Business Segment Information

12 Months Ended

Dec. 31, 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 December 31, 2020, the Company's CODM was the Company's CEO. The Company's operating and reportable segments are organized by products and services provided.

As of December 31, 2020, the Company has two reportable segments: (1) Refined Coal ("RC"); and (2) Advanced Purification Technologies ("APT").

Given the downward trends in the coal-fired power generation market, the prices of competing power generation sources as well as the expected expiration of the Section 45 tax credit period as of December 31, 2021, during 2020 we initiated plans to expand our AC products and diversify into new markets. As a result, internal changes, including changes in operating structure and the method in which the Chief Operating Decision Maker ("CODM") allocates resources, resulted in the change in reportable segments. The Company has recast segment information below for the year ended December 31, 2019 to be consistent with the new reportable segments as of December 31, 2020.

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 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 includes Payroll and benefits, General and administrative, and Depreciation, amortization, depletion and accretion.

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

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

	Years Ended December 31,
(in thousands)	2020		2019
Revenues:
Refined Coal:
Earnings in equity method investments	$	30,978	$	69,176
License royalties, related party	13,440		16,899
	44,418		86,075
Advanced Purification Technologies:
Consumables	48,122		53,187
Other	15		—
	48,137		53,187
Total segment reporting revenues	92,555		139,262
Adjustments to reconcile to reported revenues:
Earnings in equity method investments	(30,978)		(69,176)
Total reported revenues	$	61,577	$	70,086
Segment operating income (loss)
Refined Coal (1)	$	42,689	$	83,471
Advanced Purification Technologies (2)	(39,958)		(13,600)
Total segment operating income	$	2,731	$	69,871

(1) Included in RC segment operating income for the years ended December 31, 2020 and 2019 is 453A interest expense of $0.3 million and $1.0 million, respectively.

(2) Included in APT segment operating loss for the years ended December 31, 2020 and 2019 was $7.9 million and $7.2 million, respectively, of depreciation, amortization, depletion and accretion expenses on mine and plant related long-lived assets and liabilities. Included in APT segment operating loss for the year ended December 31, 2020 was an impairment charge of $26.1 million, offset by a gain on settlement of $1.1 million. Included in APT segment operating loss for the year ended December 31, 2019 was approximately $5.0 million of amortization expense related to the fair value of inventory.

A reconciliation of reportable segment operating income to the Company's consolidated net income is as follows: 

	Years Ended December 31,
(in thousands)	2020		2019
Total reported segment operating income	$	2,731	$	69,871
Adjustments to reconcile to (loss) income before income tax expense attributable to the Company:
Corporate payroll and benefits	(2,866)		(2,592)
Corporate legal and professional fees	(4,954)		(7,485)
Corporate general and administrative	(5,096)		(6,836)
Corporate depreciation and amortization	(551)		(82)
Corporate interest expense, net	(3,060)		(5,767)
Other income, net	5		427
(Loss) income before income tax expense	$	(13,791)	$	47,536

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 December 31,
(in thousands)	2020		2019
Assets:
Refined Coal (1)	$	11,516	$	43,953
Advanced Purification Technologies (2)	80,877		90,083
Total segment assets	92,393		134,036
Corporate (3)	54,278		39,763
Consolidated	$	146,671	$	173,799

(1) Includes $7.7 million and $39.2 million of investments in equity method investees as of December 31, 2020 and 2019, respectively.

(2) Includes $34.6 million and $56.5 million of long-lived assets, net. Expenditures for additions to long-lived assets were $7.3 million and $12.6 million, respectively, for the years ended December 31, 2020 and 2019.

(3) Includes the Company's net deferred tax assets of $10.6 million and $14.1 million as of December 31, 2020 and 2019, respectively