XML 45 R28.htm IDEA: XBRL DOCUMENT
v3.20.2

Segment Information | 6 Months Ended
--- | ---
Jun. 30, 2020
Segment Reporting [Abstract] |
Segment Information | Segment Information During the year ended December 31, 2019, the Cottage Grove and Kayenta Mines shipped their final tons, and the Company announced the closures of the Wildcat HiIls Underground Mine, which shipped its final tons during the second quarter of 2020 and the Somerville Central Mine, which is expected to ship its final tons during the second half of 2020. Due to these changes, the Company revised its reportable segments beginning in the first quarter of 2020 to reflect the manner in which the chief operating decision maker (CODM) views the Company’s businesses going forward for purposes of reviewing performance, allocating resources and assessing future prospects and strategic execution. The Company now reports its results of operations primarily through the following reportable segments: Seaborne Thermal Mining, Seaborne Metallurgical Mining, Powder River Basin Mining, Other U.S. Thermal Mining and Corporate and Other. Prior period results have been recast for comparability. The business of the Company’s seaborne operating platform is primarily export focused with customers spread across several countries, with a portion of its thermal and metallurgical coal sold within Australia. Generally, revenues from individual countries vary year by year based on electricity and steel demand, the strength of the global economy, governmental policies and several other factors, including those specific to each country. The Company classifies its seaborne mines within the Seaborne Thermal Mining or Seaborne Metallurgical Mining segments based on the primary customer base and coal reserve type of each mining operation. A small portion of the coal mined by the Seaborne Thermal Mining segment is of a metallurgical grade. Similarly, a small portion of the coal mined by the Seaborne Metallurgical Mining segment is of a thermal grade. Additionally, the Company may market some of its metallurgical coal products as a thermal coal product from time to time depending on market conditions. The Company’s Seaborne Thermal Mining operations consist of mines in New South Wales, Australia. The mines in that segment utilize both surface and underground extraction processes to mine low-sulfur, high Btu thermal coal. The Company’s Seaborne Metallurgical Mining operations consist of mines in Queensland, Australia, one in New South Wales, Australia and one in Alabama. The mines in that segment utilize both surface and underground extraction processes to mine various qualities of metallurgical coal (low-sulfur, high Btu coal). The metallurgical coal qualities include hard coking coal, semi-hard coking coal, semi-soft coking coal and pulverized coal injection coal. The principal business of the Company’s thermal mining segments in the U.S. is the mining, preparation and sale of thermal coal, sold primarily to electric utilities in the U.S. under long-term contracts, with a relatively small portion sold as international exports as conditions warrant. The Company’s Powder River Basin Mining operations consist of its mines in Wyoming. The mines in that segment are characterized by surface mining extraction processes, coal with a lower sulfur content and Btu and higher customer transportation costs (due to longer shipping distances). The Company’s Other U.S. Thermal Mining operations historically reflect the aggregation of its Illinois, Indiana, New Mexico, Colorado and Arizona mining operations. The mines in that segment are characterized by a mix of surface and underground mining extraction processes, coal with a higher sulfur content and Btu and lower customer transportation costs (due to shorter shipping distances). Geologically, the Company’s Powder River Basin Mining operations mine sub-bituminous coal deposits and its Other U.S. Thermal Mining operations mine both bituminous and sub-bituminous coal deposits. The Company’s Corporate and Other segment includes selling and administrative expenses, including its technical and shared services functions; results from equity affiliates; corporate hedging activities; trading and brokerage activities; results from certain mining and export/transportation joint ventures; minimum charges on certain transportation-related contracts; the closure of inactive mining sites; and certain commercial matters. The Company’s CODM uses Adjusted EBITDA as the primary metric to measure the segments’ operating performance. Adjusted EBITDA is a non-GAAP financial measure defined as (loss) income from continuing operations before deducting net interest expense, income taxes, asset retirement obligation expenses and depreciation, depletion and amortization. Adjusted EBITDA is also adjusted for the discrete items that management excluded in analyzing the segments’ operating performance, as displayed in the reconciliation below. The Company has retrospectively modified its calculation of Adjusted EBITDA to exclude restructuring charges and transaction costs related to joint ventures as management does not view these items as part of its normal operations. Management believes non-GAAP performance measures are used by investors to measure the Company’s operating performance and lenders to measure the Company’s ability to incur and service debt. Adjusted EBITDA is not intended to serve as an alternative to U.S. GAAP measures of performance and may not be comparable to similarly-titled measures presented by other companies. Reportable segment results were as follows:
| Three Months Ended June 30, |  |  |  | Six Months Ended June 30, |  |
| 2020 |  | 2019 |  | 2020 |  | 2019
| (Dollars in millions) |  |  |  |  |  |
Revenues: |  |  |  |  |  |  |
Seaborne Thermal Mining | $ | 162.0 |  |  | $ | 220.2 |  |  | $ | 363.1 |  |  | $ | 471.2 |
Seaborne Metallurgical Mining | 91.6 |  |  | 290.9 |  |  | 284.8 |  |  | 615.4 |
Powder River Basin Mining | 205.8 |  |  | 282.6 |  |  | 472.4 |  |  | 569.9 |
Other U.S. Thermal Mining | 152.0 |  |  | 309.6 |  |  | 344.3 |  |  | 644.4 |
Corporate and Other | 15.3 |  |  | 45.7 |  |  | 8.3 |  |  | 98.7 |
Total | $ | 626.7 |  |  | $ | 1,149.0 |  |  | $ | 1,472.9 |  |  | $ | 2,399.6 |
Adjusted EBITDA: |  |  |  |  |  |  |
Seaborne Thermal Mining | $ | 27.7 |  |  | $ | 74.4 |  |  | $ | 82.8 |  |  | $ | 169.1 |
Seaborne Metallurgical Mining | (36.1) |  |  | 57.4 |  |  | (68.8) |  |  | 143.2 |
Powder River Basin Mining | 39.3 |  |  | 40.2 |  |  | 64.7 |  |  | 76.6 |
Other U.S. Thermal Mining | 32.9 |  |  | 83.1 |  |  | 71.4 |  |  | 159.0 |
Corporate and Other | (40.4) |  |  | (25.1) |  |  | (89.9) |  |  | (63.8) |
Total | $ | 23.4 |  |  | $ | 230.0 |  |  | $ | 60.2 |  |  | $ | 484.1 |
A reconciliation of consolidated (loss) income from continuing operations, net of income taxes to Adjusted EBITDA follows:
| Three Months Ended June 30, |  |  |  | Six Months Ended June 30, |  |
| 2020 |  | 2019 |  | 2020 |  | 2019
| (Dollars in millions) |  |  |  |  |  |
(Loss) income from continuing operations, net of income taxes | $ | (1,545.3) |  |  | $ | 42.9 |  |  | $ | (1,674.6) |  |  | $ | 176.2 |
Depreciation, depletion and amortization | 88.3 |  |  | 165.4 |  |  | 194.3 |  |  | 337.9 |
Asset retirement obligation expenses | 14.1 |  |  | 15.3 |  |  | 31.7 |  |  | 29.1 |
Restructuring charges | 16.5 |  |  | 0.4 |  |  | 23.0 |  |  | 0.6 |
Transaction costs related to joint ventures | 12.9 |  |  | 1.6 |  |  | 17.1 |  |  | 1.6 |
Asset impairment | 1,418.1 |  |  | — |  |  | 1,418.1 |  |  | — |
Provision for North Goonyella equipment loss | — |  |  | — |  |  | — |  |  | 24.7 |
North Goonyella insurance recovery - equipment (1) | — |  |  | — |  |  | — |  |  | (91.1) |
Changes in deferred tax asset valuation allowance and reserves and amortization of basis difference related to equity affiliates | (0.4) |  |  | 0.3 |  |  | (1.1) |  |  | 0.3 |
Interest expense | 34.3 |  |  | 36.0 |  |  | 67.4 |  |  | 71.8 |
Interest income | (2.4) |  |  | (7.2) |  |  | (5.5) |  |  | (15.5) |
Unrealized gains on economic hedges | (7.0) |  |  | (22.4) |  |  | (4.8) |  |  | (62.2) |
Unrealized (gains) losses on non-coal trading derivative contracts | (2.8) |  |  | 0.3 |  |  | (2.9) |  |  | 0.1 |
Take-or-pay contract-based intangible recognition | (2.7) |  |  | (5.6) |  |  | (5.3) |  |  | (11.2) |
Income tax (benefit) provision | (0.2) |  |  | 3.0 |  |  | 2.8 |  |  | 21.8 |
Adjusted EBITDA | $ | 23.4 |  |  | $ | 230.0 |  |  | $ | 60.2 |  |  | $ | 484.1 |
(1) As described in Note 15. “Other Events,” the Company recorded a $125.0 million insurance recovery during the six months ended June 30, 2019 related to losses incurred at its North Goonyella Mine. Of this amount, Adjusted EBITDA excludes an allocated amount applicable to total equipment losses recognized at the time of the insurance recovery settlement, which consisted of $24.7 million and $66.4 million recognized during the six months ended June 30, 2019 and the year ended December 31, 2018, respectively. The remaining $33.9 million, applicable to incremental costs and business interruption losses, is included in Adjusted EBITDA for the six months ended June 30, 2019. Total assets and property, plant equipment and mine development, net decreased during 2020 within the U.S. Thermal Mining division primarily as a result of the asset impairment charge recognized during the three and six months ended June 30, 2020, as further described in Note 9. “Property, Plant, Equipment and Mine Development.” Asset details are included in the table below. Asset details are reflected at the division level only for the Company’s mining segments and are not allocated between each individual segment as such information is not regularly reviewed by the Company's CODM. Further, some assets service more than one segment within the division and an allocation of such assets would not be meaningful or representative on a segment by segment basis. Assets related to closed, suspended, or otherwise inactive mines are included within the Corporate and Other category. Assets as of June 30, 2020 were as follows:
| Seaborne Mining |  | U.S. Thermal Mining |  |  |  | Corporate and Other |  | Consolidated
| (Dollars in millions) |  |  |  |  |  |  |  |
Total assets | $ | 1,748.4 |  |  | $ | 1,470.9 |  |  |  |  | $ | 1,729.5 |  |  | $ | 4,948.8 |
Property, plant, equipment and mine development, net | 1,347.9 |  |  | 1,297.9 |  |  |  |  | 532.6 |  |  | 3,178.4 |
Operating lease right-of-use assets | 27.0 |  |  | 5.5 |  |  |  |  | 18.2 |  |  | 50.7 |
Assets as of December 31, 2019 were as follows:
| Seaborne Mining |  | U.S. Thermal Mining |  |  |  | Corporate and Other |  | Consolidated
| (Dollars in millions) |  |  |  |  |  |  |  |
Total assets | $ | 2,001.3 |  |  | $ | 3,044.8 |  |  |  |  | $ | 1,496.7 |  |  | $ | 6,542.8 |
Property, plant, equipment and mine development, net | 1,610.9 |  |  | 2,776.9 |  |  |  |  | 291.3 |  |  | 4,679.1 |
Operating lease right-of-use assets | 32.1 |  |  | 30.3 |  |  |  |  | 20.0 |  |  | 82.4 |

X
- References No definition available. + Details
Name: | us-gaap_SegmentReportingAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
Name: | us-gaap_SegmentReportingDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration