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Acquisition of Shoal Creek Mine | 9 Months Ended
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Sep. 30, 2019
Acquisition of Shoal Creek Mine [Abstract] |
Acquisition of Shoal Creek Mine [Text Block] | Acquisition of Shoal Creek Mine On December 3, 2018, the Company completed the acquisition of the Shoal Creek metallurgical coal mine, preparation plant and supporting assets located in Alabama (Shoal Creek Mine) for a purchase price of $387.4 million. In January 2019, the Company agreed to pay an additional $2.4 million to settle a working capital adjustment, bringing the total purchase price to $389.8 million. The purchase price was funded with available cash on hand and reflected customary purchase price adjustments. The acquisition expands the Company’s seaborne metallurgical mining platform. The acquisition excluded all liabilities other than reclamation and the Company is not responsible for other liabilities arising out of or relating to the operation of the Shoal Creek Mine prior to the acquisition date, including with respect to employee benefit plans and post-employment benefits. In connection with completing the acquisition, a new collective bargaining agreement was reached with the union-represented workforce that eliminates participation in the multi-employer pension plan and replaces it with a 401(k) retirement plan. In connection with the acquisition, the Company recorded a contract based intangible liability of $3.5 million to reflect the fair value of a coal supply agreement. The liability was amortized to income in January 2019 and the related contract was renegotiated on market terms. The preliminary purchase accounting allocations were recorded in the accompanying unaudited condensed consolidated financial statements as of, and for the period subsequent to the acquisition date. The following table summarizes the preliminary estimated fair values of assets acquired and liabilities assumed that were recognized at the acquisition and control date as well as fair value adjustments made through September 30, 2019:
| Preliminary Allocations |  | Adjustments |  | Final Allocations
| (Dollars in millions)
Inventories | $ | 39.7 |  |  | $ | 0.2 |  |  | $ | 39.9 |
Property, plant, equipment and mine development | 364.7 |  |  | 0.6 |  |  | 365.3 |
Current liabilities | (4.1 | ) |  | — |  |  | (4.1 | )
Asset retirement obligations | (10.5 | ) |  | (0.8 | ) |  | (11.3 | )
Total purchase price | $ | 389.8 |  |  | $ | — |  |  | $ | 389.8 |
Determining the fair value of assets acquired and liabilities assumed required judgment and the utilization of independent valuation experts, and included the use of significant estimates and assumptions, including assumptions with respect to future cash inflows and outflows, discount rates and asset lives, among other items. Due to the unobservable inputs to the valuation, the fair value would be considered Level 3 in the fair value hierarchy. The adjustments to the provisional fair values result from additional information obtained about facts in existence at the acquisition and control date. Adjustments to provisional fair values are assumed to have been made as of the acquisition and control date. As a result, "Depreciation, depletion and amortization" would have been lower by $0.4 million, $0.5 million and $0.4 million for the fourth quarter of 2018, first quarter of 2019 and second quarter of 2019, respectively, than was previously reported. The accompanying unaudited condensed consolidated statements of operations reflect these adjustments in the three months ended September 30, 2019. The Company has finalized the valuation of the net assets acquired and related purchase price allocation. The results of Shoal Creek Mine for the three and nine months ended September 30, 2019 are included in the unaudited condensed consolidated statement of operations and are reported in the Seaborne Metallurgical Mining segment. The following unaudited pro forma financial information presents the estimated combined results of operations of the Company and Shoal Creek Mine, on a pro forma basis, as though the operations of the Shoal Creek Mine had been combined with the Company’s operations as of January 1, 2018. The unaudited pro forma financial information does not necessarily reflect the results of operations that would have occurred had the operations of the Company and Shoal Creek Mine been combined during those periods or that may be attained in the future.
| Three Months Ended September 30, 2018 |  | Nine Months Ended September 30, 2018
| (Dollars in millions, except per share data)
Revenues | $ | 1,560.2 |  |  | $ | 4,517.9 |
Income from continuing operations, net of income taxes | 139.3 |  |  | 549.0 |
Basic earnings per share from continuing operations | $ | 0.64 |  |  | $ | 2.43 |
Diluted earnings per share from continuing operations | $ | 0.63 |  |  | $ | 2.40 |
The pro forma income from continuing operations, net of income taxes includes adjustments to operating costs to reflect the additional expense for the estimated impact of the fair value adjustment for coal inventory, a reduction in postretirement benefit costs resulting from the new collective bargaining agreement described above, and the estimated impact on depreciation, depletion and amortization for the fair value adjustment for property, plant and equipment (including coal reserve assets). On a pro forma basis, the acquisition would have had no impact on taxable income due to the Company’s federal net operating losses.

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