions Solutions, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(Unaudited)

	As of
(in thousands, except share data)	June 30, 2015			December 31, 2014
ASSETS
Current assets:
Cash and cash equivalents	$	10,413		$	25,181
Receivables, net	9,218			16,594
Receivables, related parties, net	1,665			1,439
Restricted cash	2,527			2,527
Costs in excess of billings on uncompleted contracts	6,830			6,153
Prepaid expenses and other assets	2,709			2,535
Total current assets	33,362			54,429
Restricted cash, long-term	10,680			8,771
Property and equipment, net of accumulated depreciation of $6,612 and $5,924, respectively	4,076			4,808
Investment securities, restricted, long-term	336			336
Cost method investment	2,776			2,776
Equity method investments	20,238			19,584
Other assets	5,029			2,995
Total Assets	$	76,497		$	93,699
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	10,227		$	7,514
Accrued payroll and related liabilities	7,329			5,158
Current portion of notes payable, related parties	1,612			1,479
Billings in excess of costs on uncompleted contracts	16,038			22,518
Settlement and royalty indemnity obligation	4,268			3,749
Other current liabilities	8,540			6,739
Total current liabilities	48,014			47,157
Long-term portion of notes payable, related party	13,716			14,431
Settlement and royalty indemnification, long-term	18,282			20,273
Advance deposit, related party	5,028			6,524
Other long-term liabilities	6,053			6,011
Total Liabilities	91,093			94,396
Commitments and contingencies (Note 8)
Stockholders’ deficit:
Preferred stock: par value of $.001 and no par value per share, respectively, 50,000,000 shares authorized, none outstanding	—			—
Common stock: par value of $.001 per share, 100,000,000 shares authorized, 21,969,795 and 21,853,263 shares issued, and 21,779,721 and 21,643,342 shares outstanding at June 30, 2015 and December 31, 2014, respectively	22			22
Additional paid-in capital	114,849			110,169
Accumulated deficit	(129,467		)	(110,888		)
Total stockholders’ deficit	(14,596		)	(697		)
Total Liabilities and Stockholders’ Deficit	$	76,497		$	93,699

See Notes to the Condensed Consolidated Financial Statements.

1

Advanced Emissions Solutions, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands, except per share data and percentages)	2015			2014			2015			2014
Revenues:
Equipment sales	$	14,236		$	1,796		$	35,351		$	1,999
Consulting services	316			1,272			684			2,022
Chemicals and other	343			106			617			137
Total revenues	14,895			3,174			36,652			4,158
Operating expenses:
Equipment sales cost of revenue, exclusive of depreciation and amortization	13,698			1,079			28,749			1,203
Consulting services cost of revenue, exclusive of depreciation and amortization	264			654			690			965
Chemical and other cost of revenue, exclusive of depreciation and amortization	41			20			278			37
Payroll and benefits	9,746			4,609			14,657			8,856
Rent and occupancy	601			558			1,232			1,118
Legal and professional fees	4,387			2,495			8,122			3,927
General and administrative	1,503			1,407			3,385			2,553
Research and development, net	1,860			316			3,110			595
Depreciation and amortization	573			456			1,104			894
Total operating expenses	32,673			11,594			61,327			20,148
Operating loss	(17,778		)	(8,420		)	(24,675		)	(15,990		)
Other income (expense):
Earnings from equity method investments	4,860			9,791			5,174			16,416
Royalties, related party	2,299			849			4,493			1,981
Interest income	6			19			18			46
Interest expense	(1,794		)	(1,219		)	(3,569		)	(2,012		)
Other	23			1			87			10
Total other income (expense), net	5,394			9,441			6,203			16,441
Income (loss) before income tax expense	(12,384		)	1,021			(18,472		)	451
Income tax expense	63			29			107			42
Net income (loss)	$	(12,447	)	$	992		$	(18,579	)	$	409
Earnings (loss) per common share (Note 1):
Basic	$	(0.57	)	$	0.05		$	(0.85	)	$	0.02
Diluted	$	(0.57	)	$	0.04		$	(0.85	)	$	0.02
Weighted-average number of common shares outstanding:
Basic	21,715			21,477			21,728			21,487
Diluted	21,715			22,035			21,728			22,092

See Notes to the Condensed Consolidated Financial Statements.

2

Advanced Emissions Solutions, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Six Months Ended June 30,
(in thousands)	2015			2014
Cash flows from operating activities
Net income (loss)	$	(18,579	)	$	409
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization	1,104			894
Amortization of debt issuance costs	50			50
Impairment of property and equipment	46			71
Provision for bad debt expense and note receivable	511			—
Interest costs added to principal balance of notes payable	432			578
Share-based compensation expense	5,459			1,745
Earnings from equity method investments	(5,174		)	(16,416		)
Other non-cash items, net	177			40
Changes in operating assets and liabilities, net of effects of acquired businesses:
Receivables	7,625			2,590
Related party receivables	(226		)	20
Prepaid expenses and other assets	(460		)	(1,482		)
Costs incurred on uncompleted contracts	2,363			(31,681		)
Restricted cash, long-term	(709		)	(1,212		)
Other long-term assets	231			102
Accounts payable	2,713			2,227
Accrued payroll and related liabilities	1,651			(683		)
Other current liabilities	1,348			(1,211		)
Billings on uncompleted contracts	(9,420		)	27,703
Advance deposit, related party	(1,496		)	(660		)
Other long-term liabilities	19			125
Settlement and royalty indemnification obligation	(1,472		)	(3,396		)
Distributions from equity method investees, return on investment	19			1,259
Net cash used in operating activities	(13,788		)	(18,928		)

3

	Six Months Ended June 30,
(in thousands)	2015			2014
Cash flows from investing activities
Purchase of investment securities, restricted	—			404
Increase in restricted cash	(1,200		)	(343		)
Acquisition of property and equipment	(380		)	(881		)
Advance on note receivable	(500		)	—
Acquisition of business	(2,124		)	—
Purchase of and contributions to equity method investees	(230		)	(3,779		)
Distributions from equity method investees in excess of cumulative earnings	4,730			16,321
Net cash provided by (used in) investing activities	296			11,722
Cash flows from financing activities
Repayments on notes payable	(1,014		)	—
Proceeds received upon exercise of stock options	—			243
Repurchase of shares to satisfy minimum tax withholdings	(262		)	(4		)
Net cash provided by (used in) financing activities	(1,276		)	239
Increase (Decrease) in Cash and Cash Equivalents	(14,768		)	(6,967		)
Cash and Cash Equivalents, beginning of period	25,181			37,890
Cash and Cash Equivalents, end of period	$	10,413		$	30,923
Supplemental disclosures of cash information:
Cash paid for interest	$	2,993		$	2,086
Cash paid for income taxes	146			95
Supplemental disclosure of non-cash investing and financing activities:
Restricted stock award reclassification (equity to liability)	—			501
Issuance of common stock to settle liabilities	—			127
Acquisition of equity method investment through note payable	—			13,301

See Notes to the Condensed Consolidated Financial Statements.

4

Advanced Emissions Solutions, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 1 - Basis of Presentation

Nature of Operations

Advanced Emissions Solutions, Inc. (“ADES” or the "Company"), a Delaware corporation with its principal office located in Highlands Ranch, Colorado, is principally engaged in providing environmental and emissions control equipment, technologies and specialty chemicals to the coal-burning electric power generation industry. Although the Company has historically operated at a net loss, the Company generates substantial earnings and tax credits under Section 45 of the Internal Revenue Code ("IRC") from its equity investments in certain entities and royalty payment streams related to technologies that are licensed to Clean Coal Solutions, LLC, a Colorado limited liability company ("CCS"). Such technologies allow CCS to provide their customers with various solutions to enhance combustion and reduced emissions of nitrogen oxide ("NO_x") and mercury from coal burned to generate electrical power. The Company’s sales occur principally throughout the United States. See Note 11 for additional information regarding the Company's operating segments.

Basis of Presentation

The accompanying Condensed Consolidated Financial Statements of ADES are unaudited and have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) and with Article 10 of Regulation S-X. In compliance with those instructions, certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted.

The unaudited Condensed Consolidated Financial Statements of ADES in this quarterly report are presented on a consolidated basis comprising ADES and its direct and indirect, wholly-owned subsidiaries: ADA-ES, Inc. ("ADA"), a Colorado corporation, BCSI, LLC ("BCSI"), a Delaware limited liability company, Advanced Clean Energy Solutions, LLC ("ACES"), a Delaware limited liability company, ADEquity, LLC ("ADEquity"), a Delaware limited liability company, ADA Environmental Solutions, LLC ("ADA LLC"), a Colorado limited liability company, ADA Intellectual Property, LLC ("ADA IP"), a Colorado limited liability company, ADA-RCM6, LLC ("ADA-RCM6"), a Colorado limited liability company, ADA Analytics, LLC, a Delaware limited liability company and ADA Analytics Israel Ltd. (collectively with ADA Analytics, LLC, "ADA Analytics"), an Israel limited liability company. ADA LLC and ADA IP had no operations in 2015 and 2014. Results of operations and cash flows for the interim periods are not necessarily indicative of the results that may be expected for the entire year. All significant intercompany transactions and accounts were eliminated as of and for the three and six months endedJune 30, 2015 and 2014.

On March 14, 2014, the Company effected a two-for-one stock split of the Company’s common stock, which was completed in the form of a common stock dividend and all amounts have been retroactively adjusted for the split.

In the opinion of management, these consolidated financial statements include all normal and recurring adjustments considered necessary for a fair presentation of the results of operations, financial position and cash flows for the interim periods presented. These Condensed Consolidated Financial Statements of ADES should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. Significant accounting policies disclosed therein have not changed.

Liquidity

During the three and six months endedJune 30, 2015 the Company's working capital and cash balances continued to decline, due principally to continued losses. Such losses were driven primarily by poor operating performance related to Dry Sorbent Injection ("DSI") equipment, which is included within the Emissions Control - Manufacturing segment as of June 30, 2015, substantial and continuing expenditures required to fund the re-audit and restatement ("Restatement") of certain of our prior consolidated financial statements, and a significant reduction in the receipt of cash distributions from CCS. This deterioration of working capital directly necessitated the securing of the loan transaction described in Note 12 ("Credit Agreement"). The Company expects that pressure on working capital will continue until such time as all Restatement activities are completed, including resolution of the SEC inquiry and the conclusion of the private litigation, both of which are described in Note 8.

The Company's ability to generate sufficient cash flow required to meet ongoing operational needs and to meet obligations, including the repayment of the loan under the Credit Agreement, depends upon several factors, including executing on the Company's contracts and initiatives, receiving royalty payments from Clean Coal Solutions, LLC ("CCS") and distributions from CCS and Clean Coal Solutions Services, LLC ("CCSS"), and our ability to maintain a significant share of the market and increase operational efficiencies for emissions control equipment, chemicals and services. Increased distributions from CCS will likely be dependent upon the securing of additional tax equity investors for those CCS facilities that are currently not operating, or operating as retained Refined Coal ("RC") facilities. If we are unable to generate sufficient cash flow, we may be

5

unable to meet our operational needs and/or repay our loan when due. Should this be the case, we will seek to refinance the loan or obtain alternative financing. If we are unable to refinance the loan or obtain alternative financing, our lenders would be entitled to take possession of the collateral securing the indebtedness, which includes substantially all of our assets, to the extent permitted by the Credit Agreement and applicable law.

Earnings (Loss) Per Share

The Company computes earnings (loss) per share in accordance with FASB ASC 260-10. Under this guidance, unvested restricted stock awards ("RSA's") that contain non-forfeitable rights to dividends or dividend equivalents are deemed to be participating securities and, therefore, are included in computing basic earnings per share pursuant to the two-class method. The two-class method determines earnings per share for each class of common stock and participating securities according to dividends or dividend equivalents and their respective participation rights in undistributed earnings (losses). The Company did not declare any cash dividends during the three-month or six-month periods ended June 30, 2015 or 2014.

Under the two-class method, net income (loss) for the period is allocated between common shareholders and the holders of the participating securities, in this case, the weighted-average number of unvested restricted stock awards outstanding during the period. The allocated, undistributed income (loss) for the period is then divided by the weighted-average number of common shares and participating securities outstanding during the period to arrive at basic earnings (loss) per common share or participating security for the period, respectively. Because the Company did not declare any dividends during the periods presented, and because the unvested RSA's possess substantially the same rights to undistributed earnings as common shares outstanding, there is no difference between the calculated basic earnings (loss) per share for common shares and participating securities. Accordingly, and pursuant to U.S. GAAP, the Company has elected not to separately present basic or diluted earnings (loss) per share attributable to participating securities on its Consolidated Statements of Operations.

Diluted earnings (loss) per share takes into consideration shares of common stock and unvested RSA's outstanding (computed under basic earnings (loss) per share) and potentially dilutive shares of common stock. Potentially dilutive shares consist of vested, in-the-money outstanding options, Stock Appreciation Rights ("SAR's") and contingent Performance Share Unit's ("PSU's") (collectively "Potential dilutive shares"). When there is a loss from continuing operations, all potentially dilutive shares become anti-dilutive and are thus excluded from the calculation of diluted loss per share.

Each PSU represents a contingent right to receive shares of the Company’s common stock, that may range from zero to two times the number of PSU's granted on the award date, should the Company meet certain performance measures over the requisite performance period. The number of potentially dilutive shares related to PSU's is based on the number of shares, if any, that would be issuable at the end of the respective reporting period, assuming that the end of the reporting period was the end of the contingency period applicable to such PSU's.

The following table sets forth the calculations of basic and diluted earnings per share:

	Three Months Ended June 30,					Six Months Ended June 30,
(in thousands, except per share amounts)	2015			2014		2015			2014
Net income (loss)	$	(12,447	)	$	992	$	(18,579	)	$	409
Less: Undistributed income (loss) allocated to participating securities	(130		)	14		(215		)	6
Income (loss) attributable to common stockholders	$	(12,317	)	$	978	$	(18,364	)	$	403
Basic weighted-average common shares outstanding (1)	21,715			21,477		21,728			21,487
Add: dilutive effect of equity instruments	—			558		—			605
Diluted weighted average shares outstanding	21,715			22,035		21,728			22,092
Earnings (loss) per share - basic	$	(0.57	)	$	0.05	$	(0.85	)	$	0.02
Earnings (loss) per share - diluted	$	(0.57	)	$	0.04	$	(0.85	)	$	0.02

(1) The number of shares and per share amounts have been retroactively restated to reflect the two-for-one stock split of the Company’s common stock, which was effected in the form of a common stock dividend distributed on March 14, 2014.

6

The table below shows the number of shares that were excluded from the calculation of diluted loss per share because their inclusion would have been anti-dilutive to the calculation:

	Three Months Ended June 30,		Six Months Ended June 30,
(share data in thousands)	2015	2014	2015	2014
Stock options	18	—	24	—
Restricted stock awards	161	—	181	—
Performance share units	200	—	195	—
Stock appreciation rights	2	—	6	—
Total shares excluded from diluted shares outstanding	381	—	406	—

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to makes estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. There have been no changes in the Company’s critical accounting estimates from those that were disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. Actual results could differ from these estimates.

New Accounting Guidance

In January 2015, the FASB issued ASU No. 2015-01, Income Statement - Extraordinary and Unusual Items (Topic 225-20), Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items that simplifies income statement presentation by eliminating extraordinary items from U.S. GAAP. This guidance is to be applied either prospectively or retrospectively and is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. Early application is permitted provided the guidance is applied from the beginning of the annual year of adoption. The Company has adopted the guidance as of January 1, 2014 and the adoption of this standard did not have an impact on the Company's consolidated financial position or results of operations.

In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810), Amendments to the Consolidation Analysis that meant to clarify the consolidation reporting guidance in U.S. GAAP. This guidance is to be applied using a retrospective method or a modified retrospective method, as outlined in the guidance, and is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. Early application is permitted. The Company is currently evaluating this guidance but does not believe the adoption of this standard will impact the Company's financial statements and disclosures.

In April 2015, the FASB issued ASU 2015-03, Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs, which requires an entity to present debt issuance costs related to a debt liability as a direct deduction from the debt liability rather than as an asset. ASU 2015-03 is effective retrospectively for fiscal years, and interim reporting periods within those years, beginning after December 15, 2015. Early adoption is permitted for financial statements that have not been previously issued. The adoption of this standard impacted the presentation of certain financial statement line items within the Company’s consolidated balance sheets and related disclosures, but did not affect the Company’s consolidated results of operations.

In September 2015, the FASB issued ASU 2015-16, Business Combinations (Topic 805): Simplifying the Accounting Measurement-Period Adjustments, which eliminates the requirement for an entity to retrospectively adjust the financial statements for measurement-period adjustments that occur in periods after a business combination is completed. ASU 2015-16 is effective prospectively for fiscal years, and interim reporting periods within those years, beginning after December 15, 2015. The adoption of this standard will not have an impact on the Company's financial position and results of operations.

In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, to simplify the presentation of deferred income taxes. The amendments in ASU 2015-17 require that deferred tax liabilities and assets be classified as non-current in a classified statement of financial position. The current requirement that deferred tax liabilities and assets of a tax-paying component of an entity be offset and presented as a single amount is not affected by the amendments in the update. ASU 2015-17 is effective for fiscal years beginning after December 15, 2016, and interim periods within those years, and may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. The adoption of this standard will not have an impact on the Company's financial position.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities. This new standard provides guidance on how entities measure certain equity investments and

7

present changes in the fair value. This standard requires that entities measure certain equity investments that do not result in consolidation and are not accounted for under the equity method at fair value and recognize any changes in fair value in net income. ASU 2016-01 is effective for fiscal years beginning after December 31, 2017. The Company is currently evaluating the provisions of this guidance and assessing its impact on the Company's financial statements and disclosures.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires lessees to recognize a right of use asset and related lease liability for those leases classified as operating leases at the commencement date and have lease terms of more than 12 months. This topic retains the distinction between finance leases and operating leases. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, and interim periods within those years, and must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company is currently evaluating the provisions of this guidance and assessing its impact on the Company's financial statements and disclosures.

In March 2016, the FASB issued ASU 2016-06, Derivatives and Hedging (Topic 815), which requires that embedded derivatives be separated from the host contract and accounted for separately as derivatives if certain criteria are met, including the “clearly and closely related” criterion. The amendments in this Update clarify the requirements for assessing whether contingent call (put) options that can accelerate the payment of principal on debt instruments are clearly and closely related to their debt hosts. An entity performing the assessment under the amendments is required to assess the embedded call (put) options solely in accordance with the four-step decision sequence. The amendments apply to all entities that are issuers of or investors in debt instruments (or hybrid financial instruments that are determined to have a debt host) with embedded call (put) options. ASU 2016-06 is effective for fiscal years beginning after December 15, 2016, and interim periods within those years, and must apply a modified retrospective transition approach. Early adoption is permitted. The Company is currently evaluating the provisions of this guidance and assessing its impact on the Company's financial statements and disclosures.

In March 2016, the FASB issued ASU 2016-07, Investments - Equity Method and Joint Ventures (Topic 323), which simplifies the accounting for equity method investments by removing the requirement that an entity retroactively adopt the equity method of accounting if an investment qualifies for use of the equity method as a result of an increase in the level of ownership or degree of influence. The amendments require that the equity method investor add the cost of acquiring the additional interest in the investee to the current basis of the investor’s previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting. ASU 2016-07 is effective for fiscal years beginning after December 15, 2016, and interim periods within those years, and must apply a prospective adoption approach. Early adoption is permitted. The Company is currently evaluating the provisions of this guidance and assessing its impact on the Company's financial statements and disclosures.

In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which clarify the implementation guidance on principal versus agent considerations. ASU 2016-08 is effective for effective for fiscal years, and interim reporting periods within those years, beginning after December 15, 2017. Early application is permitted for annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company is currently evaluating the provisions of this guidance and assessing its impact on the Company's financial statements and disclosures.

In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation- Improvements to Employee Share-Based Payment Accounting (Topic 718), which involves several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Under the new standard, income tax benefits and deficiencies are to be recognized as income tax expense or benefit in the income statement and the tax effects of exercised or vested awards should be treated as discrete items in the reporting period in which they occur. An entity should also recognize excess tax benefits regardless of whether the benefit reduces taxes payable in the current period. Excess tax benefits should be classified along with other income tax cash flows as an operating activity. In regards to forfeitures, the entity may make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures when they occur. This ASU is effective for fiscal years beginning after December 15, 2016 including interim periods within that reporting period, however early adoption is permitted. The Company is currently evaluating the guidance to determine the Company's adoption method and the effect it will have on the Company's Consolidated Financial Statements.

8

Note 2 - Restructuring

The Company recorded restructuring charges during the three and six months endedJune 30, 2015 in connection with a reduction in force, the departure of certain executive officers and management's further alignment of the business with strategic objectives. These charges related to severance arrangements with departing employees and executives and the termination of the operations of a foreign subsidiary that was involved in the development of certain data analytics and monitoring products (see Note 3), as well as non-cash charges related to the acceleration of vesting of certain stock awards. The Company incurred additional charges during the remainder of 2015 associated with the closing of BCSI's facilities and corresponding alignment of the business with strategic objectives.

The Company recorded restructuring charges during the three and six months endedJune 30, 2014 primarily related to a reduction in force and management's alignment of the business with strategic objectives. These charges were related to severance agreements with departing employees, including non-cash charges related to the acceleration of vesting of certain stock awards.

A summary of the net pretax charges, incurred by segment, for each period is as follows:

		Pretax Charge
(in thousands, except employee data)	Approximate Number of Employees	Refined Coal		Emission Control - ACI			Emissions Control - BCSI		Research & Development			All Other and Corporate		Total
Three Months Ended June 30, 2015
Restructuring charges	41	$	—	$	1,715		$	—	$	86		$	3,764	$	5,565
Changes in estimates		—		—			—		(2		)	—		(2		)
Total pretax charge, net of reversals		$	—	$	1,715		$	—	$	84		$	3,764	$	5,563
Six Months Ended June 30, 2015
Restructuring charges	45	$	—	$	1,715		$	—	$	86		$	4,242	$	6,043
Changes in estimates		—		(10		)	—		(2		)	—		(12		)
Total pretax charge, net of reversals		$	—	$	1,705		$	—	$	84		$	4,242	$	6,031
Three Months Ended June 30, 2014
Restructuring charges	18	$	—	$	352		$	—	$	—		$	14	$	366
Total pretax charge, net of reversals		$	—	$	352		$	—	$	—		$	14	$	366
Six Months Ended June 30, 2014
Restructuring charges	18	$	—	$	352		$	—	$	—		$	14	$	366
Total pretax charge, net of reversals		$	—	$	352		$	—	$	—		$	14	$	366

9

The following table summarizes the Company’s utilization of restructuring accruals for the six months ended June 30, 2015:

(in thousands)	Employee Severance
Remaining accrual as of December 31, 2014	$	1,690
Expense provision (1)	6,043
Cash payments and other (1)	(4,342		)
Change in estimates	(12		)
Remaining accrual as of June 30, 2015	$	3,379

(1) Included within the Expense provision and Cash payments and other line items in the above table is equity based compensation of $3.1 million for the six months ended June 30, 2015, resulting from the accelerated vesting of modified equity-based compensation awards for certain terminated employees.

Restructuring accruals are included within the Accrued payroll and related liabilities line item in the Condensed Consolidated Balance Sheets. Restructuring expenses are included within the Payroll and benefits line item in the Condensed Consolidated Statements of Operations.

Note 3 - Acquisition

2015 Acquisition

In November 2014, the Company entered into an agreement with InSyst Ltd. and ClearView Monitoring Solutions Ltd. (collectively "ClearView"), both Israel based companies specializing in data analytics, to allow the Company the exclusive option to purchase certain assets of ClearView. The Company paid $0.2 million related to this option, which was included within the Prepaid expenses and other assets line item within the Condensed Consolidated Balance Sheets as of December 31, 2014. In January 2015, the Company notified ClearView that it had elected to exercise its exclusive option to purchase certain assets of ClearView.

In March 2015, the Company acquired the certain assets of ClearView for total cash payments of $2.4 million, which is inclusive of VAT tax of $0.4 million. The acquisition was accounted for under the acquisition method of accounting that requires the total purchase consideration to be allocated to the assets acquired and liabilities assumed based on estimates of fair value. Operating results related to the acquired assets were consolidated into the Company’s results of operations beginning March 6, 2015.

A summary of the purchase consideration and allocation of the purchase consideration is as follows:

(in thousands)
Purchase consideration:
Cash paid	$	2,360
Fair value of liabilities assumed:
Accrued liabilities	10
Contingent consideration	451
Total fair value of liabilities assumed	461
Total purchase consideration	$	2,821
Allocation of purchase consideration
Receivables	$	360
Property and equipment and other	82
Intangibles - in process research and development	2,379
Total	$	2,821

The transaction called for a series of contingent payments based upon the achievement of sales and sales targets. These contingent payments are classified as purchase consideration. As part of the purchase price, the Company recorded a $0.5

10

million liability for the contingent consideration based upon the net present value of the Company's estimate of the future payments.

During August 2015, as part of a broader strategic restructuring of the Company's business to simplify its operating structure in a manner that creates increased customer focus, better supports sales and product delivery and also aligns the Company’s cost structure as the emissions control market shifts towards compliance solutions for the Federal Mercury and Air Toxics Standards ("MATS"), the Company’s management approved an action to wind down operations of ADA Analytics. As a result of these actions, the Company fully impaired the carrying value of the assets, thereby recognizing net impairment expense in the amount of $1.9 million during the third quarter of 2015.

Note 4 - Equity Method Investments

Clean Coal Solutions, LLC

The Company's ownership interest in CCS was 42.5% as of June 30, 2015 and December 31, 2014. CCS supplies technology equipment, and technical services to cyclone-fired, pulverized coal and other boiler users, but CCS's primary purpose is to put into operation facilities that produce Refined Coal ("RC") that qualifies for tax credits available under Section 45 of the IRC ("Section 45 tax credits"). CCS has been determined to be a variable interest entity ("VIE"); however, the Company does not have the power to direct the activities that most significantly impact the VIE’s economic performance and has therefore accounted for the investment under the equity method of accounting. The Company determined the partners of CCS with voting rights had identical voting interests, equity control interests and board control interests, and therefore, concluded that the power to direct the activities that most significantly impact the VIE’s economic performance were shared.

As shown in the tables below, the Company’s carrying value in CCS has been reduced to zero in all periods presented, as cumulative cash distributions from CCS have exceeded the Company's pro-rata share of cumulative earnings in CCS. If CCS subsequently reports net income, the Company will not record its pro-rata share of such net income until cumulative share of pro-rata income equals or exceeds the amount of its cumulative income recognized due to cash being distributed. Until such time, the Company will only report income from CCS to the extent of cash distributions.

As such, equity income or loss reported on our income statement may differ from a mathematical calculation of net income or loss attributable to our equity interest based upon the factor of our equity interest and the net income or loss attributable to equity owners as shown on CCS’s income statement. Likewise, distributions from equity method investees are reported on our Consolidated Statements of Cash Flows as “return on investment” within Operating cash flows until such time as the carrying value in an equity method investee company is reduced to zero; thereafter, such distributions are reported as “distributions in excess of cumulative earnings” within Investing cash flows.

The following tables summarize the results of operations of CCS for the three and six months endedJune 30, 2015 and 2014, respectively:

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2015			2014			2015			2014
Gross profit	$	24,905		$	20,295		$	55,834		$	37,505
Operating expenses	7,147			4,998			12,503			9,419
Income from operations	17,758			15,297			43,331			28,086
Other expenses	470			(498		)	329			(741		)
Class B preferred return	(1,632		)	(2,249		)	(3,362		)	(4,583		)
Loss attributable to noncontrolling interest	1,782			897			3,113			3,001
Net income available to Class A members	$	18,378		$	13,447		$	43,411		$	25,763
ADES equity earnings	$	4,630		$	9,733		$	4,730		$	16,321

The difference between the Company's proportionate share of CCS' net income and the Company's earnings from its CCS equity method investment as reported on its Condensed Consolidated Statements of Operations relates to the Company receiving distributions in excess of the carrying value of the investment, and therefore recognizing such excess distributions as equity method earnings in the period the distributions occur. When CCS subsequently reports income, the Company does not record its share of such income until it equals the amount of distributions in excess of carrying value that were previously recognized in income.

11

The following table presents the Company's investment balance, equity earnings and cash distributions in excess of the investment balance, on a quarterly basis, for the three and six months endedJune 30, 2015 (in thousands):

Description	Date(s)	Investment balance			ADES equity earnings (loss)			Cash distributions		Cash distributions and equity loss in (excess) of investment balance
Beginning balance	12/31/14	$	—		$	—		$	—	$	(29,877	)
ADES proportionate share of income from CCS (1)	First Quarter	9,827			9,827			—		—
Increase of equity loss in excess of investment balance (prior to cash distributions)	First Quarter	(9,827		)	(9,827		)	—		9,827
Cash distributions from CCS	First Quarter	(100		)	—			100		—
Adjustment for current year cash distributions in excess of investment balance	First Quarter	100			100			—		(100		)
Total investment balance, equity earnings (loss) and cash distributions	3/31/2015	—			100			100		(20,150		)
ADES proportionate share of income from CCS (1)	Second Quarter	7,825			7,825			—		—
Increase of equity loss in excess of investment balance (prior to cash distributions)	Second Quarter	(7,825		)	(7,825		)	—		7,825
Cash distributions from CCS	Second Quarter	(4,630		)	—			4,630		—
Adjustment for current year cash distributions in excess of investment balance	Second Quarter	4,630			4,630			—		(4,630		)
Total investment balance, equity earnings (loss) and cash distributions	6/30/2015	$	—		$	4,630		$	4,630	$	(16,955	)

The following table presents the Company's investment balance, equity earnings and cash distributions in excess of the investment balance, on a quarterly basis, for the three and six months endedJune 30, 2014 (in thousands):

Description	Date(s)	Investment balance			ADES equity earnings (loss)			Cash distributions		Cash distributions and equity loss in (excess) of investment balance
Beginning balance	12/31/2013	$	—		$	—		$	—	$	(12,906	)
ADES proportionate share of income from CCS (1)	First Quarter	4,644			4,644			—		—
Recovery of cumulative distributions and equity losses in excess of investment balance	First Quarter	(4,644		)	(4,644		)	—		4,644
Cash distributions from CCS	First Quarter	(6,588		)	—			6,588		—
Recognition of earnings for cash distributions in excess of investment balance	First Quarter	6,588			6,588			—		(6,588		)
Total investment balance, equity earnings (loss) and cash distributions	3/31/2014	—			6,588			6,588		(14,850		)
ADES proportionate share of income from CCS (1)	Second Quarter	5,130			5,130			—		—
Recovery of cumulative distributions and equity losses in excess of investment balance	Second Quarter	(5,130		)	(5,130		)	—		5,130
Cash distributions from CCS	Second Quarter	(9,733		)	—			9,733		—
Recognition of earnings for cash distributions in excess of investment balance	Second Quarter	9,733			9,733			—		(9,733		)
Total investment balance, equity earnings (loss) and cash distributions	6/30/2014	$	—		$	9,733		$	9,733	$	(19,453	)

(1) The amounts of the Company's 42.5% proportionate share of net income as shown in the table above differ from mathematical calculations of the Company’s 42.5% equity interest in CCS multiplied by the amounts of Net Income available to Class A members as shown in the table above of CCS results of operations due to adjustments related to the Redeemable Class B preferred return and the elimination of CCS earnings attributable to RCM6, of which the Company owned 24.95% during the periods presented during the years ended December 31, 2015 and 2014.

12

Clean Coal Solutions Services, LLC

On January 20, 2010, the Company, together with NexGen Refined Coal, Inc. ("NexGen"), formed Clean Coal Solutions Services, LLC ("CCSS"), a Colorado limited liability company, for the purpose of operating the RC facilities leased or sold to third parties. The Company has determined that CCSS is not a VIE and has evaluated the consolidation analysis under the Voting Interest Model. The Company has a 50% voting and economic interest in CCSS, which is equivalent to the voting and economic interest of NexGen. Therefore, as the Company does not have greater than 50% of the outstanding voting shares, either directly or indirectly, it has accounted for the investment under the equity method of accounting. The Company’s investment in CCSS as of June 30, 2015 and December 31, 2014 was $6.3 million and $4.1 million, respectively.

The following table summarizes the results of operations of CCSS:

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2015			2014			2015			2014
Gross loss	$	(9,732	)	$	(4,411	)	$	(19,895	)	$	(8,816	)
Operating expenses	41,008			21,683			78,954			43,381
Loss from operations	(50,740		)	(26,094		)	(98,849		)	(52,197		)
Other expenses	(70		)	(21		)	(75		)	(24		)
Loss attributable to noncontrolling interest	53,110			27,628			103,268			55,497
Net income	$	2,300		$	1,513		$	4,344		$	3,276
ADES equity earnings	$	1,150		$	757		$	2,172		$	1,638

Included within the Consolidated Statement of Operations of CCSS for the three and six months endedJune 30, 2015 and 2014, respectively, were losses related to VIE's of CCSS. These losses do not impact the Company's equity earnings from CCSS as 100% of those losses are removed from the net income of CCSS as they are losses attributable to a noncontrolling interest.

RCM6, LLC

On February 10, 2014, the Company purchased a 24.95% membership interest in RCM6, LLC ("RCM6"), which owns a single RC facility that produces RC that qualifies for Section 45 tax credits, from CCS through an up-front payment of $2.4 million and an initial note payable to CCS of $13.3 million. Due to the payment terms of the note purchase agreement, the note payable is periodically negatively amortizing and the note payable balance as of June 30, 2015 and December 31, 2014 were $13.9 million and $14.2 million, respectively. In addition to the up front and subsequent note payments, the Company is also subject to quarterly capital calls and variable payments based upon differences in originally forecasted RC production as of the purchase date and actual quarterly production. The following table contains the capital calls and variable payments made by the Company related to its investment in RCM6 during the three and six months endedJune 30, 2015 and 2014, respectively:

	Three Months Ended June 30,					Six Months Ended June 30,
(in thousands)	2015			2014		2015		2014
Capital calls and variable payments (1)	$	(238	)	$	126	$	230	$	1,383

(1) During the three months ended June 30, 2015, net capital calls and variable payments were negative due to a true-up calculation by CCS of the cumulative variable payments related to the RCM6 purchase by which the Company received a refund of $0.4 million.

RCM6 has been determined to be a VIE, however, during the periods presented, the Company did not have the power to direct the activities that most significantly impacted the variable interest entity’s economic performance and has therefore accounted for the investment under the equity method of accounting.

As of June 30, 2015 and December 31, 2014, the Company’s ownership in RCM6 was 24.95%. The Company’s investment in RCM6 as of June 30, 2015 and December 31, 2014 was $13.9 million and $15.4 million, respectively. On March 3, 2016, the Company sold its 24.95% membership interest in RCM6, as further described in Note 12.

13

The following table summarizes the assets, liabilities and results of operations of RCM6:

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2015			2014			2015			2014
Gross loss	$	(1,180	)	$	(412	)	$	(1,980	)	$	(1,971	)
Operating expenses	516			423			977			866
Loss from operations	(1,696		)	(835		)	(2,957		)	(2,837		)
Other expenses	(89		)	(63		)	(162		)	(169		)
Net loss	$	(1,785	)	$	(898	)	$	(3,119	)	$	(3,006	)
ADES equity losses	$	(920	)	$	(699	)	$	(1,728	)	$	(1,543	)

The purchase of RCM6 resulted in the Company recording a basis difference related to property, plant and equipment and identifiable intangible assets. The difference between the Company's proportionate share of RCM6' net loss and the Company's equity losses noted above is due to depreciation and amortization related to the basis difference allocated to property, plant and equipment and identifiable intangible assets upon the purchase of RCM6. During the three and six months endedJune 30, 2015 and 2014, the Company adjusted its equity method earnings in RCM6 by $0.5 million and $0.5 million and $1.0 million and $0.8 million, respectively, due to this basis difference.

On March 3, 2016, the Company sold its entire ownership interest in RCM6. The Company received a cash payment of $1.8 million related to the sale and has no future obligations related to the previously recorded note payable.

The following table details the components of the Company's respective equity method investments included within the Earnings from equity method investments line item on the Condensed Consolidated Statements of Operations:

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2015			2014			2015			2014
Earnings from CCS	$	4,630		$	9,733		$	4,730		$	16,321
Earnings from CCSS	1,150			757			2,172			1,638
Loss from RCM6	(920		)	(699		)	(1,728		)	(1,543		)
Earnings from equity method investments	$	4,860		$	9,791		$	5,174		$	16,416

The following table details the components of the cash distributions from the Company's respective equity method investments included within the Condensed Consolidated Statements of Cash Flows. Distributions from equity method investees are reported on our Condensed Consolidated Statements of Cash Flows as “return on investment” within Operating cash flows until such time as the carrying value in an equity method investee company is reduced to zero; thereafter, such distributions are reported as “distributions in excess of cumulative earnings” within Investing cash flows.

	Six Months Ended June 30,
(in thousands)	2015		2014
Distributions from equity method investees, return on investment
CCSS	$	19	$	1,259
	$	19	$	1,259
Distributions from equity method investees in excess of investment basis
CCS	$	4,730	$	16,321
	$	4,730	$	16,321

14

Note 5 - Investments

The Company had investment securities related to certificates of deposit in the amount of $0.3 million as of June 30, 2015 and December 31, 2014. No unrealized gains or losses were recorded as of June 30, 2015 and December 31, 2014 related to these investment securities.

The Company also had a cost method investment in the amount of $2.8 million as of June 30, 2015 and December 31, 2014. No unrealized gains or losses were recorded as of June 30, 2015 and December 31, 2014 related to this investment security.

The Company's investment securities have maturities ranging from one to five years as of June 30, 2015.

In November 2014, the Company acquired an 8% ownership interest in the common stock of Highview Enterprises Limited ("Highview"), a London, England based developmental stage company specializing in power storage, for $2.8 million in cash. The Company evaluated the investment and determined that it should account for the investment under the cost method. This investment is evaluated for impairment upon an indicator of impairment such as an event or change in circumstances that may have a significant adverse effect on the fair value of the investment. As of June 30, 2015 and December 31, 2014, no indicators of impairment had been identified. When there are no indicators of impairment present, the Company estimates the fair value for the Highview investment only if it is practical to do so. As of June 30, 2015 and December 31, 2014, the Company estimated that the fair value of the cost method investment approximated the November 2014 purchase price due to the proximity of the purchase date to December 31, 2014 and June 30, 2015.

Note 6 - Borrowings

The following table summarizes the Company's notes payable, all of which are with related parties, as of June 30, 2015 and December 31, 2014:

	As of
(in thousands)	June 30, 2015		December 31, 2014
Current portion of long-term borrowings
RCM6 note payable	$	995	$	874
DSI Business Owner note payable	617		605
Total current portion of long-term borrowings	1,612		1,479
Long-term borrowings
RCM6 note payable	12,909		13,312
DSI Business Owner note payable	807		1,119
Total Long-term borrowings	13,716		14,431
Total Borrowings	$	15,328	$	15,910

CCS - RCM6 Note Payable

As described in Note 4, the Company acquired membership interests in RCM6 from CCS in February 2014, through an up-front payment and a note payable. Due to the payment terms of the note purchase agreement, the note payable periodically adds interest to the outstanding note payable principle balance. The stated rate associated with the note is 1.65% and the effective rate of the note at inception was 20%. Due to the difference between the stated rate and the effective rate, the note payable is carried at a discount of $8.6 million and $10.1 million as of June 30, 2015 and December 31, 2014, respectively. Unpaid principal and interest on the note are due in 2022.

As described in Note 12, on March 3, 2016, the Company sold its 24.95% membership interest in RCM6 and, as a result, the Company currently has no future payment obligations related to its RCM6 equity investment.

DSI Business Owner

As of December 31, 2014, the Company terminated the consulting portion of the agreements the former, sole-owner of companies from which BCSI acquired its assets ("DSI Business Owner"), as described in Note 9 of the Company's Annual Report on Form 10-K for the year ended December 31, 2014. However, per the terms of the remaining agreements the Company was required to make all remaining payments structured as a note payable through the third quarter of 2017. In February 2016, the Company entered into an agreement with the DSI Business Owner and settled the remaining amounts owed as of the date of the agreement of approximately $1.1 million for $0.3 million which was paid during the first quarter of 2016.

15

Note 7 - Fair Value Measurements

Fair value of financial instruments

The carrying amounts of financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, deposits and accrued expenses approximate fair value due to the short maturity of these instruments. Accordingly, these instruments are not presented in the table below. The following table provides the estimated fair values of the remaining financial instruments:

	As of June 30, 2015				As of December 31, 2014
(in thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value
Financial Instruments:
Investment securities:
Investment securities, restricted, long-term	$	336	$	336	$	336	$	336
Cost method investment	$	2,776	$	2,776	$	2,776	$	2,776
Notes Payable:
Current portion of notes payable, related party	$	1,668	$	1,517	$	1,479	$	1,439
Long-term portion of notes payable, related party	$	14,022	$	13,732	$	14,431	$	14,356
Highview technology license payable	$	—	$	—	$	155	$	155
Highview technology license payable, long-term	$	1,314	$	1,314	$	1,389	$	1,389
Stock appreciation rights, liability-classified equity award	$	517	$	517	$	—	$	—

Concentration of credit risk

The Company's certificates of deposit investment securities, and virtually all of the Company’s restricted and unrestricted cash accounts, are at two financial institutions. If those institutions were to be unable to perform their obligations, the Company would be at risk regarding the amount of cash and investment in excess of the federal deposit insurance corporation limits ($250 thousand) that would be returned to the Company.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The estimated fair values of investment securities are described below. Refer to Note 5 of these Consolidated Financial Statements for additional information regarding the Company’s investment securities.

Fair value is defined as the price that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The Company uses the hierarchy prescribed in the accounting guidance for fair value measurements, based upon the available inputs to the valuation and the degree to which they are observable or not observable in the market. The three levels in the hierarchy are as follows:

•Level 1 Inputs - Quoted prices (unadjusted) for identical assets or liabilities in active markets that are accessible as of the measurement date.

•Level 2 Inputs - Inputs other than quoted prices within Level 1 that are observable either directly or indirectly, including but not limited to quoted prices in markets that are not active, quoted prices in active markets for similar assets or liabilities and observable inputs other than quoted prices such as interest rates or yield curves.

•Level 3 Inputs - Unobservable inputs reflecting the Company’s own assumptions about the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk.

Financial instruments carried and measured at fair value on a recurring basis are presented in the table below according to the fair value hierarchy described above:

16

	As of June 30, 2015
	Fair Value Measurement Using
(in thousands)	Level 1		Level 2		Level 3		Assets at Fair Value
Assets:
Investment securities, restricted, long-term	$	—	$	336	$	—	$	336
Total assets at fair value	$	—	$	336	$	—	$	336
Liabilities:
Contingent consideration	$	—	$	—	$	451	$	451
Stock appreciation rights, liability-classified equity award	—		517		—		517
Total liabilities at fair value	$	—	$	517	$	451	$	968

	As of December 31, 2014
	Fair Value Measurement Using
(in thousands)	Level 1		Level 2		Level 3		Assets at Fair Value
Assets:
Investment securities, restricted, long-term	$	—	$	336	$	—	$	336
Total assets at fair value	$	—	$	336	$	—	$	336

The estimated fair value of investments securities consisting entirely of certificates of deposits was estimated to be equal to the deposit value of the investment due to the relative short term nature of the instrument.

As discussed in Note 3, during the first quarter of 2015, contingent consideration was recorded related to the acquisition of ClearView. The transaction called for a series of contingent payments based upon the achievement of sales and sales targets. As part of the purchase price, the Company recorded a $0.5 million liability for the contingent consideration due to the sellers based upon the net present value of the Company's estimate of the future payments. This fair value measurement represents a Level 3 measurement as it is based on significant inputs not observable in the market. Significant judgment is employed in determining the appropriateness of these assumptions as of the acquisition date.

As part of the broader restructuring plan discussed in Note 3, the Company recognized a non-cash gain related to the reversal of the contingent consideration liability as the achievement of sales and sales targets would not be met.

Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

Assets and liabilities measured on a non-recurring basis are presented in the following tables:

	As of June 30, 2015
	Fair Value Measurement Using
(in thousands)	Level 1		Level 2		Level 3		Fair Value		Total Losses
Assets:
Impaired note receivable	$	—	$	—	$	—	$	—	$	(1,000	)
Total assets at fair value	$	—	$	—	$	—	$	—	$	(1,000	)

The Company recorded impairment charges related to a Note Receivable. The fair value of the impaired note receivable, determined to be fully impaired, was estimated using a discounted cash flow analysis. The fair value measurements represent a Level 3 measurement.

17

	As of December 31, 2014
	Fair Value Measurement Using
(in thousands)	Level 1		Level 2		Level 3		Fair Value		Total Losses
Assets:
Property and equipment	$	—	$	—	$	424	$	424	$	(355	)
Impaired note receivable	—		—		—		—		(500		)
Total assets at fair value	$	—	$	—	$	424	$	424	$	(855	)

During the fourth quarter of 2014, the Company recorded impairments on property and equipment, with a total carrying value of $0.8 million, as a result of ongoing negative cash flows related to assets specifically related to the Company's Dry Sorbent Injection ("DSI") system fabrication facility. The fair value of the impaired property and equipment as of December 31, 2014 was estimated using an appraisal obtained from a third party. The fair value measurements represent a Level 3 measurement as it is based on significant inputs not observable in the market. The fair value of the impaired goodwill, determined to be fully impaired, was estimated using a discounted cash flow analysis. The fair value measurement represents a Level 3 measurement.

During the fourth quarter of 2015, the Company recorded impairments totaling approximately $0.3 million to reduce the carrying value of certain property and equipment that the Company intended to sell to its estimated sales value, less estimated costs to sell. The property and equipment were subsequently sold at auction. Proceeds from the sale of the impaired assets totaled approximately $0.6 million. No gain or loss was recognized on the sale of the property and equipment.

Also during the fourth quarter of 2015, the Company sold certain property and equipment having a net book value of approximately $0.1 million. Proceeds from the sale totaled approximately $0.3 million, which resulted in the recognition of a gain on the sale of approximately $0.2 million.

Note 8 - Commitments and Contingencies

Legal Proceedings

The Company is involved in certain legal actions, described below. The outcomes of these legal actions are not within the Company’s complete control and may not be known for prolonged periods of time. In some actions, the claimants seek monetary damages and other penalties that could require significant expenditures. In accordance with U.S. GAAP, the Company records a liability in the Consolidated Financial Statements for loss contingencies when a loss is known or considered probable and the amount can be reasonably estimated. If the reasonable estimate of a known or probable loss is a range, and no amount within the range is a better estimate than any other, the minimum amount of the range is accrued. If a loss is reasonably possible but not known or probable, and can be reasonably estimated, the estimated loss or range of loss is disclosed. When determining the estimated loss or range of loss, significant judgment is required to estimate the amount and timing of a loss to be recorded. Estimates of probable losses resulting from litigation and governmental proceedings involving the Company are inherently difficult to predict, particularly when the matters are in early procedural stages, with incomplete facts or legal discovery; involve unsubstantiated or indeterminate claims for damages; potentially involve penalties or fines. ADES cannot predict, with any certainty, the final outcome of any legal proceedings as described in the paragraphs below, nor can it provide any assurance that the ultimate resolution of any such matter will not have a material adverse effect on our consolidated financial position, results of operations or cash flows.

Securities class action lawsuit: United Food and Commercial Workers Union v. Advanced Emissions Solutions, Inc., No. 14-cv-01243-CMA-KMT (U.S. District Court, D. Colo.)

A class action lawsuit against ADES and certain of its current and former officers is pending in the federal court in Denver, Colorado. This lawsuit and a companion case were originally filed in May 2014. On February 19, 2015, the Court consolidated these cases and appointed the United Foods and Commercial Workers Union and Participating Food Industry Employers Tri-State Pension Fund as lead plaintiff and approved its selection of the law firms. The consolidated case is now captioned United Food and Commercial Workers Union v. Advanced Emissions Solutions, Inc., No. 14-cv-01243-CMA-KMT (U.S. District Court, D. Colo.).

The lead plaintiff filed “Lead Plaintiff’s Consolidated Class Action Complaint” on April 20, 2015 (the “Consolidated Complaint”). The Consolidated Complaint names as defendants the Company and certain current and former Company officers.

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Plaintiffs allege that ADES and other defendants misrepresented to the investing public the Company’s financial condition and its financial controls to artificially inflate and maintain the market price of ADES’s common stock. The Consolidated Complaint alleges two claims for relief for: 1) alleged violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5, and 2) control person liability under Section 20(a) of the Exchange Act.

The lawsuit seeks unspecified monetary damages together with costs and attorneys’ fees incurred in prosecuting the class action, among other relief. The Consolidated Complaint alleges a class period covering all purchasers or acquirers of the common stock of ADES or its predecessor-in-interest during the proposed class period from May 12, 2011 through January 29, 2015.

Defendants filed a motion to dismiss the Consolidated Complaint on June 19, 2015, contending the Consolidated Complaint: 1) fails to meet the strict pleading standards required for Section 10(b) claims; and 2) fails to establish the primary violation required for any claim of secondary (control person) liability. Plaintiffs filed a response in opposition to this motion on July 2, 2015 and Defendants filed their reply brief on July 16, 2015. On March 7, 2016 the parties filed a stipulated motion to stay the case while the parties mediate the matter. On March 8, 2016, the motion to stay was granted, and the Defendants’ motion to dismiss was denied without prejudice with the option to refile should mediation fail. The case is stayed until further order of the court.

The Company has not recorded an expense related to losses in connection with this matter because any potential loss is not currently probable or reasonably estimable under U.S. GAAP. Additionally, the Company cannot reasonably estimate the range of loss, if any, that may result from this matter.

Stockholder derivative lawsuits: In Re Advanced Emissions Solutions, Inc. Shareholder Derivative Litigation, No. 2014CV-30709 (District Court, Douglas County, Colorado) (consolidated actions).

Consolidated stockholder derivative claims against certain of the Company’s current and former officers and directors, along with the Company as a "nominal defendant", are pending in the District Court for Douglas County, Colorado, and are currently stayed.

In June and July 2014 stockholder derivative actions were filed in the Colorado District Courts for Douglas County and for the City and County of Denver. By agreement of the parties, the case in the Denver District Court was transferred to the Douglas County District Court and the cases were consolidated.

In separate complaints, the plaintiffs allege breach of fiduciary duties, waste of corporate assets, and unjust enrichment against the defendants for their alleged use of improper accounting techniques and for failing to maintain effective internal controls that, together, resulted in materially inaccurate financial statements from which incentive compensation was derived and paid. Plaintiffs demand, on behalf of the Company, unspecified monetary damages, “appropriate equitable relief,” and the costs and disbursements of the action, including attorneys', accountants and expert fees, costs, expenses, and restitution, as well as certain corporate governance charges.

On August 28, 2014, the Colorado state court approved a Stipulation and proposed Order Consolidating Actions, Appointing Co-Lead Plaintiffs and Co-Lead Counsel, and Staying Consolidated Action. Under that Order the consolidated derivative actions are stayed at least 30 days after a decision by the U.S. District Court on Defendants’ motion to dismiss the operative complaint in the securities class action described above. Any party has the right to move to lift the stay on 30-days’ written notice to the other parties.

The Company has not recorded an expense related to losses in connection with this matter because any potential loss is not currently probable or reasonably estimable under U.S. GAAP. Additionally, the Company cannot reasonably estimate the range of loss, if any, that may result from this matter.

SEC Inquiry

On April 7, 2014, the SEC’s Division of Enforcement informed the Company that it had initiated an inquiry to determine if violations of the federal securities laws have occurred (the “SEC Inquiry”), and in September 2014 the SEC issued a formal order of investigation. The SEC Inquiry generally pertains to the restatement of the Company's financial statements and internal controls processes, as described in Note 2 to the Consolidated Financial Statements of the Company included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2014. The Company is fully cooperating with the SEC and has provided information and documents to the SEC on an ongoing basis. To date, the SEC has not asserted any formal claims.  While we cannot predict the duration or outcome of the SEC Inquiry, it could result in the payment of monetary penalties and other relief.

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The Company has not recorded an expense related to losses in connection with this matter because any potential loss is not currently probable or reasonably estimable under U.S. GAAP. Additionally, the Company cannot reasonably estimate the range of loss, if any, that may result from this matter.

Settlement and royalty indemnity

In August 2008, Norit International N.V. f/k/a Norit N.V. ("Norit") filed a lawsuit against the Company asserting claims for misappropriation of trade secrets and other claims related to the Company's ADA Carbon Solutions, LLC joint venture ("Carbon Solutions"). In August 2011, the Company and Norit entered into a settlement agreement whereby the Company paid amounts related to the non-solicitation breach of contract claim and ADA was also required to pay additional damages related to certain future revenues generated from the equity method investment through Q2 2018 (the “Royalty Award”). Payments of amounts due under the Royalty Award for each quarter are payable three months after such quarter ends through the second quarter of 2018. In October 2011, an arbitration panel endorsed and confirmed the terms of the settlement agreement.

Additionally, during November 2011, the Company entered into an Indemnity Settlement Agreement whereby the Company agreed to settle certain indemnity obligations asserted against the Company related to the Norit litigation and relinquished all of its equity interest in Carbon Solutions to Carbon Solutions and amended the Intellectual Property License Agreement dated October 1, 2008 between the Company and Carbon Solutions. In the event that the Company declares or otherwise issues a dividend to any or all of its stockholders prior to January 1, 2018, other than repurchases of common stock under employee stock plans, the Company must increase its letter of credit amounts, which support the payments which must be paid to Norit, equal to 50% of the aggregate fair market value of such dividends.

As of June 30, 2015 and December 31, 2014, the Company has recorded the components of the Settlement and royalty indemnity obligation within the following line items in the Condensed Consolidated Balance Sheets:

	As of
(in thousands)	June 30, 2015		December 31, 2014
Settlement and royalty indemnity obligation, short-term	$	4,268	$	3,749
Litigation settlement and royalty indemnity expense, net	18,282		20,273
Total settlement and royalty indemnity	$	22,550	$	24,022

Future amounts to be paid related to the Royalty Award may differ from current estimates due to future adjusted sales of activated carbon from the Red River plant.

CCS

The Company also has certain limited obligations contingent upon future events in connection with the activities of CCS. The Company, NexGen and two entities affiliated with NexGen have provided GSFS with limited guaranties (the “CCS Party Guaranties”) related to certain losses it may suffer as a result of inaccuracies or breach of representations and covenants. The Company also is a party to a contribution agreement with NexGen under which any party called upon to pay on a CCS Party Guaranty is entitled to receive contribution from the other party equal to 50% of the amount paid. No liability or expense provision has been recorded by the Company related to this contingent obligation as the Company believes that it is not probable that a loss will occur with respect to CCS Party Guaranties.

Consultant obligation

On January 1, 2012, the Company entered into a residual payment agreement with a former consultant who was involved in the development and deployment of RC technologies. Pursuant to the agreement, the Company was required to make annual payments based upon CCS RC production from January 1, 2012 through June 30, 2015. These expenses are recorded within the Legal and professional fees line item in the Condensed Consolidated Statements of Operations and are recorded as RC production occurs. The following tables summarize the expenses under this agreement for the three and six months endedJune 30, 2015 and 2014, respectively:

	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2015		2014		2015		2014
Consultant expense	$	212	$	307	$	279	$	557

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Line of Credit

In September 2013, ADA, as borrower, and ADES, as guarantor, entered into a 2013 Loan and Security Agreement with a bank for an aggregate principal amount of $10 million that is secured by certain amounts due to the Company from certain CCS RC leases (the "Line of Credit"). As amended, the Line of Credit is available until May 31, 2016.

Covenants in the Line of Credit include a borrowing base limitation that is based on a percentage of the net present value of ADA’s portion of payments due to Clean Coal from the RC leases. The Line of Credit also contains other affirmative and negative covenants and customary indemnification obligations of ADA to the lender and provides for the issuance of Letters of Credit provided that the aggregate amount of the Letters of Credit plus all advances then outstanding does not exceed the calculated borrowing base. The Company guaranteed the obligations and agreements of ADA under the Line of Credit. Amounts outstanding under the line of credit bear interest payable monthly at a rate per annum equal to the higher of 5% or the “Prime Rate” (as defined in the agreement) plus 1%. There were no outstanding balances under this agreement at June 30, 2015 and December 31, 2014, respectively. As a result of certain covenant violations, the Company has no borrowing availability under this facility.

The Line of Credit has been amended six times (December 2, 2013, April 3, 2014, September 20, 2014, December 15, 2014, May 29, 2015 and September 30, 2015), most notably to extend the maturity date. The lender has also provided seven waivers relating to various transactions and obligations to provide financial information to the lender.

Letters of Credit

The Company has letters of credit ("LOC") with two financial institutions related to equipment projects, the Royalty Award and certain other agreements. The following tables summarize the letters of credit outstanding, collateral, by type, and the related line items within the Condensed Consolidated Balance Sheets where the collateral related to the letters of credit is recorded:

	As of June 30, 2015
(in thousands)	LOC Outstanding		Restricted Cash		Restricted cash, long-term		Investment securities, restricted, long-term
Contract performance - equipment systems	$	7,956	$	2,527	$	5,430	$	—
Royalty Award	5,250		—		5,250		—
Other	328		—		—		336
Total LOC outstanding	$	13,534	$	2,527	$	10,680	$	336

	As of December 31, 2014
(in thousands)	LOC Outstanding		Restricted Cash		Restricted cash, long-term		Investment securities, restricted, long-term
Contract performance - equipment systems	$	7,247	$	2,527	$	4,721	$	—
Royalty Award	4,050		—		4,050		—
Other	328		—		—		336
Total LOC outstanding	$	11,625	$	2,527	$	8,771	$	336

Restricted balances may exceed the letters of credit outstanding due to interest income earned on the restricted balances.

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Performance Guarantee on Equipment Systems

In the normal course of business related to ACI and DSI systems, the Company may guarantee certain performance thresholds during a discrete performance testing period that do not extend beyond six months from the initial test date, the commencement of which is determined by the customer. Performance thresholds include such matters as the achievement of a certain level of mercury removal and other emissions based upon the injection of a specified quantity of a qualified activated carbon or other chemical at a specified rate given other plant operating conditions, availability of equipment and electric power usage. In the event the equipment fails to perform as specified during the testing period, the Company may have an obligation to correct or replace the equipment. In the event the level of mercury removal is not achieved, the Company may have a “make right” obligation within the contract limits. As of June 30, 2015, the Company had not incurred a performance guarantee claim. Performance guarantee claims, if incurred, would be included within the Equipment sales cost of revenue line of the Condensed Consolidated Statements of Operations. However, during the third quarter of 2015, the Company began working to modify and correct two performance guarantee issues related to EC systems. Resolution of these performance guarantees is not expected to result in a material adverse effect on the Company’s operating performance or liquidity in 2015 or beyond.

Note 9 - Stock-Based Compensation

The Company grants equity based awards to employees and non-employee directors. Equity based awards include RSA's, Stock Options, PSU's and Stock Appreciation Rights ("SAR's"). Stock-based compensation expense related to employees is included within the Payroll and benefits line item in the Condensed Consolidated Statements of Operations. Stock-based compensation expense related to non-employee directors is included within the General and administrative line item in the Condensed Consolidated Statements of Operations.

Total stock-based compensation expense for the three and six months endedJune 30, 2015 and 2014 was as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2015		2014		2015		2014
Restricted stock award expense	$	1,409	$	491	$	1,939	$	1,000
Stock option expense	192		18		570		31
PSU expense	2,387		332		2,433		714
SAR expense	517		—		517		—
Total stock-based compensation expense	$	4,505	$	841	$	5,459	$	1,745

The amount of unrecognized compensation cost as of June 30, 2015, and the expected weighted average period over which the cost will be recognized is as follows:

	As of June 30, 2015
(in thousands)	Unrecognized Compensation Cost		Expected Weighted Average Period of Recognition (in years)
Restricted stock award expense	$	1,574	.96
Stock option expense	290		1.07
PSU expense	1,075		1.04
SAR expense	1,384		0.45
Total unrecognized stock-based compensation expense	$	4,323	1.0

Restricted Stock Awards

Restricted stock is typically granted with vesting terms of three or five years. The fair value of restricted stock awards is determined based on the closing price of the Company’s common stock on the authorization date of the grant multiplied by the number of shares subject to the stock award. Compensation expense for restricted stock awards is recognized over the entire vesting period on a straight-line basis. A summary of restricted stock award activity under the Company's various stock compensation plans for the six months ended June 30, 2015 is presented below:

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Non-vested at (in thousands, except for per share amounts)	Shares		Weighted Average Grant Date Fair Value
Non-vested at January 1, 2015	209,921		$	13.59
Granted	127,375		14.98
Vested	(134,983	)	18.42
Forfeited	(12,239	)	17.59
Non-vested at June 30, 2015	190,074		10.83

During the three and six months endedJune 30, 2015, the Company accelerated the terms of equity awards, including both RSA's and PSU's, granted to employees as part of the reduction in workforce. The Company recorded incremental expense of $3.0 million and $3.1 million, respectively, in the Payroll and benefits line item in the Consolidated Statement of Operations.

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Stock Options

Stock options generally vest over three years and have a contractual limit of five years from the date of grant to exercise. The fair value of stock options granted pursuant to one of the Company’s plans is determined on the date of grant using the Black-Scholes option pricing model and the related expense is recognized on a straight-line basis over the entire vesting period.

The fair value of the Company's options that were granted during the six months ended June 30, 2015 was estimated at the date of grant using a Black-Scholes options pricing model with the following weighted average assumptions:

	Six Months Ended June 30, 2015
Stock options granted:
Risk-free interest rate	1.8	%
Dividend yield	—	%
Volatility	74.5	%
Expected term (in years)	5.0

A summary of option activity for the six months ended June 30, 2015 is presented below:

(in thousands, except for per share amounts)	Number of Options Outstanding and Exercisable	Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Term (in years)
Options outstanding, January 1, 2015	74,200	$	13.76
Options granted	56,250	$	13.87
Options exercised	—	$	—
Options expired / forfeited	—	$	—
Options outstanding, June 30, 2015	130,450	$	13.81	$	—	3.56
Options exercisable as of June 30, 2015	97,115	$	12.08	$	—	3.5

Stock Appreciation Rights

Stock Appreciation Rights ("SAR's") generally vest over three years and have a contractual limit of five years from the date of grant to exercise. The fair value of SAR's granted pursuant to one of the Company’s plans is determined on the date of grant using the Black-Scholes option pricing model and the related expense is recognized on a straight-line basis over the entire vesting period.

The fair value of the Company's SAR's that were granted during the six months ended June 30, 2015 was estimated at the date of grant using a Black-Scholes options pricing model with the following weighted average assumptions:

	Six Months Ended June 30, 2015
SAR's granted:
Risk-free interest rate	1.8	%
Dividend yield	—	%
Volatility	74.5	%
Expected term (in years)	5.0

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A summary of SAR's activity for the six months ended June 30, 2015 is presented below:

(in thousands, except for per share amounts)	Number of SAR's Outstanding and Exercisable	Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Term (in years)
SAR's outstanding January 1, 2015	—	$	—
Granted	243,750	$	13.87
Exercised	—	$	—
Expired / forfeited	—	$	—
SAR's outstanding June 30, 2015	243,750	$	13.87	$	—	4.5
SAR's exercisable as of June 30, 2015	43,750	$	13.87	$	—	—

The SAR's granted during the three months ended June 30, 2015 were awarded to the Company's Chief Executive Officer. If Amendment No. 4 to the Company’s Amended and Restated 2007 Equity Incentive Plan, as amended, is approved by a vote of the stockholder's prior to June 5, 2017, the SAR award will automatically terminate and the Option award granted in tandem with the SAR award will become exercisable pursuant to the vesting terms thereof. However, until stockholder approval is obtained, as settlement of the award is out of the control of the Company, the awards are currently classified as liability based equity awards and are recorded at the estimated fair value at each balance sheet date.

Performance Share Units

Compensation expense is recognized for PSU awards on a straight-line basis over the applicable service period, which is generally three years, based on the estimated fair value at the date of grant using a Monte Carlo simulation model. The fair value of the Company's PSU's granted during the six months ended June 30, 2015 were estimated at the date of grant with the following weighted-average assumptions:

	Six Months Ended June 30, 2015
PSUs granted:
Risk-free interest rate	1.0	%
Dividend yield	—	%
Volatility	64.3	%
Performance period (in years)	3.0

A summary of PSU activity under the Plans for the six months ended June 30, 2015 is presented below:

(in thousands except per share amounts)	Units		Weighted Average Grant Date Fair Value
Non-vested at January 1, 2015	142,357		$	30.65
Granted (1)	68,650		20.16
Vested / Settled (1)	(13,763	)	30.52
Forfeited / Canceled (1)	(2,420	)	26.04
Non-vested at June 30, 2015	194,824		$	27.02

(1) The number of units shown in the table above are based on target performance. The final number of shares of common stock issued may vary depending on the achievement of market conditions established within the awards, which could result in the actual number of shares issued ranging from zero to a maximum of two times the number of units shown in the above table.

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The following table shows the PSUs that were settled during thesix months ended June 30, 2015by issuing the Company's common stock relative to a broad stock index and a peer group performance index. There were no PSUs settled during thesix months ended June 30, 2014.

	Year of Grant	Net Number of Issued Shares upon Vesting	Shares Withheld to Settle Tax Withholding Obligations	TSR Multiple Range		Russell 3000 Multiple
				Low	High	Low	High
Six Months Ended June 30, 2015
	2013	8,768	3,954	1.75	1.75	2.00	2.00
	2014	2,506	1,145	0.63	0.75	—	0.75

Note 10 - Income Taxes

For the three and six months endedJune 30, 2015 and 2014, the Company's income tax expense and effective tax rates on forecasted pretax losses were:

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands, except for rate)	2015			2014			2015			2014
Income tax expense	$	63		$	29		$	107		$	42
Effective tax rate	(1		)%	3		%	(1		)%	10		%

The effective tax rates for the three and six months endedJune 30, 2015 and 2014 were different from the statutory rate primarily due to an increase in the Company's valuation allowances against federal and state net operating losses and federal tax credits, which was partially offset by estimated state tax expense.

The Company projects that its deferred tax assets will exceed its deferred tax liabilities as of December 31, 2015. As a result, the Company determined that it is not more likely than not that it would be able to realize the value of its federal and state net operating loss carryforwards, tax credits and other deferred tax assets and has recorded a full valuation allowance against the excess deferred tax assets. This valuation allowance is expected to increase over time as the Company's deferred tax assets increase.

Note 11 - Business Segment Information

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by a company's chief operating decision maker ("CODM"), or a decision making group, in deciding how to allocate resources and in assessing financial performance. As of June 30, 2015, the Company's CODM was the Company's CEO. The Company's operating and reportable segments are organized by products and services provided. Segments have been reorganized from prior periods due to changes within the Company's management structure and the manner in which the Company is operating the business. All prior periods have been conformed to the current year presentation.

The Company had four reportable segments during the periods presented: (1) Refined Coal ("RC"); (2) Emissions Control - Engineering and Technology Services ("EC - ETS"); (3) Emissions Control - Manufacturing ("EC - Manufacturing"); and (4) Research and Development ("R&D").

The business segment measurements provided to and evaluated by the CODM are computed in accordance with the principles listed below:

• The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies except as described below.

• Segment revenue includes the Company's equity method earnings and losses from the Company's equity method investments. Segment revenue also includes the Company's royalty earnings from CCS.

• Segment operating income (loss) includes the Company's equity method earnings and losses from the Company's equity method investments and royalty earnings from CCS (including depreciation and amortization expense). However, segment operating income (loss) excludes Payroll and benefits, Rent and occupancy, Legal and professional fees, and General and administrative ("Corporate general and administrative expenses") unless otherwise specifically included as the Company does not allocate those amounts between segments.

• Segment revenue includes Research and Development reimbursements.

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• All items not included in operating income are excluded from the segments reporting.

As of June 30, 2015 and December 31, 2014 all material assets are located in the U.S. and all significant customers are either U.S. companies or the U.S. Government. The following table presents the Company's operating segment results for the three and six months endedJune 30, 2015 and 2014:

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2015			2014			2015			2014
Revenues:
Refined Coal:
Earnings in equity method investments	$	4,860		$	9,791		$	5,174		$	16,416
Consulting services	34			204			55			436
Royalties	2,299			849			4,493			1,981
	7,193			10,844			9,722			18,833
Emissions Control - Engineering Technology and Services:
Equipment sales	14,212			1,736			35,259			1,754
Consulting services	248			731			591			1,006
Chemical and other	344			106			617			137
	14,804			2,573			36,467			2,897
Emissions Control - Manufacturing:
Equipment sales	23			60			92			245
Consulting services	34			337			38			580
	57			397			130			825
Research and Development:	412			442			412			938
	412			442			412			938
Total segment reporting revenues	$	22,466		$	14,256		$	46,731		$	23,493
Adjustments to reconcile to reported revenues:
Refined Coal:
Earnings in equity method investments	$	(4,860	)	$	(9,791	)	$	(5,174	)	$	(16,416	)
Royalties	(2,299		)	(849		)	(4,493		)	(1,981		)
	(7,159		)	(10,640		)	(9,667		)	(18,397		)
Research and Development:	(412		)	(442		)	(412		)	(938		)
Total reported revenues	$	14,895		$	3,174		$	36,652		$	4,158
Segment reporting operating income (loss)
Refined Coal	$	5,168		$	9,156		$	5,835		$	15,915
Emissions Control - Engineering Technology Services	(300		)	(689		)	4,445			(1,925		)
Emissions Control - Manufacturing	(3,178		)	(1,097		)	(5,370		)	(1,996		)
Research and Development	(2,051		)	(425		)	(3,984		)	(799		)
Total segment operating income (loss)	$	(361	)	$	6,945		$	926		$	11,195

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A reconciliation of reportable segment amounts to the Company's consolidated balances is as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2015			2014			2015			2014
Segment income (loss)
Total reported segment income (loss)	$	(361	)	$	6,945		$	926		$	11,195
Adjustments to reconcile to net loss attributable to Advanced Emissions Solutions, Inc.
Corporate payroll and benefits	(6,571		)	(2,715		)	(9,511		)	(5,567		)
Corporate rent and occupancy	(163		)	(165		)	(301		)	(327		)
Corporate legal and professional fees	(4,056		)	(1,838		)	(7,364		)	(2,708		)
Corporate general and administrative	(1,085		)	(1,139		)	(1,991		)	(2,027		)
Depreciation and amortization	(156		)	(87		)	(306		)	(171		)
Interest income	6			19			18			46
Other income	2			1			57			10
Income tax expense	(63		)	(29		)	(107		)	(42		)
Net income (loss)	$	(12,447	)	$	992		$	(18,579	)	$	409

Unallocated general and administrative expenses include certain costs that benefit the business as a whole but are not directly related to one of our segments. Such costs include but are not limited to accounting and human resources staff, information systems costs, legal fees, facility costs, audit fees and corporate governance expenses. 

Segment assets were as follows as of the dates presented:

	As of
(in thousands)	June 30, 2015		December 31, 2014
Refined Coal (1)	$	22,211	$	21,322
Emissions Control - Engineering Technology and Services:	24,968		34,175
Emissions Control - Manufacturing	8,699		11,285
Research and Development	7,661		6,431
All Other and Corporate	12,958		20,486
Consolidated	$	76,497	$	93,699

(1) The asset carrying value of the Company's equity investment in CCS was zero as of June 30, 2015 and December 31, 2014, respectively.

During the fourth quarter of 2015 the Company realigned its operating segments into two reportable segments: (1) Refined Coal ("RC"); and (2) Emissions Control ("EC"). Beginning with the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2015, the Company will retroactively adjust all segment related disclosures.

Note 12 - Subsequent Events

Unless disclosed elsewhere within the notes to the Condensed Consolidated Financial Statements, the following are the matters that occurred subsequent to the balance sheet date.

Highview License

In November 2014, in addition to acquiring the cost method investment in Highview, as described in Note 5, the Company's subsidiary, ADA-ES, Inc. also acquired an exclusive license to utilize Highview's technology in North America. The technology license is included within the Other assets line item in the Condensed Consolidated Balance Sheets and is being amortized over a 10-year period. The liability is included within the Other current liabilities and Other long-term liabilities line items in the Condensed Consolidated Balance Sheets. The technology license agreement was amended in November 2015 to defer license fee payments for a period of one year, allowing the Company to elect a non-exclusive license at a lower cost, or to terminate the license in return for paying a buy-out fee starting at £0.2 million if terminated in 2016 ($0.3 million based upon the exchange rate in effect as of the date of the November 2015 amendment) and decreases annually over the term of the 10 year agreement.

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Assets Sold and Lease Abandoned

As discussed within Note 2, as part of a broader strategic restructuring of the Company's business, the Company’s management approved an action to wind down the manufacturing operations of BCSI, LLC, in order to focus the Company's efforts within the DSI market on engineering. During the fourth quarter of 2015, the Company classified certain assets used in the BCSI, LLC manufacturing operations as held for sale. In doing so, the Company recognized impairment expense of approximately $0.3 million to reduce the carrying value of the assets to their estimated sales value, less estimated costs to sell. The property and equipment was subsequently sold at auction. Proceeds from the sale of the impaired assets totaled approximately $0.6 million. No gain or loss was recognized on the sale of the property and equipment.

Also during the fourth quarter of 2015, the Company sold certain property and equipment having a net book value of approximately $0.1 million. Proceeds from the sale totaled approximately $0.3 million, which resulted in the recognition of a gain on the sale of approximately $0.2 million.

The Company also closed its fabrication facility in McKeesport, Pennsylvania during the fourth quarter of 2015 and recognized $0.8 million of expense related to the abandonment of leased facilities. In March 2016, the Company entered into an agreement to terminate various lease agreements covering approximately 207 thousand square feet of manufacturing, warehouse and office space located in Pennsylvania. As consideration for terminating the leases, the Company agreed to pay the lessor termination fees of $250 thousand in April 2016 and the same amount in April 2017.

RCM6 Sale

On March 3, 2016, the Company sold its 24.95% membership interest in RCM6 for a cash payment of $1.8 million and assumption of the outstanding note payable made by the Company in connection with its purchase of RCM6 membership interests from CCS in February 2014. As a result of the sale, the Company is no longer a member of RCM6 and is no longer subject to any quarterly capital calls and variable payments to RCM6. However, the Company will still receive it pro-rata share of income and cash distributions through its ownership in CCS. The income and cash distribution will be generated from the RCM6 RC facility lease payments made to CCS.

Notes Payable subsequent toJune 30, 2015

On October 22, 2015, the Company entered into a credit agreement for a $15.0 million term loan, with Franklin Mutual Quest Fund and MFP Investors LLC (the "Lenders"), and Wilmington Trust, National Association, as the administrative agent and collateral agent (the “Credit Agreement”), which was subsequently amended in 2016 as discussed below. Under the original terms and conditions, the Credit Agreement matured on April 22, 2016, subject to a three month extension at the Company's option to the extent certain conditions are met. The Credit Agreement bears interest at an annual rate equal to 10.5% and is subject to various prepayment and other premiums if certain events, including a change in control, occur. The Company received net proceeds of $13.9 million and recorded debt discounts and debt issuance costs of $1.5 million. The debt discounts and debt issuance costs will be amortized to interest expense using the effective interest method over the life of the Credit Agreement. The net proceeds are being used to fund working capital needs and for general operating purposes of the Company and its subsidiaries.

On February 8, 2016, the Company entered into the first amendment to the Credit Agreement ("First Amendment") that extended the SEC filings date to March 30, 2016. On March 30, 2016, the Company entered into the second amendment to the Credit Agreement ("Second Amendment"). The Second Amendment extended the maturity date to July 8, 2016, extended the Company's filing date deadline related to its 2015 SEC filings to April 20, 2016, increased the stated interest rate from 10.5% to 15.0% and increased the minimum cash balance requirement from $3.0 million to $3.5 million. The Company incurred approximately $0.6 million in fees related to the Second Amendment.

All obligations of the Company under the Credit Agreement are unconditionally guaranteed by each of the Company’s wholly-owned domestic subsidiaries (excluding ADA Analytics, LLC) and are secured by perfected security interests in substantially all of the assets of the Company and the guarantors, subject to certain agreed upon exceptions.

The Lenders are beneficial owners of Common Stock in the Company. The Credit Agreement was approved by the Company's Board of Directors and by the Audit Committee as a related party transaction.

In connection with the Credit Agreement, and the Company's pledge and assignment to the Collateral Agent for all of ADA's equity interests in CCSS, the Lenders required that NexGen consent to a pledge. The Company entered into an Indemnity Agreement with NexGen whereby ADES and ADA agreed to indemnify NexGen from and against any and all losses, claims, damages, liabilities, costs, fees or expenses, which may arise in connection with the Company pledging its CCSS equity

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interests. The Indemnity Agreement was approved by the Company's Board of Directors and by the Audit Committee as a related party transaction.

In April 2016, the Company initiated a workforce reduction plan affecting approximately 30% of the Company’s employees ("Restructuring"). In connection with these actions, the Company currently expects to record aggregate charges with respect to severance payments, benefits continuation and vesting of certain equity awards that are estimated to be approximately $0.6 million - $0.9 million and are expected to be recorded during the second and third quarters of 2016. Cash expenditures related to the Restructuring are expected to be approximately $0.6 million - $0.9 million.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of the financial condition and results of our operations should be read together with the unaudited Condensed Consolidated Financial Statements and notes of Advanced Emissions Solutions, Inc. (“ADES" or the “Company”) included elsewhere in Item 1 of Part I of this Quarterly Report on Form 10-Q and with the audited consolidated financial statements and the related notes of ADES, included in our most recent Annual Report on Form 10-K for the year ended December 31, 2014.

Overview

ADES serves as the holding entity for a family of companies that provide emissions solutions to customers in the coal-fired power generation, industrial boiler and cement industries. Through its subsidiaries and joint ventures, the Company is a leader in emissions control technologies and associated equipment, chemicals, and services. Our proprietary environmental technologies enable our customers to reduce emissions of mercury and other pollutants, maximize utilization levels and improve operating efficiencies to meet the challenges of existing and pending emission control regulations.

Our approach to technology development, implementation and commercialization involves taking technology to full-scale testing as quickly as we can and enhancing the technology under actual operating conditions.

Our major activities include:

• Development and sale of technology to reduce emissions and improve operations of coal-fired boilers used for power generation and industrial processes;

• Development and sale of equipment, consulting services, specialty chemicals and other products designed to reduce emissions of mercury, acid gases, metals and other pollutants and the providing of technology services in support of our customers' emissions compliance strategies;

• Research and development of technologies and other solutions to advance cleaner energy and to help our customers meet existing and future regulatory and business challenges, including Carbon Dioxide (“CO₂”) emissions control technologies and technologies designed to reduce other emissions related to power generation or industrial processes;

• Through CCS, an unconsolidated entity, reduction of mercury and nitrogen oxide ("NO_X") emissions at select coal-fired power generators, via the production of Refined Coal. Additionally, benefit from the tax credits generated by the production of RC by retaining the credits or selling or leasing the pertinent RC facilities to tax equity investors. See the separately filed financial statements of CCS and the other related RC entities within the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.

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Results of Operations

For comparability purposes, the following tables set forth our results of operations for the periods presented in our Condensed Consolidated Financial Statements included in Item 1 of this Quarterly Report. The period-to-period comparison of financial results may not be indicative of financial results to be achieved in future periods.

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2015			2014			2015			2014
Revenues:
Equipment sales	$	14,236		$	1,796		$	35,351		$	1,999
Consulting services	316			1,272			684			2,022
Chemicals and other	343			106			617			137
Total revenues	14,895			3,174			36,652			4,158
Operating expenses:
Equipment sales cost of revenue, exclusive of depreciation and amortization	13,698			1,079			28,749			1,203
Consulting services cost of revenue, exclusive of depreciation and amortization	264			654			690			965
Chemical and other cost of revenue, exclusive of depreciation and amortization	41			20			278			37
Payroll and benefits	9,746			4,609			14,657			8,856
Rent and occupancy	601			558			1,232			1,118
Legal and professional fees	4,387			2,495			8,122			3,927
General and administrative	1,503			1,407			3,385			2,553
Research and development, net	1,860			316			3,110			595
Depreciation and amortization	573			456			1,104			894
Total operating expenses	32,673			11,594			61,327			20,148
Operating loss	(17,778		)	(8,420		)	(24,675		)	(15,990		)
Other income (expense):
Earnings from equity method investments	4,860			9,791			5,174			16,416
Royalties, related party	2,299			849			4,493			1,981
Interest income	6			19			18			46
Interest expense	(1,794		)	(1,219		)	(3,569		)	(2,012		)
Settlement and royalty indemnity expense, net	—			—			—			—
Other	23			1			87			10
Total other income (expense), net	5,394			9,441			6,203			16,441
Income (loss) before income tax expense	(12,384		)	1,021			(18,472		)	451
Income tax expense	63			29			107			42
Net income (loss)	$	(12,447	)	$	992		$	(18,579	)	$	409

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Comparison of the Three Months Ended June 30, 2015 and 2014

Total Revenue and Cost of Revenue

A summary of the components of our revenue and costs of revenue for the three months ended June 30, 2015 and 2014 is as follows:

	Three Months Ended June 30,				Change
(in thousands, except percentages)	2015		2014		($)			(%)
Revenues:
Equipment sales	$	14,236	$	1,796	$	12,440		693	%
Consulting services	316		1,272		(956		)	(75	)%
Chemicals and other	343		106		237			224	%
Total revenues	14,895		3,174		11,721			369	%
Operating expenses:
Equipment sales cost of revenue, exclusive of depreciation and amortization	13,698		1,079		12,619			1,170	%
Consulting services cost of revenue, exclusive of depreciation and amortization	264		654		(390		)	(60	)%
Chemical and other cost of revenue, exclusive of depreciation and amortization	41		20		21			105	%

Equipment sales and Equipment sales cost of revenue, exclusive of items shown separately below

During the three months ended June 30, 2015 and 2014, we entered into one and five long term (6 months or longer) fixed price contracts to supply Activated Carbon Injection ("ACI") systems with aggregate contract values including associated change orders of $0.9 million and $6.4 million, respectively. Total value per contract may change due to the relative sizes of ACI systems and the contracts related thereto. During the three months ended June 30, 2015 and 2014, we completed 10 and two ACI systems, recognizing revenues of $14.0 million and $1.7 million and costs of revenue of $11.8 million and $0.9 million, respectively. We did not recognize any loss provisions related to contracts during the three months ended June 30, 2015 and 2014 related to ACI systems.

During the three months ended June 30, 2015 and 2014, we entered into zero and five long term (6 months or longer) fixed price contracts to supply Dry Sorbent Injection ("DSI") systems and other material handling equipment with aggregate contract values including associated change orders of $0.4 million and $5.8 million, respectively. Total value per contract may change due to the relative sizes of DSI systems and the contracts related thereto. During the three months ended June 30, 2015 and 2014, we completed zero and zero DSI systems, recognizing revenues of zero and zero and costs of revenue of $1.8 million and $0.2 million, respectively. Certain of the DSI system long-term fixed price contracts were expected to be completed with losses. As a result, cost of sales included $1.8 million and zero in loss provisions related to DSI system contracts that were recognized during the three months ended June 30, 2015 and 2014, respectively. Due to potential cost overruns related to certain DSI projects, we expect that the future relationship between revenues and costs may be dissimilar from prior results.

The remaining changes were due to other equipment sales.

Consulting services and Consulting services cost of revenue

We provided consulting services related to emissions regulations. During the three months ended June 30, 2015 and 2014, revenues decreased period over period due to a decrease in average contract revenue, which will fluctuate due to customer mix and specific consulting engagements, as well as a decrease in the number of consulting service engagements performed.

Chemicals and other

The most significant component of Chemicals and other revenues and costs of revenues were chemical sales related to emissions control technologies. During the three months ended June 30, 2015 and 2014, revenues increased year over year due to an increase in the number of chemical contracts. Due to coal-fired power plant requirements to be in compliance with applicable regulations in 2015 and beyond, we believe this will lead to an increase in the market for these products in the future.

Additional information related to revenue concentrations and contributions by class and reportable segment can be found within the segment discussion below and in Note 11 to the Company's Condensed Consolidated Financial Statements.

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Other Operating Expenses

A summary of the components of our operating expenses, exclusive of costs of revenue (presented above), for the three months ended June 30, 2015 and 2014 is as follows:

	Three Months Ended June 30,				Change
(in thousands, except percentages)	2015		2014		($)		(%)
Operating expenses:
Payroll and benefits	$	9,746	$	4,609	$	5,137	111	%
Rent and occupancy	601		558		43		8	%
Legal and professional fees	4,387		2,495		1,892		76	%
General and administrative	1,503		1,407		96		7	%
Research and development, net	1,860		316		1,544		489	%
Depreciation and amortization	573		456		117		26	%
	$	18,670	$	9,841	$	8,829	90	%

Payroll and benefits

Payroll and benefits expenses increased during the three months ended June 30, 2015 compared to the same period in 2014 primarily due to restructuring expenses of $5.6 million, including the modification and acceleration of equity awards of $3.0 million, during the three months ended June 30, 2015 in connection with certain executive officers and employees impacted by management's alignment of the business with strategic objectives. During the three months ended June 30, 2014, the Company recorded restructuring charges of $0.4 million, including the modification and acceleration of equity awards of $0.1 million in connection with employees impacted by management's alignment of the business with strategic objectives.

Rent and occupancy

Rent and occupancy expenses increased during the three months ended June 30, 2015 compared to the same period in 2014 primarily due to an increase in insurance expense.

Legal and professional fees

Legal and professional fees expenses increased during the three months ended June 30, 2015 compared to the same period in 2014 as a result of the significant professional resources deployed to address the Restatement of our consolidated financial statements, including the ongoing SEC Inquiry. We began incurring such costs during the second quarter of 2014. Expenses related to the Restatement during the three months ended June 30, 2015 and 2014 were $2.7 million and $1.1 million respectively. Other increases in expenses related to general business activities.

General and administrative

General and administrative expense increased during the three months ended June 30, 2015 compared to the same period in 2014 due to general operating expenses.

Research and development, net

Research and development expense increased during the three months ended June 30, 2015 compared to the same period in 2014 due to expenses incurred related to ADA Analytics, net Department of Energy (“DOE”) costs, and an independent third party to develop cooling technology to liquefy natural gas, which project has subsequently been terminated.

Depreciation and amortization

Depreciation and amortization expense increased during the three months ended June 30, 2015 compared to the same period in 2014 due to amortization of the Highview technology license and asset additions.

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Other Income (Expense), net

A summary of the components of our other income (expense), net for the three months ended June 30, 2015 and 2014 is as follows:

	Three Months Ended June 30,						Change
(in thousands, except percentages)	2015			2014			($)			(%)
Other income (expense):
Earnings from equity method investments	$	4,860		$	9,791		$	(4,931	)	(50	)%
Royalties, related party	2,299			849			1,450			171	%
Interest income	6			19			(13		)	(68	)%
Interest expense	(1,794		)	(1,219		)	(575		)	47	%
Other	23			1			22			2,200	%
Total other income (expense), net	$	5,394		$	9,441		$	(4,047	)	(43	)%

Earnings in equity method investments

The following table details the components of the Company's respective equity method investments included within the Earnings from equity method investments line item on the Condensed Consolidated Statements of Operations:

	Three Months Ended June 30,
(in thousands)	2015			2014
Earnings from CCS	$	4,630		$	9,733
Earnings from CCSS	1,150			757
Loss from RCM6	(920		)	(699		)
Earnings from equity method investments	$	4,860		$	9,791

Earnings in equity method investments, and changes related thereto, are impacted by our three equity method investee's, CCS, CCSS and RCM6. Earnings in equity method investments decreased due to decreases in cash distributions in excess of our investment balance from CCS.

During the three months ended June 30, 2015 we recognized $4.6 million in equity income from CCS, compared to our proportionate share of CCS's net income of $7.8 million for the period. During the three months ended June 30, 2014, we recognized $9.7 million in equity income from CCS, compared to our proportionate share of CCS's net income of $5.1 million for the period. The difference between our pro-rata share of CCS's net income (loss) and our earnings from our CCS equity method investment as reported on our Condensed Consolidated Statements of Operations relates to the Company receiving distributions in excess of the carrying value of the investment during prior periods, and therefore recognizing such excess distributions as equity method earnings in the period the distributions occur. If CCS subsequently reports net income, the Company will not record its pro-rata share of such net income until its cumulative share of pro-rata net income equals the amount of its cumulative income recognized due to cash being distributed. Until such time, the Company will only report income from CCS to the extent of cash distributions. See additional information related to the Company's investment balance, equity earnings and cash distributions in Note 4 of the Condensed Consolidated Financial Statements.

As a result of earnings and cash flows from invested RC facilities, CCS distributed $4.6 million to the Company, which is included in our equity method earnings for the three months ended June 30, 2015 compared to distributions and earnings of $9.7 million for the three months ended June 30, 2014. This decrease is due primarily to the increased working capital needs of CCS to operate retained RC facilities and other operating expenses.

As of June 30, 2015 and 2014, the number of invested RC facilities that were generating rental income was 12 and nine, respectively. The number of retained RC facilities that were generating Internal Revenue Code Section 45 tax credits ("PTCs") and other tax benefits as of as of June 30, 2015 and 2014, were five and four, respectively.

Equity earnings from our interest in CCSS increased by $0.4 million during the three months ended June 30, 2015 compared to the three months ended June 30, 2014, primarily due to an increase in the number of RC facilities being operated by CCSS. The weighted-average number of RC facilities for which CCSS had operating and maintenance agreements in place, based upon the number of months each facility was operated during the respective periods, increased period over period. As of June 30, 2015

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and 2014, CCSS had operating and maintenance agreements in place with 17 and 13 RC facilities, respectively. CCSS derives earnings both from fixed-fee arrangements as well as fees that are tied to actual RC production, depending upon the specific RC facility operating and maintenance agreement.

During February 2014, we purchased a membership interest in RCM6 and recognized equity method losses resulting from the operation of the RC facility owned by RCM6, which generated tax credits and tax benefits available to us. Equity losses from our interest in RCM6 increased by $0.2 million during the three months ended June 30, 2015 compared to the three months ended June 30, 2014, due to an increase in the RC production by RCM6 period over period.

On March 3, 2016, the Company sold its 24.95% membership interest in RCM6 for a cash payment of $1.8 million and assumption of the outstanding note payable made by the Company in connection with its purchase of RCM6 membership interests from CCS in February 2014. As a result of the sale, the Company is no longer a member of RCM6 and is no longer subject to any quarterly capital calls and variable payments to RCM6.

Although all of our deferred tax assets have a full valuation allowance recorded against them as of June 30, 2015 and 2014, respectively, we earned the following tax credits which may be available for future benefit related to the operation of retained RC facilities that were not invested:

	Three Months Ended June 30,
(in thousands)	2015		2014
Section 45 tax credits earned	$	9,113	$	3,576

Additional information related to our equity method investees is included in Note 4 of the Condensed Consolidated Financial Statements.

Royalties, related party

During the three months ended June 30, 2015 and 2014, there was 4.9 million tons and 2.0 million tons of RC produced using M-45^TM and M-45-PC^TM technologies, which CCS licenses from us. The increase was due to an increase in the number of RC facilities producing RC with our technologies.

Interest expense

During the three months ended June 30, 2015 and 2014, interest expense increased due to Internal Revenue Code section 453A ("453A"), which requires taxpayers using the installment method to pay an interest charge on the portion of the tax liability that was deferred under the installment method. Our interest expense increased beginning in the fourth quarter of 2015 due to interest payments on the term loan entered into during the fourth quarter of 2015.

Income tax expense

We did not record any federal income tax expense (benefit) during the three months ended June 30, 2015 and 2014 as a result of recording full valuation allowances against all of our net deferred tax assets in all jurisdictions. However, we did record state income tax expense for the three months ended June 30, 2015 and 2014 of $0.1 million and zero, respectively.

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Comparison of the Six Months Ended June 30, 2015 and 2014

Total Revenue and Cost of Revenue

A summary of the components of our revenue and costs of revenue for the six months ended June 30, 2015 and 2014 is as follows:

	Six Months Ended June 30,				Change
(in thousands, except per share data and percentages)	2015		2014		($)			(%)
Revenues:
Equipment sales	$	35,351	$	1,999	$	33,352		1,668	%
Consulting services	684		2,022		(1,338		)	(66	)%
Chemicals and other	617		137		480			350	%
Total revenues	36,652		4,158		32,494			781	%
Operating expenses:
Equipment sales cost of revenue, exclusive of depreciation and amortization	28,749		1,203		27,546			2,290	%
Consulting services cost of revenue, exclusive of depreciation and amortization	690		965		(275		)	(28	)%
Chemical and other cost of revenue, exclusive of depreciation and amortization	278		37		241			651	%

Equipment sales and Equipment sales cost of revenue

During the six months ended June 30, 2015 and 2014, we entered into two and 19 long term (6 months or longer) fixed price contracts to supply ACI systems, having aggregate contract values, including associated change orders, of $4.2 million and $32.8 million, respectively. Total value per contract may change due to the relative sizes of ACI systems and the contracts related thereto. During the six months ended June 30, 2015 and 2014, we completed 21 and two ACI systems, recognizing revenues of $35.0 million and $1.7 million and costs of revenue of $26.5 million and $0.9 million, respectively. We did not recognize any loss provisions related to ACI systems contracts during the six months ended June 30, 2015 and 2014.

During the six months ended June 30, 2015 and 2014, we entered into one and seven long term (6 months or longer) fixed price contracts to supply DSI systems and other material handling equipment with aggregate contract values including associated change orders of $1.9 million and $9.0 million, respectively. Total value per contract may change due to the relative sizes of DSI systems and the contracts related thereto. During the six months ended June 30, 2015 and 2014, we completed zero and one DSI systems, recognizing revenues of zero and $0.2 million and costs of revenue of $2.0 million and $0.4 million, respectively. Due to potential cost overruns related to certain DSI projects, we expect that the future relationship between revenues and costs may be dissimilar from prior results. Certain of the DSI long-term fixed price contracts were expected to be completed with losses. As a result, cost of sales included $2.0 million and zero in loss provisions recognized during the six months ended June 30, 2015 and 2014, respectively, related to DSI contracts. Due to the completed contract method of revenue recognition, these amounts are included in Costs in excess of billings on uncompleted contracts on our Condensed Consolidated Balance Sheets and will be recognized within Equipment sales cost of revenue when revenue is recognized on these projects.

The remaining changes were due to other equipment sales.

Consulting services and Consulting services cost of revenue

We provided consulting services related to emissions regulations. During the six months ended June 30, 2015 and 2014, revenues decreased period over period due to a decrease in average contract revenue, which will fluctuate due to customer mix and specific consulting engagements, as well as, a decrease in the number of consulting service engagements performed.

Chemical and other

The most significant component of Chemicals and other revenues and costs of revenues were chemical sales related to emissions control technologies. During the six months ended June 30, 2015 and 2014, revenues increased year over year due to an increase in average contract revenue. Due to coal-fired power plant requirements to be in compliance with applicable regulations in 2015 and beyond, we anticipated that this will lead to an increase in the market for these products in the future.

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Other Operating Expenses

A summary of the components of our other operating expenses, exclusive of costs of revenue (presented above), for the six months ended June 30, 2015 and 2014 is as follows:

	Six Months Ended June 30,				Change
(in thousands, except percentages)	2015		2014		($)		(%)
Operating expenses:
Payroll and benefits	$	14,657	$	8,856	$	5,801	66	%
Rent and occupancy	1,232		1,118		114		10	%
Legal and professional fees	8,122		3,927		4,195		107	%
General and administrative	3,385		2,553		832		33	%
Research and development, net	3,110		595		2,515		423	%
Depreciation and amortization	1,104		894		210		23	%
	$	31,610	$	17,943	$	13,667	76	%

Payroll and benefits

Payroll and benefits expenses increased during the six months ended June 30, 2015 compared to the same period in 2014 primarily due to restructuring expenses of $6.0 million, including the modification and acceleration of equity awards of $3.1 million, during the six months ended June 30, 2015 in connection with certain executive officers and employees impacted by management's alignment of the business with strategic objectives. During the six months ended June 30, 2014, the Company recorded restructuring charges of $0.4 million, including the modification and acceleration of equity awards of $0.1 million in connection with employees impacted by management's alignment of the business with strategic objectives.

Rent and occupancy

Rent and occupancy expenses increased during the six months ended June 30, 2015 compared to the same period in 2014 primarily due to an increase in insurance expense.

Legal and professional fees

Legal and professional fees expenses increased during the six months ended June 30, 2015 compared to the same period in 2014 as a result of the significant professional resources deployed to address the Restatement of our consolidated financial statements, including the ongoing SEC Inquiry. We began incurring such costs during the second quarter of 2014. Expenses related to the Restatement during the six months ended June 30, 2015 and 2014 were $5.3 million and $1.1 million respectively. Other increases in expenses related to general business activities.

General and administrative

General and administrative expense increased during the six months ended June 30, 2015 compared to the same period in 2014 due to a $0.5 million allowance recorded against the entire principal balance of a note receivable. Additionally, there was an increase of $0.3 million related to general other operating expenses during the six months ended June 30, 2015.

Research and development, net

Research and development expense increased during the six months ended June 30, 2015 compared to the same period in 2014 due to expenses incurred related to ADA Analytics, net Department of Energy (“DOE”) costs, and an independent third party to develop cooling technology to liquefy natural gas, which project has subsequently been terminated.

Depreciation and amortization

Depreciation and amortization expense increased during the six months ended June 30, 2015 compared to the same period in 2014 due to amortization of the Highview technology license and asset additions.

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Other Income (Expense), net

A summary of the components of our other income (expense), net for the six months ended June 30, 2015 and 2014 is as follows:

	Six Months Ended June 30,						Change
(in thousands, except percentages)	2015			2014			($)			(%)
Other income (expense):
Earnings from equity method investments	$	5,174		$	16,416		$	(11,242	)	(68	)%
Royalties, related party	4,493			1,981			2,512			127	%
Interest income	18			46			(28		)	(61	)%
Interest expense	(3,569		)	(2,012		)	(1,557		)	77	%
Other	87			10			77			770	%
Total other income (expense), net	$	6,203		$	16,441		$	(10,238	)	(62	)%

Earnings in equity method investments

The following table details the components of the Company's respective equity method investments included within the Earnings from equity method investments line item on the Condensed Consolidated Statements of Operations:

	Six Months Ended June 30,
(in thousands)	2015			2014
Earnings from CCS	$	4,730		$	16,321
Earnings from CCSS	2,172			1,638
Loss from RCM6	(1,728		)	(1,543		)
Earnings from equity method investments	$	5,174		$	16,416

Earnings in equity method investments, and changes related thereto, are impacted by our three equity method investee's, CCS, CCSS and RCM6. Earnings in equity method investments decreased primarily due to decreases in cash distributions in excess of our investment balance from CCS.

During the six months ended June 30, 2015 we recognized $4.7 million in equity income from CCS, compared to our proportionate share of CCS's net income of $17.7 million for the period. During the six months ended June 30, 2014, we recognized $16.3 million in equity income from CCS, compared to our proportionate share of CCS's net income of $9.8 million for the period. The difference between our pro-rata share of CCS's net income (loss) and our earnings from our CCS equity method investment as reported on our Condensed Consolidated Statements of Operations relates to the Company receiving distributions in excess of the carrying value of the investment during prior periods, and therefore recognizing such excess distributions as equity method earnings in the period the distributions occur. If CCS subsequently reports net income, the Company will not record its pro-rata share of such net income until its cumulative share of pro-rata net income equals the amount of its cumulative income recognized due to cash being distributed. Until such time, the Company will only report income from CCS to the extent of cash distributions. See additional information related to the Company's investment balance, equity earnings and cash distributions in Note 4 of the Condensed Consolidated Financial Statements.

As a result of earnings and cash flows from invested RC facilities, CCS distributed $4.7 million in cash to the Company, which is included in our equity method earnings for the six months ended June 30, 2015 compared to distributions and earnings of $16.3 million for the six months ended June 30, 2014. This decrease is due primarily to the increased working capital needs of CCS to operate retained RC facilities and other operating expenses.

Equity earnings from our interest in CCSS increased by $0.5 million during the six months ended June 30, 2015 compared to the six months ended June 30, 2014, primarily due to an increase in the number of RC facilities being operated by CCSS. The weighted-average number of RC facilities for which CCSS had operating and maintenance agreements in place, based upon the number of months each facility was operated during the respective years, increased year over year. As of June 30, 2015 and 2014, CCSS had operating and maintenance agreements in place with 17 and 13 RC facilities, respectively. CCSS derives earnings both from fixed-fee arrangements as well as fees that are tied to actual RC production, depending upon the specific RC facility operating and maintenance agreement.

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During February 2014, we purchased a membership interest in RCM6 and recognized equity method losses resulting from the operation of the RC facility owned by RCM6, which generated tax credits and tax benefits available to us. Equity losses from our interest in RCM6 increased by $0.2 million during the six months ended June 30, 2015 compared to the six months ended June 30, 2014, as the Company purchased its membership interest in RCM6 during February 2014 compared to six-months of ownership in 2015.

On March 3, 2016, the Company sold its 24.95% membership interest in RCM6 for a cash payment of $1.8 million and assumption of the outstanding note payable made by the Company in connection with its purchase of RCM6 membership interests from CCS in February 2014. As a result of the sale, the Company is no longer a member of RCM6 and is no longer subject to any quarterly capital calls and variable payments to RCM6.

Although all of our deferred tax assets have full valuation allowances recorded against them as of June 30, 2015 and 2014, respectively, we earned the following tax credits which may be available for future benefit related to the operation of retained RC facilities:

	Six Months Ended June 30,
(in thousands)	2015		2014
Section 45 tax credits earned	$	17,389	$	10,569

Royalties, related party

During the six months ended June 30, 2015 and 2014 there were 9.1 million tons and 4.2 million tons of RC produced using M-45^TM and M-45-PC^TM technologies, which CCS licenses from us. The increase was due to an increase in the number of RC facilities producing RC with our technologies.

Interest expense

During the six months ended June 30, 2015 and 2014, interest expense increased due to IRS section 453A, which requires taxpayers using the installment method to pay an interest charge on the portion of the tax liability that was deferred under the installment method and interest expense on the RCM6 note payable used to finance our purchase of RCM6 in February 2014. These increases were $1.3 million and $0.3 million, respectively. Our interest expense increased beginning in the fourth quarter of 2015 due to interest payments on the term loan entered into during the fourth quarter of 2015.

Income tax expense

We did not recognize any federal income tax expense (benefit) during the six months ended June 30, 2015 and 2014 as a result of recording full valuation allowances against all of our net deferred tax assets. However, we did recognize state income tax expense for the six months ended June 30, 2015 and 2014 of $0.1 million and zero, respectively.

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Business Segments

As discussed in Note 11 of the Condensed Consolidated Financial Statements, we have four reportable segments: (1) RC; (2) EC - ETS; (3) EC - Manufacturing; and (4) R&D. The business segment measurements are computed in accordance with the principles listed below:

• The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies except as described below.

• Segment revenue includes the Company's equity method earnings and losses from the Company's equity method investments. Segment revenue also includes the Company's royalty earnings from CCS.

• Segment operating income (loss) includes the Company's equity method earnings and losses from the Company's equity method investments and royalty earnings from CCS. However, segment operating income (loss) excludes Payroll and benefits, Rent and occupancy, Legal and professional fees, and General and administrative ("Corporate general and administrative expenses") unless otherwise specifically included as the Company does not allocate those amounts between segments.

• Segment revenue includes Research and Development reimbursements.

• Items not included in operating income are excluded from segment reporting except for 453A and RCM6 interest expense, which is directly attributable to our RC segment.

The principal products and services of our segments are:

1. RC - Our RC segment derives its earnings from equity method investments as well as royalty payment streams and other revenues related to enhanced combustion of and reduced emissions of both NO_X and mercury from the burning of coals. The Company's equity method investments related to the RC segment include CCS, CCSS and RCM6. Segment revenues include the Company's equity method earnings and losses from the Company's equity method investments and royalty earnings from CCS. These earnings are included within the Earnings from equity method investments and Royalties, related party line items in the Condensed Consolidated Statements of Operations.

2. EC - ETS - Our EC - ETS segment includes revenues and related expenses from the sale of ACI equipment systems, consulting services and chemical and other sales related to the reduction of emissions in the coal-fired electric generation process. The fabrication of ACI systems is largely dependent upon third party manufacturers. These amounts are included within the respective revenue and cost of sales line items in the Condensed Consolidated Statements of Operations.

3. EC - Manufacturing - Our EC - Manufacturing segments includes revenues and related expenses from the sale of DSI equipment systems, consulting services and other sales related to the reduction of emissions in the electric utility industry. We fabricated DSI systems through our subsidiary BCSI through December 2015. These amounts are included within the respective revenue and cost of sales line items in the Condensed Consolidated Statements of Operations.

4. R&D - Our R&D segment focuses on the research and development of technologies through internal funds, and contracts supported by the DOE and industry participants. The contracts with the DOE take the form of grants or cooperative agreements and are considered financial assistance awards. Segment revenues include the reimbursements received from the DOE and industry participants as well as any revenues from third parties that engage the Company for R&D consulting services. These reimbursements are included as contra expense within the Research and development, net line item in the Condensed Consolidated Statements of Operations.

Management uses segment operating income (loss) to measure profitability and performance at the segment level. Management believes segment operating income (loss) provides investors with a useful measure of our operating performance and underlying trends of the businesses. Segment operating income (loss) may not be indicative of our overall consolidated performance and therefore, should be read in conjunction with our consolidated results of operations.

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The following table presents the Company's operating segment results for the three and six months endedJune 30, 2015 and 2014:

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2015			2014			2015			2014
Revenues:
Refined Coal:
Earnings in equity method investments	$	4,860		$	9,791		$	5,174		$	16,416
Consulting services	34			204			55			436
Royalties	2,299			849			4,493			1,981
	7,193			10,844			9,722			18,833
Emissions Control - Engineering Technology and Services:
Equipment sales	14,212			1,736			35,259			1,754
Consulting services	248			731			591			1,006
Chemical and other	344			106			617			137
	14,804			2,573			36,467			2,897
Emissions Control - Manufacturing:
Equipment sales	23			60			92			245
Consulting services	34			337			38			580
	57			397			130			825
Research and Development:	412			442			412			938
	412			442			412			938
Total segment reporting revenues	$	22,466		$	14,256		$	46,731		$	23,493
Adjustments to reconcile to reported revenues:
Refined Coal:
Earnings in equity method investments	$	(4,860	)	$	(9,791	)	$	(5,174	)	$	(16,416	)
Royalties	(2,299		)	(849		)	(4,493		)	(1,981		)
	(7,159		)	(10,640		)	(9,667		)	(18,397		)
Research and Development:	(412		)	(442		)	(412		)	(938		)
Total reported revenues	$	14,895		$	3,174		$	36,652		$	4,158
Segment reporting operating income (loss)
Refined Coal	$	5,168		$	9,156		$	5,835		$	15,915
Emissions Control - Engineering Technology Services	(300		)	(689		)	4,445			(1,925		)
Emissions Control - Manufacturing	(3,178		)	(1,097		)	(5,370		)	(1,996		)
Research and Development	(2,051		)	(425		)	(3,984		)	(799		)
Total segment operating income (loss)	$	(361	)	$	6,945		$	926		$	11,195

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RC

The following table details the segment revenues of the Company's respective equity method investments:

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2015			2014			2015			2014
Earnings from CCS	$	4,630		$	9,733		$	4,730		$	16,321
Earnings from CCSS	1,150			757			2,172			1,638
Loss from RCM6	(920		)	(699		)	(1,728		)	(1,543		)
Earnings from equity method investments	$	4,860		$	9,791		$	5,174		$	16,416

Earnings in equity method investments decreased during the three and six months endedJune 30, 2015 compared to 2014 due to decreases in cash distributions from CCS and three and six months of losses from RCM6 in 2015 whereas RCM6 was purchased in February 2014.

Additional discussion of our equity method investments is included above within our consolidated results and in Note 4 of the Consolidated Financial Statements.

During the three and six months endedJune 30, 2015 and 2014, there was 4.9 million, 2.0 million, 9.1 million and 4.2 million tons, respectively, of RC produced RC facilities using M-45^TM and M-45-PC^TM technologies, which CCS licensed from us beginning in July 2012. Changes in tons produced were driven by increases in the number of RC facilities using the M-45^TM and M-45-PC^TM technologies.

Segment operating income (loss) decreased during the three months ended June 30, 2015 compared to 2014 due to a decrease in revenue, driven by the decrease in cash distributions from CCS, offset by an increase in CCSS earnings of $0.4 million and Royalties related to CCS's use of our M-45 License of $0.9 million.

Segment operating income decreased to a loss during the six months ended June 30, 2015 compared to 2014 due to a decrease in revenue, driven by the decrease in cash distributions from CCS, offset by an increase in CCSS earnings of $0.5 million and Royalties related to CCS's use of our M-45 License of $1.2 million.

EC - ETS

During the three months ended June 30, 2015 compared to 2014, revenues increased due to an increase in contracts completed. We recognized revenues of $14.2 million and $1.7 million and costs of revenue of $11.8 million and $0.9 million, respectively. We did not recognize any loss provisions related to contracts during the three months ended June 30, 2015 and 2014 related to ACI systems.

During the six months ended June 30, 2015 compared to 2014, revenues increased due to an increase in contracts completed. We recognized revenues of $35.3 million and $1.8 million and costs of revenue of $26.5 million and $0.9 million, respectively. We did not recognize any loss provisions related to ACI systems contracts during the six months ended June 30, 2015 and 2014.

We provided consulting services related to emissions regulations. During the three months ended June 30, 2015 and 2014, revenues decreased period over period due to a decrease in average contract revenue and a decrease in the number of consulting service engagements performed.

During the six months ended June 30, 2015 and 2014, consulting service revenues decreased period over period due to a decrease in average contract revenue and a decrease in the number of consulting service engagements performed.

The most significant component of Chemicals and other revenues and costs of revenues were chemical sales related to emissions control technologies. During the three months ended June 30, 2015 and 2014, revenues increased year over year due to an increase in the number of chemical contracts. Due to coal-fired power plant requirements to be in compliance with applicable regulations in 2015 and beyond, we believe this will lead to an increase in the market for these products in the future.

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During the six months ended June 30, 2015 compared to 2014, revenues increased year over year due to an increase in average contract revenue.

The decrease in segment operating loss during the three months ended June 30, 2015 compared to 2014, was due to increases in the number of contracts completed during the quarter and a decrease in costs.

The increase in segment operating income during the six months ended June 30, 2015 compared to 2014, was due to increases in the number of contracts completed during the period and a decrease in costs.

EC - Manufacturing

During the three months ended June 30, 2015 compared to 2014, revenues decreased slightly. We recognized revenues of zero and zero and costs of revenue of $1.8 million and $0.2 million, respectively. Due to potential cost overruns related to certain DSI projects, the Company expects that the future relationship between revenues and costs may be dissimilar from prior results. Cost of sales were impacted year over year due to $1.8 million and zero in loss provisions related to DSI contracts that were recognized during the three months ended June 30, 2015 and 2014, respectively.

During the six months ended June 30, 2015 and 2014, revenues decreased due to a decrease in contracts completed. We recognized revenues of zero and $0.2 million and costs of revenue of $2.0 million and $0.4 million, respectively. Due to potential cost overruns related to certain DSI projects, we expect that the future relationship between revenues and costs may be dissimilar from prior results. Cost of sales were impacted year over year due to $2.0 million and zero in loss provisions recognized during the six months ended June 30, 2015 and 2014, respectively, related to DSI contracts

We provided consulting services related to emissions regulations. During the three months ended June 30, 2015 and 2014, revenues decreased period over period due to an decrease in average contract revenue, which was partially offset by an increase in the number of consulting service engagements performed.

During the six months ended June 30, 2015 and 2014, revenues decreased period over period due to an increase in the number of consulting service engagements performed, which was partially offset by a decrease in average contract revenue.

The increase in segment operating loss during the three months ended June 30, 2015 compared to 2014, was due to a decrease in the number of contracts completed and loss provisions recognized.

The decrease in segment operating loss during the six months ended June 30, 2015 compared to 2014, was due to a decrease in the number of contracts completed and loss provisions recognized.

R&D

Research and development expense increased during the three months ended June 30, 2015 compared to 2014 due to an increase in activity. The Company incurred expenses related to ADA Analytics, net Department of Energy (“DOE”) costs, and an independent third party to develop cooling technology to liquefy natural gas, which project has subsequently been terminated.

Research and development expense increased during the six months ended June 30, 2015 compared to 2014 due to an increase in activity. The Company incurred expenses related to ADA Analytics, net Department of Energy (“DOE”) costs, and an independent third party to develop cooling technology to liquefy natural gas, which project has subsequently been terminated.

Segment operating loss increased during the three months ended June 30, 2015 compared to 2014, due to additional costs spent on R&D related projects including ADA Analytics and development of cooling technology.

Segment operating loss increased during the six months ended June 30, 2015 compared to 2014, due to additional costs spent on R&D related projects including ADA Analytics and development of cooling technology.

Other matters

During the fourth quarter of 2015 the Company realigned its operating segments into two reportable segments: (1) Refined Coal ("RC"); and (2) Emissions Control ("EC"). During 2016, the Company will retroactively adjust all quarterly segment related disclosures in its Quarterly Reports on Form 10-Q for the three months ended March 31, 2016 and the three months ending June 30 and September 30, 2016.

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Liquidity and Capital Resources

Overview of Factors Affecting Our Liquidity

During the six months ended June 30, 2015, our working capital and cash balances continued to decline, consistent with such balances also declining in the previous three month period in 2015, due principally to continued losses. Such losses were driven primarily by poor operating performance within our EC - Manufacturing segment, substantial and continuing expenditures required to fund the Restatement activities, research and development activities and a significant reduction in the receipt of cash distributions from CCS. This deterioration of working capital directly necessitated the securing of the loan transaction described below. The Company expects that pressure on its working capital will continue until such time as all Restatement activities are completed, including resolution of the SEC Inquiry and the conclusion of the private litigation described in Note 8 to the Condensed Consolidated Financial Statements.

Our principal sources of liquidity include:

• cash on hand;

• distributions from CCS and CCSS;

• royalty payments from CCS; and

• proceeds from the securing of debt facilities, such as the $15 million term loan obtained in october 2015, as described below.

Since April 2014, we have been unable to borrow from our bank line of credit as a result of not being in compliance with certain covenants related to our loan agreement. No borrowings were outstanding as of June 30, 2015 or December 31, 2014. Prior to June 2014, the bank line of credit was used primarily to provide collateral support for certain Letters of Credit that had been issued to customers related to certain contractual performance and payment guarantees, typically provided in lieu of surety bonds. Upon notification of such covenant non-compliance, we were required to secure such letters of credit with cash collateral. Additionally, we are required to provide collateral to other financial institutions that have issued letters of credit providing security for continuing royalty indemnification obligations related to the settlement of certain litigation. The collateral amounts are disclosed on our Condensed Consolidated Balance Sheets as Restricted cash, Restricted cash, long-term and Investment securities, restricted, long-term. As of June 30, 2015 and December 31, 2014, these collateral amounts totaled $13.5 million and $11.6 million, respectively.

Our bank line of credit has been amended six times (December 2, 2013, April 3, 2014, September 20, 2014, December 15, 2014, May 29, 2015 and September 30, 2015), most notably to extend the maturity date. The lender has also provided seven waivers relating to various transactions and obligations to provide financial information to the lender. As amended, the Line of Credit is available until May 31, 2016. No amounts were drawn on the line of credit during the six months ended June 30, 2015 and 2014, respectively.

Our primary uses of liquidity during the six months ended June 30, 2015, in addition to the restricted cash assets described above, include costs and expenses related to completing the Restatement of prior year financial statements, including litigation and other expenses related thereto; delivering on our existing contracts and customer commitments; funding operating losses within our EC-Manufacturing segment; our corporate restructuring and realignment of its businesses. Additional uses of liquidity include 453A interest payments, capital calls related to RCM6 to fund operating expenses, royalty indemnification payments, interest expense on the Company’s notes payable, capital expenditures and research and development costs. During the first quarter of 2015, we used $2.1 million in cash resources to acquire certain assets of InSyst Ltd. and ClearView Monitoring Solutions Ltd.

On October 22, 2015, we entered into a credit agreement for a $15.0 million term loan, with Franklin Mutual Quest Fund and MFP Investors LLC (the "Lenders"), and Wilmington Trust, National Association, as the administrative agent and collateral agent (the “Credit Agreement”), which was subsequently amended in 2016 as discussed below. Under the original terms and conditions, the Credit Agreement matured on April 22, 2016, subject to a three month extension at the Company's option to the extent certain conditions are met. The Credit Agreement bears interest at an annual rate equal to 10.5% and is subject to various prepayment and other premiums if certain events, including a change in control, occur. Upon closing, we received net proceeds of $13.9 million and recorded debt discounts and debt issuance costs of $1.5 million. The debt discounts and debt issuance costs will be amortized to interest expense using the effective interest method over the life of the Credit Agreement. The net proceeds received are being used to fund our working capital needs and general operating purposes. The Credit Agreement may become due prior to maturity based on certain customary events requiring mandatory prepayment, including upon certain asset sales or receipts of certain types of cash proceeds outside the ordinary course of business, upon a change of control, and upon a default.

On February 8, 2016, the Company entered into the first amendment to the Credit Agreement ("First Amendment") that extended the 2015 SEC filings date to March 30, 2016. On March 30, 2016, the Company entered into the second amendment to the Credit Agreement ("Second Amendment"). The Second Amendment extended the maturity date to July 8, 2016, extended the Company's filing date deadline related to its 2015 SEC filings to April 20, 2016, increased the stated interest rate from

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10.5% to 15.0% and increased the minimum cash balance requirement from $3.0 million to $3.5 million. The Company incurred approximately $0.6 million in fees related to the Second Amendment.

In February 2016, the Company entered into an agreement with the DSI Business Owner to settle the remaining amounts owed as of the date of the agreement of approximately $1.1 million for $0.3 million, which was paid in the first quarter of 2016.

On March 3, 2016, the Company sold its entire ownership interest in RCM6. The Company received a cash payment of $1.8 million related to the sale and has no future obligations related to previously recorded notes payable.

Our ability to generate sufficient cash flow required to meet ongoing operational needs and to meet our obligations, including the repayment of the loan under the Credit Agreement, depends upon several factors, including executing on our contracts and initiatives, discussed above, receiving royalty payments from CCS and distributions from CCS and CCSS, and our ability to maintain a significant share of the market and increase operational efficiencies for emissions control equipment, chemicals and services. Distributions from CCS will likely be dependent upon the securing of additional tax equity investors for those CCS facilities that are currently not operating, or operating as retained RC facilities.If we are unable to generate sufficient cash flow, we may be unable to meet our operational needs and/or repay our loan when due. Should this be the case, we will seek to refinance the loan or obtain alternative financing. If we are unable to refinance the loan or obtain alternative financing, our lenders would be entitled to take possession of the collateral securing the indebtedness, which includes substantially all of our assets, to the extent permitted by the Credit Agreement and applicable law.

Sources and Uses of Cash

Six Months Ended June 30, 2015 vs. Six Months Ended June 30, 2014

Cash and cash equivalents decreased from $25.2 million as of December 31, 2014 to $10.4 million as of June 30, 2015. The following table summarizes our cash flows for the six months ended June 30, 2015 and 2014, respectively:

	Six Months Ended June 30,
(in thousands)	2015			2014			Change
Cash provided by (used in):
Operating activities	$	(13,788	)	$	(18,928	)	$	5,140
Investing activities	296			11,722			(11,426		)
Financing activities	(1,276		)	239			(1,515		)
Net change in cash and cash equivalents	$	(14,768	)	$	(6,967	)	$	(7,801	)

Cash flow from operating activities

Cash flows used in operating activities reflect operating losses as well as the timing of our working capital requirements, in addition to other items discussed herein.

Our cash spend for legal and professional fees for the six months ended June 30, 2015 increased from that of the comparable prior year period, primarily due to our efforts related to the Restatement process and SEC Inquiry, causing an increase in cash outflows of $3.4 million, and consulting fees paid to a former consultant for RC technology.

Deferred revenue and project costs resulted in a change in the use of operating cash flows on a net basis of $3.1 million due to production of ACI and DSI equipment systems. However, due to the completed contract revenue recognition method, these billings and related costs have not yet been recognized within revenues and cost of sales, respectively.

We are required to provide collateral for certain letters of credit for ACI and DSI equipment, as discussed in Note 8 of the our Condensed Consolidated Financial Statements. Cash is pledged as security for letters of credit in the same amount as the assets. Restricted cash was used during the six months ended June 30, 2015 and six months ended June 30, 2014 to collateralize the increase in ACI and DSI equipment contracts.

Our operating cash flow may also be significantly impacted by distributions from our equity investees which are classified as either a return on investment within operating cash flows or a return in excess of investment basis within investing cash flows. During the six months ended June 30, 2015, we received $11.6 million less in total cash distributions from equity method investees than we did during the six months ended June 30, 2014.

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Cash flow from investing activities

Purchase and maturity of investments in securities, restricted and Increase in restricted cash

We are required to provide collateral for certain letters of credit for future payments related to royalty indemnification obligation and other payments as discussed in Note 8 of our Condensed Consolidated Financial Statements. Investment securities and cash are pledged as security for letters of credit in the same amount as the assets. The restricted investments and cash increased during the six months ended June 30, 2015 due to a contractual requirement related to the royalty indemnification obligation.

Acquisition of property and equipment

Acquisitions of property and equipment were $0.4 million and $0.9 million during the six months ended June 30, 2015 and June 30, 2014, respectively. Investing cash flows during 2015 were related to equipment and during 2014 related to spend for equipment and leasehold improvements.

Advance on note receivable

In December 2014, we loaned $0.5 million to an independent third party to provide financing to for the pursuit of emissions technology projects, bearing annual interest of 8%. Interest and principal were payable at maturity of the agreement in June 2015. In March 2015, we loaned an additional $0.5 million to the third party, continuing to bear annual interest at 8%. All interest and principal payments were then deferred until March 2018. Subsequent to the second loan disbursement, it was determined that the independent third party was not awarded contracts, which would have utilized their emissions technology. Without these contracts, we concluded that the ability of the independent third party to repay these loans was in doubt. We have recorded an allowance against the entire principal balance of the note receivable outstanding, reversed accrued interest and put the two respective portions of the note on non-accrual status as of December 31, 2014 and June 30, 2015, respectively.

Acquisition of a business

During March 2015, we acquired Clearview, which operated as ADA Analytics, for $2.4 million, as described in Note 3 of the Condensed Consolidated Financial Statements, $2.1 million of which was paid in 2015. The Company acquired the in-process research and development in order to potentially commercialize and expand its analytics services available to customers. However, in August 2015, as part of a broader strategic restructuring of our business to simplify our operating structure in a manner that creates increased customer focus, better supports sales and product delivery and also aligns the Company’s cost structure as the emissions control market shifts towards compliance solutions for the Federal Mercury and Air Toxics Standards ("MATS"), the Company’s management approved an action to wind down operations of ADA Analytics.

Equity method and cost method investments

On February 10, 2014, we purchased a 24.95% membership interest in RCM6, which owns a single RC facility that produces RC that qualifies for Section 45 tax credits. Total consideration given included a cash payment of $2.4 million and the execution of a $13.3 million note payable. In addition, we are subject to quarterly capital calls and variable payments based upon differences in originally forecasted RC production as of the purchase date and actual quarterly production. Due to the difference of the stated rate and the effective rate, the note payable is periodically negatively amortizing and is carried at a discount of $13.9 million and $14.2 million, respectively, as of June 30, 2015 and December 31, 2014. During the six months ended June 30, 2015 and 2014, we funded capital calls and made net variable payments of $0.2 million and $1.4 million, respectively.

As discussed within the Results of Operations and the operating cash flow activities above, our investing cash flow may also be significantly impacted by the classification of cash distributions from equity method investees as either a return on investment within operating cash flows or a return in excess of investment basis within investing cash flows. During the six months ended June 30, 2015, there was a decrease in distributions from equity method investments within the investing section due to a decrease in period over period distributions in excess of cumulative earnings from CCS.

Cash flow from financing activities

Notes payable activity

During the six months ended June 30, 2015 and 2014 we used $1.0 million and zero cash, respectively, for repayments of principal on the RCM6 and DSI Business Owner notes payable, as described in Note 6 of our Condensed Consolidated Financial Statements. Principal payments increased period over period as the Company did not purchase RCM6 until the first quarter of 2014 and no payments during the six-months ended June 30, 2014 were applied to the principal balance. Additionally, the Company did not terminate its consulting agreement with the DSI Business Owner until December 31, 2014, at which time the Company recorded a note payable for remaining amounts owed.

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Equity award activity

During the six months ended June 30, 2015 and 2014 we used $0.3 million and zero, respectively, for the repurchase of shares to satisfy minimum tax withholdings upon the vesting of equity based awards. Additionally, during the same periods, we received zero and $0.2 million of proceeds related to the exercise of options.

Significant non-cash transactions

	Six Months Ended June 30,
(in thousands)	2015		2014
Restricted stock award reclassification (equity to liability)	$	—	$	501
Issuance of common stock to settle liabilities	—		127
Acquisition of equity method investment through note payable	—		13,301

Contractual Obligations

During the six months ended June 30, 2015, there were no material changes to our contractual obligations outside of the ordinary course of business. As noted above, we entered into the $15.0 million Credit Agreement on October 22, 2015. Additionally, in March 2016 we sold our 24.95% interest in RCM6 and thus will have no further obligations related to the outstanding note payable to CCS. For further discussion, refer to Note 6 of our Condensed Consolidated Financial Statements included in Item 1 of this Quarterly Report.

Off-Balance Sheet Arrangements

During the six months ended June 30, 2015, we did not engage in any off-balance sheet arrangements except those discussed in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's Annual Report on Form 10-K for the year ended December 31, 2014, which included operating leases, letters of credit and future 453A interest obligations.

Critical Accounting Policies and Estimates

Our significant accounting policies and estimates have not changed from those reported in Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Annual Report on Form 10-K for the fiscal year ended December 31, 2014.

New Accounting Guidance

Refer to Note 1 of our Condensed Consolidated Financial Statements, included in Item 1 of this Quarterly Report for new accounting guidance issued during the six months ended June 30, 2015 and subsequent thereto through the date of this filing.

Forward-Looking Statements Found in this Report

This Quarterly Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, or the Exchange Act, that involve risks and uncertainties. In particular such forward-looking statements are found in this Part I and under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operation” in Part II, Item 7 below. Words or phrases such as “anticipates,” “believes,” “expects,” “intends,” “plans,” “estimates,” “predicts,” the negative expressions of such words, or similar expressions are used in this Report to identify forward-looking statements, and such forward-looking statements include, but are not limited to, statements or expectations regarding:

(a) the scope and impact of mercury and other regulations or pollution control requirements, including the impact of the final Mercury and Air Toxics Standards (“MATS”);

(b) the production of RC will qualify for IRC Section 45 tax credits in conjunction with the production of RC;

(c) expected growth in and potential size of our target markets;

(d) expected supply and demand for our products and services;

(e) increasing competition in the emission control market;

(f) future levels of research and development activities;

(g) the effectiveness of our technologies and the benefits they provide;

(h) CCS’s ability to profitably sell and/or lease additional RC facilities or recognize the tax benefits from their operations;

48

(i) probability of any loss occurring with respect to CCS Party Guarantees;

(j) the timing of awards of, and work and related testing under, our contracts and agreements and their value;

(k) timing and amounts of or changes in future revenues, backlog, funding for our business and projects, margins, expenses, earnings, tax rate, cash flow, royalty payments, working capital, liquidity and other financial and accounting measures;

(l) ability to refinance the loan under the Credit Agreement or obtain alternative financing;

(m) the outcome of current and pending legal proceedings;

(n) awards of patents designed to protect our proprietary technologies both in the U.S. and abroad;

(o) the materiality of any future adjustments to previously recorded reimbursements as a result of DOE audits and the amount of contributions from the DOE and others towards planned project construction and demonstrations; and

(p) whether any legal challenges or Environmental Protection Agency actions will have a material impact on the implementation of the MATS or other regulations and on our ongoing business.

Our expectations are based on certain assumptions, including without limitation, that:

(a) coal will continue to be a major source of fuel for electrical generation in the United States;

(b) the IRS will allow the production of RC to qualify for IRC Section 45 tax credits;

(c) contracts we have with the DOE will continue to be funded at expected levels and we will be chosen to participate in additional contracts of a similar nature;

(d) we will continue as a key supplier of equipment, chemicals and services to the coal-fired power generation industry as it seeks to implement reduction of mercury emissions;

(e) current environmental laws and regulations requiring reduction of mercury from coal-fired boiler flue gases will not be materially weakened or repealed by courts or legislation in the future;

(f) we will be able to meet any performance guaranties we make and continue meet our other obligations under contracts;

(g) we will be able to obtain adequate capital and personnel resources to meet our operating needs and to fund anticipated growth and our indemnity obligations;

(h) we will be able to establish and retain key business relationships with other companies;

(i) orders we anticipate receiving will in fact be received;

(j) governmental audits of our costs incurred under DOE contracts will not result in material adjustments to amounts we have previously received under those contracts;

(k) we will be able to formulate new chemicals and blends that will be useful to, and accepted by, the coal-fired boiler power generation business;

(l) we will be able to effectively compete against others;

(m) we will be able to meet any technical requirements of projects we undertake;

(n) CCS will be able to sell or lease the remaining RC facilities to third party investors; and

(o) we will be able to utilize our portion of the Section 45 tax credits generated by operation of RC facilities for the benefit of the members of CCS.

The forward-looking statements included in this Quarterly Report involve risks and uncertainties. Actual events or results could differ materially from those discussed in the forward-looking statements as a result of various factors including, but not limited to, timing of new and pending regulations and any legal challenges to or extensions of compliance dates of them; the government’s failure to promulgate regulations or appropriate funds that benefit our business; changes in laws and regulations, accounting rules, prices, economic conditions and market demand; impact of competition; availability, cost of and demand for alternative energy sources and other technologies; technical, start up and operational difficulties; failure of the RC facilities to produce coal that qualifies for tax credits; termination of or amendments to the contracts for RC facilities; decreases in the production of RC; inability to commercialize our technologies on favorable terms; our inability to ramp up our operations to effectively address recent and expected growth in our business; loss of key personnel; potential claims from any terminated employees, customers or vendors; failure to satisfy performance guarantees; availability of materials and equipment for our businesses; intellectual property infringement claims from third parties; pending litigation; elevated spending on non-recurring cash expenses, which may last longer than expected or reductions in operating costs may be less than expected; identification of additional material weaknesses or significant deficiencies; as well as other factors relating to our business, as described in our filings with the SEC, with particular emphasis on the risk factor disclosures contained in those filings and in Item 1A of this Quarterly Report. Readers are cautioned not to place undue reliance on the forward-looking statements made in this Quarterly Report and to consult filings we have made and will make with the SEC for additional discussion concerning risks and uncertainties that may apply to our business and the ownership of our securities. The forward-looking statements contained in this Quarterly Report are presented as of the date hereof, and we disclaim any duty to update such statements unless required by law to do so.

49

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Interest Rate Risk

The Company is most significantly exposed to interest rate risk related to its obligations to pay 453A interest to the IRS. Additionally, the Company is currently exposed to interest rate risk related to cash equivalents and restricted cash subject to variable interest rates. There have been no material changes from those reported in the Company's Annual Report on Form 10-K for the year ended December 31, 2014, except for an increase in the applicable 453A interest rate from 3.00% to 4.00%, effective in the third quarter of 2015.

Foreign Currency Risk

There have been no material changes from those reported in the Company's Annual Report on Form 10-K for the year ended December 31, 2014.

Commodity Price Risk

There have been no material changes from those reported in the Company's Annual Report on Form 10-K for the year ended December 31, 2014.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company has evaluated, under the supervision of the Company’s Chief Executive Officer and Chief Financial Officer, the effectiveness of disclosure controls and procedures as of June 30, 2015. This is done in order to ensure that information the Company is required to disclose in reports that are filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms.

Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were not effective as of June 30, 2015, due to the material weaknesses described in “Item 9A. Controls and Procedures” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.

Notwithstanding the material weaknesses, management has concluded that the consolidated financial statements included in this Form 10-Q present fairly, in all material aspects, the Company’s financial position, results of operations and cash flows for the periods presented in conformity with accounting principles generally accepted in the United States.

Changes in Internal Control Over Financial Reporting

Under the applicable SEC rules (Exchange Act Rules 13a-15(f)) and 15d-15(f) management is required to evaluate any changes in internal control over financial reporting that occurred during each fiscal quarter that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. As discussed in Item 9A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, we have undertaken a broad range of remedial procedures to address material weaknesses in our internal control over financial reporting. These remedial procedures continued throughout the three and six-months ended June 30, 2015 and will continue throughout the remainder of 2015 and during 2016. While we continue to implement remediation efforts and design enhancements to our internal control procedures, we believe there were significant changes in internal controls implemented during the three and six-months ended June 30, 2015, but the controls were not in place for a sufficient period of time to conclude on the effectiveness of the controls, therefore, further changes may be required.

50

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, the Company is involved in litigation, claims and other proceedings related to the conduct of our business. Litigation and other disputes are inherently unpredictable and subject to substantial uncertainties and unfavorable resolutions could occur. None of these matters, either individually or in the aggregate, currently is material to the Company except those matters reported in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2014 (the "Annual Report").

Item 1A. Risk Factors

There are no material updates to our risk factors as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2014.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On June 12, 2015, the Compensation Committee of our Board of Directors approved the grant of 31,138 restricted shares of our common stock to the newly-appointed Chief Financial Officer for services to be rendered to the Company pursuant to our Long Term Incentive Plan under the Amended and Restated 2007 Equity Incentive Plan, as amended. The issuance of shares described in this Item 2 was exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended, as sales of securities that do not involve a public offering or distribution. The recipient was an accredited investor at the respective times of the sale of securities. No underwriters were involved, no sales commission or other remuneration was paid and we did not receive any cash proceeds in connection with this issuance.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable

Item 5. Other Information

None.

51

Item 6. Exhibits

Exhibit No.	Description	Form	File No.	Incorporated by Reference Exhibit	Filing Date
10.30	Severance Agreement dated April 30, 2015 between Michael D. Durham and Advanced Emissions Solutions, Inc.**	8-K	000-54992	10.1	May 6, 2015
10.39	Second Amended and Restated Limited Liability Company Agreement of RCM6, LLC, made and entered into as of April 1, 2015	10-K	000-54992	10.39	February 29, 2016
10.76	Fifth Amendment and Sixth Waiver to 2013 Loan and Security Agreement by and among ADA-ES, Inc., Advanced Emissions Solutions, Inc., and CoBiz Bank d/b/a Colorado Business Bank in the State of Colorado dated as of May 29, 2015	10-K	000-54992	10.76	February 29, 2016
31.1	Certification of Chief Executive Officer of Advanced Emissions Solutions, Inc. Pursuant to 17 CFR 240.13a-14(a) or 17 CFR 240.15d-14(a)*
31.2	Certification of Chief Financial Officer of Advanced Emissions Solutions, Inc. Pursuant to 17 CFR 240.13a-14(a) or 17 CFR 240.15d-14(a)*
32.1	Certification of Chief Executive Officer and Chief Financial Officer of Advanced Emissions Solutions, Inc. Pursuant to 18 U.S.C Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
32.2	Certification of Chief Financial Officer of Advanced Emissions Solutions, Inc. Pursuant to 18 U.S.C Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
101. INS	XBRL Instance Document
101.SCH	XBRL Schema Document
101.CAL	XBRL Calculation Linkbase Document
101.LAB	XBRL Label Linkbase Document
101.PRE	XBRL Presentation Linkbase Document
101.DEF	Taxonomy Extension Definition Linkbase Document

Notes:

* – Filed herewith.

** – Management contract or compensatory plan or arrangement.

52

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Advanced Emissions Solutions, Inc.
	(Registrant)
April 19, 2016	By:	/s/ L. Heath Sampson
		L. Heath Sampson
		President, Chief Executive Officer and Treasurer
		(Principal Executive and Accounting Officer)
April 19, 2016	By:	/s/ A. Bradley Gabbard
		A. Bradley Gabbard
		Chief Financial Officer
		(Principal Financial Officer)

53

EX-31.1

Exhibit 31.1

Pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as Amended

I, L. Heath Sampson, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Advanced Emissions Solutions, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(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

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(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.

Date: April 19, 2016

/s/ L. Heath Sampson

L. Heath Sampson

President, Chief Executive Officer and Treasurer

EX-31.2

Exhibit 31.2

Pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as Amended

I, A. Bradley Gabbard, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Advanced Emissions Solutions, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(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

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(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.

Date: April 19, 2016

/s/ A. Bradley Gabbard

A. Bradley Gabbard

Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification

Pursuant to

18 U.S.C. Section 1350,

as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report on Form 10-Q of Advanced Emissions Solutions, Inc. (the “Company”) for the quarterly period ended June 30, 2015, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), L. Heath Sampson, as President and Chief Executive Officer of the Company, and A. Bradley Gabbard, as Chief Financial Officer of the Company, each hereby certifies, pursuant to and solely for the purpose of 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, to the best of his knowledge and belief, that:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ L. Heath Sampson

L. Heath Sampson

President, Chief Executive Officer and Treasurer

(Principal Executive and Accounting Officer)

April 19, 2016

/s/ A. Bradley Gabbard

A. Bradley Gabbard

Chief Financial Officer

(Principal Financial Officer)

April 19, 2016

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2015	Apr. 14, 2016
Document and Entity Information [Abstract]
Entity Registrant Name	Advanced Emissions Solutions, Inc.
Entity Central Index Key	0001515156
Document Type	10-Q
Document Period End Date	Jun. 30, 2015
Amendment Flag	false
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		22,011,494

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
ASSETS
Cash and cash equivalents	$ 10,413	$ 25,181
Receivables, net	9,218	16,594
Receivables, related parties, net	1,665	1,439
Restricted cash	2,527	2,527
Costs in excess of billings on uncompleted contracts	6,830	6,153
Prepaid expenses and other assets	2,709	2,535
Total current assets	33,362	54,429
Restricted cash, long-term	10,680	8,771
Property and equipment, net of accumulated depreciation of $6,612 and $5,924, respectively	4,076	4,808
Investment securities, restricted, long-term	336	336
Cost method investment	2,776	2,776
Equity method investments	20,238	19,584
Other assets	5,029	2,995
Total Assets	76,497	93,699
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Accounts payable	10,227	7,514
Accrued payroll and related liabilities	7,329	5,158
Current portion of notes payable, related parties	1,612	1,479
Billings in excess of costs on uncompleted contracts	16,038	22,518
Settlement and royalty indemnity obligation	4,268	3,749
Other current liabilities	8,540	6,739
Total current liabilities	48,014	47,157
Long-term portion of notes payable, related party	13,716	14,431
Settlement and royalty indemnification, long-term	18,282	20,273
Advance deposit, related party	5,028	6,524
Other long-term liabilities	6,053	6,011
Total Liabilities	$ 91,093	$ 94,396
Commitments and contingencies (Note 8)
Stockholders’ deficit:
Preferred stock: par value of $.001 and no par value per share, respectively, 50,000,000 shares authorized, none outstanding	$ 0	$ 0
Common stock: par value of $.001 per share, 100,000,000 shares authorized, 21,969,795 and 21,853,263 shares issued, and 21,779,721 and 21,643,342 shares outstanding at June 30, 2015 and December 31, 2014, respectively	22	22
Additional paid-in capital	114,849	110,169
Accumulated deficit	(129,467)	(110,888)
Total stockholders’ deficit	(14,596)	(697)
Total Liabilities and Stockholders’ Deficit	$ 76,497	$ 93,699

XML

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Statement of Financial Position [Abstract]
Accumulated depreciation and amortization	$ 6,612	$ 5,924
Preferred stock, par value (in dollars per share)	$ 0.001
Preferred stock, shares authorized	50,000,000	50,000,000
Preferred stock, shares outstanding	0	0
Common stock par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	21,969,795	21,853,263
Common stock, shares outstanding	21,779,721	21,643,342

XML

Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Revenues:
Equipment sales	$ 14,236	$ 1,796	$ 35,351	$ 1,999
Consulting services	316	1,272	684	2,022
Chemicals and other	343	106	617	137
Total revenues	14,895	3,174	36,652	4,158
Operating expenses:
Equipment sales cost of revenue, exclusive of depreciation and amortization	13,698	1,079	28,749	1,203
Consulting services cost of revenue, exclusive of depreciation and amortization	264	654	690	965
Chemical and other cost of revenue, exclusive of depreciation and amortization	41	20	278	37
Payroll and benefits	9,746	4,609	14,657	8,856
Rent and occupancy	601	558	1,232	1,118
Legal and professional fees	4,387	2,495	8,122	3,927
General and administrative	1,503	1,407	3,385	2,553
Research and development, net	1,860	316	3,110	595
Depreciation and amortization	573	456	1,104	894
Total operating expenses	32,673	11,594	61,327	20,148
Operating loss	(17,778)	(8,420)	(24,675)	(15,990)
Other income (expense):
Earnings from equity method investments	4,860	9,791	5,174	16,416
Royalties, related party	2,299	849	4,493	1,981
Interest income	6	19	18	46
Interest expense	(1,794)	(1,219)	(3,569)	(2,012)
Other	23	1	87	10
Total other income (expense), net	5,394	9,441	6,203	16,441
Income (loss) before income tax expense	(12,384)	1,021	(18,472)	451
Income tax expense	63	29	107	42
Net income (loss)	$ (12,447)	$ 992	$ (18,579)	$ 409
Earnings (loss) per common share (Note 1):
Basic (in dollars per share)	$ (0.57)	$ 0.05	$ (0.85)	$ 0.02
Diluted (in dollars per share)	$ (0.57)	$ 0.04	$ (0.85)	$ 0.02
Weighted-average number of common shares outstanding:
Basic (in shares)	21,715	21,477	21,728	21,487
Diluted (in shares)	21,715	22,035	21,728	22,092

XML

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Cash flows from operating activities
Net income (loss)	$ (18,579)	$ 409
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization	1,104	894
Amortization of debt issuance costs	50	50
Impairment of property and equipment	46	71
Provision for bad debt expense and note receivable	511	0
Interest costs added to principal balance of notes payable	432	578
Share-based compensation expense	5,459	1,745
Earnings from equity method investments	(5,174)	(16,416)
Other non-cash items, net	177	40
Changes in operating assets and liabilities, net of effects of acquired businesses:
Receivables	7,625	2,590
Related party receivables	(226)	20
Prepaid expenses and other assets	(460)	(1,482)
Costs incurred on uncompleted contracts	2,363	(31,681)
Restricted cash, long-term	(709)	(1,212)
Other long-term assets	231	102
Accounts payable	2,713	2,227
Accrued payroll and related liabilities	1,651	(683)
Other current liabilities	1,348	(1,211)
Billings on uncompleted contracts	(9,420)	27,703
Advance deposit, related party	(1,496)	(660)
Other long-term liabilities	19	125
Settlement and royalty indemnification obligation	(1,472)	(3,396)
Distributions from equity method investees, return on investment	19	1,259
Net cash used in operating activities	(13,788)	(18,928)
Cash flows from investing activities
Purchase of investment securities, restricted	0	404
Increase in restricted cash	(1,200)	(343)
Acquisition of property and equipment	(380)	(881)
Advance on note receivable	(500)	0
Acquisition of business	(2,124)	0
Purchase of and contributions to equity method investees	(230)	(3,779)
Distributions from equity method investees in excess of cumulative earnings	4,730	16,321
Net cash provided by (used in) investing activities	296	11,722
Cash flows from financing activities
Repayments on notes payable	(1,014)	0
Proceeds received upon exercise of stock options	0	243
Repurchase of shares to satisfy minimum tax withholdings	(262)	(4)
Net cash provided by (used in) financing activities	(1,276)	239
Increase (Decrease) in Cash and Cash Equivalents	(14,768)	(6,967)
Cash and Cash Equivalents, beginning of period	25,181	37,890
Cash and Cash Equivalents, end of period	10,413	30,923
Supplemental disclosures of cash information:
Cash paid for interest	2,993	2,086
Cash paid for income taxes	146	95
Restricted stock award reclassification (equity to liability)	0	501
Issuance of common stock to settle liabilities	0	127
Acquisition of equity method investment through note payable	$ 0	$ 13,301

XML

Basis of Presentation

6 Months Ended

Jun. 30, 2015

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

Nature of Operations

Advanced Emissions Solutions, Inc. (“ADES” or the "Company"), a Delaware corporation with its principal office located in Highlands Ranch, Colorado, is principally engaged in providing environmental and emissions control equipment, technologies and specialty chemicals to the coal-burning electric power generation industry. Although the Company has historically operated at a net loss, the Company generates substantial earnings and tax credits under Section 45 of the Internal Revenue Code ("IRC") from its equity investments in certain entities and royalty payment streams related to technologies that are licensed to Clean Coal Solutions, LLC, a Colorado limited liability company ("CCS"). Such technologies allow CCS to provide their customers with various solutions to enhance combustion and reduced emissions of nitrogen oxide ("NO_x") and mercury from coal burned to generate electrical power. The Company’s sales occur principally throughout the United States. See Note 11 for additional information regarding the Company's operating segments.

Basis of Presentation

The accompanying Condensed Consolidated Financial Statements of ADES are unaudited and have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) and with Article 10 of Regulation S-X. In compliance with those instructions, certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted.

The unaudited Condensed Consolidated Financial Statements of ADES in this quarterly report are presented on a consolidated basis comprising ADES and its direct and indirect, wholly-owned subsidiaries: ADA-ES, Inc. ("ADA"), a Colorado corporation, BCSI, LLC ("BCSI"), a Delaware limited liability company, Advanced Clean Energy Solutions, LLC ("ACES"), a Delaware limited liability company, ADEquity, LLC ("ADEquity"), a Delaware limited liability company, ADA Environmental Solutions, LLC ("ADA LLC"), a Colorado limited liability company, ADA Intellectual Property, LLC ("ADA IP"), a Colorado limited liability company, ADA-RCM6, LLC ("ADA-RCM6"), a Colorado limited liability company, ADA Analytics, LLC, a Delaware limited liability company and ADA Analytics Israel Ltd. (collectively with ADA Analytics, LLC, "ADA Analytics"), an Israel limited liability company. ADA LLC and ADA IP had no operations in 2015 and 2014. Results of operations and cash flows for the interim periods are not necessarily indicative of the results that may be expected for the entire year. All significant intercompany transactions and accounts were eliminated as of and for the three and six months endedJune 30, 2015 and 2014.

On March 14, 2014, the Company effected a two-for-one stock split of the Company’s common stock, which was completed in the form of a common stock dividend and all amounts have been retroactively adjusted for the split.

In the opinion of management, these consolidated financial statements include all normal and recurring adjustments considered necessary for a fair presentation of the results of operations, financial position and cash flows for the interim periods presented. These Condensed Consolidated Financial Statements of ADES should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. Significant accounting policies disclosed therein have not changed.

Liquidity

During the three and six months endedJune 30, 2015 the Company's working capital and cash balances continued to decline, due principally to continued losses. Such losses were driven primarily by poor operating performance related to Dry Sorbent Injection ("DSI") equipment, which is included within the Emissions Control - Manufacturing segment as of June 30, 2015, substantial and continuing expenditures required to fund the re-audit and restatement ("Restatement") of certain of our prior consolidated financial statements, and a significant reduction in the receipt of cash distributions from CCS. This deterioration of working capital directly necessitated the securing of the loan transaction described in Note 12 ("Credit Agreement"). The Company expects that pressure on working capital will continue until such time as all Restatement activities are completed, including resolution of the SEC inquiry and the conclusion of the private litigation, both of which are described in Note 8.

The Company's ability to generate sufficient cash flow required to meet ongoing operational needs and to meet obligations, including the repayment of the loan under the Credit Agreement, depends upon several factors, including executing on the Company's contracts and initiatives, receiving royalty payments from Clean Coal Solutions, LLC ("CCS") and distributions from CCS and Clean Coal Solutions Services, LLC ("CCSS"), and our ability to maintain a significant share of the market and increase operational efficiencies for emissions control equipment, chemicals and services. Increased distributions from CCS will likely be dependent upon the securing of additional tax equity investors for those CCS facilities that are currently not operating, or operating as retained Refined Coal ("RC") facilities. If we are unable to generate sufficient cash flow, we may be unable to meet our operational needs and/or repay our loan when due. Should this be the case, we will seek to refinance the loan or obtain alternative financing. If we are unable to refinance the loan or obtain alternative financing, our lenders would be entitled to take possession of the collateral securing the indebtedness, which includes substantially all of our assets, to the extent permitted by the Credit Agreement and applicable law.

Earnings (Loss) Per Share

The Company computes earnings (loss) per share in accordance with FASB ASC 260-10. Under this guidance, unvested restricted stock awards ("RSA's") that contain non-forfeitable rights to dividends or dividend equivalents are deemed to be participating securities and, therefore, are included in computing basic earnings per share pursuant to the two-class method. The two-class method determines earnings per share for each class of common stock and participating securities according to dividends or dividend equivalents and their respective participation rights in undistributed earnings (losses). The Company did not declare any cash dividends during the three-month or six-month periods ended June 30, 2015 or 2014.

Under the two-class method, net income (loss) for the period is allocated between common shareholders and the holders of the participating securities, in this case, the weighted-average number of unvested restricted stock awards outstanding during the period. The allocated, undistributed income (loss) for the period is then divided by the weighted-average number of common shares and participating securities outstanding during the period to arrive at basic earnings (loss) per common share or participating security for the period, respectively. Because the Company did not declare any dividends during the periods presented, and because the unvested RSA's possess substantially the same rights to undistributed earnings as common shares outstanding, there is no difference between the calculated basic earnings (loss) per share for common shares and participating securities. Accordingly, and pursuant to U.S. GAAP, the Company has elected not to separately present basic or diluted earnings (loss) per share attributable to participating securities on its Consolidated Statements of Operations.

Diluted earnings (loss) per share takes into consideration shares of common stock and unvested RSA's outstanding (computed under basic earnings (loss) per share) and potentially dilutive shares of common stock. Potentially dilutive shares consist of vested, in-the-money outstanding options, Stock Appreciation Rights ("SAR's") and contingent Performance Share Unit's ("PSU's") (collectively "Potential dilutive shares"). When there is a loss from continuing operations, all potentially dilutive shares become anti-dilutive and are thus excluded from the calculation of diluted loss per share.

Each PSU represents a contingent right to receive shares of the Company’s common stock, that may range from zero to two times the number of PSU's granted on the award date, should the Company meet certain performance measures over the requisite performance period. The number of potentially dilutive shares related to PSU's is based on the number of shares, if any, that would be issuable at the end of the respective reporting period, assuming that the end of the reporting period was the end of the contingency period applicable to such PSU's.

The following table sets forth the calculations of basic and diluted earnings per share:

	Three Months Ended June 30,					Six Months Ended June 30,
(in thousands, except per share amounts)	2015			2014		2015			2014
Net income (loss)	$	(12,447	)	$	992	$	(18,579	)	$	409
Less: Undistributed income (loss) allocated to participating securities	(130		)	14		(215		)	6
Income (loss) attributable to common stockholders	$	(12,317	)	$	978	$	(18,364	)	$	403
Basic weighted-average common shares outstanding (1)	21,715			21,477		21,728			21,487
Add: dilutive effect of equity instruments	—			558		—			605
Diluted weighted average shares outstanding	21,715			22,035		21,728			22,092
Earnings (loss) per share - basic	$	(0.57	)	$	0.05	$	(0.85	)	$	0.02
Earnings (loss) per share - diluted	$	(0.57	)	$	0.04	$	(0.85	)	$	0.02

(1) The number of shares and per share amounts have been retroactively restated to reflect the two-for-one stock split of the Company’s common stock, which was effected in the form of a common stock dividend distributed on March 14, 2014.

The table below shows the number of shares that were excluded from the calculation of diluted loss per share because their inclusion would have been anti-dilutive to the calculation:

	Three Months Ended June 30,		Six Months Ended June 30,
(share data in thousands)	2015	2014	2015	2014
Stock options	18	—	24	—
Restricted stock awards	161	—	181	—
Performance share units	200	—	195	—
Stock appreciation rights	2	—	6	—
Total shares excluded from diluted shares outstanding	381	—	406	—

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to makes estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. There have been no changes in the Company’s critical accounting estimates from those that were disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. Actual results could differ from these estimates.

New Accounting Guidance

In January 2015, the FASB issued ASU No. 2015-01, Income Statement - Extraordinary and Unusual Items (Topic 225-20), Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items that simplifies income statement presentation by eliminating extraordinary items from U.S. GAAP. This guidance is to be applied either prospectively or retrospectively and is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. Early application is permitted provided the guidance is applied from the beginning of the annual year of adoption. The Company has adopted the guidance as of January 1, 2014 and the adoption of this standard did not have an impact on the Company's consolidated financial position or results of operations.

In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810), Amendments to the Consolidation Analysis that meant to clarify the consolidation reporting guidance in U.S. GAAP. This guidance is to be applied using a retrospective method or a modified retrospective method, as outlined in the guidance, and is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. Early application is permitted. The Company is currently evaluating this guidance but does not believe the adoption of this standard will impact the Company's financial statements and disclosures.

In April 2015, the FASB issued ASU 2015-03, Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs, which requires an entity to present debt issuance costs related to a debt liability as a direct deduction from the debt liability rather than as an asset. ASU 2015-03 is effective retrospectively for fiscal years, and interim reporting periods within those years, beginning after December 15, 2015. Early adoption is permitted for financial statements that have not been previously issued. The adoption of this standard impacted the presentation of certain financial statement line items within the Company’s consolidated balance sheets and related disclosures, but did not affect the Company’s consolidated results of operations.

In September 2015, the FASB issued ASU 2015-16, Business Combinations (Topic 805): Simplifying the Accounting Measurement-Period Adjustments, which eliminates the requirement for an entity to retrospectively adjust the financial statements for measurement-period adjustments that occur in periods after a business combination is completed. ASU 2015-16 is effective prospectively for fiscal years, and interim reporting periods within those years, beginning after December 15, 2015. The adoption of this standard will not have an impact on the Company's financial position and results of operations.

In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, to simplify the presentation of deferred income taxes. The amendments in ASU 2015-17 require that deferred tax liabilities and assets be classified as non-current in a classified statement of financial position. The current requirement that deferred tax liabilities and assets of a tax-paying component of an entity be offset and presented as a single amount is not affected by the amendments in the update. ASU 2015-17 is effective for fiscal years beginning after December 15, 2016, and interim periods within those years, and may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. The adoption of this standard will not have an impact on the Company's financial position.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities. This new standard provides guidance on how entities measure certain equity investments and present changes in the fair value. This standard requires that entities measure certain equity investments that do not result in consolidation and are not accounted for under the equity method at fair value and recognize any changes in fair value in net income. ASU 2016-01 is effective for fiscal years beginning after December 31, 2017. The Company is currently evaluating the provisions of this guidance and assessing its impact on the Company's financial statements and disclosures.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires lessees to recognize a right of use asset and related lease liability for those leases classified as operating leases at the commencement date and have lease terms of more than 12 months. This topic retains the distinction between finance leases and operating leases. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, and interim periods within those years, and must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company is currently evaluating the provisions of this guidance and assessing its impact on the Company's financial statements and disclosures.

In March 2016, the FASB issued ASU 2016-06, Derivatives and Hedging (Topic 815), which requires that embedded derivatives be separated from the host contract and accounted for separately as derivatives if certain criteria are met, including the “clearly and closely related” criterion. The amendments in this Update clarify the requirements for assessing whether contingent call (put) options that can accelerate the payment of principal on debt instruments are clearly and closely related to their debt hosts. An entity performing the assessment under the amendments is required to assess the embedded call (put) options solely in accordance with the four-step decision sequence. The amendments apply to all entities that are issuers of or investors in debt instruments (or hybrid financial instruments that are determined to have a debt host) with embedded call (put) options. ASU 2016-06 is effective for fiscal years beginning after December 15, 2016, and interim periods within those years, and must apply a modified retrospective transition approach. Early adoption is permitted. The Company is currently evaluating the provisions of this guidance and assessing its impact on the Company's financial statements and disclosures.

In March 2016, the FASB issued ASU 2016-07, Investments - Equity Method and Joint Ventures (Topic 323), which simplifies the accounting for equity method investments by removing the requirement that an entity retroactively adopt the equity method of accounting if an investment qualifies for use of the equity method as a result of an increase in the level of ownership or degree of influence. The amendments require that the equity method investor add the cost of acquiring the additional interest in the investee to the current basis of the investor’s previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting. ASU 2016-07 is effective for fiscal years beginning after December 15, 2016, and interim periods within those years, and must apply a prospective adoption approach. Early adoption is permitted. The Company is currently evaluating the provisions of this guidance and assessing its impact on the Company's financial statements and disclosures.

In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which clarify the implementation guidance on principal versus agent considerations. ASU 2016-08 is effective for effective for fiscal years, and interim reporting periods within those years, beginning after December 15, 2017. Early application is permitted for annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company is currently evaluating the provisions of this guidance and assessing its impact on the Company's financial statements and disclosures.

In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation- Improvements to Employee Share-Based Payment Accounting (Topic 718), which involves several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Under the new standard, income tax benefits and deficiencies are to be recognized as income tax expense or benefit in the income statement and the tax effects of exercised or vested awards should be treated as discrete items in the reporting period in which they occur. An entity should also recognize excess tax benefits regardless of whether the benefit reduces taxes payable in the current period. Excess tax benefits should be classified along with other income tax cash flows as an operating activity. In regards to forfeitures, the entity may make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures when they occur. This ASU is effective for fiscal years beginning after December 15, 2016 including interim periods within that reporting period, however early adoption is permitted. The Company is currently evaluating the guidance to determine the Company's adoption method and the effect it will have on the Company's Consolidated Financial Statements.

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Restructuring

6 Months Ended

Jun. 30, 2015

Restructuring and Related Activities [Abstract]

Restructuring

Restructuring

The Company recorded restructuring charges during the three and six months endedJune 30, 2015 in connection with a reduction in force, the departure of certain executive officers and management's further alignment of the business with strategic objectives. These charges related to severance arrangements with departing employees and executives and the termination of the operations of a foreign subsidiary that was involved in the development of certain data analytics and monitoring products (see Note 3), as well as non-cash charges related to the acceleration of vesting of certain stock awards. The Company incurred additional charges during the remainder of 2015 associated with the closing of BCSI's facilities and corresponding alignment of the business with strategic objectives.

The Company recorded restructuring charges during the three and six months endedJune 30, 2014 primarily related to a reduction in force and management's alignment of the business with strategic objectives. These charges were related to severance agreements with departing employees, including non-cash charges related to the acceleration of vesting of certain stock awards.

A summary of the net pretax charges, incurred by segment, for each period is as follows:

		Pretax Charge
(in thousands, except employee data)	Approximate Number of Employees	Refined Coal		Emission Control - ACI			Emissions Control - BCSI		Research & Development			All Other and Corporate		Total
Three Months Ended June 30, 2015
Restructuring charges	41	$	—	$	1,715		$	—	$	86		$	3,764	$	5,565
Changes in estimates		—		—			—		(2		)	—		(2		)
Total pretax charge, net of reversals		$	—	$	1,715		$	—	$	84		$	3,764	$	5,563
Six Months Ended June 30, 2015
Restructuring charges	45	$	—	$	1,715		$	—	$	86		$	4,242	$	6,043
Changes in estimates		—		(10		)	—		(2		)	—		(12		)
Total pretax charge, net of reversals		$	—	$	1,705		$	—	$	84		$	4,242	$	6,031
Three Months Ended June 30, 2014
Restructuring charges	18	$	—	$	352		$	—	$	—		$	14	$	366
Total pretax charge, net of reversals		$	—	$	352		$	—	$	—		$	14	$	366
Six Months Ended June 30, 2014
Restructuring charges	18	$	—	$	352		$	—	$	—		$	14	$	366
Total pretax charge, net of reversals		$	—	$	352		$	—	$	—		$	14	$	366

The following table summarizes the Company’s utilization of restructuring accruals for the six months ended June 30, 2015:

(in thousands)	Employee Severance
Remaining accrual as of December 31, 2014	$	1,690
Expense provision (1)	6,043
Cash payments and other (1)	(4,342		)
Change in estimates	(12		)
Remaining accrual as of June 30, 2015	$	3,379

(1) Included within the Expense provision and Cash payments and other line items in the above table is equity based compensation of $3.1 million for the six months ended June 30, 2015, resulting from the accelerated vesting of modified equity-based compensation awards for certain terminated employees.

Restructuring accruals are included within the Accrued payroll and related liabilities line item in the Condensed Consolidated Balance Sheets. Restructuring expenses are included within the Payroll and benefits line item in the Condensed Consolidated Statements of Operations.

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Acquisition

6 Months Ended

Jun. 30, 2015

Business Combinations [Abstract]

Acquisition

Acquisition

2015 Acquisition

In November 2014, the Company entered into an agreement with InSyst Ltd. and ClearView Monitoring Solutions Ltd. (collectively "ClearView"), both Israel based companies specializing in data analytics, to allow the Company the exclusive option to purchase certain assets of ClearView. The Company paid $0.2 million related to this option, which was included within the Prepaid expenses and other assets line item within the Condensed Consolidated Balance Sheets as of December 31, 2014. In January 2015, the Company notified ClearView that it had elected to exercise its exclusive option to purchase certain assets of ClearView.

In March 2015, the Company acquired the certain assets of ClearView for total cash payments of $2.4 million, which is inclusive of VAT tax of $0.4 million. The acquisition was accounted for under the acquisition method of accounting that requires the total purchase consideration to be allocated to the assets acquired and liabilities assumed based on estimates of fair value. Operating results related to the acquired assets were consolidated into the Company’s results of operations beginning March 6, 2015.

A summary of the purchase consideration and allocation of the purchase consideration is as follows:

(in thousands)
Purchase consideration:
Cash paid	$	2,360
Fair value of liabilities assumed:
Accrued liabilities	10
Contingent consideration	451
Total fair value of liabilities assumed	461
Total purchase consideration	$	2,821
Allocation of purchase consideration
Receivables	$	360
Property and equipment and other	82
Intangibles - in process research and development	2,379
Total	$	2,821

The transaction called for a series of contingent payments based upon the achievement of sales and sales targets. These contingent payments are classified as purchase consideration. As part of the purchase price, the Company recorded a $0.5 million liability for the contingent consideration based upon the net present value of the Company's estimate of the future payments.

During August 2015, as part of a broader strategic restructuring of the Company's business to simplify its operating structure in a manner that creates increased customer focus, better supports sales and product delivery and also aligns the Company’s cost structure as the emissions control market shifts towards compliance solutions for the Federal Mercury and Air Toxics Standards ("MATS"), the Company’s management approved an action to wind down operations of ADA Analytics. As a result of these actions, the Company fully impaired the carrying value of the assets, thereby recognizing net impairment expense in the amount of $1.9 million during the third quarter of 2015.

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Equity Method Investments

6 Months Ended

Jun. 30, 2015

Equity Method Investments and Joint Ventures [Abstract]

Equity Method Investments

Equity Method Investments

Clean Coal Solutions, LLC

The Company's ownership interest in CCS was 42.5% as of June 30, 2015 and December 31, 2014. CCS supplies technology equipment, and technical services to cyclone-fired, pulverized coal and other boiler users, but CCS's primary purpose is to put into operation facilities that produce Refined Coal ("RC") that qualifies for tax credits available under Section 45 of the IRC ("Section 45 tax credits"). CCS has been determined to be a variable interest entity ("VIE"); however, the Company does not have the power to direct the activities that most significantly impact the VIE’s economic performance and has therefore accounted for the investment under the equity method of accounting. The Company determined the partners of CCS with voting rights had identical voting interests, equity control interests and board control interests, and therefore, concluded that the power to direct the activities that most significantly impact the VIE’s economic performance were shared.

As shown in the tables below, the Company’s carrying value in CCS has been reduced to zero in all periods presented, as cumulative cash distributions from CCS have exceeded the Company's pro-rata share of cumulative earnings in CCS. If CCS subsequently reports net income, the Company will not record its pro-rata share of such net income until cumulative share of pro-rata income equals or exceeds the amount of its cumulative income recognized due to cash being distributed. Until such time, the Company will only report income from CCS to the extent of cash distributions.

As such, equity income or loss reported on our income statement may differ from a mathematical calculation of net income or loss attributable to our equity interest based upon the factor of our equity interest and the net income or loss attributable to equity owners as shown on CCS’s income statement. Likewise, distributions from equity method investees are reported on our Consolidated Statements of Cash Flows as “return on investment” within Operating cash flows until such time as the carrying value in an equity method investee company is reduced to zero; thereafter, such distributions are reported as “distributions in excess of cumulative earnings” within Investing cash flows.

The following tables summarize the results of operations of CCS for the three and six months endedJune 30, 2015 and 2014, respectively:

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2015			2014			2015			2014
Gross profit	$	24,905		$	20,295		$	55,834		$	37,505
Operating expenses	7,147			4,998			12,503			9,419
Income from operations	17,758			15,297			43,331			28,086
Other expenses	470			(498		)	329			(741		)
Class B preferred return	(1,632		)	(2,249		)	(3,362		)	(4,583		)
Loss attributable to noncontrolling interest	1,782			897			3,113			3,001
Net income available to Class A members	$	18,378		$	13,447		$	43,411		$	25,763
ADES equity earnings	$	4,630		$	9,733		$	4,730		$	16,321

The difference between the Company's proportionate share of CCS' net income and the Company's earnings from its CCS equity method investment as reported on its Condensed Consolidated Statements of Operations relates to the Company receiving distributions in excess of the carrying value of the investment, and therefore recognizing such excess distributions as equity method earnings in the period the distributions occur. When CCS subsequently reports income, the Company does not record its share of such income until it equals the amount of distributions in excess of carrying value that were previously recognized in income.

The following table presents the Company's investment balance, equity earnings and cash distributions in excess of the investment balance, on a quarterly basis, for the three and six months endedJune 30, 2015 (in thousands):

Description	Date(s)	Investment balance			ADES equity earnings (loss)			Cash distributions		Cash distributions and equity loss in (excess) of investment balance
Beginning balance	12/31/14	$	—		$	—		$	—	$	(29,877	)
ADES proportionate share of income from CCS (1)	First Quarter	9,827			9,827			—		—
Increase of equity loss in excess of investment balance (prior to cash distributions)	First Quarter	(9,827		)	(9,827		)	—		9,827
Cash distributions from CCS	First Quarter	(100		)	—			100		—
Adjustment for current year cash distributions in excess of investment balance	First Quarter	100			100			—		(100		)
Total investment balance, equity earnings (loss) and cash distributions	3/31/2015	—			100			100		(20,150		)
ADES proportionate share of income from CCS (1)	Second Quarter	7,825			7,825			—		—
Increase of equity loss in excess of investment balance (prior to cash distributions)	Second Quarter	(7,825		)	(7,825		)	—		7,825
Cash distributions from CCS	Second Quarter	(4,630		)	—			4,630		—
Adjustment for current year cash distributions in excess of investment balance	Second Quarter	4,630			4,630			—		(4,630		)
Total investment balance, equity earnings (loss) and cash distributions	6/30/2015	$	—		$	4,630		$	4,630	$	(16,955	)

The following table presents the Company's investment balance, equity earnings and cash distributions in excess of the investment balance, on a quarterly basis, for the three and six months endedJune 30, 2014 (in thousands):

Description	Date(s)	Investment balance			ADES equity earnings (loss)			Cash distributions		Cash distributions and equity loss in (excess) of investment balance
Beginning balance	12/31/2013	$	—		$	—		$	—	$	(12,906	)
ADES proportionate share of income from CCS (1)	First Quarter	4,644			4,644			—		—
Recovery of cumulative distributions and equity losses in excess of investment balance	First Quarter	(4,644		)	(4,644		)	—		4,644
Cash distributions from CCS	First Quarter	(6,588		)	—			6,588		—
Recognition of earnings for cash distributions in excess of investment balance	First Quarter	6,588			6,588			—		(6,588		)
Total investment balance, equity earnings (loss) and cash distributions	3/31/2014	—			6,588			6,588		(14,850		)
ADES proportionate share of income from CCS (1)	Second Quarter	5,130			5,130			—		—
Recovery of cumulative distributions and equity losses in excess of investment balance	Second Quarter	(5,130		)	(5,130		)	—		5,130
Cash distributions from CCS	Second Quarter	(9,733		)	—			9,733		—
Recognition of earnings for cash distributions in excess of investment balance	Second Quarter	9,733			9,733			—		(9,733		)
Total investment balance, equity earnings (loss) and cash distributions	6/30/2014	$	—		$	9,733		$	9,733	$	(19,453	)

(1) The amounts of the Company's 42.5% proportionate share of net income as shown in the table above differ from mathematical calculations of the Company’s 42.5% equity interest in CCS multiplied by the amounts of Net Income available to Class A members as shown in the table above of CCS results of operations due to adjustments related to the Redeemable Class B preferred return and the elimination of CCS earnings attributable to RCM6, of which the Company owned 24.95% during the periods presented during the years ended December 31, 2015 and 2014.

Clean Coal Solutions Services, LLC

On January 20, 2010, the Company, together with NexGen Refined Coal, Inc. ("NexGen"), formed Clean Coal Solutions Services, LLC ("CCSS"), a Colorado limited liability company, for the purpose of operating the RC facilities leased or sold to third parties. The Company has determined that CCSS is not a VIE and has evaluated the consolidation analysis under the Voting Interest Model. The Company has a 50% voting and economic interest in CCSS, which is equivalent to the voting and economic interest of NexGen. Therefore, as the Company does not have greater than 50% of the outstanding voting shares, either directly or indirectly, it has accounted for the investment under the equity method of accounting. The Company’s investment in CCSS as of June 30, 2015 and December 31, 2014 was $6.3 million and $4.1 million, respectively.

The following table summarizes the results of operations of CCSS:

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2015			2014			2015			2014
Gross loss	$	(9,732	)	$	(4,411	)	$	(19,895	)	$	(8,816	)
Operating expenses	41,008			21,683			78,954			43,381
Loss from operations	(50,740		)	(26,094		)	(98,849		)	(52,197		)
Other expenses	(70		)	(21		)	(75		)	(24		)
Loss attributable to noncontrolling interest	53,110			27,628			103,268			55,497
Net income	$	2,300		$	1,513		$	4,344		$	3,276
ADES equity earnings	$	1,150		$	757		$	2,172		$	1,638

Included within the Consolidated Statement of Operations of CCSS for the three and six months endedJune 30, 2015 and 2014, respectively, were losses related to VIE's of CCSS. These losses do not impact the Company's equity earnings from CCSS as 100% of those losses are removed from the net income of CCSS as they are losses attributable to a noncontrolling interest.

RCM6, LLC

On February 10, 2014, the Company purchased a 24.95% membership interest in RCM6, LLC ("RCM6"), which owns a single RC facility that produces RC that qualifies for Section 45 tax credits, from CCS through an up-front payment of $2.4 million and an initial note payable to CCS of $13.3 million. Due to the payment terms of the note purchase agreement, the note payable is periodically negatively amortizing and the note payable balance as of June 30, 2015 and December 31, 2014 were $13.9 million and $14.2 million, respectively. In addition to the up front and subsequent note payments, the Company is also subject to quarterly capital calls and variable payments based upon differences in originally forecasted RC production as of the purchase date and actual quarterly production. The following table contains the capital calls and variable payments made by the Company related to its investment in RCM6 during the three and six months endedJune 30, 2015 and 2014, respectively:

	Three Months Ended June 30,					Six Months Ended June 30,
(in thousands)	2015			2014		2015		2014
Capital calls and variable payments (1)	$	(238	)	$	126	$	230	$	1,383

(1) During the three months ended June 30, 2015, net capital calls and variable payments were negative due to a true-up calculation by CCS of the cumulative variable payments related to the RCM6 purchase by which the Company received a refund of $0.4 million.

RCM6 has been determined to be a VIE, however, during the periods presented, the Company did not have the power to direct the activities that most significantly impacted the variable interest entity’s economic performance and has therefore accounted for the investment under the equity method of accounting.

As of June 30, 2015 and December 31, 2014, the Company’s ownership in RCM6 was 24.95%. The Company’s investment in RCM6 as of June 30, 2015 and December 31, 2014 was $13.9 million and $15.4 million, respectively. On March 3, 2016, the Company sold its 24.95% membership interest in RCM6, as further described in Note 12.

The following table summarizes the assets, liabilities and results of operations of RCM6:

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2015			2014			2015			2014
Gross loss	$	(1,180	)	$	(412	)	$	(1,980	)	$	(1,971	)
Operating expenses	516			423			977			866
Loss from operations	(1,696		)	(835		)	(2,957		)	(2,837		)
Other expenses	(89		)	(63		)	(162		)	(169		)
Net loss	$	(1,785	)	$	(898	)	$	(3,119	)	$	(3,006	)
ADES equity losses	$	(920	)	$	(699	)	$	(1,728	)	$	(1,543	)

The purchase of RCM6 resulted in the Company recording a basis difference related to property, plant and equipment and identifiable intangible assets. The difference between the Company's proportionate share of RCM6' net loss and the Company's equity losses noted above is due to depreciation and amortization related to the basis difference allocated to property, plant and equipment and identifiable intangible assets upon the purchase of RCM6. During the three and six months endedJune 30, 2015 and 2014, the Company adjusted its equity method earnings in RCM6 by $0.5 million and $0.5 million and $1.0 million and $0.8 million, respectively, due to this basis difference.

On March 3, 2016, the Company sold its entire ownership interest in RCM6. The Company received a cash payment of $1.8 million related to the sale and has no future obligations related to the previously recorded note payable.

The following table details the components of the Company's respective equity method investments included within the Earnings from equity method investments line item on the Condensed Consolidated Statements of Operations:

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2015			2014			2015			2014
Earnings from CCS	$	4,630		$	9,733		$	4,730		$	16,321
Earnings from CCSS	1,150			757			2,172			1,638
Loss from RCM6	(920		)	(699		)	(1,728		)	(1,543		)
Earnings from equity method investments	$	4,860		$	9,791		$	5,174		$	16,416

The following table details the components of the cash distributions from the Company's respective equity method investments included within the Condensed Consolidated Statements of Cash Flows. Distributions from equity method investees are reported on our Condensed Consolidated Statements of Cash Flows as “return on investment” within Operating cash flows until such time as the carrying value in an equity method investee company is reduced to zero; thereafter, such distributions are reported as “distributions in excess of cumulative earnings” within Investing cash flows.

	Six Months Ended June 30,
(in thousands)	2015		2014
Distributions from equity method investees, return on investment
CCSS	$	19	$	1,259
	$	19	$	1,259
Distributions from equity method investees in excess of investment basis
CCS	$	4,730	$	16,321
	$	4,730	$	16,321

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Investments

6 Months Ended

Jun. 30, 2015

Investments, Debt and Equity Securities [Abstract]

Investments

Investments

The Company had investment securities related to certificates of deposit in the amount of $0.3 million as of June 30, 2015 and December 31, 2014. No unrealized gains or losses were recorded as of June 30, 2015 and December 31, 2014 related to these investment securities.

The Company also had a cost method investment in the amount of $2.8 million as of June 30, 2015 and December 31, 2014. No unrealized gains or losses were recorded as of June 30, 2015 and December 31, 2014 related to this investment security.

The Company's investment securities have maturities ranging from one to five years as of June 30, 2015.

In November 2014, the Company acquired an 8% ownership interest in the common stock of Highview Enterprises Limited ("Highview"), a London, England based developmental stage company specializing in power storage, for $2.8 million in cash. The Company evaluated the investment and determined that it should account for the investment under the cost method. This investment is evaluated for impairment upon an indicator of impairment such as an event or change in circumstances that may have a significant adverse effect on the fair value of the investment. As of June 30, 2015 and December 31, 2014, no indicators of impairment had been identified. When there are no indicators of impairment present, the Company estimates the fair value for the Highview investment only if it is practical to do so. As of June 30, 2015 and December 31, 2014, the Company estimated that the fair value of the cost method investment approximated the November 2014 purchase price due to the proximity of the purchase date to December 31, 2014 and June 30, 2015.

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Borrowings

6 Months Ended

Jun. 30, 2015

Debt Disclosure [Abstract]

Borrowings

Borrowings

The following table summarizes the Company's notes payable, all of which are with related parties, as of June 30, 2015 and December 31, 2014:

	As of
(in thousands)	June 30, 2015		December 31, 2014
Current portion of long-term borrowings
RCM6 note payable	$	995	$	874
DSI Business Owner note payable	617		605
Total current portion of long-term borrowings	1,612		1,479
Long-term borrowings
RCM6 note payable	12,909		13,312
DSI Business Owner note payable	807		1,119
Total Long-term borrowings	13,716		14,431
Total Borrowings	$	15,328	$	15,910

CCS - RCM6 Note Payable

As described in Note 4, the Company acquired membership interests in RCM6 from CCS in February 2014, through an up-front payment and a note payable. Due to the payment terms of the note purchase agreement, the note payable periodically adds interest to the outstanding note payable principle balance. The stated rate associated with the note is 1.65% and the effective rate of the note at inception was 20%. Due to the difference between the stated rate and the effective rate, the note payable is carried at a discount of $8.6 million and $10.1 million as of June 30, 2015 and December 31, 2014, respectively. Unpaid principal and interest on the note are due in 2022.

As described in Note 12, on March 3, 2016, the Company sold its 24.95% membership interest in RCM6 and, as a result, the Company currently has no future payment obligations related to its RCM6 equity investment.

DSI Business Owner

As of December 31, 2014, the Company terminated the consulting portion of the agreements the former, sole-owner of companies from which BCSI acquired its assets ("DSI Business Owner"), as described in Note 9 of the Company's Annual Report on Form 10-K for the year ended December 31, 2014. However, per the terms of the remaining agreements the Company was required to make all remaining payments structured as a note payable through the third quarter of 2017. In February 2016, the Company entered into an agreement with the DSI Business Owner and settled the remaining amounts owed as of the date of the agreement of approximately $1.1 million for $0.3 million which was paid during the first quarter of 2016.

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Fair Value Measurements

6 Months Ended

Jun. 30, 2015

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

Fair value of financial instruments

The carrying amounts of financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, deposits and accrued expenses approximate fair value due to the short maturity of these instruments. Accordingly, these instruments are not presented in the table below. The following table provides the estimated fair values of the remaining financial instruments:

	As of June 30, 2015				As of December 31, 2014
(in thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value
Financial Instruments:
Investment securities:
Investment securities, restricted, long-term	$	336	$	336	$	336	$	336
Cost method investment	$	2,776	$	2,776	$	2,776	$	2,776
Notes Payable:
Current portion of notes payable, related party	$	1,668	$	1,517	$	1,479	$	1,439
Long-term portion of notes payable, related party	$	14,022	$	13,732	$	14,431	$	14,356
Highview technology license payable	$	—	$	—	$	155	$	155
Highview technology license payable, long-term	$	1,314	$	1,314	$	1,389	$	1,389
Stock appreciation rights, liability-classified equity award	$	517	$	517	$	—	$	—

Concentration of credit risk

The Company's certificates of deposit investment securities, and virtually all of the Company’s restricted and unrestricted cash accounts, are at two financial institutions. If those institutions were to be unable to perform their obligations, the Company would be at risk regarding the amount of cash and investment in excess of the federal deposit insurance corporation limits ($250 thousand) that would be returned to the Company.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The estimated fair values of investment securities are described below. Refer to Note 5 of these Consolidated Financial Statements for additional information regarding the Company’s investment securities.

Fair value is defined as the price that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The Company uses the hierarchy prescribed in the accounting guidance for fair value measurements, based upon the available inputs to the valuation and the degree to which they are observable or not observable in the market. The three levels in the hierarchy are as follows:

•Level 1 Inputs - Quoted prices (unadjusted) for identical assets or liabilities in active markets that are accessible as of the measurement date.

•Level 2 Inputs - Inputs other than quoted prices within Level 1 that are observable either directly or indirectly, including but not limited to quoted prices in markets that are not active, quoted prices in active markets for similar assets or liabilities and observable inputs other than quoted prices such as interest rates or yield curves.

•Level 3 Inputs - Unobservable inputs reflecting the Company’s own assumptions about the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk.

Financial instruments carried and measured at fair value on a recurring basis are presented in the table below according to the fair value hierarchy described above:

	As of June 30, 2015
	Fair Value Measurement Using
(in thousands)	Level 1		Level 2		Level 3		Assets at Fair Value
Assets:
Investment securities, restricted, long-term	$	—	$	336	$	—	$	336
Total assets at fair value	$	—	$	336	$	—	$	336
Liabilities:
Contingent consideration	$	—	$	—	$	451	$	451
Stock appreciation rights, liability-classified equity award	—		517		—		517
Total liabilities at fair value	$	—	$	517	$	451	$	968

	As of December 31, 2014
	Fair Value Measurement Using
(in thousands)	Level 1		Level 2		Level 3		Assets at Fair Value
Assets:
Investment securities, restricted, long-term	$	—	$	336	$	—	$	336
Total assets at fair value	$	—	$	336	$	—	$	336

The estimated fair value of investments securities consisting entirely of certificates of deposits was estimated to be equal to the deposit value of the investment due to the relative short term nature of the instrument.

As discussed in Note 3, during the first quarter of 2015, contingent consideration was recorded related to the acquisition of ClearView. The transaction called for a series of contingent payments based upon the achievement of sales and sales targets. As part of the purchase price, the Company recorded a $0.5 million liability for the contingent consideration due to the sellers based upon the net present value of the Company's estimate of the future payments. This fair value measurement represents a Level 3 measurement as it is based on significant inputs not observable in the market. Significant judgment is employed in determining the appropriateness of these assumptions as of the acquisition date.

As part of the broader restructuring plan discussed in Note 3, the Company recognized a non-cash gain related to the reversal of the contingent consideration liability as the achievement of sales and sales targets would not be met.

Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

Assets and liabilities measured on a non-recurring basis are presented in the following tables:

	As of June 30, 2015
	Fair Value Measurement Using
(in thousands)	Level 1		Level 2		Level 3		Fair Value		Total Losses
Assets:
Impaired note receivable	$	—	$	—	$	—	$	—	$	(1,000	)
Total assets at fair value	$	—	$	—	$	—	$	—	$	(1,000	)

The Company recorded impairment charges related to a Note Receivable. The fair value of the impaired note receivable, determined to be fully impaired, was estimated using a discounted cash flow analysis. The fair value measurements represent a Level 3 measurement.

	As of December 31, 2014
	Fair Value Measurement Using
(in thousands)	Level 1		Level 2		Level 3		Fair Value		Total Losses
Assets:
Property and equipment	$	—	$	—	$	424	$	424	$	(355	)
Impaired note receivable	—		—		—		—		(500		)
Total assets at fair value	$	—	$	—	$	424	$	424	$	(855	)

During the fourth quarter of 2014, the Company recorded impairments on property and equipment, with a total carrying value of $0.8 million, as a result of ongoing negative cash flows related to assets specifically related to the Company's Dry Sorbent Injection ("DSI") system fabrication facility. The fair value of the impaired property and equipment as of December 31, 2014 was estimated using an appraisal obtained from a third party. The fair value measurements represent a Level 3 measurement as it is based on significant inputs not observable in the market. The fair value of the impaired goodwill, determined to be fully impaired, was estimated using a discounted cash flow analysis. The fair value measurement represents a Level 3 measurement.

During the fourth quarter of 2015, the Company recorded impairments totaling approximately $0.3 million to reduce the carrying value of certain property and equipment that the Company intended to sell to its estimated sales value, less estimated costs to sell. The property and equipment were subsequently sold at auction. Proceeds from the sale of the impaired assets totaled approximately $0.6 million. No gain or loss was recognized on the sale of the property and equipment.

Also during the fourth quarter of 2015, the Company sold certain property and equipment having a net book value of approximately $0.1 million. Proceeds from the sale totaled approximately $0.3 million, which resulted in the recognition of a gain on the sale of approximately $0.2 million.

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2015

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Legal Proceedings

The Company is involved in certain legal actions, described below. The outcomes of these legal actions are not within the Company’s complete control and may not be known for prolonged periods of time. In some actions, the claimants seek monetary damages and other penalties that could require significant expenditures. In accordance with U.S. GAAP, the Company records a liability in the Consolidated Financial Statements for loss contingencies when a loss is known or considered probable and the amount can be reasonably estimated. If the reasonable estimate of a known or probable loss is a range, and no amount within the range is a better estimate than any other, the minimum amount of the range is accrued. If a loss is reasonably possible but not known or probable, and can be reasonably estimated, the estimated loss or range of loss is disclosed. When determining the estimated loss or range of loss, significant judgment is required to estimate the amount and timing of a loss to be recorded. Estimates of probable losses resulting from litigation and governmental proceedings involving the Company are inherently difficult to predict, particularly when the matters are in early procedural stages, with incomplete facts or legal discovery; involve unsubstantiated or indeterminate claims for damages; potentially involve penalties or fines. ADES cannot predict, with any certainty, the final outcome of any legal proceedings as described in the paragraphs below, nor can it provide any assurance that the ultimate resolution of any such matter will not have a material adverse effect on our consolidated financial position, results of operations or cash flows.

Securities class action lawsuit: United Food and Commercial Workers Union v. Advanced Emissions Solutions, Inc., No. 14-cv-01243-CMA-KMT (U.S. District Court, D. Colo.)

A class action lawsuit against ADES and certain of its current and former officers is pending in the federal court in Denver, Colorado. This lawsuit and a companion case were originally filed in May 2014. On February 19, 2015, the Court consolidated these cases and appointed the United Foods and Commercial Workers Union and Participating Food Industry Employers Tri-State Pension Fund as lead plaintiff and approved its selection of the law firms. The consolidated case is now captioned United Food and Commercial Workers Union v. Advanced Emissions Solutions, Inc., No. 14-cv-01243-CMA-KMT (U.S. District Court, D. Colo.).

The lead plaintiff filed “Lead Plaintiff’s Consolidated Class Action Complaint” on April 20, 2015 (the “Consolidated Complaint”). The Consolidated Complaint names as defendants the Company and certain current and former Company officers.

Plaintiffs allege that ADES and other defendants misrepresented to the investing public the Company’s financial condition and its financial controls to artificially inflate and maintain the market price of ADES’s common stock. The Consolidated Complaint alleges two claims for relief for: 1) alleged violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5, and 2) control person liability under Section 20(a) of the Exchange Act.

The lawsuit seeks unspecified monetary damages together with costs and attorneys’ fees incurred in prosecuting the class action, among other relief. The Consolidated Complaint alleges a class period covering all purchasers or acquirers of the common stock of ADES or its predecessor-in-interest during the proposed class period from May 12, 2011 through January 29, 2015.

Defendants filed a motion to dismiss the Consolidated Complaint on June 19, 2015, contending the Consolidated Complaint: 1) fails to meet the strict pleading standards required for Section 10(b) claims; and 2) fails to establish the primary violation required for any claim of secondary (control person) liability. Plaintiffs filed a response in opposition to this motion on July 2, 2015 and Defendants filed their reply brief on July 16, 2015. On March 7, 2016 the parties filed a stipulated motion to stay the case while the parties mediate the matter. On March 8, 2016, the motion to stay was granted, and the Defendants’ motion to dismiss was denied without prejudice with the option to refile should mediation fail. The case is stayed until further order of the court.

The Company has not recorded an expense related to losses in connection with this matter because any potential loss is not currently probable or reasonably estimable under U.S. GAAP. Additionally, the Company cannot reasonably estimate the range of loss, if any, that may result from this matter.

Stockholder derivative lawsuits: In Re Advanced Emissions Solutions, Inc. Shareholder Derivative Litigation, No. 2014CV-30709 (District Court, Douglas County, Colorado) (consolidated actions).

Consolidated stockholder derivative claims against certain of the Company’s current and former officers and directors, along with the Company as a "nominal defendant", are pending in the District Court for Douglas County, Colorado, and are currently stayed.

In June and July 2014 stockholder derivative actions were filed in the Colorado District Courts for Douglas County and for the City and County of Denver. By agreement of the parties, the case in the Denver District Court was transferred to the Douglas County District Court and the cases were consolidated.

In separate complaints, the plaintiffs allege breach of fiduciary duties, waste of corporate assets, and unjust enrichment against the defendants for their alleged use of improper accounting techniques and for failing to maintain effective internal controls that, together, resulted in materially inaccurate financial statements from which incentive compensation was derived and paid. Plaintiffs demand, on behalf of the Company, unspecified monetary damages, “appropriate equitable relief,” and the costs and disbursements of the action, including attorneys', accountants and expert fees, costs, expenses, and restitution, as well as certain corporate governance charges.

On August 28, 2014, the Colorado state court approved a Stipulation and proposed Order Consolidating Actions, Appointing Co-Lead Plaintiffs and Co-Lead Counsel, and Staying Consolidated Action. Under that Order the consolidated derivative actions are stayed at least 30 days after a decision by the U.S. District Court on Defendants’ motion to dismiss the operative complaint in the securities class action described above. Any party has the right to move to lift the stay on 30-days’ written notice to the other parties.

The Company has not recorded an expense related to losses in connection with this matter because any potential loss is not currently probable or reasonably estimable under U.S. GAAP. Additionally, the Company cannot reasonably estimate the range of loss, if any, that may result from this matter.

SEC Inquiry

On April 7, 2014, the SEC’s Division of Enforcement informed the Company that it had initiated an inquiry to determine if violations of the federal securities laws have occurred (the “SEC Inquiry”), and in September 2014 the SEC issued a formal order of investigation. The SEC Inquiry generally pertains to the restatement of the Company's financial statements and internal controls processes, as described in Note 2 to the Consolidated Financial Statements of the Company included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2014. The Company is fully cooperating with the SEC and has provided information and documents to the SEC on an ongoing basis. To date, the SEC has not asserted any formal claims.  While we cannot predict the duration or outcome of the SEC Inquiry, it could result in the payment of monetary penalties and other relief.

The Company has not recorded an expense related to losses in connection with this matter because any potential loss is not currently probable or reasonably estimable under U.S. GAAP. Additionally, the Company cannot reasonably estimate the range of loss, if any, that may result from this matter.

Settlement and royalty indemnity

In August 2008, Norit International N.V. f/k/a Norit N.V. ("Norit") filed a lawsuit against the Company asserting claims for misappropriation of trade secrets and other claims related to the Company's ADA Carbon Solutions, LLC joint venture ("Carbon Solutions"). In August 2011, the Company and Norit entered into a settlement agreement whereby the Company paid amounts related to the non-solicitation breach of contract claim and ADA was also required to pay additional damages related to certain future revenues generated from the equity method investment through Q2 2018 (the “Royalty Award”). Payments of amounts due under the Royalty Award for each quarter are payable three months after such quarter ends through the second quarter of 2018. In October 2011, an arbitration panel endorsed and confirmed the terms of the settlement agreement.

Additionally, during November 2011, the Company entered into an Indemnity Settlement Agreement whereby the Company agreed to settle certain indemnity obligations asserted against the Company related to the Norit litigation and relinquished all of its equity interest in Carbon Solutions to Carbon Solutions and amended the Intellectual Property License Agreement dated October 1, 2008 between the Company and Carbon Solutions. In the event that the Company declares or otherwise issues a dividend to any or all of its stockholders prior to January 1, 2018, other than repurchases of common stock under employee stock plans, the Company must increase its letter of credit amounts, which support the payments which must be paid to Norit, equal to 50% of the aggregate fair market value of such dividends.

As of June 30, 2015 and December 31, 2014, the Company has recorded the components of the Settlement and royalty indemnity obligation within the following line items in the Condensed Consolidated Balance Sheets:

	As of
(in thousands)	June 30, 2015		December 31, 2014
Settlement and royalty indemnity obligation, short-term	$	4,268	$	3,749
Litigation settlement and royalty indemnity expense, net	18,282		20,273
Total settlement and royalty indemnity	$	22,550	$	24,022

Future amounts to be paid related to the Royalty Award may differ from current estimates due to future adjusted sales of activated carbon from the Red River plant.

CCS

The Company also has certain limited obligations contingent upon future events in connection with the activities of CCS. The Company, NexGen and two entities affiliated with NexGen have provided GSFS with limited guaranties (the “CCS Party Guaranties”) related to certain losses it may suffer as a result of inaccuracies or breach of representations and covenants. The Company also is a party to a contribution agreement with NexGen under which any party called upon to pay on a CCS Party Guaranty is entitled to receive contribution from the other party equal to 50% of the amount paid. No liability or expense provision has been recorded by the Company related to this contingent obligation as the Company believes that it is not probable that a loss will occur with respect to CCS Party Guaranties.

Consultant obligation

On January 1, 2012, the Company entered into a residual payment agreement with a former consultant who was involved in the development and deployment of RC technologies. Pursuant to the agreement, the Company was required to make annual payments based upon CCS RC production from January 1, 2012 through June 30, 2015. These expenses are recorded within the Legal and professional fees line item in the Condensed Consolidated Statements of Operations and are recorded as RC production occurs. The following tables summarize the expenses under this agreement for the three and six months endedJune 30, 2015 and 2014, respectively:

	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2015		2014		2015		2014
Consultant expense	$	212	$	307	$	279	$	557

Line of Credit

In September 2013, ADA, as borrower, and ADES, as guarantor, entered into a 2013 Loan and Security Agreement with a bank for an aggregate principal amount of $10 million that is secured by certain amounts due to the Company from certain CCS RC leases (the "Line of Credit"). As amended, the Line of Credit is available until May 31, 2016.

Covenants in the Line of Credit include a borrowing base limitation that is based on a percentage of the net present value of ADA’s portion of payments due to Clean Coal from the RC leases. The Line of Credit also contains other affirmative and negative covenants and customary indemnification obligations of ADA to the lender and provides for the issuance of Letters of Credit provided that the aggregate amount of the Letters of Credit plus all advances then outstanding does not exceed the calculated borrowing base. The Company guaranteed the obligations and agreements of ADA under the Line of Credit. Amounts outstanding under the line of credit bear interest payable monthly at a rate per annum equal to the higher of 5% or the “Prime Rate” (as defined in the agreement) plus 1%. There were no outstanding balances under this agreement at June 30, 2015 and December 31, 2014, respectively. As a result of certain covenant violations, the Company has no borrowing availability under this facility.

The Line of Credit has been amended six times (December 2, 2013, April 3, 2014, September 20, 2014, December 15, 2014, May 29, 2015 and September 30, 2015), most notably to extend the maturity date. The lender has also provided seven waivers relating to various transactions and obligations to provide financial information to the lender.

Letters of Credit

The Company has letters of credit ("LOC") with two financial institutions related to equipment projects, the Royalty Award and certain other agreements. The following tables summarize the letters of credit outstanding, collateral, by type, and the related line items within the Condensed Consolidated Balance Sheets where the collateral related to the letters of credit is recorded:

	As of June 30, 2015
(in thousands)	LOC Outstanding		Restricted Cash		Restricted cash, long-term		Investment securities, restricted, long-term
Contract performance - equipment systems	$	7,956	$	2,527	$	5,430	$	—
Royalty Award	5,250		—		5,250		—
Other	328		—		—		336
Total LOC outstanding	$	13,534	$	2,527	$	10,680	$	336

	As of December 31, 2014
(in thousands)	LOC Outstanding		Restricted Cash		Restricted cash, long-term		Investment securities, restricted, long-term
Contract performance - equipment systems	$	7,247	$	2,527	$	4,721	$	—
Royalty Award	4,050		—		4,050		—
Other	328		—		—		336
Total LOC outstanding	$	11,625	$	2,527	$	8,771	$	336

Restricted balances may exceed the letters of credit outstanding due to interest income earned on the restricted balances.

Performance Guarantee on Equipment Systems

In the normal course of business related to ACI and DSI systems, the Company may guarantee certain performance thresholds during a discrete performance testing period that do not extend beyond six months from the initial test date, the commencement of which is determined by the customer. Performance thresholds include such matters as the achievement of a certain level of mercury removal and other emissions based upon the injection of a specified quantity of a qualified activated carbon or other chemical at a specified rate given other plant operating conditions, availability of equipment and electric power usage. In the event the equipment fails to perform as specified during the testing period, the Company may have an obligation to correct or replace the equipment. In the event the level of mercury removal is not achieved, the Company may have a “make right” obligation within the contract limits. As of June 30, 2015, the Company had not incurred a performance guarantee claim. Performance guarantee claims, if incurred, would be included within the Equipment sales cost of revenue line of the Condensed Consolidated Statements of Operations. However, during the third quarter of 2015, the Company began working to modify and correct two performance guarantee issues related to EC systems. Resolution of these performance guarantees is not expected to result in a material adverse effect on the Company’s operating performance or liquidity in 2015 or beyond.

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Stock-Based Compensation

6 Months Ended

Jun. 30, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

Stock-Based Compensation

The Company grants equity based awards to employees and non-employee directors. Equity based awards include RSA's, Stock Options, PSU's and Stock Appreciation Rights ("SAR's"). Stock-based compensation expense related to employees is included within the Payroll and benefits line item in the Condensed Consolidated Statements of Operations. Stock-based compensation expense related to non-employee directors is included within the General and administrative line item in the Condensed Consolidated Statements of Operations.

Total stock-based compensation expense for the three and six months endedJune 30, 2015 and 2014 was as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2015		2014		2015		2014
Restricted stock award expense	$	1,409	$	491	$	1,939	$	1,000
Stock option expense	192		18		570		31
PSU expense	2,387		332		2,433		714
SAR expense	517		—		517		—
Total stock-based compensation expense	$	4,505	$	841	$	5,459	$	1,745

The amount of unrecognized compensation cost as of June 30, 2015, and the expected weighted average period over which the cost will be recognized is as follows:

	As of June 30, 2015
(in thousands)	Unrecognized Compensation Cost		Expected Weighted Average Period of Recognition (in years)
Restricted stock award expense	$	1,574	.96
Stock option expense	290		1.07
PSU expense	1,075		1.04
SAR expense	1,384		0.45
Total unrecognized stock-based compensation expense	$	4,323	1.0

Restricted Stock Awards

Restricted stock is typically granted with vesting terms of three or five years. The fair value of restricted stock awards is determined based on the closing price of the Company’s common stock on the authorization date of the grant multiplied by the number of shares subject to the stock award. Compensation expense for restricted stock awards is recognized over the entire vesting period on a straight-line basis. A summary of restricted stock award activity under the Company's various stock compensation plans for the six months ended June 30, 2015 is presented below:

Non-vested at (in thousands, except for per share amounts)	Shares		Weighted Average Grant Date Fair Value
Non-vested at January 1, 2015	209,921		$	13.59
Granted	127,375		14.98
Vested	(134,983	)	18.42
Forfeited	(12,239	)	17.59
Non-vested at June 30, 2015	190,074		10.83

During the three and six months endedJune 30, 2015, the Company accelerated the terms of equity awards, including both RSA's and PSU's, granted to employees as part of the reduction in workforce. The Company recorded incremental expense of $3.0 million and $3.1 million, respectively, in the Payroll and benefits line item in the Consolidated Statement of Operations.

Stock Options

Stock options generally vest over three years and have a contractual limit of five years from the date of grant to exercise. The fair value of stock options granted pursuant to one of the Company’s plans is determined on the date of grant using the Black-Scholes option pricing model and the related expense is recognized on a straight-line basis over the entire vesting period.

The fair value of the Company's options that were granted during the six months ended June 30, 2015 was estimated at the date of grant using a Black-Scholes options pricing model with the following weighted average assumptions:

	Six Months Ended June 30, 2015
Stock options granted:
Risk-free interest rate	1.8	%
Dividend yield	—	%
Volatility	74.5	%
Expected term (in years)	5.0

A summary of option activity for the six months ended June 30, 2015 is presented below:

(in thousands, except for per share amounts)	Number of Options Outstanding and Exercisable	Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Term (in years)
Options outstanding, January 1, 2015	74,200	$	13.76
Options granted	56,250	$	13.87
Options exercised	—	$	—
Options expired / forfeited	—	$	—
Options outstanding, June 30, 2015	130,450	$	13.81	$	—	3.56
Options exercisable as of June 30, 2015	97,115	$	12.08	$	—	3.5

Stock Appreciation Rights

Stock Appreciation Rights ("SAR's") generally vest over three years and have a contractual limit of five years from the date of grant to exercise. The fair value of SAR's granted pursuant to one of the Company’s plans is determined on the date of grant using the Black-Scholes option pricing model and the related expense is recognized on a straight-line basis over the entire vesting period.

The fair value of the Company's SAR's that were granted during the six months ended June 30, 2015 was estimated at the date of grant using a Black-Scholes options pricing model with the following weighted average assumptions:

	Six Months Ended June 30, 2015
SAR's granted:
Risk-free interest rate	1.8	%
Dividend yield	—	%
Volatility	74.5	%
Expected term (in years)	5.0

A summary of SAR's activity for the six months ended June 30, 2015 is presented below:

(in thousands, except for per share amounts)	Number of SAR's Outstanding and Exercisable	Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Term (in years)
SAR's outstanding January 1, 2015	—	$	—
Granted	243,750	$	13.87
Exercised	—	$	—
Expired / forfeited	—	$	—
SAR's outstanding June 30, 2015	243,750	$	13.87	$	—	4.5
SAR's exercisable as of June 30, 2015	43,750	$	13.87	$	—	—

The SAR's granted during the three months ended June 30, 2015 were awarded to the Company's Chief Executive Officer. If Amendment No. 4 to the Company’s Amended and Restated 2007 Equity Incentive Plan, as amended, is approved by a vote of the stockholder's prior to June 5, 2017, the SAR award will automatically terminate and the Option award granted in tandem with the SAR award will become exercisable pursuant to the vesting terms thereof. However, until stockholder approval is obtained, as settlement of the award is out of the control of the Company, the awards are currently classified as liability based equity awards and are recorded at the estimated fair value at each balance sheet date.

Performance Share Units

Compensation expense is recognized for PSU awards on a straight-line basis over the applicable service period, which is generally three years, based on the estimated fair value at the date of grant using a Monte Carlo simulation model. The fair value of the Company's PSU's granted during the six months ended June 30, 2015 were estimated at the date of grant with the following weighted-average assumptions:

	Six Months Ended June 30, 2015
PSUs granted:
Risk-free interest rate	1.0	%
Dividend yield	—	%
Volatility	64.3	%
Performance period (in years)	3.0

A summary of PSU activity under the Plans for the six months ended June 30, 2015 is presented below:

(in thousands except per share amounts)	Units		Weighted Average Grant Date Fair Value
Non-vested at January 1, 2015	142,357		$	30.65
Granted (1)	68,650		20.16
Vested / Settled (1)	(13,763	)	30.52
Forfeited / Canceled (1)	(2,420	)	26.04
Non-vested at June 30, 2015	194,824		$	27.02

(1) The number of units shown in the table above are based on target performance. The final number of shares of common stock issued may vary depending on the achievement of market conditions established within the awards, which could result in the actual number of shares issued ranging from zero to a maximum of two times the number of units shown in the above table.

The following table shows the PSUs that were settled during thesix months ended June 30, 2015by issuing the Company's common stock relative to a broad stock index and a peer group performance index. There were no PSUs settled during thesix months ended June 30, 2014.

	Year of Grant	Net Number of Issued Shares upon Vesting	Shares Withheld to Settle Tax Withholding Obligations	TSR Multiple Range		Russell 3000 Multiple
				Low	High	Low	High
Six Months Ended June 30, 2015
	2013	8,768	3,954	1.75	1.75	2.00	2.00
	2014	2,506	1,145	0.63	0.75	—	0.75

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Income Taxes

6 Months Ended

Jun. 30, 2015

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

For the three and six months endedJune 30, 2015 and 2014, the Company's income tax expense and effective tax rates on forecasted pretax losses were:

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands, except for rate)	2015			2014			2015			2014
Income tax expense	$	63		$	29		$	107		$	42
Effective tax rate	(1		)%	3		%	(1		)%	10		%

The effective tax rates for the three and six months endedJune 30, 2015 and 2014 were different from the statutory rate primarily due to an increase in the Company's valuation allowances against federal and state net operating losses and federal tax credits, which was partially offset by estimated state tax expense.

The Company projects that its deferred tax assets will exceed its deferred tax liabilities as of December 31, 2015. As a result, the Company determined that it is not more likely than not that it would be able to realize the value of its federal and state net operating loss carryforwards, tax credits and other deferred tax assets and has recorded a full valuation allowance against the excess deferred tax assets. This valuation allowance is expected to increase over time as the Company's deferred tax assets increase.

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Business Segment Information

6 Months Ended

Jun. 30, 2015

Segment Reporting [Abstract]

Business Segment Information

Business Segment Information

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by a company's chief operating decision maker ("CODM"), or a decision making group, in deciding how to allocate resources and in assessing financial performance. As of June 30, 2015, the Company's CODM was the Company's CEO. The Company's operating and reportable segments are organized by products and services provided. Segments have been reorganized from prior periods due to changes within the Company's management structure and the manner in which the Company is operating the business. All prior periods have been conformed to the current year presentation.

The Company had four reportable segments during the periods presented: (1) Refined Coal ("RC"); (2) Emissions Control - Engineering and Technology Services ("EC - ETS"); (3) Emissions Control - Manufacturing ("EC - Manufacturing"); and (4) Research and Development ("R&D").

The business segment measurements provided to and evaluated by the CODM are computed in accordance with the principles listed below:

• The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies except as described below.

• Segment revenue includes the Company's equity method earnings and losses from the Company's equity method investments. Segment revenue also includes the Company's royalty earnings from CCS.

• Segment operating income (loss) includes the Company's equity method earnings and losses from the Company's equity method investments and royalty earnings from CCS (including depreciation and amortization expense). However, segment operating income (loss) excludes Payroll and benefits, Rent and occupancy, Legal and professional fees, and General and administrative ("Corporate general and administrative expenses") unless otherwise specifically included as the Company does not allocate those amounts between segments.

• Segment revenue includes Research and Development reimbursements.

• All items not included in operating income are excluded from the segments reporting.

As of June 30, 2015 and December 31, 2014 all material assets are located in the U.S. and all significant customers are either U.S. companies or the U.S. Government. The following table presents the Company's operating segment results for the three and six months endedJune 30, 2015 and 2014:

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2015			2014			2015			2014
Revenues:
Refined Coal:
Earnings in equity method investments	$	4,860		$	9,791		$	5,174		$	16,416
Consulting services	34			204			55			436
Royalties	2,299			849			4,493			1,981
	7,193			10,844			9,722			18,833
Emissions Control - Engineering Technology and Services:
Equipment sales	14,212			1,736			35,259			1,754
Consulting services	248			731			591			1,006
Chemical and other	344			106			617			137
	14,804			2,573			36,467			2,897
Emissions Control - Manufacturing:
Equipment sales	23			60			92			245
Consulting services	34			337			38			580
	57			397			130			825
Research and Development:	412			442			412			938
	412			442			412			938
Total segment reporting revenues	$	22,466		$	14,256		$	46,731		$	23,493
Adjustments to reconcile to reported revenues:
Refined Coal:
Earnings in equity method investments	$	(4,860	)	$	(9,791	)	$	(5,174	)	$	(16,416	)
Royalties	(2,299		)	(849		)	(4,493		)	(1,981		)
	(7,159		)	(10,640		)	(9,667		)	(18,397		)
Research and Development:	(412		)	(442		)	(412		)	(938		)
Total reported revenues	$	14,895		$	3,174		$	36,652		$	4,158
Segment reporting operating income (loss)
Refined Coal	$	5,168		$	9,156		$	5,835		$	15,915
Emissions Control - Engineering Technology Services	(300		)	(689		)	4,445			(1,925		)
Emissions Control - Manufacturing	(3,178		)	(1,097		)	(5,370		)	(1,996		)
Research and Development	(2,051		)	(425		)	(3,984		)	(799		)
Total segment operating income (loss)	$	(361	)	$	6,945		$	926		$	11,195

A reconciliation of reportable segment amounts to the Company's consolidated balances is as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2015			2014			2015			2014
Segment income (loss)
Total reported segment income (loss)	$	(361	)	$	6,945		$	926		$	11,195
Adjustments to reconcile to net loss attributable to Advanced Emissions Solutions, Inc.
Corporate payroll and benefits	(6,571		)	(2,715		)	(9,511		)	(5,567		)
Corporate rent and occupancy	(163		)	(165		)	(301		)	(327		)
Corporate legal and professional fees	(4,056		)	(1,838		)	(7,364		)	(2,708		)
Corporate general and administrative	(1,085		)	(1,139		)	(1,991		)	(2,027		)
Depreciation and amortization	(156		)	(87		)	(306		)	(171		)
Interest income	6			19			18			46
Other income	2			1			57			10
Income tax expense	(63		)	(29		)	(107		)	(42		)
Net income (loss)	$	(12,447	)	$	992		$	(18,579	)	$	409

Unallocated general and administrative expenses include certain costs that benefit the business as a whole but are not directly related to one of our segments. Such costs include but are not limited to accounting and human resources staff, information systems costs, legal fees, facility costs, audit fees and corporate governance expenses. 

Segment assets were as follows as of the dates presented:

	As of
(in thousands)	June 30, 2015		December 31, 2014
Refined Coal (1)	$	22,211	$	21,322
Emissions Control - Engineering Technology and Services:	24,968		34,175
Emissions Control - Manufacturing	8,699		11,285
Research and Development	7,661		6,431
All Other and Corporate	12,958		20,486
Consolidated	$	76,497	$	93,699

(1) The asset carrying value of the Company's equity investment in CCS was zero as of June 30, 2015 and December 31, 2014, respectively.

During the fourth quarter of 2015 the Company realigned its operating segments into two reportable segments: (1) Refined Coal ("RC"); and (2) Emissions Control ("EC"). Beginning with the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2015, the Company will retroactively adjust all segment related disclosures.

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Subsequent Events

6 Months Ended

Jun. 30, 2015

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

Unless disclosed elsewhere within the notes to the Condensed Consolidated Financial Statements, the following are the matters that occurred subsequent to the balance sheet date.

Highview License

In November 2014, in addition to acquiring the cost method investment in Highview, as described in Note 5, the Company's subsidiary, ADA-ES, Inc. also acquired an exclusive license to utilize Highview's technology in North America. The technology license is included within the Other assets line item in the Condensed Consolidated Balance Sheets and is being amortized over a 10-year period. The liability is included within the Other current liabilities and Other long-term liabilities line items in the Condensed Consolidated Balance Sheets. The technology license agreement was amended in November 2015 to defer license fee payments for a period of one year, allowing the Company to elect a non-exclusive license at a lower cost, or to terminate the license in return for paying a buy-out fee starting at £0.2 million if terminated in 2016 ($0.3 million based upon the exchange rate in effect as of the date of the November 2015 amendment) and decreases annually over the term of the 10 year agreement.

Assets Sold and Lease Abandoned

As discussed within Note 2, as part of a broader strategic restructuring of the Company's business, the Company’s management approved an action to wind down the manufacturing operations of BCSI, LLC, in order to focus the Company's efforts within the DSI market on engineering. During the fourth quarter of 2015, the Company classified certain assets used in the BCSI, LLC manufacturing operations as held for sale. In doing so, the Company recognized impairment expense of approximately $0.3 million to reduce the carrying value of the assets to their estimated sales value, less estimated costs to sell. The property and equipment was subsequently sold at auction. Proceeds from the sale of the impaired assets totaled approximately $0.6 million. No gain or loss was recognized on the sale of the property and equipment.

Also during the fourth quarter of 2015, the Company sold certain property and equipment having a net book value of approximately $0.1 million. Proceeds from the sale totaled approximately $0.3 million, which resulted in the recognition of a gain on the sale of approximately $0.2 million.

The Company also closed its fabrication facility in McKeesport, Pennsylvania during the fourth quarter of 2015 and recognized $0.8 million of expense related to the abandonment of leased facilities. In March 2016, the Company entered into an agreement to terminate various lease agreements covering approximately 207 thousand square feet of manufacturing, warehouse and office space located in Pennsylvania. As consideration for terminating the leases, the Company agreed to pay the lessor termination fees of $250 thousand in April 2016 and the same amount in April 2017.

RCM6 Sale

On March 3, 2016, the Company sold its 24.95% membership interest in RCM6 for a cash payment of $1.8 million and assumption of the outstanding note payable made by the Company in connection with its purchase of RCM6 membership interests from CCS in February 2014. As a result of the sale, the Company is no longer a member of RCM6 and is no longer subject to any quarterly capital calls and variable payments to RCM6. However, the Company will still receive it pro-rata share of income and cash distributions through its ownership in CCS. The income and cash distribution will be generated from the RCM6 RC facility lease payments made to CCS.

Notes Payable subsequent toJune 30, 2015

On October 22, 2015, the Company entered into a credit agreement for a $15.0 million term loan, with Franklin Mutual Quest Fund and MFP Investors LLC (the "Lenders"), and Wilmington Trust, National Association, as the administrative agent and collateral agent (the “Credit Agreement”), which was subsequently amended in 2016 as discussed below. Under the original terms and conditions, the Credit Agreement matured on April 22, 2016, subject to a three month extension at the Company's option to the extent certain conditions are met. The Credit Agreement bears interest at an annual rate equal to 10.5% and is subject to various prepayment and other premiums if certain events, including a change in control, occur. The Company received net proceeds of $13.9 million and recorded debt discounts and debt issuance costs of $1.5 million. The debt discounts and debt issuance costs will be amortized to interest expense using the effective interest method over the life of the Credit Agreement. The net proceeds are being used to fund working capital needs and for general operating purposes of the Company and its subsidiaries.

On February 8, 2016, the Company entered into the first amendment to the Credit Agreement ("First Amendment") that extended the SEC filings date to March 30, 2016. On March 30, 2016, the Company entered into the second amendment to the Credit Agreement ("Second Amendment"). The Second Amendment extended the maturity date to July 8, 2016, extended the Company's filing date deadline related to its 2015 SEC filings to April 20, 2016, increased the stated interest rate from 10.5% to 15.0% and increased the minimum cash balance requirement from $3.0 million to $3.5 million. The Company incurred approximately $0.6 million in fees related to the Second Amendment.

All obligations of the Company under the Credit Agreement are unconditionally guaranteed by each of the Company’s wholly-owned domestic subsidiaries (excluding ADA Analytics, LLC) and are secured by perfected security interests in substantially all of the assets of the Company and the guarantors, subject to certain agreed upon exceptions.

The Lenders are beneficial owners of Common Stock in the Company. The Credit Agreement was approved by the Company's Board of Directors and by the Audit Committee as a related party transaction.

In connection with the Credit Agreement, and the Company's pledge and assignment to the Collateral Agent for all of ADA's equity interests in CCSS, the Lenders required that NexGen consent to a pledge. The Company entered into an Indemnity Agreement with NexGen whereby ADES and ADA agreed to indemnify NexGen from and against any and all losses, claims, damages, liabilities, costs, fees or expenses, which may arise in connection with the Company pledging its CCSS equity interests. The Indemnity Agreement was approved by the Company's Board of Directors and by the Audit Committee as a related party transaction.

In April 2016, the Company initiated a workforce reduction plan affecting approximately 30% of the Company’s employees ("Restructuring"). In connection with these actions, the Company currently expects to record aggregate charges with respect to severance payments, benefits continuation and vesting of certain equity awards that are estimated to be approximately $0.6 million - $0.9 million and are expected to be recorded during the second and third quarters of 2016. Cash expenditures related to the Restructuring are expected to be approximately $0.6 million - $0.9 million.

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Basis of Presentation (Policies)

6 Months Ended

Jun. 30, 2015

Accounting Policies [Abstract]

Basis of Presentation

The accompanying Condensed Consolidated Financial Statements of ADES are unaudited and have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) and with Article 10 of Regulation S-X. In compliance with those instructions, certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted.

The unaudited Condensed Consolidated Financial Statements of ADES in this quarterly report are presented on a consolidated basis comprising ADES and its direct and indirect, wholly-owned subsidiaries: ADA-ES, Inc. ("ADA"), a Colorado corporation, BCSI, LLC ("BCSI"), a Delaware limited liability company, Advanced Clean Energy Solutions, LLC ("ACES"), a Delaware limited liability company, ADEquity, LLC ("ADEquity"), a Delaware limited liability company, ADA Environmental Solutions, LLC ("ADA LLC"), a Colorado limited liability company, ADA Intellectual Property, LLC ("ADA IP"), a Colorado limited liability company, ADA-RCM6, LLC ("ADA-RCM6"), a Colorado limited liability company, ADA Analytics, LLC, a Delaware limited liability company and ADA Analytics Israel Ltd. (collectively with ADA Analytics, LLC, "ADA Analytics"), an Israel limited liability company. ADA LLC and ADA IP had no operations in 2015 and 2014. Results of operations and cash flows for the interim periods are not necessarily indicative of the results that may be expected for the entire year. All significant intercompany transactions and accounts were eliminated as of and for the three and six months endedJune 30, 2015 and 2014.

On March 14, 2014, the Company effected a two-for-one stock split of the Company’s common stock, which was completed in the form of a common stock dividend and all amounts have been retroactively adjusted for the split.

In the opinion of management, these consolidated financial statements include all normal and recurring adjustments considered necessary for a fair presentation of the results of operations, financial position and cash flows for the interim periods presented. These Condensed Consolidated Financial Statements of ADES should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. Significant accounting policies disclosed therein have not changed.

Earnings (Loss) Per Share

The Company computes earnings (loss) per share in accordance with FASB ASC 260-10. Under this guidance, unvested restricted stock awards ("RSA's") that contain non-forfeitable rights to dividends or dividend equivalents are deemed to be participating securities and, therefore, are included in computing basic earnings per share pursuant to the two-class method. The two-class method determines earnings per share for each class of common stock and participating securities according to dividends or dividend equivalents and their respective participation rights in undistributed earnings (losses). The Company did not declare any cash dividends during the three-month or six-month periods ended June 30, 2015 or 2014.

Under the two-class method, net income (loss) for the period is allocated between common shareholders and the holders of the participating securities, in this case, the weighted-average number of unvested restricted stock awards outstanding during the period. The allocated, undistributed income (loss) for the period is then divided by the weighted-average number of common shares and participating securities outstanding during the period to arrive at basic earnings (loss) per common share or participating security for the period, respectively. Because the Company did not declare any dividends during the periods presented, and because the unvested RSA's possess substantially the same rights to undistributed earnings as common shares outstanding, there is no difference between the calculated basic earnings (loss) per share for common shares and participating securities. Accordingly, and pursuant to U.S. GAAP, the Company has elected not to separately present basic or diluted earnings (loss) per share attributable to participating securities on its Consolidated Statements of Operations.

Diluted earnings (loss) per share takes into consideration shares of common stock and unvested RSA's outstanding (computed under basic earnings (loss) per share) and potentially dilutive shares of common stock. Potentially dilutive shares consist of vested, in-the-money outstanding options, Stock Appreciation Rights ("SAR's") and contingent Performance Share Unit's ("PSU's") (collectively "Potential dilutive shares"). When there is a loss from continuing operations, all potentially dilutive shares become anti-dilutive and are thus excluded from the calculation of diluted loss per share.

Each PSU represents a contingent right to receive shares of the Company’s common stock, that may range from zero to two times the number of PSU's granted on the award date, should the Company meet certain performance measures over the requisite performance period. The number of potentially dilutive shares related to PSU's is based on the number of shares, if any, that would be issuable at the end of the respective reporting period, assuming that the end of the reporting period was the end of the contingency period applicable to such PSU's.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to makes estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. There have been no changes in the Company’s critical accounting estimates from those that were disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. Actual results could differ from these estimates.

New Accounting Guidance

In January 2015, the FASB issued ASU No. 2015-01, Income Statement - Extraordinary and Unusual Items (Topic 225-20), Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items that simplifies income statement presentation by eliminating extraordinary items from U.S. GAAP. This guidance is to be applied either prospectively or retrospectively and is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. Early application is permitted provided the guidance is applied from the beginning of the annual year of adoption. The Company has adopted the guidance as of January 1, 2014 and the adoption of this standard did not have an impact on the Company's consolidated financial position or results of operations.

In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810), Amendments to the Consolidation Analysis that meant to clarify the consolidation reporting guidance in U.S. GAAP. This guidance is to be applied using a retrospective method or a modified retrospective method, as outlined in the guidance, and is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. Early application is permitted. The Company is currently evaluating this guidance but does not believe the adoption of this standard will impact the Company's financial statements and disclosures.

In April 2015, the FASB issued ASU 2015-03, Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs, which requires an entity to present debt issuance costs related to a debt liability as a direct deduction from the debt liability rather than as an asset. ASU 2015-03 is effective retrospectively for fiscal years, and interim reporting periods within those years, beginning after December 15, 2015. Early adoption is permitted for financial statements that have not been previously issued. The adoption of this standard impacted the presentation of certain financial statement line items within the Company’s consolidated balance sheets and related disclosures, but did not affect the Company’s consolidated results of operations.

In September 2015, the FASB issued ASU 2015-16, Business Combinations (Topic 805): Simplifying the Accounting Measurement-Period Adjustments, which eliminates the requirement for an entity to retrospectively adjust the financial statements for measurement-period adjustments that occur in periods after a business combination is completed. ASU 2015-16 is effective prospectively for fiscal years, and interim reporting periods within those years, beginning after December 15, 2015. The adoption of this standard will not have an impact on the Company's financial position and results of operations.

In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, to simplify the presentation of deferred income taxes. The amendments in ASU 2015-17 require that deferred tax liabilities and assets be classified as non-current in a classified statement of financial position. The current requirement that deferred tax liabilities and assets of a tax-paying component of an entity be offset and presented as a single amount is not affected by the amendments in the update. ASU 2015-17 is effective for fiscal years beginning after December 15, 2016, and interim periods within those years, and may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. The adoption of this standard will not have an impact on the Company's financial position.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities. This new standard provides guidance on how entities measure certain equity investments and present changes in the fair value. This standard requires that entities measure certain equity investments that do not result in consolidation and are not accounted for under the equity method at fair value and recognize any changes in fair value in net income. ASU 2016-01 is effective for fiscal years beginning after December 31, 2017. The Company is currently evaluating the provisions of this guidance and assessing its impact on the Company's financial statements and disclosures.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires lessees to recognize a right of use asset and related lease liability for those leases classified as operating leases at the commencement date and have lease terms of more than 12 months. This topic retains the distinction between finance leases and operating leases. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, and interim periods within those years, and must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company is currently evaluating the provisions of this guidance and assessing its impact on the Company's financial statements and disclosures.

In March 2016, the FASB issued ASU 2016-06, Derivatives and Hedging (Topic 815), which requires that embedded derivatives be separated from the host contract and accounted for separately as derivatives if certain criteria are met, including the “clearly and closely related” criterion. The amendments in this Update clarify the requirements for assessing whether contingent call (put) options that can accelerate the payment of principal on debt instruments are clearly and closely related to their debt hosts. An entity performing the assessment under the amendments is required to assess the embedded call (put) options solely in accordance with the four-step decision sequence. The amendments apply to all entities that are issuers of or investors in debt instruments (or hybrid financial instruments that are determined to have a debt host) with embedded call (put) options. ASU 2016-06 is effective for fiscal years beginning after December 15, 2016, and interim periods within those years, and must apply a modified retrospective transition approach. Early adoption is permitted. The Company is currently evaluating the provisions of this guidance and assessing its impact on the Company's financial statements and disclosures.

In March 2016, the FASB issued ASU 2016-07, Investments - Equity Method and Joint Ventures (Topic 323), which simplifies the accounting for equity method investments by removing the requirement that an entity retroactively adopt the equity method of accounting if an investment qualifies for use of the equity method as a result of an increase in the level of ownership or degree of influence. The amendments require that the equity method investor add the cost of acquiring the additional interest in the investee to the current basis of the investor’s previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting. ASU 2016-07 is effective for fiscal years beginning after December 15, 2016, and interim periods within those years, and must apply a prospective adoption approach. Early adoption is permitted. The Company is currently evaluating the provisions of this guidance and assessing its impact on the Company's financial statements and disclosures.

In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which clarify the implementation guidance on principal versus agent considerations. ASU 2016-08 is effective for effective for fiscal years, and interim reporting periods within those years, beginning after December 15, 2017. Early application is permitted for annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company is currently evaluating the provisions of this guidance and assessing its impact on the Company's financial statements and disclosures.

In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation- Improvements to Employee Share-Based Payment Accounting (Topic 718), which involves several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Under the new standard, income tax benefits and deficiencies are to be recognized as income tax expense or benefit in the income statement and the tax effects of exercised or vested awards should be treated as discrete items in the reporting period in which they occur. An entity should also recognize excess tax benefits regardless of whether the benefit reduces taxes payable in the current period. Excess tax benefits should be classified along with other income tax cash flows as an operating activity. In regards to forfeitures, the entity may make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures when they occur. This ASU is effective for fiscal years beginning after December 15, 2016 including interim periods within that reporting period, however early adoption is permitted. The Company is currently evaluating the guidance to determine the Company's adoption method and the effect it will have on the Company's Consolidated Financial Statements.

Fair Value of Financial Instruments

Fair value is defined as the price that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The Company uses the hierarchy prescribed in the accounting guidance for fair value measurements, based upon the available inputs to the valuation and the degree to which they are observable or not observable in the market. The three levels in the hierarchy are as follows:

•Level 1 Inputs - Quoted prices (unadjusted) for identical assets or liabilities in active markets that are accessible as of the measurement date.

•Level 2 Inputs - Inputs other than quoted prices within Level 1 that are observable either directly or indirectly, including but not limited to quoted prices in markets that are not active, quoted prices in active markets for similar assets or liabilities and observable inputs other than quoted prices such as interest rates or yield curves.

•Level 3 Inputs - Unobservable inputs reflecting the Company’s own assumptions about the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk.

The carrying amounts of financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, deposits and accrued expenses approximate fair value due to the short maturity of these instruments.

The estimated fair value of investments securities consisting entirely of certificates of deposits was estimated to be equal to the deposit value of the investment due to the relative short term nature of the instrument.

Concentration of Credit Risk

The Company's certificates of deposit investment securities, and virtually all of the Company’s restricted and unrestricted cash accounts, are at two financial institutions. If those institutions were to be unable to perform their obligations, the Company would be at risk regarding the amount of cash and investment in excess of the federal deposit insurance corporation limits ($250 thousand) that would be returned to the Company.

Segment Reporting

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by a company's chief operating decision maker ("CODM"), or a decision making group, in deciding how to allocate resources and in assessing financial performance. As of June 30, 2015, the Company's CODM was the Company's CEO. The Company's operating and reportable segments are organized by products and services provided. Segments have been reorganized from prior periods due to changes within the Company's management structure and the manner in which the Company is operating the business. All prior periods have been conformed to the current year presentation.

The Company had four reportable segments during the periods presented: (1) Refined Coal ("RC"); (2) Emissions Control - Engineering and Technology Services ("EC - ETS"); (3) Emissions Control - Manufacturing ("EC - Manufacturing"); and (4) Research and Development ("R&D").

The business segment measurements provided to and evaluated by the CODM are computed in accordance with the principles listed below:

• The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies except as described below.

• Segment revenue includes the Company's equity method earnings and losses from the Company's equity method investments. Segment revenue also includes the Company's royalty earnings from CCS.

• Segment operating income (loss) includes the Company's equity method earnings and losses from the Company's equity method investments and royalty earnings from CCS (including depreciation and amortization expense). However, segment operating income (loss) excludes Payroll and benefits, Rent and occupancy, Legal and professional fees, and General and administrative ("Corporate general and administrative expenses") unless otherwise specifically included as the Company does not allocate those amounts between segments.

• Segment revenue includes Research and Development reimbursements.

• All items not included in operating income are excluded from the segments reporting.

Unallocated general and administrative expenses include certain costs that benefit the business as a whole but are not directly related to one of our segments. Such costs include but are not limited to accounting and human resources staff, information systems costs, legal fees, facility costs, audit fees and corporate governance expenses. 

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Basis of Presentation (Tables)

6 Months Ended

Jun. 30, 2015

Accounting Policies [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The following table sets forth the calculations of basic and diluted earnings per share:

	Three Months Ended June 30,					Six Months Ended June 30,
(in thousands, except per share amounts)	2015			2014		2015			2014
Net income (loss)	$	(12,447	)	$	992	$	(18,579	)	$	409
Less: Undistributed income (loss) allocated to participating securities	(130		)	14		(215		)	6
Income (loss) attributable to common stockholders	$	(12,317	)	$	978	$	(18,364	)	$	403
Basic weighted-average common shares outstanding (1)	21,715			21,477		21,728			21,487
Add: dilutive effect of equity instruments	—			558		—			605
Diluted weighted average shares outstanding	21,715			22,035		21,728			22,092
Earnings (loss) per share - basic	$	(0.57	)	$	0.05	$	(0.85	)	$	0.02
Earnings (loss) per share - diluted	$	(0.57	)	$	0.04	$	(0.85	)	$	0.02

(1) The number of shares and per share amounts have been retroactively restated to reflect the two-for-one stock split of the Company’s common stock, which was effected in the form of a common stock dividend distributed on March 14, 2014.

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

The table below shows the number of shares that were excluded from the calculation of diluted loss per share because their inclusion would have been anti-dilutive to the calculation:

	Three Months Ended June 30,		Six Months Ended June 30,
(share data in thousands)	2015	2014	2015	2014
Stock options	18	—	24	—
Restricted stock awards	161	—	181	—
Performance share units	200	—	195	—
Stock appreciation rights	2	—	6	—
Total shares excluded from diluted shares outstanding	381	—	406	—

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Restructuring (Tables)

6 Months Ended

Jun. 30, 2015

Restructuring and Related Activities [Abstract]

Restructuring and Related Costs

A summary of the net pretax charges, incurred by segment, for each period is as follows:

		Pretax Charge
(in thousands, except employee data)	Approximate Number of Employees	Refined Coal		Emission Control - ACI			Emissions Control - BCSI		Research & Development			All Other and Corporate		Total
Three Months Ended June 30, 2015
Restructuring charges	41	$	—	$	1,715		$	—	$	86		$	3,764	$	5,565
Changes in estimates		—		—			—		(2		)	—		(2		)
Total pretax charge, net of reversals		$	—	$	1,715		$	—	$	84		$	3,764	$	5,563
Six Months Ended June 30, 2015
Restructuring charges	45	$	—	$	1,715		$	—	$	86		$	4,242	$	6,043
Changes in estimates		—		(10		)	—		(2		)	—		(12		)
Total pretax charge, net of reversals		$	—	$	1,705		$	—	$	84		$	4,242	$	6,031
Three Months Ended June 30, 2014
Restructuring charges	18	$	—	$	352		$	—	$	—		$	14	$	366
Total pretax charge, net of reversals		$	—	$	352		$	—	$	—		$	14	$	366
Six Months Ended June 30, 2014
Restructuring charges	18	$	—	$	352		$	—	$	—		$	14	$	366
Total pretax charge, net of reversals		$	—	$	352		$	—	$	—		$	14	$	366

Schedule of Restructuring Reserve by Type of Cost

The following table summarizes the Company’s utilization of restructuring accruals for the six months ended June 30, 2015:

(in thousands)	Employee Severance
Remaining accrual as of December 31, 2014	$	1,690
Expense provision (1)	6,043
Cash payments and other (1)	(4,342		)
Change in estimates	(12		)
Remaining accrual as of June 30, 2015	$	3,379

(1) Included within the Expense provision and Cash payments and other line items in the above table is equity based compensation of $3.1 million for the six months ended June 30, 2015, resulting from the accelerated vesting of modified equity-based compensation awards for certain terminated employees.

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Acquisition (Tables)

6 Months Ended

Jun. 30, 2015

Business Combinations [Abstract]

Summary of Purchase Consideration and Allocation

A summary of the purchase consideration and allocation of the purchase consideration is as follows:

(in thousands)
Purchase consideration:
Cash paid	$	2,360
Fair value of liabilities assumed:
Accrued liabilities	10
Contingent consideration	451
Total fair value of liabilities assumed	461
Total purchase consideration	$	2,821
Allocation of purchase consideration
Receivables	$	360
Property and equipment and other	82
Intangibles - in process research and development	2,379
Total	$	2,821

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Equity Method Investments (Tables)

6 Months Ended

Jun. 30, 2015

Equity Method Investments and Joint Ventures [Abstract]

Schedule of Equity Method Investments

Company related to its investment in RCM6 during the three and six months endedJune 30, 2015 and 2014, respectively:

	Three Months Ended June 30,					Six Months Ended June 30,
(in thousands)	2015			2014		2015		2014
Capital calls and variable payments (1)	$	(238	)	$	126	$	230	$	1,383

(1) During the three months ended June 30, 2015, net capital calls and variable payments were negative due to a true-up calculation by CCS of the cumulative variable payments related to the RCM6 purchase by which the Company received a refund of $0.4 million.

The following table presents the Company's investment balance, equity earnings and cash distributions in excess of the investment balance, on a quarterly basis, for the three and six months endedJune 30, 2015 (in thousands):

Description	Date(s)	Investment balance			ADES equity earnings (loss)			Cash distributions		Cash distributions and equity loss in (excess) of investment balance
Beginning balance	12/31/14	$	—		$	—		$	—	$	(29,877	)
ADES proportionate share of income from CCS (1)	First Quarter	9,827			9,827			—		—
Increase of equity loss in excess of investment balance (prior to cash distributions)	First Quarter	(9,827		)	(9,827		)	—		9,827
Cash distributions from CCS	First Quarter	(100		)	—			100		—
Adjustment for current year cash distributions in excess of investment balance	First Quarter	100			100			—		(100		)
Total investment balance, equity earnings (loss) and cash distributions	3/31/2015	—			100			100		(20,150		)
ADES proportionate share of income from CCS (1)	Second Quarter	7,825			7,825			—		—
Increase of equity loss in excess of investment balance (prior to cash distributions)	Second Quarter	(7,825		)	(7,825		)	—		7,825
Cash distributions from CCS	Second Quarter	(4,630		)	—			4,630		—
Adjustment for current year cash distributions in excess of investment balance	Second Quarter	4,630			4,630			—		(4,630		)
Total investment balance, equity earnings (loss) and cash distributions	6/30/2015	$	—		$	4,630		$	4,630	$	(16,955	)

The following table presents the Company's investment balance, equity earnings and cash distributions in excess of the investment balance, on a quarterly basis, for the three and six months endedJune 30, 2014 (in thousands):

Description	Date(s)	Investment balance			ADES equity earnings (loss)			Cash distributions		Cash distributions and equity loss in (excess) of investment balance
Beginning balance	12/31/2013	$	—		$	—		$	—	$	(12,906	)
ADES proportionate share of income from CCS (1)	First Quarter	4,644			4,644			—		—
Recovery of cumulative distributions and equity losses in excess of investment balance	First Quarter	(4,644		)	(4,644		)	—		4,644
Cash distributions from CCS	First Quarter	(6,588		)	—			6,588		—
Recognition of earnings for cash distributions in excess of investment balance	First Quarter	6,588			6,588			—		(6,588		)
Total investment balance, equity earnings (loss) and cash distributions	3/31/2014	—			6,588			6,588		(14,850		)
ADES proportionate share of income from CCS (1)	Second Quarter	5,130			5,130			—		—
Recovery of cumulative distributions and equity losses in excess of investment balance	Second Quarter	(5,130		)	(5,130		)	—		5,130
Cash distributions from CCS	Second Quarter	(9,733		)	—			9,733		—
Recognition of earnings for cash distributions in excess of investment balance	Second Quarter	9,733			9,733			—		(9,733		)
Total investment balance, equity earnings (loss) and cash distributions	6/30/2014	$	—		$	9,733		$	9,733	$	(19,453	)

(1) The amounts of the Company's 42.5% proportionate share of net income as shown in the table above differ from mathematical calculations of the Company’s 42.5% equity interest in CCS multiplied by the amounts of Net Income available to Class A members as shown in the table above of CCS results of operations due to adjustments related to the Redeemable Class B preferred return and the elimination of CCS earnings attributable to RCM6, of which the Company owned 24.95% during the periods presented during the years ended December 31, 2015 and 2014.

The following table summarizes the results of operations of CCSS:

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2015			2014			2015			2014
Gross loss	$	(9,732	)	$	(4,411	)	$	(19,895	)	$	(8,816	)
Operating expenses	41,008			21,683			78,954			43,381
Loss from operations	(50,740		)	(26,094		)	(98,849		)	(52,197		)
Other expenses	(70		)	(21		)	(75		)	(24		)
Loss attributable to noncontrolling interest	53,110			27,628			103,268			55,497
Net income	$	2,300		$	1,513		$	4,344		$	3,276
ADES equity earnings	$	1,150		$	757		$	2,172		$	1,638

The following table summarizes the assets, liabilities and results of operations of RCM6:

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2015			2014			2015			2014
Gross loss	$	(1,180	)	$	(412	)	$	(1,980	)	$	(1,971	)
Operating expenses	516			423			977			866
Loss from operations	(1,696		)	(835		)	(2,957		)	(2,837		)
Other expenses	(89		)	(63		)	(162		)	(169		)
Net loss	$	(1,785	)	$	(898	)	$	(3,119	)	$	(3,006	)
ADES equity losses	$	(920	)	$	(699	)	$	(1,728	)	$	(1,543	)

The following tables summarize the results of operations of CCS for the three and six months endedJune 30, 2015 and 2014, respectively:

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2015			2014			2015			2014
Gross profit	$	24,905		$	20,295		$	55,834		$	37,505
Operating expenses	7,147			4,998			12,503			9,419
Income from operations	17,758			15,297			43,331			28,086
Other expenses	470			(498		)	329			(741		)
Class B preferred return	(1,632		)	(2,249		)	(3,362		)	(4,583		)
Loss attributable to noncontrolling interest	1,782			897			3,113			3,001
Net income available to Class A members	$	18,378		$	13,447		$	43,411		$	25,763
ADES equity earnings	$	4,630		$	9,733		$	4,730		$	16,321

The following table details the components of the Company's respective equity method investments included within the Earnings from equity method investments line item on the Condensed Consolidated Statements of Operations:

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2015			2014			2015			2014
Earnings from CCS	$	4,630		$	9,733		$	4,730		$	16,321
Earnings from CCSS	1,150			757			2,172			1,638
Loss from RCM6	(920		)	(699		)	(1,728		)	(1,543		)
Earnings from equity method investments	$	4,860		$	9,791		$	5,174		$	16,416

The following table details the components of the cash distributions from the Company's respective equity method investments included within the Condensed Consolidated Statements of Cash Flows. Distributions from equity method investees are reported on our Condensed Consolidated Statements of Cash Flows as “return on investment” within Operating cash flows until such time as the carrying value in an equity method investee company is reduced to zero; thereafter, such distributions are reported as “distributions in excess of cumulative earnings” within Investing cash flows.

	Six Months Ended June 30,
(in thousands)	2015		2014
Distributions from equity method investees, return on investment
CCSS	$	19	$	1,259
	$	19	$	1,259
Distributions from equity method investees in excess of investment basis
CCS	$	4,730	$	16,321
	$	4,730	$	16,321

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Borrowings (Tables)

6 Months Ended

Jun. 30, 2015

Debt Disclosure [Abstract]

Schedule of Borrowings

The following table summarizes the Company's notes payable, all of which are with related parties, as of June 30, 2015 and December 31, 2014:

	As of
(in thousands)	June 30, 2015		December 31, 2014
Current portion of long-term borrowings
RCM6 note payable	$	995	$	874
DSI Business Owner note payable	617		605
Total current portion of long-term borrowings	1,612		1,479
Long-term borrowings
RCM6 note payable	12,909		13,312
DSI Business Owner note payable	807		1,119
Total Long-term borrowings	13,716		14,431
Total Borrowings	$	15,328	$	15,910

The following tables summarize the letters of credit outstanding, collateral, by type, and the related line items within the Condensed Consolidated Balance Sheets where the collateral related to the letters of credit is recorded:

	As of June 30, 2015
(in thousands)	LOC Outstanding		Restricted Cash		Restricted cash, long-term		Investment securities, restricted, long-term
Contract performance - equipment systems	$	7,956	$	2,527	$	5,430	$	—
Royalty Award	5,250		—		5,250		—
Other	328		—		—		336
Total LOC outstanding	$	13,534	$	2,527	$	10,680	$	336

	As of December 31, 2014
(in thousands)	LOC Outstanding		Restricted Cash		Restricted cash, long-term		Investment securities, restricted, long-term
Contract performance - equipment systems	$	7,247	$	2,527	$	4,721	$	—
Royalty Award	4,050		—		4,050		—
Other	328		—		—		336
Total LOC outstanding	$	11,625	$	2,527	$	8,771	$	336

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2015

Fair Value Disclosures [Abstract]

Schedule of Estimated Fair Values of Remaining Financial Instruments

The following table provides the estimated fair values of the remaining financial instruments:

	As of June 30, 2015				As of December 31, 2014
(in thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value
Financial Instruments:
Investment securities:
Investment securities, restricted, long-term	$	336	$	336	$	336	$	336
Cost method investment	$	2,776	$	2,776	$	2,776	$	2,776
Notes Payable:
Current portion of notes payable, related party	$	1,668	$	1,517	$	1,479	$	1,439
Long-term portion of notes payable, related party	$	14,022	$	13,732	$	14,431	$	14,356
Highview technology license payable	$	—	$	—	$	155	$	155
Highview technology license payable, long-term	$	1,314	$	1,314	$	1,389	$	1,389
Stock appreciation rights, liability-classified equity award	$	517	$	517	$	—	$	—

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

Financial instruments carried and measured at fair value on a recurring basis are presented in the table below according to the fair value hierarchy described above:

	As of June 30, 2015
	Fair Value Measurement Using
(in thousands)	Level 1		Level 2		Level 3		Assets at Fair Value
Assets:
Investment securities, restricted, long-term	$	—	$	336	$	—	$	336
Total assets at fair value	$	—	$	336	$	—	$	336
Liabilities:
Contingent consideration	$	—	$	—	$	451	$	451
Stock appreciation rights, liability-classified equity award	—		517		—		517
Total liabilities at fair value	$	—	$	517	$	451	$	968

	As of December 31, 2014
	Fair Value Measurement Using
(in thousands)	Level 1		Level 2		Level 3		Assets at Fair Value
Assets:
Investment securities, restricted, long-term	$	—	$	336	$	—	$	336
Total assets at fair value	$	—	$	336	$	—	$	336

Schedule of Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

Assets and liabilities measured on a non-recurring basis are presented in the following tables:

	As of June 30, 2015
	Fair Value Measurement Using
(in thousands)	Level 1		Level 2		Level 3		Fair Value		Total Losses
Assets:
Impaired note receivable	$	—	$	—	$	—	$	—	$	(1,000	)
Total assets at fair value	$	—	$	—	$	—	$	—	$	(1,000	)

The Company recorded impairment charges related to a Note Receivable. The fair value of the impaired note receivable, determined to be fully impaired, was estimated using a discounted cash flow analysis. The fair value measurements represent a Level 3 measurement.

	As of December 31, 2014
	Fair Value Measurement Using
(in thousands)	Level 1		Level 2		Level 3		Fair Value		Total Losses
Assets:
Property and equipment	$	—	$	—	$	424	$	424	$	(355	)
Impaired note receivable	—		—		—		—		(500		)
Total assets at fair value	$	—	$	—	$	424	$	424	$	(855	)

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Commitments and Contingencies (Tables)

6 Months Ended

Jun. 30, 2015

Commitments and Contingencies Disclosure [Abstract]

Settlement and Royalty Indemnity Obligation

As of June 30, 2015 and December 31, 2014, the Company has recorded the components of the Settlement and royalty indemnity obligation within the following line items in the Condensed Consolidated Balance Sheets:

	As of
(in thousands)	June 30, 2015		December 31, 2014
Settlement and royalty indemnity obligation, short-term	$	4,268	$	3,749
Litigation settlement and royalty indemnity expense, net	18,282		20,273
Total settlement and royalty indemnity	$	22,550	$	24,022

Schedule of Consultant Expense

Pursuant to the agreement, the Company was required to make annual payments based upon CCS RC production from January 1, 2012 through June 30, 2015. These expenses are recorded within the Legal and professional fees line item in the Condensed Consolidated Statements of Operations and are recorded as RC production occurs. The following tables summarize the expenses under this agreement for the three and six months endedJune 30, 2015 and 2014, respectively:

	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2015		2014		2015		2014
Consultant expense	$	212	$	307	$	279	$	557

Schedule of Debt

The following table summarizes the Company's notes payable, all of which are with related parties, as of June 30, 2015 and December 31, 2014:

	As of
(in thousands)	June 30, 2015		December 31, 2014
Current portion of long-term borrowings
RCM6 note payable	$	995	$	874
DSI Business Owner note payable	617		605
Total current portion of long-term borrowings	1,612		1,479
Long-term borrowings
RCM6 note payable	12,909		13,312
DSI Business Owner note payable	807		1,119
Total Long-term borrowings	13,716		14,431
Total Borrowings	$	15,328	$	15,910

The following tables summarize the letters of credit outstanding, collateral, by type, and the related line items within the Condensed Consolidated Balance Sheets where the collateral related to the letters of credit is recorded:

	As of June 30, 2015
(in thousands)	LOC Outstanding		Restricted Cash		Restricted cash, long-term		Investment securities, restricted, long-term
Contract performance - equipment systems	$	7,956	$	2,527	$	5,430	$	—
Royalty Award	5,250		—		5,250		—
Other	328		—		—		336
Total LOC outstanding	$	13,534	$	2,527	$	10,680	$	336

	As of December 31, 2014
(in thousands)	LOC Outstanding		Restricted Cash		Restricted cash, long-term		Investment securities, restricted, long-term
Contract performance - equipment systems	$	7,247	$	2,527	$	4,721	$	—
Royalty Award	4,050		—		4,050		—
Other	328		—		—		336
Total LOC outstanding	$	11,625	$	2,527	$	8,771	$	336

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Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Allocation of Compensation Expense

Total stock-based compensation expense for the three and six months endedJune 30, 2015 and 2014 was as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2015		2014		2015		2014
Restricted stock award expense	$	1,409	$	491	$	1,939	$	1,000
Stock option expense	192		18		570		31
PSU expense	2,387		332		2,433		714
SAR expense	517		—		517		—
Total stock-based compensation expense	$	4,505	$	841	$	5,459	$	1,745

Schedule of Unrecognized Compensation Cost

The amount of unrecognized compensation cost as of June 30, 2015, and the expected weighted average period over which the cost will be recognized is as follows:

	As of June 30, 2015
(in thousands)	Unrecognized Compensation Cost		Expected Weighted Average Period of Recognition (in years)
Restricted stock award expense	$	1,574	.96
Stock option expense	290		1.07
PSU expense	1,075		1.04
SAR expense	1,384		0.45
Total unrecognized stock-based compensation expense	$	4,323	1.0

Summary of Restricted Stock Activity

A summary of restricted stock award activity under the Company's various stock compensation plans for the six months ended June 30, 2015 is presented below:

Non-vested at (in thousands, except for per share amounts)	Shares		Weighted Average Grant Date Fair Value
Non-vested at January 1, 2015	209,921		$	13.59
Granted	127,375		14.98
Vested	(134,983	)	18.42
Forfeited	(12,239	)	17.59
Non-vested at June 30, 2015	190,074		10.83

Schedule of Stock Options, Valuation Assumptions

The fair value of the Company's options that were granted during the six months ended June 30, 2015 was estimated at the date of grant using a Black-Scholes options pricing model with the following weighted average assumptions:

	Six Months Ended June 30, 2015
Stock options granted:
Risk-free interest rate	1.8	%
Dividend yield	—	%
Volatility	74.5	%
Expected term (in years)	5.0

Summary of Option Activity

A summary of option activity for the six months ended June 30, 2015 is presented below:

(in thousands, except for per share amounts)	Number of Options Outstanding and Exercisable	Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Term (in years)
Options outstanding, January 1, 2015	74,200	$	13.76
Options granted	56,250	$	13.87
Options exercised	—	$	—
Options expired / forfeited	—	$	—
Options outstanding, June 30, 2015	130,450	$	13.81	$	—	3.56
Options exercisable as of June 30, 2015	97,115	$	12.08	$	—	3.5

Schedule of Valuation Assumptions

The fair value of the Company's SAR's that were granted during the six months ended June 30, 2015 was estimated at the date of grant using a Black-Scholes options pricing model with the following weighted average assumptions:

	Six Months Ended June 30, 2015
SAR's granted:
Risk-free interest rate	1.8	%
Dividend yield	—	%
Volatility	74.5	%
Expected term (in years)	5.0

The fair value of the Company's PSU's granted during the six months ended June 30, 2015 were estimated at the date of grant with the following weighted-average assumptions:

	Six Months Ended June 30, 2015
PSUs granted:
Risk-free interest rate	1.0	%
Dividend yield	—	%
Volatility	64.3	%
Performance period (in years)	3.0

Schedule of Award Activity

A summary of SAR's activity for the six months ended June 30, 2015 is presented below:

(in thousands, except for per share amounts)	Number of SAR's Outstanding and Exercisable	Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Term (in years)
SAR's outstanding January 1, 2015	—	$	—
Granted	243,750	$	13.87
Exercised	—	$	—
Expired / forfeited	—	$	—
SAR's outstanding June 30, 2015	243,750	$	13.87	$	—	4.5
SAR's exercisable as of June 30, 2015	43,750	$	13.87	$	—	—

A summary of PSU activity under the Plans for the six months ended June 30, 2015 is presented below:

(in thousands except per share amounts)	Units		Weighted Average Grant Date Fair Value
Non-vested at January 1, 2015	142,357		$	30.65
Granted (1)	68,650		20.16
Vested / Settled (1)	(13,763	)	30.52
Forfeited / Canceled (1)	(2,420	)	26.04
Non-vested at June 30, 2015	194,824		$	27.02

(1) The number of units shown in the table above are based on target performance. The final number of shares of common stock issued may vary depending on the achievement of market conditions established within the awards, which could result in the actual number of shares issued ranging from zero to a maximum of two times the number of units shown in the above table.

Schedule of Performance-Based Units, Settled

The following table shows the PSUs that were settled during thesix months ended June 30, 2015by issuing the Company's common stock relative to a broad stock index and a peer group performance index. There were no PSUs settled during thesix months ended June 30, 2014.

	Year of Grant	Net Number of Issued Shares upon Vesting	Shares Withheld to Settle Tax Withholding Obligations	TSR Multiple Range		Russell 3000 Multiple
				Low	High	Low	High
Six Months Ended June 30, 2015
	2013	8,768	3,954	1.75	1.75	2.00	2.00
	2014	2,506	1,145	0.63	0.75	—	0.75

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Income Taxes (Tables)

6 Months Ended

Jun. 30, 2015

Income Tax Disclosure [Abstract]

Schedule of Income Tax Expense and Effective Tax Rates

For the three and six months endedJune 30, 2015 and 2014, the Company's income tax expense and effective tax rates on forecasted pretax losses were:

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands, except for rate)	2015			2014			2015			2014
Income tax expense	$	63		$	29		$	107		$	42
Effective tax rate	(1		)%	3		%	(1		)%	10		%

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Business Segment Information (Tables)

6 Months Ended

Jun. 30, 2015

Segment Reporting [Abstract]

Segment Operating Results

As of June 30, 2015 and December 31, 2014 all material assets are located in the U.S. and all significant customers are either U.S. companies or the U.S. Government. The following table presents the Company's operating segment results for the three and six months endedJune 30, 2015 and 2014:

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2015			2014			2015			2014
Revenues:
Refined Coal:
Earnings in equity method investments	$	4,860		$	9,791		$	5,174		$	16,416
Consulting services	34			204			55			436
Royalties	2,299			849			4,493			1,981
	7,193			10,844			9,722			18,833
Emissions Control - Engineering Technology and Services:
Equipment sales	14,212			1,736			35,259			1,754
Consulting services	248			731			591			1,006
Chemical and other	344			106			617			137
	14,804			2,573			36,467			2,897
Emissions Control - Manufacturing:
Equipment sales	23			60			92			245
Consulting services	34			337			38			580
	57			397			130			825
Research and Development:	412			442			412			938
	412			442			412			938
Total segment reporting revenues	$	22,466		$	14,256		$	46,731		$	23,493
Adjustments to reconcile to reported revenues:
Refined Coal:
Earnings in equity method investments	$	(4,860	)	$	(9,791	)	$	(5,174	)	$	(16,416	)
Royalties	(2,299		)	(849		)	(4,493		)	(1,981		)
	(7,159		)	(10,640		)	(9,667		)	(18,397		)
Research and Development:	(412		)	(442		)	(412		)	(938		)
Total reported revenues	$	14,895		$	3,174		$	36,652		$	4,158
Segment reporting operating income (loss)
Refined Coal	$	5,168		$	9,156		$	5,835		$	15,915
Emissions Control - Engineering Technology Services	(300		)	(689		)	4,445			(1,925		)
Emissions Control - Manufacturing	(3,178		)	(1,097		)	(5,370		)	(1,996		)
Research and Development	(2,051		)	(425		)	(3,984		)	(799		)
Total segment operating income (loss)	$	(361	)	$	6,945		$	926		$	11,195

Reconciliation of Reportable Segment Amounts to Consolidated Balances

A reconciliation of reportable segment amounts to the Company's consolidated balances is as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2015			2014			2015			2014
Segment income (loss)
Total reported segment income (loss)	$	(361	)	$	6,945		$	926		$	11,195
Adjustments to reconcile to net loss attributable to Advanced Emissions Solutions, Inc.
Corporate payroll and benefits	(6,571		)	(2,715		)	(9,511		)	(5,567		)
Corporate rent and occupancy	(163		)	(165		)	(301		)	(327		)
Corporate legal and professional fees	(4,056		)	(1,838		)	(7,364		)	(2,708		)
Corporate general and administrative	(1,085		)	(1,139		)	(1,991		)	(2,027		)
Depreciation and amortization	(156		)	(87		)	(306		)	(171		)
Interest income	6			19			18			46
Other income	2			1			57			10
Income tax expense	(63		)	(29		)	(107		)	(42		)
Net income (loss)	$	(12,447	)	$	992		$	(18,579	)	$	409

Reconciliation of Assets from Segment to Consolidated

Segment assets were as follows as of the dates presented:

	As of
(in thousands)	June 30, 2015		December 31, 2014
Refined Coal (1)	$	22,211	$	21,322
Emissions Control - Engineering Technology and Services:	24,968		34,175
Emissions Control - Manufacturing	8,699		11,285
Research and Development	7,661		6,431
All Other and Corporate	12,958		20,486
Consolidated	$	76,497	$	93,699

(1) The asset carrying value of the Company's equity investment in CCS was zero as of June 30, 2015 and December 31, 2014, respectively.

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Basis of Presentation - Calculations of Basic and Diluted Earnings per Share (Details) $ / shares in Units, shares in Thousands, $ in Thousands		3 Months Ended		6 Months Ended
	Mar. 14, 2014	Jun. 30, 2015 USD ($) $ / shares shares	Jun. 30, 2014 USD ($) $ / shares shares	Jun. 30, 2015 USD ($) $ / shares shares	Jun. 30, 2014 USD ($) $ / shares shares
Accounting Policies [Abstract]
Stock split, conversion ratio	2
Net income (loss) | $		$ (12,447)	$ 992	$ (18,579)	$ 409
Less: Undistributed income (loss) allocated to participating securities | $		(130)	14	(215)	6
Income (loss) attributable to common stockholders | $		$ (12,317)	$ 978	$ (18,364)	$ 403
Basic weighted-average common shares outstanding (in shares) | shares		21,715	21,477	21,728	21,487
Add: dilutive effect of equity instruments (in shares) | shares		0	558	0	605
Diluted weighted average shares outstanding (in shares) | shares		21,715	22,035	21,728	22,092
Loss per common share - basic (in dollars per share) | $ / shares		$ (0.57)	$ 0.05	$ (0.85)	$ 0.02
Loss per common share - diluted (in dollars per share) | $ / shares		$ (0.57)	$ 0.04	$ (0.85)	$ 0.02

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Basis of Presentation - Number of Shares Excluded from Calculation of Diluted Loss per Share (Details) - shares shares in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total shares excluded from diluted shares outstanding	381	0	406	0
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total shares excluded from diluted shares outstanding	18	0	24	0
Restricted stock awards
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total shares excluded from diluted shares outstanding	161	0	181	0
Performance share units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total shares excluded from diluted shares outstanding	200	0	195	0
Stock appreciation rights
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total shares excluded from diluted shares outstanding	2	0	6	0

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Restructuring - Net Pretax Benefits (Charges), Incurred by Segment (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015 USD ($) employee	Jun. 30, 2014 USD ($) employee	Jun. 30, 2015 USD ($) employee	Jun. 30, 2014 USD ($) employee
Restructuring Cost and Reserve [Line Items]
Approximate Number of Employees | employee	41	18	45	18
Restructuring charges	$ 5,565	$ 366	$ 6,043	$ 366
Changes in estimates	(2)		(12)
Total pretax charge, net of reversals	5,563	366	6,031	366
Refined Coal
Restructuring Cost and Reserve [Line Items]
Restructuring charges	0	0	0	0
Changes in estimates	0		0
Total pretax charge, net of reversals	0	0	0	0
Emission Control - ACI
Restructuring Cost and Reserve [Line Items]
Restructuring charges	1,715	352	1,715	352
Changes in estimates	0		(10)
Total pretax charge, net of reversals	1,715	352	1,705	352
Emissions Control - BCSI
Restructuring Cost and Reserve [Line Items]
Restructuring charges	0	0	0	0
Changes in estimates	0		0
Total pretax charge, net of reversals	0	0	0	0
Research & Development
Restructuring Cost and Reserve [Line Items]
Restructuring charges	86	0	86	0
Changes in estimates	(2)		(2)
Total pretax charge, net of reversals	84	0	84	0
Total
Restructuring Cost and Reserve [Line Items]
Restructuring charges	3,764	14	4,242	14
Changes in estimates	0		0
Total pretax charge, net of reversals	$ 3,764	$ 14	$ 4,242	$ 14

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Restructuring - Utilization of Restructuring Accruals (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2015 USD ($)
Restructuring Reserve [Roll Forward]
Equity based compensation	$ 3,100
Employee Severance
Restructuring Reserve [Roll Forward]
Remaining accrual as of December 31, 2014	1,690
Expense provision	6,043
Cash payments and other	(4,342)
Change in estimates	(12)
Remaining accrual as of June 30, 2015	$ 3,379

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Acquisition - Narrative (Details - USD ($) $ in Thousands			1 Months Ended	3 Months Ended		6 Months Ended
	Mar. 06, 2015	Nov. 20, 2014	Mar. 31, 2015	Sep. 30, 2015	Dec. 31, 2014	Jun. 30, 2015	Jun. 30, 2014
Business Acquisition [Line Items]
Cash paid						$ 2,124	$ 0
Impairment expense					$ 800	$ 46	$ 71
ADA Analytics Israel, LLC
Business Acquisition [Line Items]
Cash paid	$ 2,360	$ 200	$ 2,400
Cash paid to acquire business, VAT tax			$ 400
Contingent consideration	451
Contingent consideration, liability	$ 500
ADA Analytics Israel, LLC | Subsequent Event
Business Acquisition [Line Items]
Impairment expense				$ 1,900

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Acquisition - Consideration and Allocation (Details) - USD ($) $ in Thousands			1 Months Ended	6 Months Ended
	Mar. 06, 2015	Nov. 20, 2014	Mar. 31, 2015	Jun. 30, 2015	Jun. 30, 2014
Business Acquisition [Line Items]
Cash paid				$ 2,124	$ 0
ADA Analytics Israel, LLC
Business Acquisition [Line Items]
Cash paid	$ 2,360	$ 200	$ 2,400
Accrued liabilities	10
Contingent consideration	451
Total fair value of liabilities assumed	461
Total purchase consideration	2,821
Receivables	360
Property and equipment and other	82
Intangibles - in process research and development	2,379
Total	$ 2,821

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Equity Method Investments - Narrative (Details) - USD ($) $ in Thousands			3 Months Ended		6 Months Ended
	Mar. 03, 2016	Feb. 10, 2014	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Mar. 31, 2015	Dec. 31, 2014	Mar. 31, 2014	Dec. 31, 2013	Jan. 20, 2010
Schedule of Equity Method Investments [Line Items]
Equity method investments			$ 20,238		$ 20,238			$ 19,584
Capital calls and variable payments					230	$ 3,779
Purchase of membership interest, note payable outstanding			$ 15,328		$ 15,328			$ 15,910
Subsequent Event | RMC6, LLC (RCM6) | Disposed of by Sale
Schedule of Equity Method Investments [Line Items]
Ownership interest, percent	24.95%
Proceeds from sale of ownership interest, including proceeds to third party	$ 1,800
Clean Coal Solutions (CCS)
Schedule of Equity Method Investments [Line Items]
Ownership interest, percent			42.50%		42.50%			42.50%
Equity method investments			$ 0	$ 0	$ 0	0	$ 0	$ 0	$ 0	$ 0
Clean Coal Solutions (CCS) | Cash distributions and equity loss in (excess) of investment balance
Schedule of Equity Method Investments [Line Items]
Equity method investments			(16,955)	(19,453)	(16,955)	(19,453)	$ (20,150)	(29,877)	$ (14,850)	$ (12,906)
Clean Coal Solutions Services (CCSS)
Schedule of Equity Method Investments [Line Items]
Ownership interest, percent											50.00%
Equity method investments			$ 6,300		$ 6,300			$ 4,100
Percent of losses removed from net income, attributable to noncontrolling interest			100.00%		100.00%
RMC6, LLC (RCM6)
Schedule of Equity Method Investments [Line Items]
Ownership interest, percent		24.95%	24.95%		24.95%			24.95%
Equity method investments			$ 13,900		$ 13,900			$ 15,400
Capital calls and variable payments		$ 2,400	(238)	126	230	1,383
Purchase of membership interest, note payable issued		$ 13,300
Purchase of membership interest, note payable outstanding			13,900		13,900			$ 14,200
Earnings (loss) from equity method investment for depreciation and amortization related to investment basis difference			$ 500	$ 1,000	$ 500	$ 800

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Equity Method Investments - Equity Method Investments (Details) - USD ($) $ in Thousands		3 Months Ended				6 Months Ended
	Feb. 10, 2014	Jun. 30, 2015	Mar. 31, 2015	Jun. 30, 2014	Mar. 31, 2014	Jun. 30, 2015	Jun. 30, 2014
Equity Method Investment, Summarized Financial Information, Income Statement [Abstract]
ADES equity earnings		$ 4,860		$ 9,791		$ 5,174	$ 16,416
Capital calls and variable payments						230	3,779
Equity Method Investment, Financial Statement, Reported Amounts [Abstract]
Distributions from equity method investees, return on investment						19	1,259
Earnings from equity method investments		4,860		9,791		5,174	16,416
Included in investing cash flows						4,730	16,321
Clean Coal Solutions (CCS)
Equity Method Investment, Summarized Financial Information, Income Statement [Abstract]
Gross profit (loss)		24,905		20,295		55,834	37,505
Operating expenses		7,147		4,998		12,503	9,419
Income (loss) from operations		17,758		15,297		43,331	28,086
Other expenses		470		(498)		329	(741)
Class B preferred return		(1,632)		(2,249)		(3,362)	(4,583)
Loss attributable to noncontrolling interest		1,782		897		3,113	3,001
Net income (loss) available to Class A members		18,378		13,447		43,411	25,763
ADES equity earnings		4,630	$ 100	9,733	$ 6,588	4,730	16,321
Equity Method Investment, Financial Statement, Reported Amounts [Abstract]
Earnings from equity method investments		4,630	100	9,733	6,588	4,730	16,321
Included in investing cash flows		4,630	$ 100	9,733	$ 6,588
Clean Coal Solutions Services (CCSS)
Equity Method Investment, Summarized Financial Information, Income Statement [Abstract]
Gross profit (loss)		(9,732)		(4,411)		(19,895)	(8,816)
Operating expenses		41,008		21,683		78,954	43,381
Income (loss) from operations		(50,740)		(26,094)		(98,849)	(52,197)
Other expenses		(70)		(21)		(75)	(24)
Loss attributable to noncontrolling interest		53,110		27,628		103,268	55,497
Net income (loss) available to Class A members		2,300		1,513		4,344	3,276
ADES equity earnings		1,150		757		2,172	1,638
Equity Method Investment, Financial Statement, Reported Amounts [Abstract]
Distributions from equity method investees, return on investment						19	1,259
Earnings from equity method investments		1,150		757		2,172	1,638
RMC6, LLC (RCM6)
Equity Method Investment, Summarized Financial Information, Income Statement [Abstract]
Gross profit (loss)		(1,180)		(412)		(1,980)	(1,971)
Operating expenses		516		423		977	866
Income (loss) from operations		(1,696)		(835)		(2,957)	(2,837)
Other expenses		(89)		(63)		(162)	(169)
Net income (loss) available to Class A members		(1,785)		(898)		(3,119)	(3,006)
ADES equity earnings		(920)		(699)		(1,728)	(1,543)
Capital calls and variable payments	$ 2,400	(238)		126		230	1,383
Refund		400
Equity Method Investment, Financial Statement, Reported Amounts [Abstract]
Earnings from equity method investments		$ (920)		$ (699)		$ (1,728)	$ (1,543)

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Equity Method Investments - Rollforward of CCS Investment (Details) - USD ($) $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2015	Mar. 31, 2015	Jun. 30, 2014	Mar. 31, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014	Feb. 10, 2014
Equity Method Investments [Roll Forward]
Beginning balance		$ 19,584			$ 19,584
Cash distributions from CCS	$ (4,860)		$ (9,791)		(5,174)	$ (16,416)
Adjustment for current year cash distributions in excess of investment balance					4,730	16,321
Total investment balance, equity earnings (loss) and cash distributions	20,238				20,238
Clean Coal Solutions (CCS)
Equity Method Investments [Roll Forward]
Beginning balance	0	0	0	$ 0	0	0
ADES proportionate share of income from CCS	7,825	9,827	5,130	4,644
Increase of equity loss in excess of investment balance (prior to cash distributions)	(7,825)	(9,827)	(5,130)	(4,644)
Cash distributions from CCS	(4,630)	(100)	(9,733)	(6,588)	(4,730)	(16,321)
Adjustment for current year cash distributions in excess of investment balance	4,630	100	9,733	6,588
Total investment balance, equity earnings (loss) and cash distributions	$ 0	0	0	0	$ 0	0
Ownership interest, percent	42.50%				42.50%		42.50%
Ownership interest multiplied by net income available to members, percent	42.50%				42.50%
Clean Coal Solutions (CCS) | ADES equity earnings (loss)
Equity Method Investments [Roll Forward]
Beginning balance	$ 100	0	6,588	0	$ 0	0
ADES proportionate share of income from CCS	7,825	9,827	5,130	4,644
Increase of equity loss in excess of investment balance (prior to cash distributions)	(7,825)	(9,827)	(5,130)	(4,644)
Cash distributions from CCS	0	0	0	0
Adjustment for current year cash distributions in excess of investment balance	4,630	100	9,733	6,588
Total investment balance, equity earnings (loss) and cash distributions	4,630	100	9,733	6,588	4,630	9,733
Clean Coal Solutions (CCS) | Cash distributions
Equity Method Investments [Roll Forward]
Beginning balance	100	0	6,588	0	0	0
ADES proportionate share of income from CCS	0	0	0	0
Increase of equity loss in excess of investment balance (prior to cash distributions)	0	0	0	0
Cash distributions from CCS	4,630	100	9,733	6,588
Adjustment for current year cash distributions in excess of investment balance	0	0	0	0
Total investment balance, equity earnings (loss) and cash distributions	4,630	100	9,733	6,588	4,630	9,733
Clean Coal Solutions (CCS) | Cash distributions and equity loss in (excess) of investment balance
Equity Method Investments [Roll Forward]
Beginning balance	(20,150)	(29,877)	(14,850)	(12,906)	(29,877)	(12,906)
ADES proportionate share of income from CCS	0	0	0	0
Increase of equity loss in excess of investment balance (prior to cash distributions)	7,825	9,827	5,130	4,644
Cash distributions from CCS	0	0	0	0
Adjustment for current year cash distributions in excess of investment balance	(4,630)	(100)	(9,733)	(6,588)
Total investment balance, equity earnings (loss) and cash distributions	(16,955)	(20,150)	(19,453)	$ (14,850)	(16,955)	(19,453)
RMC6, LLC (RCM6)
Equity Method Investments [Roll Forward]
Beginning balance		$ 15,400			15,400
Cash distributions from CCS	920		$ 699		1,728	$ 1,543
Total investment balance, equity earnings (loss) and cash distributions	$ 13,900				$ 13,900
Ownership interest, percent	24.95%				24.95%		24.95%	24.95%

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Investments - Narrative (Details) - USD ($) $ in Millions	1 Months Ended	6 Months Ended
	Nov. 30, 2014	Jun. 30, 2015	Dec. 31, 2014
Highview Enterprises Limited
Investment [Line Items]
Ownership interest, percent	8.00%
Payments to acquire investments	$ 2.8
Minimum
Investment [Line Items]
Investment securities, maturities range		1 year
Maximum
Investment [Line Items]
Investment securities, maturities range		5 years
Cost method investment
Investment [Line Items]
Available-for-sale securities, debt securities		$ 2.8	$ 2.8
Certificates of deposit
Investment [Line Items]
Investments		$ 0.3	$ 0.3

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Borrowings - Summary of Notes Payable (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Debt Instrument [Line Items]
Total current portion of long-term borrowings	$ 1,612	$ 1,479
Total Long-term borrowings	13,716	14,431
Total Borrowings	15,328	15,910
RCM6 note payable
Debt Instrument [Line Items]
Total current portion of long-term borrowings	995	874
Total Long-term borrowings	12,909	13,312
DSI Business Owner note payable
Debt Instrument [Line Items]
Total current portion of long-term borrowings	617	605
Total Long-term borrowings	$ 807	$ 1,119

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Borrowings - Additional Information (Details) - USD ($) $ in Millions	1 Months Ended
	Feb. 29, 2016	Mar. 03, 2016	Jun. 30, 2015	Dec. 31, 2014	Feb. 10, 2014
Subsequent Event | Affiliated Entity
Debt Instrument [Line Items]
Due to related parties	$ 1.1
Extinguishment of debt, amount	$ 0.3
RMC6, LLC (RCM6)
Debt Instrument [Line Items]
Interest rate, stated percentage					1.65%
Interest rate, effective percentage					20.00%
Ownership interest, percent			24.95%	24.95%	24.95%
RMC6, LLC (RCM6) | Notes Payable
Debt Instrument [Line Items]
Unamortized discount			$ 8.6	$ 10.1
RMC6, LLC (RCM6) | Disposed of by Sale | Subsequent Event
Debt Instrument [Line Items]
Ownership interest, percent		24.95%

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Fair Value Measurements - Narrative (Details) $ in Thousands	3 Months Ended			6 Months Ended
	Dec. 31, 2015 USD ($)	Sep. 30, 2015 USD ($)	Dec. 31, 2014 USD ($)	Jun. 30, 2015 USD ($) Financial_Institution	Jun. 30, 2014 USD ($)	Mar. 06, 2015 USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Number of financial institutions with certificates of deposit investments | Financial_Institution				2
Time deposits, $250,000 or more				$ 250
Impairment of property and equipment			$ 800	46	$ 71
Property and equipment			$ 4,808	$ 4,076
Disposed of by Sale | Subsequent Event
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impairment of property and equipment	$ 300
Proceeds from sale of impaired assets	600
Property and equipment	100
Proceeds from sale of assets	300
Gain on disposition of assets	$ 200
ADA Analytics Israel, LLC
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration, liability						$ 500
ADA Analytics Israel, LLC | Subsequent Event
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impairment of property and equipment		$ 1,900

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Fair Value Measurements - Estimated Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Investment securities:
Investment securities, restricted, long-term	$ 336	$ 336
Carrying Value
Investment securities:
Investment securities, restricted, long-term	336	336
Cost method investment	2,776	2,776
Notes Payable:
Current portion of notes payable, related party	1,668	1,479
Long-term portion of notes payable, related party	14,022	14,431
Highview technology license payable	0	155
Highview technology license payable, long-term	1,314	1,389
Stock appreciation rights, liability-classified equity award	517	0
Fair Value
Investment securities:
Investment securities, restricted, long-term	336	336
Cost method investment	2,776	2,776
Notes Payable:
Current portion of notes payable, related party	1,517	1,439
Long-term portion of notes payable, related party	13,732	14,356
Highview technology license payable	0	155
Highview technology license payable, long-term	1,314	1,389
Stock appreciation rights, liability-classified equity award	$ 517	$ 0

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Fair Value Measurements - Financial Instruments Carried and Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities, restricted, long-term	$ 336	$ 336
Recurring Basis
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities, restricted, long-term	336	336
Total assets at fair value	336	336
Contingent consideration	451
Stock appreciation rights, liability-classified equity award	517
Total liabilities at fair value	968
Recurring Basis | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities, restricted, long-term	0	0
Total assets at fair value	0	0
Contingent consideration	0
Stock appreciation rights, liability-classified equity award	0
Total liabilities at fair value	0
Recurring Basis | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities, restricted, long-term	336	336
Total assets at fair value	336	336
Contingent consideration	0
Stock appreciation rights, liability-classified equity award	517
Total liabilities at fair value	517
Recurring Basis | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities, restricted, long-term	0	0
Total assets at fair value	0	$ 0
Contingent consideration	451
Stock appreciation rights, liability-classified equity award	0
Total liabilities at fair value	$ 451

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Fair Value Measurements - Assets and Liabilities Measursed on Non-Recurring Basis (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended		12 Months Ended
	Dec. 31, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Assets:
Total Losses	$ (800)	$ (46)	$ (71)
Nonrecurring Basis
Assets:
Property and equipment	424			$ 424
Impaired note receivable	0	0		0
Total assets at fair value	424	0		424
Nonrecurring Basis | General and Administrative Expense
Assets:
Total Losses, Property and equipment				(355)
Total Losses, Impaired notes receivable		(1,000)		(500)
Total Losses		(1,000)		(855)
Nonrecurring Basis | Level 1
Assets:
Property and equipment	0			0
Impaired note receivable	0	0		0
Total assets at fair value	0	0		0
Nonrecurring Basis | Level 2
Assets:
Property and equipment	0			0
Impaired note receivable	0	0		0
Total assets at fair value	0	0		0
Nonrecurring Basis | Level 3
Assets:
Property and equipment	424			424
Impaired note receivable	0	0		0
Total assets at fair value	$ 424	$ 0		$ 424

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Commitments and Contingencies - Settlement and Royalty Indemnity, Narrative (Details)	Jun. 30, 2015
Norit Litigation
Loss Contingencies [Line Items]
Ability to pay dividends, percent of market fair value	50.00%

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Commitments and Contingencies - Settlement and Royalty Indemnity (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Commitments and Contingencies Disclosure [Abstract]
Settlement and royalty indemnity obligation, short-term	$ 4,268	$ 3,749
Settlement and royalty indemnification, long-term	18,282	20,273
Total settlement and royalty indemnity	$ 22,550	$ 24,022

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Commitments and Contingencies - CCS (Details)	Jun. 30, 2015
Clean Coal Solutions (CCS)
Related Party Transaction [Line Items]
Limited guarantees. percent	50.00%

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Commitments and Contingencies - Consultant Obligation (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Related Party Transaction [Line Items]
Consultant expense	$ 4,387	$ 2,495	$ 8,122	$ 3,927
Clean Coal Solutions (CCS)
Related Party Transaction [Line Items]
Consultant expense	$ 212	$ 307	$ 279	$ 557

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Commitments and Contingencies - Line of Credit (Details) $ in Millions	6 Months Ended
	Jun. 30, 2015 USD ($)
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	$ 10
Line of credit facility, interest rate during period	5.00%
Prime Rate
Debt Instrument [Line Items]
Basis spread on variable rate	1.00%

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Commitments and Contingencies - Letters of Credit (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Other Commitments [Line Items]
LOC Outstanding	$ 13,534	$ 11,625
Restricted cash	2,527	2,527
Restricted cash, long-term	10,680	8,771
Investment securities, restricted, long-term	336	336
Contract performance - equipment systems
Other Commitments [Line Items]
LOC Outstanding	7,956	7,247
Restricted cash	2,527	2,527
Restricted cash, long-term	5,430	4,721
Investment securities, restricted, long-term	0	0
Royalty Award
Other Commitments [Line Items]
LOC Outstanding	5,250	4,050
Restricted cash	0	0
Restricted cash, long-term	5,250	4,050
Investment securities, restricted, long-term	0	0
Other
Other Commitments [Line Items]
LOC Outstanding	328	328
Restricted cash	0	0
Restricted cash, long-term	0	0
Investment securities, restricted, long-term	$ 336	$ 336

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Stock-Based Compensation - Narrative (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2015
Restricted stock awards | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period		3 years
Restricted stock awards | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period		5 years
Restricted stock units and Stock appreciation rights
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Accrued incentive expense	$ 3.0	$ 3.1
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period		3 years
Expected term (in years)		5 years
Stock appreciation rights
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period		3 years
Expected term (in years)		5 years
Performance share units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term (in years)		3 years
Service period		3 years

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Stock-Based Compensation - Allocation of Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	$ 4,505	$ 841	$ 5,459	$ 1,745
Restricted stock awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	1,409	491	1,939	1,000
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	192	18	570	31
Performance share units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	2,387	332	2,433	714
Stock appreciation rights
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	$ 517	$ 0	$ 517	$ 0

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Stock-Based Compensation - Summary of Unrecognized Compensation Cost (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2015 USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation costs, equity instruments other than options	$ 4,323
Expected Weighted Average Period of Recognition (in years)	1 year
Restricted stock awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation costs, equity instruments other than options	$ 1,574
Expected Weighted Average Period of Recognition (in years)	11 months 16 days
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation costs, options	$ 290
Expected Weighted Average Period of Recognition (in years)	1 year 26 days
Performance share units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation costs, equity instruments other than options	$ 1,075
Expected Weighted Average Period of Recognition (in years)	1 year 15 days
Stock appreciation rights
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation costs, options	$ 1,384
Expected Weighted Average Period of Recognition (in years)	5 months 12 days

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Stock-Based Compensation - Summary of Non-vested Restricted Stock Activity (Details) - Restricted stock awards	6 Months Ended
	Jun. 30, 2015 $ / shares shares
Number of SAR's Outstanding and Exercisable
Non-vested shares, Beginning balance (in shares) | shares	209,921
Granted (in shares) | shares	127,375
Vested (in shares) | shares	(134,983)
Forfeited (in shares) | shares	(12,239)
Non-vested shares, Ending balance (in shares) | shares	190,074
Weighted Average Exercise Price
Nonvested shares, Weighted Average Grant Date Fair Value, Beginning Balance (in usd per share) | $ / shares	$ 13.59
Non vested shares granted, Weighted Average Grant Date Fair Value (in usd per share) | $ / shares	14.98
Vested in period, Weighted Average Grant Date Fair Value (in usd per share) | $ / shares	18.42
Forfeited, Weighted Average Grant Date Fair Value (in usd per share) | $ / shares	17.59
Non-vested shares, Weighted Average Grant Date Fair Value, Ending Balance (in usd per share) | $ / shares	$ 10.83

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Stock-Based Compensation - Fair Value Assumptions for Options (Details) - Stock options	6 Months Ended
	Jun. 30, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate	1.80%
Dividend yield	0.00%
Volatility	74.50%
Expected term (in years)	5 years

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Stock-Based Compensation - Summary of Option Activity (Details) - Stock options $ / shares in Units, $ in Thousands	6 Months Ended
	Jun. 30, 2015 USD ($) $ / shares shares
Employee and Director Options
Options outstanding, start of year (in shares) | shares	74,200
Options granted (in shares) | shares	56,250
Options exercised (in shares) | shares	0
Options expired / forfeited (in shares) | shares	0
Options outstanding, end of year (in shares) | shares	130,450
Options vested and exercisable (in shares) | shares	97,115
Weighted Average Exercise Price
Options outstanding, start of year (in usd per share) | $ / shares	$ 13.76
Options granted (in usd per share) | $ / shares	13.87
Options exercised (in usd per share) | $ / shares	0.00
Options expired / forfeited (in usd per share) | $ / shares	0.00
Options outstanding, end of year (in usd per share) | $ / shares	13.81
Options vested and exercisable, weighted average exercise price (in usd per share) | $ / shares	$ 12.08
Options outstanding, intrinsic value | $	$ 0
Options exercisable, intrinsic value | $	$ 0
Options outstanding, weighted average remaining contractual term	3 years 6 months 22 days
Options exercisable, weighted average remaining contractual term	3 years 6 months

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Stock-Based Compensation - Fair Value Assumptions for SARs (Details) - Stock appreciation rights	6 Months Ended
	Jun. 30, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate	1.80%
Dividend yield	0.00%
Volatility	74.50%
Expected term (in years)	5 years

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Stock-Based Compensation - Summary of Outstanding SARs (Details) - Stock appreciation rights	6 Months Ended
	Jun. 30, 2015 USD ($) $ / shares shares
Number of SAR's Outstanding and Exercisable
Non-vested shares, Beginning balance (in shares) | shares	0
Granted (in shares) | shares	243,750
Vested (in shares) | shares	0
Forfeited/Canceled (in shares) | shares	0
Non-vested shares, Ending balance (in shares) | shares	243,750
Weighted Average Exercise Price
Nonvested shares, Weighted Average Grant Date Fair Value, Beginning Balance (in usd per share) | $ / shares	$ 0.00
Non vested shares granted, Weighted Average Grant Date Fair Value (in usd per share) | $ / shares	13.87
Vested in period, Weighted Average Grant Date Fair Value (in usd per share) | $ / shares	0.00
Forfeited, Weighted Average Grant Date Fair Value (in usd per share) | $ / shares	0.00
Non-vested shares, Weighted Average Grant Date Fair Value, Ending Balance (in usd per share) | $ / shares	$ 13.87
SAR's outstanding, Aggregate Intrinsic Value | $	$ 0
SAR's outstanding, Weighted Average Remaining Contractual Term (in years)	4 years 6 months
SAR's exercisable, Number of SAR's Outstanding and Exercisable (in shares) | shares	43,750
SAR's exercisable, Weighted Average Exercise (in usd per share) | $ / shares	$ 13.87
SAR's exercisable, Aggregate Intrinsic Value | $	$ 0

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Stock-Based Compensation - Fair Value Assumptions for PSUs (Details) - Performance share units	6 Months Ended
	Jun. 30, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate	1.00%
Dividend yield	0.00%
Volatility	64.30%
Performance period (in years)	3 years

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Stock-Based Compensation - Summary of Non-vested PSUs (Details) - Performance share units	6 Months Ended
	Jun. 30, 2015 $ / shares shares
Number of SAR's Outstanding and Exercisable
Non-vested shares, Beginning balance (in shares) | shares	142,357
Granted (in shares) | shares	68,650
Vested (in shares) | shares	(13,763)
Forfeited/Canceled (in shares) | shares	(2,420)
Non-vested shares, Ending balance (in shares) | shares	194,824
Weighted Average Exercise Price
Nonvested shares, Weighted Average Grant Date Fair Value, Beginning Balance (in usd per share) | $ / shares	$ 30.65
Non vested shares granted, Weighted Average Grant Date Fair Value (in usd per share) | $ / shares	20.16
Vested in period, Weighted Average Grant Date Fair Value (in usd per share) | $ / shares	30.52
Forfeited, Weighted Average Grant Date Fair Value (in usd per share) | $ / shares	26.04
Non-vested shares, Weighted Average Grant Date Fair Value, Ending Balance (in usd per share) | $ / shares	$ 27.02

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Stock-Based Compensation - Performance Share Units Settled (Details) - Performance share units	6 Months Ended
	Jun. 30, 2015 shares
2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Net Number of Issued Shares upon Vesting	8,768
Shares Withheld to Settle Tax Withholding Obligations	3,954
2013 | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
TSR Multiple Range	1.75
Russell 3000 Multiple	2.00
2013 | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
TSR Multiple Range	1.75
Russell 3000 Multiple	2.00
2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Net Number of Issued Shares upon Vesting	2,506
Shares Withheld to Settle Tax Withholding Obligations	1,145
2014 | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
TSR Multiple Range	0.63
Russell 3000 Multiple	0.00
2014 | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
TSR Multiple Range	0.75
Russell 3000 Multiple	0.75

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Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Income Tax Disclosure [Abstract]
Income tax expense	$ 63	$ 29	$ 107	$ 42
Effective tax rate	(1.00%)	3.00%	(1.00%)	10.00%

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Business Segment Information - Segment Operating Results (Details) $ in Thousands	3 Months Ended			6 Months Ended
	Dec. 31, 2015 segment	Jun. 30, 2015 USD ($)	Jun. 30, 2014 USD ($)	Jun. 30, 2015 USD ($) segment	Jun. 30, 2014 USD ($)
Segment Reporting Information [Line Items]
Number of reportable segments | segment				4
Revenues:
Earnings from equity method investments		$ 4,860	$ 9,791	$ 5,174	$ 16,416
Consulting services		316	1,272	684	2,022
Royalties		2,299	849	4,493	1,981
Chemicals and other		343	106	617	137
Total reported revenues		14,895	3,174	36,652	4,158
Equipment sales		14,236	1,796	35,351	1,999
Segment reporting operating income (loss)
Total segment operating income (loss)		(17,778)	(8,420)	(24,675)	(15,990)
Subsequent Event
Segment Reporting Information [Line Items]
Number of reportable segments | segment	2
Operating Segments
Revenues:
Total reported revenues		22,466	14,256	46,731	23,493
Segment reporting operating income (loss)
Total segment operating income (loss)		(361)	6,945	926	11,195
Refined Coal | Operating Segments
Revenues:
Earnings from equity method investments		4,860	9,791	5,174	16,416
Consulting services		34	204	55	436
Royalties		2,299	849	4,493	1,981
Total reported revenues		7,193	10,844	9,722	18,833
Segment reporting operating income (loss)
Total segment operating income (loss)		5,168	9,156	5,835	15,915
Refined Coal | Segment Reconciling Items
Revenues:
Earnings from equity method investments		(4,860)	(9,791)	(5,174)	(16,416)
Royalties		(2,299)	(849)	(4,493)	(1,981)
Total reported revenues		(7,159)	(10,640)	(9,667)	(18,397)
Emissions Control - Engineering Technology Services | Operating Segments
Revenues:
Consulting services		248	731	591	1,006
Chemicals and other		344	106	617	137
Total reported revenues		14,804	2,573	36,467	2,897
Equipment sales		14,212	1,736	35,259	1,754
Segment reporting operating income (loss)
Total segment operating income (loss)		(300)	(689)	4,445	(1,925)
Emissions Control - Manufacturing | Operating Segments
Revenues:
Consulting services		34	337	38	580
Total reported revenues		57	397	130	825
Equipment sales		23	60	92	245
Segment reporting operating income (loss)
Total segment operating income (loss)		(3,178)	(1,097)	(5,370)	(1,996)
Research and Development | Operating Segments
Revenues:
Total reported revenues		412	442	412	938
Segment reporting operating income (loss)
Total segment operating income (loss)		(2,051)	(425)	(3,984)	(799)
Research and Development | Segment Reconciling Items
Revenues:
Total reported revenues		$ (412)	$ (442)	$ (412)	$ (938)

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Business Segment Information - Reconciliation of Reportable Segment Amounts (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Segment Reporting Information [Line Items]
Total segment operating income (loss)	$ (17,778)	$ (8,420)	$ (24,675)	$ (15,990)
Corporate payroll and benefits	9,746	4,609	14,657	8,856
Corporate rent and occupancy	601	558	1,232	1,118
Corporate legal and professional fees	4,387	2,495	8,122	3,927
Corporate general and administrative	1,503	1,407	3,385	2,553
Depreciation and amortization	573	456	1,104	894
Interest income	6	19	18	46
Other income	23	1	87	10
Income tax expense	(63)	(29)	(107)	(42)
Net income (loss)	(12,447)	992	(18,579)	409
Operating Segments
Segment Reporting Information [Line Items]
Total segment operating income (loss)	(361)	6,945	926	11,195
Segment Reconciling Items
Segment Reporting Information [Line Items]
Corporate payroll and benefits	(6,571)	(2,715)	(9,511)	(5,567)
Corporate rent and occupancy	(163)	(165)	(301)	(327)
Corporate legal and professional fees	(4,056)	(1,838)	(7,364)	(2,708)
Corporate general and administrative	(1,085)	(1,139)	(1,991)	(2,027)
Depreciation and amortization	(156)	(87)	(306)	(171)
Interest income	6	19	18	46
Other income	2	1	57	10
Income tax expense	$ (63)	$ (29)	$ (107)	$ (42)

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Business Segment Information - Segment Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013
Segment Reporting Information [Line Items]
Assets	$ 76,497		$ 93,699
Equity method investments	20,238		19,584
Clean Coal Solutions (CCS)
Segment Reporting Information [Line Items]
Equity method investments	0	$ 0	0	$ 0	$ 0	$ 0
Operating Segments | Refined Coal
Segment Reporting Information [Line Items]
Assets	22,211		21,322
Operating Segments | Emissions Control - Engineering Technology Services
Segment Reporting Information [Line Items]
Assets	24,968		34,175
Operating Segments | Emissions Control - Manufacturing
Segment Reporting Information [Line Items]
Assets	8,699		11,285
Operating Segments | Research and Development
Segment Reporting Information [Line Items]
Assets	7,661		6,431
All Other and Corporate
Segment Reporting Information [Line Items]
Assets	$ 12,958		$ 20,486

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Subsequent Events (Details) ft² in Thousands, $ in Thousands, £ in Millions		3 Months Ended					6 Months Ended		12 Months Ended
	Mar. 03, 2016 USD ($)	Mar. 31, 2016 USD ($) ft²	Dec. 31, 2015 USD ($)	Jun. 30, 2015 USD ($)	Dec. 31, 2014 USD ($)	Jun. 30, 2014 USD ($)	Jun. 30, 2015 USD ($)	Jun. 30, 2014 USD ($)	Dec. 31, 2014 USD ($)	Nov. 30, 2014 USD ($)	Nov. 30, 2014 GBP (£)	Feb. 10, 2014
Subsequent Event [Line Items]
Impairment expense					$ 800		$ 46	$ 71
Property and equipment				$ 4,076	$ 4,808		4,076		$ 4,808
Restructuring expense				$ 5,563		$ 366	$ 6,031	$ 366
Subsequent Event | Facility Closing
Subsequent Event [Line Items]
Restructuring expense			$ 800
Net rented area | ft²		207
Loss on contract termination		$ 250
Subsequent Event | Disposed of by Sale
Subsequent Event [Line Items]
Impairment expense			300
Proceeds from sale of impaired assets			600
Property and equipment			100
Proceeds from sale of assets			300
Gain on disposition of assets			$ 200
Highview Enterprises Limited
Subsequent Event [Line Items]
Ownership interest, percent										8.00%	8.00%
Highview Enterprises Limited | Technology-Based Intangible Assets
Subsequent Event [Line Items]
Useful life									10 years
Related party, buy-out fee										$ 300	£ 0.2
RMC6, LLC (RCM6)
Subsequent Event [Line Items]
Ownership interest, percent				24.95%	24.95%		24.95%		24.95%			24.95%
RMC6, LLC (RCM6) | Subsequent Event | Disposed of by Sale
Subsequent Event [Line Items]
Ownership interest, percent	24.95%
Proceeds from sale of ownership interest, including proceeds to third party	$ 1,800

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Subsequent Events - Notes Payable (Details) - USD ($) $ in Thousands			1 Months Ended	3 Months Ended		6 Months Ended
	Mar. 30, 2016	Oct. 22, 2015	Apr. 18, 2016	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Subsequent Event [Line Items]
Restructuring charges				$ 5,565	$ 366	$ 6,043	$ 366
Employee Severance
Subsequent Event [Line Items]
Payments for restructuring						$ 4,342
Subsequent Event | Employee Severance
Subsequent Event [Line Items]
Number of positions eliminated, period percent			30.00%
Subsequent Event | Employee Severance | Minimum
Subsequent Event [Line Items]
Restructuring charges			$ 600
Payments for restructuring			600
Subsequent Event | Employee Severance | Maximum
Subsequent Event [Line Items]
Restructuring charges			900
Payments for restructuring			$ 900
Subsequent Event | Term Loan
Subsequent Event [Line Items]
Short-term bank loans and notes payable		$ 15,000
Extension option, term		3 months
Interest rate, effective percentage	15.00%	10.50%
Proceeds from debt		$ 13,900
Debt issuance cost	$ 600	1,500
Cash balance requirements	$ 3,500	$ 3,000