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Equity Method Investments
 6 Months Ended
Jun. 30, 2021
Equity Method Investments and Joint Ventures [Abstract]  
Equity Method Investments Equity Method Investments
Tinuum Group, LLC
As of June 30, 2021 and December 31, 2020, the Company's ownership interest in Tinuum Group was 42.5%. Tinuum Group supplies technology equipment and technical services at select coal-fired generators, but its primary purpose is to put into operation facilities that produce and sell RC that lower emissions and also qualify for Section 45 tax credits. The Company concluded that Tinuum Group was a VIE, but the Company does not have the power to direct the activities that most significantly impact Tinuum Group's economic performance, as the voting partners of Tinuum Group have identical voting rights, equity control interests and board control interests, and therefore power is shared. Accordingly, the Company has accounted for its investment in Tinuum Group under the equity method of accounting since inception.
The following table summarizes the results of operations of Tinuum Group:
Three Months Ended June 30,Six Months Ended June 30,
(in thousands)2021202020212020
Gross profit$8,820 $6,868 $11,495 $11,878 
Operating, selling, general and administrative expenses12,429 11,919 26,231 24,695 
Loss from operations(3,609)(5,051)(14,736)(12,817)
Other income (expenses), net3,150 2,144 4,003 5,787 
Loss attributable to noncontrolling interest29,038 18,823 64,616 38,094 
Net income available to members$28,579 $15,916 $53,883 $31,064 
ADES equity earnings from Tinuum Group$19,125 $6,764 $35,487 $13,202 
For the three and six months ended June 30, 2021, the Company recognized earnings from Tinuum Group's net income available to members that were different from its pro-rata share of Tinuum Group's net income available to members, as cash distributions for the three and six months ended June 30, 2021 exceeded the carrying value of the Tinuum Group equity investment. For 2021, the Company expects to recognize such excess contributions as equity method earnings in the period the distributions occur, limited to the carrying value of the Tinuum Group equity investment. For the three and six months ended June 30, 2020, the Company recognized its pro-rata share of Tinuum Group's net income available to its members for the respective period.
The following tables present the Company's investment balance, equity earnings and cash distributions in excess of the investment balance, if any, for the three and six months ended June 30, 2021 and 2020 (in thousands):
DescriptionDate(s)Investment balanceADES equity earningsCash distributionsMemorandum Account: Cash distributions and equity earnings in (excess) of investment balance
Beginning balance12/31/2020$3,387 $— $— $— 
ADES proportionate share of income from Tinuum GroupFirst Quarter10,755 10,755 — — 
Cash distributions from Tinuum GroupFirst Quarter(19,749)— 19,749 — 
Adjustment for current year cash distributions in excess of investment balanceFirst Quarter5,607 5,607 — (5,607)
Total investment balance, equity earnings and cash distributions3/31/2021— $16,362 $19,749 (5,607)
ADES proportionate share of income from Tinuum GroupSecond Quarter12,146 $12,146 $— — 
Recovery of prior cash distributions in excess of investment balance (prior to cash distributions)Second Quarter(5,607)(5,607)— 5,607 
Cash distributions from Tinuum GroupSecond Quarter(19,125)— 19,125 — 
Adjustment for current year cash distributions in excess of investment balanceSecond Quarter12,586 12,586 — (12,586)
Total investment balance, equity earnings and cash distributions6/30/2021$— $19,125 $19,125 $(12,586)
DescriptionDate(s)Investment balanceADES equity earningsCash distributions
Beginning balance12/31/2019$32,280 $— $— 
ADES proportionate share of income from Tinuum GroupFirst Quarter6,438 6,438 — 
Cash distributions from Tinuum GroupFirst Quarter(13,764)— 13,764 
Total investment balance, equity earnings and cash distributions3/31/202024,954 $6,438 $13,764 
ADES proportionate share of income from Tinuum GroupSecond Quarter6,764 $6,764 $— 
Cash distributions from Tinuum GroupSecond Quarter(13,600)— 13,600 
Total investment balance, equity earnings and cash distributions6/30/2020$18,118 $6,764 $13,600 
Tinuum Services, LLC
The Company has a 50% voting and economic interest in Tinuum Services as of June 30, 2021 and December 31, 2020. The Company determined that Tinuum Services was not a VIE and further evaluated it for consolidation under the voting interest model. Because the Company does not own greater than 50% of the outstanding voting shares, either directly or indirectly, it has accounted for its investment in Tinuum Services under the equity method of accounting since inception. As of June 30, 2021 and December 31, 2020, the Company’s investment in Tinuum Services was $3.5 million and $4.2 million, respectively.
The following table summarizes the results of operations of Tinuum Services:
 Three Months Ended June 30,Six Months Ended June 30,
(in thousands)2021202020212020
Gross loss$(22,641)$(20,418)$(41,163)$(42,677)
Operating, selling, general and administrative expenses47,355 43,515 101,722 89,268 
Loss from operations(69,996)(63,933)(142,885)(131,945)
Other income (expenses), net32 (330)(394)(615)
Loss attributable to noncontrolling interest74,587 67,071 151,802 139,043 
Net income$4,623 $2,808 $8,523 $6,483 
ADES equity earnings from Tinuum Services$2,312 $1,404 $4,262 $3,242 
Included in the Consolidated Statements of Operations of Tinuum Services for the three and six months ended June 30, 2021 and 2020 were losses attributable to noncontrolling interests of Tinuum Services' VIE entities, which were eliminated in the calculations of Tinuum Services' net income attributable to the Company's interest.
The following table details the carrying value of the Company's respective equity method investments included in the Equity method investments line item on the Condensed Consolidated Balance Sheets and indicates the Company's maximum exposure to loss:
 As of
(in thousands)June 30,
2021		December 31,
2020
Equity method investment in Tinuum Group$— $3,387 
Equity method investment in Tinuum Services3,501 4,242 
Equity method investment in other63 63 
Total equity method investments$3,564 $7,692 
The following table details the components of the Company's respective equity method investments included in 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)2021202020212020
Earnings from Tinuum Group$19,125 $6,764 $35,487 $13,202 
Earnings from Tinuum Services2,312 1,404 4,262 3,242 
Earnings (loss) from other— — — (3)
Earnings from equity method investments$21,437 $8,168 $39,749 $16,441 
The following table details the components of the cash distributions from the Company's respective equity method investments included as a component of cash flows from operating activities and investing activities in the Condensed Consolidated Statements of Cash Flows. Distributions from equity method investees are reported in the Condensed Consolidated Statements of Cash Flows as "Distributions from equity method investees, 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" as a component of cash flows from investing activities.
Six Months Ended June 30,
(in thousands)20212020
Distributions from equity method investees, return on investment
Tinuum Group$14,142 $27,364 
Tinuum Services5,002 5,152 
$19,144 $32,516 
Distributions from equity method investees in excess of investment basis
Tinuum Group$24,732 $— 
$24,732 $—