Business Segment Information

6 Months Ended

Jun. 30, 2020

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, 2020, the Company's CODM was the Company's CEO. The Company's operating and reportable segments are identified by products and services provided.

As of June 30, 2020, the Company has two reportable segments: (1) Refined Coal ("RC"); and (2) Power Generation and Industrials ("PGI").

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 in the 2019 Form 10-K.

• Segment revenues include equity method earnings and losses from the Company's equity method investments.

• Segment operating income (loss) includes segment revenues and allocation of certain "Corporate general and administrative expenses," which include Payroll and benefits, Legal and professional fees and General and administrative.

• RC segment operating income includes interest expense directly attributable to the RC segment.

As of June 30, 2020 and December 31, 2019, substantially all of the Company's material assets are located in the U.S. and substantially all of significant customers are U.S. companies. The following table presents the Company's operating segment results for the three and six months ended June 30, 2020 and 2019:

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2020			2019			2020			2019
Revenues:
Refined Coal:
Earnings in equity method investments	$	8,168		$	20,935		$	16,441		$	42,625
License royalties, related party	3,313			4,191			6,359			8,411
	11,481			25,126			22,800			51,036
Power Generation and Industrials:
Consumables	7,070			11,049			15,545			25,602
	7,070			11,049			15,545			25,602
Total segment reporting revenues	18,551			36,175			38,345			76,638
Adjustments to reconcile to reported revenues:
Earnings in equity method investments	(8,168		)	(20,935		)	(16,441		)	(42,625		)
Corporate and other	1,100			337			1,842			893
Total reported revenues	$	11,483		$	15,577		$	23,746		$	34,906
Segment operating income (loss):
Refined Coal (1)	$	10,777		$	24,596		$	21,637		$	49,979
Power Generation and Industrials (2)	(25,737		)	(3,862		)	(32,314		)	(7,324		)
Total segment operating income	$	(14,960	)	$	20,734		$	(10,677	)	$	42,655

(1) Included in RC segment operating income for the three and six months ended June 30, 2020 is 453A interest expense of zero and $0.2 million, respectively. Included in RC segment operating income for the three and six months ended June 30, 2019 is 453A interest expense of $0.3 million and $0.6 million, respectively.

(2) Included in PGI segment operating loss for the three and six months ended June 30, 2020 is $23.2 million and $23.2 million, respectively, of impairment expense on the Asset Group, and $0.4 million and $0.4 million, respectively, of expenses related to sequestration of certain of our employees at our manufacturing plant in Louisiana. Included in PGI segment operating loss for the three and six months ended June 30, 2020 and 2019 is $1.4 million and $3.4 million, and $0.7 million and $2.6 million, respectively, of depreciation, amortization, and depletion

expense on mine and plant long-lived assets. Included in PGI segment operating loss for the three and six months ended June 30, 2019 was $1.3 million and $4.7 million, respectively, of costs recognized as a result of the step-up in inventory fair value recorded from the Carbon Solutions Acquisition.

A reconciliation of reportable segment operating income to the Company's consolidated (loss) income before income tax expense is as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2020			2019			2020			2019
Total reported segment operating income	$	(14,960	)	$	20,734		$	(10,677	)	$	42,655
Other operating loss (1)	(4,262		)	(353		)	(5,055		)	(751		)
	(19,222		)	20,381			(15,732		)	41,904
Adjustments to reconcile to (loss) income before income tax expense attributable to the Company:
Corporate payroll and benefits	(1,148		)	(804		)	(1,857		)	(1,236		)
Corporate legal and professional fees	(925		)	(1,556		)	(2,674		)	(3,517		)
Corporate general and administrative	(1,558		)	(1,715		)	(3,157		)	(3,149		)
Corporate depreciation and amortization	(163		)	(7		)	(189		)	(20		)
Corporate interest (expense) income, net	(824		)	(1,604		)	(1,766		)	(3,255		)
Other income (expense), net	129			53			129			122
(Loss) income before income tax expense	$	(23,711	)	$	14,748		$	(25,246	)	$	30,849

(1) Included in Other operating loss for the three and six months ended June 30, 2020 was $2.9 million and $2.9 million, respectively, of impairment expense on the Asset Group.

Corporate general and administrative expenses include certain costs that benefit the business as a whole but are not directly related to one of the Company's 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. 

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

	As of
(in thousands)	June 30, 2020		December 31, 2019
Assets:
Refined Coal (1)	$	27,070	$	43,953
Power Generation and Industrials	54,022		80,912
Total segment assets	81,092		124,865
All Other and Corporate (2)	52,238		48,934
Consolidated	$	133,330	$	173,799

(1) Includes $23.1 million and $39.2 million of investments in equity method investees, respectively.

(2) Includes the Company's deferred tax assets.