Equity Method Investments

9 Months Ended

Sep. 30, 2019

Equity Method Investment, Summarized Financial Information [Abstract]

The Company had total equity method investments of $29.3 million and $45.9 million reflected in “Investments and other assets” in the condensed consolidated balance sheets as of September 30, 2019 and December 31, 2018, respectively, related to Middlemount Coal Pty Ltd (Middlemount). Included in “Loss (income) from equity affiliates” in the unaudited condensed consolidated statements of operations was a loss of $18.8 million and $5.3 million related to Middlemount during the three and nine months ended September 30, 2019, respectively and income of $17.4 million and $65.1 million during the three and nine months ended September 30, 2018, respectively. Middlemount’s standalone results include (on a 50% attributable basis):



	Three Months Ended September 30,					Nine Months Ended September 30,
	2019			2018		2019			2018
	(Dollars in millions)
Depreciation, depletion and amortization and asset retirement obligation expenses	$	8.2		$	3.7	$	15.3		$	11.8
Net interest expense	2.4			2.8		6.4			10.0
Income tax (benefit) provision	(7.5		)	3.9		(1.6		)	15.4

The Company received cash payments from Middlemount of $14.7 million and $81.1 million during the nine months ended September 30, 2019 and 2018, respectively.

One of the Company’s Australian subsidiaries and the other shareholder of Middlemount are parties to an agreement, as amended from time to time, to provide a revolving loan (Revolving Loans) to Middlemount not to exceed $50.0 million Australian dollars (Revolving Loan Limit). The Company’s participation in the Revolving Loans will not, at any time, exceed its 50% equity interest of the Revolving Loan Limit. The Revolving Loans bear interest at 15% per annum and expire on December 31, 2020. As of September 30, 2019 and December 31, 2018, the carrying value of the Revolving Loans due to the Company’s Australian subsidiary was $5.4 million and zero, respectively.

As of September 30, 2019, the Company had an existing reserve of approximately $20 million related to an uncertain tax position that had been the subject of an ongoing income tax audit on Middlemount. In October 2019, subsequent to the balance sheet date, Middlemount received notification that the Australian Taxation Office will no longer pursue its position. Therefore, the related tax reserve will be released in the fourth quarter of 2019.