Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Nov. 07, 2014 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'ALLIANCE RESOURCE PARTNERS LP | ' |
Entity Central Index Key | '0001086600 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Well-known Seasoned Issuer | 'Yes | ' |
Entity Voluntary Filers | 'No | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Entity Common Units Outstanding | ' | 74,060,634 |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | |
In Thousands, unless otherwise specified | |||
CURRENT ASSETS: | ' | ' | |
Cash and cash equivalents | $14,829 | $93,654 | |
Trade receivables | 175,770 | 153,662 | |
Other receivables | 857 | 776 | |
Due from affiliates | 2,532 | 1,964 | |
Inventories | 67,896 | 44,214 | |
Advance royalties | 10,779 | 11,454 | |
Prepaid expenses and other assets | 2,779 | 16,186 | |
Total current assets | 275,442 | 321,910 | |
PROPERTY, PLANT AND EQUIPMENT: | ' | ' | |
Property, plant and equipment, at cost | 2,771,664 | 2,645,872 | |
Less accumulated depreciation, depletion and amortization | -1,126,199 | -1,031,493 | |
Total property, plant and equipment, net | 1,645,465 | 1,614,379 | |
OTHER ASSETS: | ' | ' | |
Advance royalties | 16,312 | 18,813 | |
Due from affiliate | 11,256 | 11,560 | |
Equity investments in affiliates | 201,624 | 130,410 | |
Other long-term assets | 23,503 | 24,826 | |
Total other assets | 252,695 | 185,609 | |
TOTAL ASSETS | 2,173,602 | [1] | 2,121,898 |
CURRENT LIABILITIES: | ' | ' | |
Accounts payable | 98,884 | 79,371 | |
Due to affiliates | 367 | 290 | |
Accrued taxes other than income taxes | 20,355 | 19,061 | |
Accrued payroll and related expenses | 50,231 | 47,105 | |
Accrued interest | 6,021 | 996 | |
Workers' compensation and pneumoconiosis benefits | 9,287 | 9,065 | |
Current capital lease obligations | 1,305 | 1,288 | |
Other current liabilities | 15,436 | 18,625 | |
Current maturities, long-term debt | 230,000 | 36,750 | |
Total current liabilities | 431,886 | 212,551 | |
LONG-TERM LIABILITIES: | ' | ' | |
Long-term debt, excluding current maturities | 527,500 | 831,250 | |
Pneumoconiosis benefits | 52,131 | 48,455 | |
Accrued pension benefit | 16,290 | 18,182 | |
Workers' compensation | 52,603 | 54,949 | |
Asset retirement obligations | 76,660 | 80,807 | |
Long-term capital lease obligations | 16,005 | 17,135 | |
Other liabilities | 6,031 | 7,332 | |
Total long-term liabilities | 747,220 | 1,058,110 | |
Total liabilities | 1,179,106 | 1,270,661 | |
COMMITMENTS AND CONTINGENCIES | ' | ' | |
PARTNERS' CAPITAL: | ' | ' | |
Limited Partners - Common Unitholders 74,060,634 and 73,926,108 units outstanding, respectively | 1,266,269 | 1,128,519 | |
General Partners' deficit | -261,845 | -267,563 | |
Accumulated other comprehensive loss | -9,928 | -9,719 | |
Total Partners' Capital | 994,496 | 851,237 | |
TOTAL LIABILITIES AND PARTNERS' CAPITAL | $2,173,602 | $2,121,898 | |
[1] | Total assets for the White Oak and Other and Corporate segments include investments in affiliate of $200.1 million and $1.5 million, respectively, at September 30, 2014 and $122.7 million and $1.6 million, respectively, at September 30, 2013. |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) | Sep. 30, 2014 | Dec. 31, 2013 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ' | ' |
Limited Partners, Common Unitholders, units outstanding | 74,060,634 | 73,926,108 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (USD $) | 3 Months Ended | 9 Months Ended | ||||||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | ||||
SALES AND OPERATING REVENUES: | ' | ' | ' | ' | ||||
Coal sales | $548,357 | $518,447 | $1,649,093 | $1,594,530 | ||||
Transportation revenues | 6,001 | 11,554 | 17,816 | 23,459 | ||||
Other sales and operating revenues | 14,970 | 7,228 | 43,019 | 20,866 | ||||
Total revenues | 569,328 | [1] | 537,229 | [1] | 1,709,928 | [1] | 1,638,855 | [1] |
EXPENSES: | ' | ' | ' | ' | ||||
Operating expenses (excluding depreciation, depletion and amortization) | 349,170 | 346,045 | 1,024,305 | 1,042,057 | ||||
Transportation expenses | 6,001 | 11,554 | 17,816 | 23,459 | ||||
Outside coal purchases | 3 | 636 | 7 | 2,028 | ||||
General and administrative | 16,995 | 14,893 | 54,201 | 46,736 | ||||
Depreciation, depletion and amortization | 69,646 | 66,099 | 203,539 | 198,688 | ||||
Total operating expenses | 441,815 | 439,227 | 1,299,868 | 1,312,968 | ||||
INCOME FROM OPERATIONS | 127,513 | 98,002 | 410,060 | 325,887 | ||||
Interest expense (net of interest capitalized for the three months ended September 30, 2013 of $2,816 and the nine months ended September 30, 2014 and 2013 of $833 and $8,220, respectively) | -8,584 | -6,168 | -25,395 | -19,004 | ||||
Interest income | 432 | 252 | 1,238 | 564 | ||||
Equity in income (loss) of affiliates, net | 68 | -5,990 | -13,546 | -15,556 | ||||
Other income | 549 | 372 | 1,178 | 999 | ||||
INCOME BEFORE INCOME TAXES | 119,978 | 86,468 | 373,535 | 292,890 | ||||
INCOME TAX BENEFIT | ' | -718 | ' | -1,307 | ||||
NET INCOME | 119,978 | 87,186 | 373,535 | 294,197 | ||||
GENERAL PARTNERS' INTEREST IN NET INCOME | 35,316 | 31,052 | 103,465 | 91,414 | ||||
LIMITED PARTNERS' INTEREST IN NET INCOME | $84,662 | $56,134 | $270,070 | $202,783 | ||||
BASIC AND DILUTED NET INCOME PER LIMITED PARTNER UNIT (in dollars per unit) | $1.13 | [2] | $0.75 | [2] | $3.59 | [2] | $2.71 | [2] |
DISTRIBUTIONS PAID PER LIMITED PARTNER UNIT (in dollars per unit) | $0.63 | $0.58 | $1.84 | $1.70 | ||||
WEIGHTED AVERAGE NUMBER OF UNITS OUTSTANDING - BASIC AND DILUTED (in units) | 74,060,634 | 73,926,108 | 74,038,952 | 73,897,062 | ||||
[1] | Revenues included in the Other and Corporate column are primarily attributable to the Matrix Group revenues, Mt. Vernon transloading revenues, administrative service revenues from affiliates, brokerage sales and Pontikibs coal sales revenue (primarily 2013). | |||||||
[2] | Diluted EPU gives effect to all dilutive potential common units outstanding during the period using the treasury stock method. Diluted EPU excludes all dilutive potential units calculated under the treasury stock method if their effect is anti-dilutive. For the three and nine months ended September 30, 2014 and 2013, the combined total of LTIP, SERP and Deferred Compensation Plan units of 843,976, 710,518, 776,094, and 656,628 respectively, were considered anti-dilutive under the treasury stock method. |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Parenthetical) (USD $) | 3 Months Ended | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ' | ' | ' |
Interest expense, interest capitalized | $2,816 | $833 | $8,220 |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 3 Months Ended | 9 Months Ended | ||||||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | ||||
NET INCOME | $119,978 | $87,186 | $373,535 | $294,197 | ||||
OTHER COMPREHENSIVE (LOSS)/INCOME: | ' | ' | ' | ' | ||||
Total adjustments | -70 | 725 | -209 | 2,178 | ||||
TOTAL COMPREHENSIVE INCOME | 119,908 | 87,911 | 373,326 | 296,375 | ||||
Pension Plan | ' | ' | ' | ' | ||||
OTHER COMPREHENSIVE (LOSS)/INCOME: | ' | ' | ' | ' | ||||
Amortization of actuarial loss | 193 | [1] | 557 | [1] | 580 | [1] | 1,675 | [1] |
Total adjustments | 193 | 557 | 580 | 1,675 | ||||
Pneumoconiosis benefits | ' | ' | ' | ' | ||||
OTHER COMPREHENSIVE (LOSS)/INCOME: | ' | ' | ' | ' | ||||
Amortization of actuarial loss | -263 | [1] | 168 | [1] | -789 | [1] | 503 | [1] |
Total adjustments | ($263) | $168 | ($789) | $503 | ||||
[1] | Amortization of actuarial (gain)/loss is included in the computation of net periodic benefit cost (see Notes 8 and 10 for additional details). |
CONDENSED_CONSOLIDATED_STATEME3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ' | ' |
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES | $586,393 | $550,385 |
Property, plant and equipment: | ' | ' |
Capital expenditures | -233,659 | -242,653 |
Changes in accounts payable and accrued liabilities | 145 | -354 |
Proceeds from sale of property, plant and equipment | 272 | 124 |
Proceeds from insurance settlement for property, plant and equipment | 4,512 | ' |
Purchases of equity investments in affiliate | -85,250 | -47,500 |
Payments to affiliate for acquisition and development of coal reserves | -1,401 | -21,318 |
Advances/loans to affiliate | ' | -7,500 |
Net cash used in investing activities | -315,381 | -319,201 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' |
Payments under term loan | -12,500 | ' |
Borrowings under revolving credit facilities | 221,800 | 211,000 |
Payments under revolving credit facilities | -301,800 | -216,000 |
Payment on long-term debt | -18,000 | -18,000 |
Payments on capital lease obligations | -1,113 | -886 |
Net settlement of employee withholding taxes on vesting of Long-Term Incentive Plan | -2,991 | -3,015 |
Cash contributions by General Partners | 111 | 114 |
Distributions paid to Partners | -235,344 | -213,809 |
Net cash used in financing activities | -349,837 | -240,596 |
NET CHANGE IN CASH AND CASH EQUIVALENTS | -78,825 | -9,412 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 93,654 | 28,283 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 14,829 | 18,871 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ' | ' |
Cash paid for interest | 20,381 | 21,638 |
NON-CASH INVESTING AND FINANCING ACTIVITY: | ' | ' |
Accounts payable for purchase of property, plant and equipment | 18,069 | 20,618 |
Market value of common units issued under Long-Term Incentive and Directors Deferred Compensation Plans before minimum statutory tax withholding requirements | 8,417 | 8,583 |
Disposition of property, plant and equipment: | ' | ' |
Net change in assets | 846 | ' |
Book value of liabilities transferred | -5,246 | ' |
Gain recognized | ($4,400) | ' |
ORGANIZATION_AND_PRESENTATION
ORGANIZATION AND PRESENTATION | 9 Months Ended | |||
Sep. 30, 2014 | ||||
ORGANIZATION AND PRESENTATION | ' | |||
ORGANIZATION AND PRESENTATION | ' | |||
1.ORGANIZATION AND PRESENTATION | ||||
Significant Relationships Referenced in Notes to Condensed Consolidated Financial Statements | ||||
· | References to “we,” “us,” “our” or “ARLP Partnership” mean the business and operations of Alliance Resource Partners, L.P., the parent company, as well as its consolidated subsidiaries. | |||
· | References to “ARLP” mean Alliance Resource Partners, L.P., individually as the parent company, and not on a consolidated basis. | |||
· | References to “MGP” mean Alliance Resource Management GP, LLC, the managing general partner of Alliance Resource Partners, L.P., also referred to as our managing general partner. | |||
· | References to “SGP” mean Alliance Resource GP, LLC, the special general partner of Alliance Resource Partners, L.P., also referred to as our special general partner. | |||
· | References to “Intermediate Partnership” mean Alliance Resource Operating Partners, L.P., the intermediate partnership of Alliance Resource Partners, L.P., also referred to as our intermediate partnership. | |||
· | References to “Alliance Coal” mean Alliance Coal, LLC, the holding company for the operations of Alliance Resource Operating Partners, L.P., also referred to as our operating subsidiary. | |||
· | References to “AHGP” mean Alliance Holdings GP, L.P., individually as the parent company, and not on a consolidated basis. | |||
· | References to “AGP” mean Alliance GP, LLC, the general partner of Alliance Holdings GP, L.P. | |||
Organization | ||||
ARLP is a Delaware limited partnership listed on the NASDAQ Global Select Market under the ticker symbol “ARLP.” ARLP was formed in May 1999 to acquire, upon completion of ARLP’s initial public offering on August 19, 1999, certain coal production and marketing assets of Alliance Resource Holdings, Inc., a Delaware corporation (“ARH”), consisting of substantially all of ARH’s operating subsidiaries, but excluding ARH. ARH is owned by Joseph W. Craft III, the President and Chief Executive Officer and a Director of our managing general partner, and Kathleen S. Craft. SGP, a Delaware limited liability company, is owned by ARH and holds a 0.01% general partner interest in each of ARLP and the Intermediate Partnership. | ||||
We are managed by our managing general partner, MGP, a Delaware limited liability company, which holds a 0.99% and a 1.0001% managing general partner interest in ARLP and the Intermediate Partnership, respectively, and a 0.001% managing member interest in Alliance Coal. AHGP is a Delaware limited partnership that was formed to become the owner and controlling member of MGP. AHGP completed its initial public offering on May 15, 2006. AHGP owns directly and indirectly 100% of the members’ interest of MGP, the incentive distribution rights (“IDR”) in ARLP and 31,088,338 common units of ARLP. | ||||
Basis of Presentation | ||||
The accompanying condensed consolidated financial statements include the accounts and operations of the ARLP Partnership and present our financial position as of September 30, 2014 and December 31, 2013, the results of our operations and comprehensive income for the three and nine months ended September 30, 2014 and 2013 and the cash flows for the nine months ended September 30, 2014 and 2013. All of our intercompany transactions and accounts have been eliminated. | ||||
These condensed consolidated financial statements and notes are unaudited. However, in the opinion of management, these financial statements reflect all adjustments (which include only normal recurring adjustments) necessary for a fair presentation of the results for the periods presented. Results for interim periods are not necessarily indicative of results for a full year. | ||||
These condensed consolidated financial statements and notes are prepared pursuant to the rules and regulations of the Securities and Exchange Commission for interim reporting and should be read in conjunction with the consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2013. | ||||
On June 16, 2014, we completed a two-for-one split of our common units, whereby holders of record as of May 30, 2014 received a one unit distribution on each unit outstanding on that date. The unit split resulted in the issuance of 37,030,317 common units. All references to the number of units and per unit net income and distribution amounts included in this report have been adjusted to give effect for this unit split for all periods presented. Also, ARLP’s partnership agreement was amended effective June 16, 2014, to reduce by half the target thresholds for the incentive distribution rights per unit. | ||||
Use of Estimates | ||||
The preparation of the ARLP Partnership’s condensed consolidated financial statements in conformity with generally accepted accounting principles (“GAAP”) of the United States (“U.S.”) requires management to make estimates and assumptions that affect the reported amounts and disclosures in our condensed consolidated financial statements. Actual results could differ from those estimates. | ||||
NEW_ACCOUNTING_STANDARDS
NEW ACCOUNTING STANDARDS | 9 Months Ended |
Sep. 30, 2014 | |
NEW ACCOUNTING STANDARDS | ' |
NEW ACCOUNTING STANDARDS | ' |
2.NEW ACCOUNTING STANDARDS | |
New Accounting Standards Issued and Not Yet Adopted | |
In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity (“ASU 2014-08”). ASU 2014-08 changes the requirements for reporting discontinued operations in Accounting Standards Codification 205, Presentation of Financial Statements, by updating the criteria for determining which disposals can be presented as discontinued operations and requires new disclosures of both discontinued operations and certain other disposals that do not meet the definition of discontinued operations. ASU 2014-08 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2014. We do not anticipate the adoption of ASU 2014-08 on January 1, 2015 will have a material impact on our consolidated financial statements. | |
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). ASU 2014-09 is a new revenue recognition standard that provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle of the new standard is an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016 and shall be applied retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. Early adoption is not permitted. We are currently evaluating the effect of adopting ASU 2014-09 on January 1, 2017. | |
In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”). ASU 2014-15 provides guidance on management’s responsibility in evaluating whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. ASU 2014-15 is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter with early adoption permitted. We do not anticipate the adoption of ASU 2014-15 will have a material impact on our consolidated financial statements. | |
CONTINGENCIES
CONTINGENCIES | 9 Months Ended |
Sep. 30, 2014 | |
CONTINGENCIES | ' |
CONTINGENCIES | ' |
3.CONTINGENCIES | |
Various lawsuits, claims and regulatory proceedings incidental to our business are pending against the ARLP Partnership. We record an accrual for a potential loss related to these matters when, in management’s opinion, such loss is probable and reasonably estimable. Based on known facts and circumstances, we believe the ultimate outcome of these outstanding lawsuits, claims and regulatory proceedings will not have a material adverse effect on our financial condition, results of operations or liquidity. However, if the results of these matters were different from management’s current opinion and in amounts greater than our accruals, then they could have a material adverse effect. | |
FAIR_VALUE_MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended | |||
Sep. 30, 2014 | ||||
FAIR VALUE MEASUREMENTS | ' | |||
FAIR VALUE MEASUREMENTS | ' | |||
4.FAIR VALUE MEASUREMENTS | ||||
We apply the provisions of FASB ASC 820, Fair Value Measurement, which, among other things, defines fair value, requires disclosures about assets and liabilities carried at fair value and establishes a hierarchal disclosure framework based upon the quality of inputs used to measure fair value. | ||||
Valuation techniques are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our own market assumptions. These two types of inputs create the following fair value hierarchy: | ||||
· | Level 1 – Quoted prices for identical instruments in active markets. | |||
· | Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model derived valuations whose inputs are observable or whose significant value drivers are observable. | |||
· | Level 3 – Instruments whose significant value drivers are unobservable. | |||
The carrying amounts for cash equivalents, accounts receivable, accounts payable, due from affiliates and due to affiliates approximate fair value because of the short maturity of those instruments. At September 30, 2014 and December 31, 2013, the estimated fair value of our long-term debt, including current maturities, was approximately $776.1 million and $884.8 million, respectively, based on interest rates that we believe are currently available to us for issuance of debt with similar terms and remaining maturities (Note 5). The fair value of debt, which is based upon interest rates for similar instruments in active markets, is classified as a Level 2 measurement under the fair value hierarchy. | ||||
LONGTERM_DEBT
LONG-TERM DEBT | 9 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
LONG-TERM DEBT | ' | ||||||||||
LONG-TERM DEBT | ' | ||||||||||
5.LONG-TERM DEBT | |||||||||||
Long-term debt consists of the following (in thousands): | |||||||||||
September 30, | December 31, | ||||||||||
2014 | 2013 | ||||||||||
Revolving Credit facility | $ | 170,000 | $ | 250,000 | |||||||
Senior notes | - | 18,000 | |||||||||
Series A senior notes | 205,000 | 205,000 | |||||||||
Series B senior notes | 145,000 | 145,000 | |||||||||
Term loan | 237,500 | 250,000 | |||||||||
757,500 | 868,000 | ||||||||||
Less current maturities | (230,000 | ) | (36,750 | ) | |||||||
Total long-term debt | $ | 527,500 | $ | 831,250 | |||||||
Our Intermediate Partnership has $205.0 million in Series A and $145.0 million in Series B senior notes (collectively, the “2008 Senior Notes”), a $700.0 million revolving credit facility (“Revolving Credit Facility”) and a $237.5 million term loan (“Term Loan”) (collectively, with the 2008 Senior Notes and the Revolving Credit Facility, the “ARLP Debt Arrangements”), which are guaranteed by all of the material direct and indirect subsidiaries of our Intermediate Partnership. At September 30, 2014, current maturities include Series A Senior notes, due in June 2015, and a portion of the Term Loan. The ARLP Debt Arrangements contain various covenants affecting our Intermediate Partnership and its subsidiaries restricting, among other things, the amount of distributions by our Intermediate Partnership, incurrence of additional indebtedness and liens, sale of assets, investments, mergers and consolidations and transactions with affiliates, in each case subject to various exceptions. The ARLP Debt Arrangements also require the Intermediate Partnership to remain in control of a certain amount of mineable coal reserves relative to its annual production. In addition, the ARLP Debt Arrangements require our Intermediate Partnership to maintain (a) debt to cash flow ratio of not more than 3.0 to 1.0 and (b) cash flow to interest expense ratio of not less than 3.0 to 1.0, in each case, during the four most recently ended fiscal quarters. The debt to cash flow ratio and cash flow to interest expense ratio were 0.97 to 1.0 and 22.9 to 1.0, respectively, for the trailing twelve months ended September 30, 2014. We were in compliance with the covenants of the ARLP Debt Arrangements as of September 30, 2014. | |||||||||||
At September 30, 2014, we had borrowings of $170.0 million and $5.4 million of letters of credit outstanding with $524.6 million available for borrowing under the Revolving Credit Facility. We utilize the Revolving Credit Facility, as appropriate, for working capital requirements, capital expenditures and investments in affiliates, scheduled debt payments and distribution payments. We incur an annual commitment fee of 0.25% on the undrawn portion of the Revolving Credit Facility. | |||||||||||
WHITE_OAK_TRANSACTIONS
WHITE OAK TRANSACTIONS | 9 Months Ended |
Sep. 30, 2014 | |
WHITE OAK TRANSACTIONS | ' |
WHITE OAK TRANSACTIONS | ' |
6.WHITE OAK TRANSACTIONS | |
On September 22, 2011 (the “Transaction Date”), we entered into a series of transactions with White Oak Resources LLC (“White Oak”) and related entities to support development of a longwall mining operation. The initial longwall system commenced operation in late October 2014. The transactions with White Oak feature several components, including an equity investment in White Oak (represented by “Series A Units” containing certain distribution and liquidation preferences), the acquisition and lease-back of certain coal reserves and surface rights and a construction loan. Our initial investment funding to White Oak at the Transaction Date, consummated utilizing existing cash on hand, was $69.5 million and we have funded White Oak $303.3 million between the Transaction Date and September 30, 2014. We expect to fund a total of approximately $395.5 million to $435.5 million from the Transaction Date through December 31, 2015, which includes the funding made to White Oak through September 30, 2014 discussed above. We will continue to assess and provide funding, as needed, to White Oak after December 31, 2015. We expect to fund additional commitments utilizing existing cash balances, future cash flows from operations, borrowings under credit facilities and cash provided from the issuance of debt or equity. On the Transaction Date, we also entered into a coal handling and preparation agreement, pursuant to which we constructed and are operating a preparation plant and other surface facilities. The following information discusses each component of these transactions in further detail. | |
Hamilton County, Illinois Reserve Acquisition | |
On the Transaction Date, Alliance WOR Properties, LLC (“WOR Properties”) acquired from White Oak the rights to approximately 204.9 million tons of proven and probable high-sulfur coal reserves, of which 105.2 million tons have been developed for mining by White Oak, and certain surface properties and rights in Hamilton County, Illinois (the “Reserve Acquisition”), which is adjacent to White County, Illinois, where our White County Coal, LLC’s Pattiki mine is located. The asset purchase price of $33.8 million cash paid at closing was allocated to owned and leased coal rights. Between the Transaction Date and December 31, 2012, WOR Properties provided $51.6 million to White Oak for development of the acquired coal reserves, fulfilling its initial commitment for further development funding. During the twelve months ended December 31, 2013, WOR Properties acquired from White Oak, for $25.3 million cash paid at various closings, an additional 90.1 million tons of reserves. During the nine months ended September 30, 2014, WOR Properties acquired from White Oak, for $1.4 million cash paid at closing, an additional 5.1 million tons of reserves. Of the additional tons acquired in 2013 and the nine months ended September 30, 2014, 48.5 million tons have been developed for mining by White Oak. At September 30, 2014, WOR Properties had provided $112.1 million to acquire a total of 300.1 million tons of coal reserves and fund the development of the acquired reserves. WOR Properties has a remaining commitment of $27.9 million for additional coal reserve acquisitions. | |
Equity Investment – Series A Units | |
Concurrent with the Reserve Acquisition, our subsidiary, Alliance WOR Processing, LLC (“WOR Processing”), made an initial equity investment of $35.7 million in White Oak to purchase Series A Units representing ownership in White Oak. WOR Processing purchased $129.3 million of additional Series A Units between the Transaction Date and December 31, 2013, and fulfilled WOR Processing’s minimum equity investment commitment of $150.0 million. During the nine months ended September 30, 2014, WOR Processing purchased $85.3 million of additional Series A Units, bringing our total investment in Series A Units to $250.3 million at September 30, 2014. | |
WOR Processing’s ownership and member’s voting interest in White Oak at September 30, 2014 were 37.5% based upon currently outstanding voting units. The remainder of the equity ownership in White Oak, represented by Series A and B Units, is held by other investors and members of White Oak management. | |
We continually review all rights provided to WOR Processing and us by various agreements with White Oak and continue to conclude that all such rights are protective or participating in nature and do not provide WOR Processing or us the ability to unilaterally direct any of the primary activities of White Oak that most significantly impact its economic performance. As such, we recognize WOR Processing’s interest in White Oak as an equity investment in affiliate in our consolidated balance sheets. As of September 30, 2014, WOR Processing had invested $250.3 million in Series A Units of White Oak equity, which represents our current maximum exposure to loss as a result of our equity investment in White Oak exclusive of capitalized interest. White Oak has made no distributions to us. | |
We record WOR Processing’s equity in income or losses of affiliates under the hypothetical liquidation at book value (“HLBV”) method of accounting due to the preferences to which WOR Processing is entitled to distributions. We were allocated $39,000 of losses for the three months ended September 30, 2014 due primarily to losses incurred by White Oak offset in part by the impact of changes in allocations of equity income or losses resulting from the purchase of Series A Units during the period by another White Oak owner concurrent with the continued purchase of Series A Units by WOR Processing. Series A Unit purchases impact the future preferred distributions allocable to each owner and the ongoing allocation of income and losses for GAAP purposes under the HLBV method. For the three months ended September 30, 2013, we were allocated losses of $6.2 million. For the nine months ended September 30, 2014 and 2013, we were allocated losses of $13.8 million and $16.3 million, respectively. | |
Services Agreement | |
Simultaneous with the closing of the Reserve Acquisition, WOR Processing entered into a Coal Handling and Preparation Agreement with White Oak pursuant to which WOR Processing committed to construct and operate a coal preparation plant and related facilities and a rail loop and loadout facility to service the White Oak longwall Mine No. 1. WOR Processing earned throughput fees of $2.7 million and $10.1 million, for the three and nine months ended September 30, 2014, respectively, and $0.6 million for each of the three and nine months ended September 30, 2013, from White Oak for processing and loading coal through the facilities. Throughput fees earned from White Oak are included in the other sales and operating revenues line item within our condensed consolidated statements of income. | |
In addition, the Intermediate Partnership agreed to loan $10.5 million to White Oak for the construction of various assets on the surface property, including a bathhouse, office and warehouse (“Construction Loan”). The Construction Loan has a term of 20 years, with repayment scheduled to begin in 2015. White Oak had borrowed the entire amount available under the Construction Loan as of September 30, 2014. | |
NET_INCOME_PER_LIMITED_PARTNER
NET INCOME PER LIMITED PARTNER UNIT | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
NET INCOME PER LIMITED PARTNER UNIT | ' | ||||||||||||
NET INCOME PER LIMITED PARTNER UNIT | ' | ||||||||||||
7.NET INCOME PER LIMITED PARTNER UNIT | |||||||||||||
We apply the provisions of FASB ASC 260, Earnings Per Share, which requires the two-class method in calculating basic and diluted earnings per unit (“EPU”). Net income is allocated to the general partners and limited partners in accordance with their respective partnership percentages, after giving effect to any special income or expense allocations, including incentive distributions to our managing general partner, the holder of the IDR pursuant to our partnership agreement, which are declared and paid following the end of each quarter. Under the quarterly IDR provisions of our partnership agreement, our managing general partner is entitled to receive 15% of the amount we distribute in excess of $0.1375 per unit, 25% of the amount we distribute in excess of $0.15625 per unit, and 50% of the amount we distribute in excess of $0.1875 per unit. Our partnership agreement contractually limits our distributions to available cash; therefore, undistributed earnings of the ARLP Partnership are not allocated to the IDR holder. In addition, outstanding awards under our Long-Term Incentive Plan (“LTIP”) and phantom units in notional accounts under our Supplemental Executive Retirement Plan (“SERP”) and the MGP Amended and Restated Deferred Compensation Plan for Directors (“Deferred Compensation Plan”) include rights to nonforfeitable distributions or distribution equivalents and are therefore considered participating securities. As such, we allocate undistributed and distributed earnings to these outstanding awards in our calculation of EPU. The following is a reconciliation of net income used for calculating basic earnings per unit and the weighted average units used in computing EPU for the three and nine months ended September 30, 2014 and 2013 (in thousands, except per unit data): | |||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||
September 30, | September 30, | ||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||
Net income | $ | 119,978 | $ | 87,186 | $ | 373,535 | $ | 294,197 | |||||
Adjustments: | |||||||||||||
Managing general partner’s priority distributions | -33,588 | -29,906 | -97,954 | -87,275 | |||||||||
General partners’ 2% equity ownership | -1,728 | -1,146 | -5,511 | -4,139 | |||||||||
Limited partners’ interest in net income | 84,662 | 56,134 | 270,070 | 202,783 | |||||||||
Less: | |||||||||||||
Distributions to participating securities | -751 | -597 | -2,188 | -1,749 | |||||||||
Undistributed earnings attributable to participating securities | -585 | -167 | -2,027 | -1,012 | |||||||||
Net income available to limited partners | $ | 83,326 | $ | 55,370 | $ | 265,855 | $ | 200,022 | |||||
Weighted average limited partner units outstanding – basic and diluted | 74,061 | 73,926 | 74,039 | 73,897 | |||||||||
Basic and diluted net income per limited partner unit (1) | $ | 1.13 | $ | 0.75 | $ | 3.59 | $ | 2.71 | |||||
-1 | Diluted EPU gives effect to all dilutive potential common units outstanding during the period using the treasury stock method. Diluted EPU excludes all dilutive potential units calculated under the treasury stock method if their effect is anti-dilutive. For the three and nine months ended September 30, 2014 and 2013, the combined total of LTIP, SERP and Deferred Compensation Plan units of 843,976, 710,518, 776,094 and 656,628 respectively, were considered anti-dilutive under the treasury stock method. | ||||||||||||
WORKERS_COMPENSATION_AND_PNEUM
WORKERS' COMPENSATION AND PNEUMOCONIOSIS | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||
WORKERS' COMPENSATION AND PNEUMOCONIOSIS | ' | ||||||||||||||||||||
WORKERS' COMPENSATION AND PNEUMOCONIOSIS | ' | ||||||||||||||||||||
8.WORKERS’ COMPENSATION AND PNEUMOCONIOSIS | |||||||||||||||||||||
The changes in the workers’ compensation liability (including current and long-term liability balances) for each of the periods presented were as follows (in thousands): | |||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||
Beginning balance | $ | 61,515 | $ | 80,630 | $ | 62,909 | $ | 77,046 | |||||||||||||
Accruals increase | 1,291 | 452 | 8,755 | 8,399 | |||||||||||||||||
Payments | (2,667 | ) | (2,553 | ) | (8,194 | ) | (8,156 | ) | |||||||||||||
Interest accretion | 646 | 621 | 1,939 | 1,861 | |||||||||||||||||
Valuation gain (1) | - | - | (4,624 | ) | - | ||||||||||||||||
Ending balance | $ | 60,785 | $ | 79,150 | $ | 60,785 | $ | 79,150 | |||||||||||||
-1 | Our liability for the estimated present value of current workers' compensation benefits is based on our actuarial estimates. Our actuarial calculations are based on a blend of actuarial projection methods and numerous assumptions including claim development patterns, mortality, medical costs and interest rates. We conducted a mid-year review of our actuarial assumptions which resulted in a valuation gain in June 2014 primarily attributable to favorable changes in claims development, offset partially by a decrease in the discount rate used to calculate the estimated present value of future obligations from 4.11% at December 31, 2013 to 3.67% at June 30, 2014. | ||||||||||||||||||||
Certain of our mine operating entities are liable under state statutes and the Federal Coal Mine Health and Safety Act of 1969, as amended, to pay pneumoconiosis, or black lung, benefits to eligible employees and former employees and their dependents. Components of the net periodic benefit cost for each of the periods presented are as follows (in thousands): | |||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||
Service cost | $ | 857 | $ | 953 | $ | 2,571 | $ | 2,858 | |||||||||||||
Interest cost | 566 | 563 | 1,697 | 1,690 | |||||||||||||||||
Amortization of net (gain)/loss (1) | (263 | ) | 168 | (789 | ) | 503 | |||||||||||||||
Net periodic benefit cost | $ | 1,160 | $ | 1,684 | $ | 3,479 | $ | 5,051 | |||||||||||||
-1 | Amortization of net (gain)/loss is included in the operating expenses line item within our condensed consolidated statements of income. | ||||||||||||||||||||
COMPENSATION_PLANS
COMPENSATION PLANS | 9 Months Ended |
Sep. 30, 2014 | |
COMPENSATION PLANS | ' |
COMPENSATION PLANS | ' |
9.COMPENSATION PLANS | |
Long-Term Incentive Plan | |
We have the LTIP for certain employees and officers of our managing general partner and its affiliates who perform services for us. The LTIP awards are grants of non-vested “phantom” or notional units, which upon satisfaction of vesting requirements, entitle the LTIP participant to receive ARLP common units. Annual grant levels and vesting provisions for designated participants are recommended by our President and Chief Executive Officer, subject to review and approval of the compensation committee of the MGP board of directors (the “Compensation Committee”). On January 22, 2014, the Compensation Committee determined that the vesting requirements for the 2011 grants of 202,742 restricted units (which is net of 14,090 forfeitures) had been satisfied as of January 1, 2014. As a result of this vesting, on February 14, 2014, we issued 128,610 unrestricted common units to the LTIP participants. The remaining units were settled in cash to satisfy the individual statutory minimum tax obligations of the LTIP participants. On January 22, 2014, the Compensation Committee authorized additional grants of up to 370,410 restricted units, of which 356,154 were granted during the nine months ended September 30, 2014 and will vest on January 1, 2017, subject to satisfaction of certain financial tests. The fair value of these 2014 grants is equal to the intrinsic value at the date of grant, which was $40.72 per unit. LTIP expense was $2.5 million and $1.8 million for the three months ended September 30, 2014 and 2013, respectively, and $7.1 million and $5.4 million for the nine months ended September 30, 2014 and 2013, respectively. After consideration of the January 1, 2014 vesting and subsequent issuance of 128,610 common units, approximately 3.9 million units remain available under the LTIP for issuance in the future, assuming all grants issued in 2012, 2013 and 2014 currently outstanding are settled with common units, without reduction for tax withholding, and no future forfeitures occur. | |
As of September 30, 2014, there was $15.1 million in total unrecognized compensation expense related to the non-vested LTIP grants that are expected to vest. That expense is expected to be recognized over a weighted-average period of 1.4 years. As of September 30, 2014, the intrinsic value of the non-vested LTIP grants was $36.3 million. As of September 30, 2014, the total obligation associated with the LTIP was $15.4 million and is included in the partners’ capital-limited partners line item in our condensed consolidated balance sheets. | |
As provided under the distribution equivalent rights provisions of the LTIP, all non-vested grants include contingent rights to receive quarterly cash distributions in an amount equal to the cash distributions we make to unitholders during the vesting period. | |
SERP and Directors Deferred Compensation Plan | |
We utilize the SERP to provide deferred compensation benefits for certain officers and key employees. All allocations made to participants under the SERP are made in the form of “phantom” ARLP units. The SERP is administered by the Compensation Committee. | |
Our directors participate in the Deferred Compensation Plan. Pursuant to the Deferred Compensation Plan, for amounts deferred either automatically or at the election of the director, a notional account is established and credited with notional common units of ARLP, described in the Deferred Compensation Plan as “phantom” units. | |
For both the SERP and Deferred Compensation Plan, when quarterly cash distributions are made with respect to ARLP common units, an amount equal to such quarterly distribution is credited to each participant’s notional account as additional phantom units. All grants of phantom units under the SERP and Deferred Compensation Plan vest immediately. | |
For the nine months ended September 30, 2014 and 2013, SERP and Deferred Compensation Plan participant notional account balances were credited with a total of 15,860 and 21,670 phantom units, respectively, and the fair value of these phantom units was $44.47 per unit and $34.16 per unit, respectively, on a weighted-average basis. Total SERP and Deferred Compensation Plan expense was approximately $0.3 million for each of the three months ended September 30, 2014 and 2013, and $0.9 million for each of the nine months ended September 30, 2014 and 2013. | |
As of September 30, 2014, there were 357,264 total phantom units outstanding under the SERP and Deferred Compensation Plan and the total intrinsic value of the SERP and Deferred Compensation Plan phantom units was $15.3 million. As of September 30, 2014, the total obligation associated with the SERP and Deferred Compensation Plan was $12.0 million and is included in the partners’ capital-limited partners line item in our condensed consolidated balance sheets. On February 14, 2014, we issued 5,916 ARLP common units to directors under the Deferred Compensation Plan. | |
COMPONENTS_OF_PENSION_PLAN_NET
COMPONENTS OF PENSION PLAN NET PERIODIC BENEFIT COSTS | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||
COMPONENTS OF PENSION PLAN NET PERIODIC BENEFIT COSTS | ' | ||||||||||||||||||||
COMPONENTS OF PENSION PLAN NET PERIODIC BENEFIT COSTS | ' | ||||||||||||||||||||
10.COMPONENTS OF PENSION PLAN NET PERIODIC BENEFIT COSTS | |||||||||||||||||||||
Eligible employees at certain of our mining operations participate in a defined benefit plan (the “Pension Plan”) that we sponsor. The benefit formula for the Pension Plan is a fixed dollar unit based on years of service. | |||||||||||||||||||||
Components of the net periodic benefit cost for each of the periods presented are as follows (in thousands): | |||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||
Service cost | $ | 543 | $ | 674 | $ | 1,630 | $ | 2,108 | |||||||||||||
Interest cost | 1,019 | 929 | 3,056 | 2,710 | |||||||||||||||||
Expected return on plan assets | (1,368 | ) | (930 | ) | (4,106 | ) | (3,094 | ) | |||||||||||||
Amortization of net loss (1) | 193 | 557 | 580 | 1,675 | |||||||||||||||||
Net periodic benefit cost | $ | 387 | $ | 1,230 | $ | 1,160 | $ | 3,399 | |||||||||||||
(1)Amortization of net loss is included in the operating expenses line item within our condensed consolidated statements of income. | |||||||||||||||||||||
We previously disclosed in our financial statements for the year ended December 31, 2013 that we expected to contribute $3.6 million to the Pension Plan in 2014. During the nine months ended September 30, 2014, we made contribution payments of $0.8 million to the Pension Plan for the 2013 plan year and $1.7 million for the 2014 plan year. On October 15, 2014, we made a contribution payment of $0.2 million for the 2014 plan year. | |||||||||||||||||||||
On August 8, 2014, new federal legislation extending the Moving Ahead for Progress in the 21st Century Act was passed, which includes a provision aimed at stabilizing the interest rates used to calculate pension plan liabilities for pension funding purposes. We anticipate that as a result of this new legislation, we will not make any further contributions during 2014 beyond the $2.7 million noted above. | |||||||||||||||||||||
SEGMENT_INFORMATION
SEGMENT INFORMATION | 9 Months Ended | ||||||||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||||||||
SEGMENT INFORMATION | ' | ||||||||||||||||||||||||||||||
SEGMENT INFORMATION | ' | ||||||||||||||||||||||||||||||
11.SEGMENT INFORMATION | |||||||||||||||||||||||||||||||
We operate in the eastern U.S. as a producer and marketer of coal to major utilities and industrial users. We aggregate multiple operating segments into four reportable segments: the Illinois Basin, Appalachia, White Oak and Other and Corporate. The first two reportable segments correspond to major coal producing regions in the eastern U.S. Similar economic characteristics for our operating segments within each of these two reportable segments generally include coal quality, geology, coal marketing opportunities, mining and transportation methods and regulatory issues. The White Oak reportable segment includes our activities associated with the White Oak longwall Mine No. 1, which commenced initial longwall operation in late October 2014. | |||||||||||||||||||||||||||||||
The Illinois Basin reportable segment is comprised of multiple operating segments, including Webster County Coal, LLC’s Dotiki mining complex, Gibson County Coal, LLC’s mining complex, which includes the Gibson North mine and Gibson South mine, Hopkins County Coal, LLC’s Elk Creek mining complex, White County Coal, LLC’s Pattiki mining complex, Warrior Coal, LLC’s mining complex, Sebree Mining, LLC’s mining complex, which includes the Onton mine, and River View Coal, LLC’s mining complex. The development of the Gibson South mine continues and includes incidental production which began in April 2014. | |||||||||||||||||||||||||||||||
The Appalachian reportable segment is comprised of multiple operating segments, including the Mettiki mining complex, the Tunnel Ridge, LLC mining complex, the MC Mining, LLC mining complex and the Penn Ridge Coal, LLC (“Penn Ridge”) property. The Mettiki mining complex includes Mettiki Coal (WV), LLC’s Mountain View mine, Mettiki Coal, LLC’s preparation plant and a small third-party mining operation which has been idled since July 2013. We are in the process of permitting the Penn Ridge property for future mine development. | |||||||||||||||||||||||||||||||
The White Oak reportable segment is comprised of two operating segments, WOR Processing and WOR Properties. WOR Processing includes both the surface operations at White Oak and the equity investment in White Oak. WOR Properties owns coal reserves acquired from White Oak under lease-back arrangements (Note 6). | |||||||||||||||||||||||||||||||
The Other and Corporate segment includes marketing and administrative expenses, Alliance Service, Inc. (“ASI”) and its subsidiary, Matrix Design Group, LLC (“Matrix Design”), Alliance Design Group, LLC (“Alliance Design”) (collectively, Matrix Design and Alliance Design are referred to as the “Matrix Group”), ASI’s ownership of aircraft, the Mt. Vernon Transfer Terminal, LLC (“Mt. Vernon”) dock activities, coal brokerage activity, our equity investment in Mid-America Carbonates, LLC, certain activities of Alliance Resource Properties, the Pontiki Coal, LLC mining complex (“Pontiki”), which ceased operations in November 2013 and sold most of its assets in May 2014, and Wildcat Insurance, LLC. | |||||||||||||||||||||||||||||||
As a result of the cessation of operations at Pontiki in November 2013, we evaluated the ongoing management of our mining operations and coal sales efforts to ensure that resources were appropriately allocated to maximize our overall results. Based on this evaluation, we have realigned the management of our operating and marketing teams and changed our reportable segment presentation to reflect this realignment. Due to the change in our reportable segment presentation in 2014, certain reclassifications of 2013 segment information have been made to conform to the 2014 presentation. These reclassifications include changes to the Appalachian segment and Other and Corporate segment. | |||||||||||||||||||||||||||||||
Reportable segment results as of and for the three and nine months ended September 30, 2014 and 2013 are presented below. | |||||||||||||||||||||||||||||||
Illinois | Appalachia | White Oak | Other and | Elimination | Consolidated | ||||||||||||||||||||||||||
Basin | Corporate | -1 | |||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||
Reportable segment results for the three months ended September 30, 2014 were as follows: | |||||||||||||||||||||||||||||||
Total revenues (2) | $ | 392,401 | $ | 167,391 | $ | 3,583 | $ | 7,730 | $ | (1,777 | ) | $ | 569,328 | ||||||||||||||||||
Segment Adjusted EBITDA Expense (3) | 245,481 | 95,956 | 2,144 | 6,820 | (1,777 | ) | 348,624 | ||||||||||||||||||||||||
Segment Adjusted EBITDA (4)(5) | 143,854 | 68,501 | 1,401 | 1,015 | - | 214,771 | |||||||||||||||||||||||||
Capital expenditures (7) | 62,583 | 13,371 | 247 | 2,880 | - | 79,081 | |||||||||||||||||||||||||
Reportable segment results for the three months ended September 30, 2013 were as follows: | |||||||||||||||||||||||||||||||
Total revenues (2) | $ | 405,597 | $ | 111,789 | $ | 566 | $ | 23,530 | $ | (4,253 | ) | $ | 537,229 | ||||||||||||||||||
Segment Adjusted EBITDA Expense (3) | 239,962 | 89,578 | 546 | 20,476 | (4,253 | ) | 346,309 | ||||||||||||||||||||||||
Segment Adjusted EBITDA (4)(5) | 156,790 | 19,504 | (6,190 | ) | 3,272 | - | 173,376 | ||||||||||||||||||||||||
Capital expenditures (7) | 58,569 | 14,528 | 6,632 | 2,352 | - | 82,081 | |||||||||||||||||||||||||
Reportable segment results as of and for the nine months ended September 30, 2014 were as follows: | |||||||||||||||||||||||||||||||
Total revenues (2) | $ | 1,213,426 | $ | 468,671 | $ | 11,451 | $ | 23,660 | $ | (7,280 | ) | $ | 1,709,928 | ||||||||||||||||||
Segment Adjusted EBITDA Expense (3) | 731,014 | 275,446 | 5,160 | 18,794 | (7,280 | ) | 1,023,134 | ||||||||||||||||||||||||
Segment Adjusted EBITDA (4)(5) | 473,362 | 184,460 | (7,511 | ) | 5,121 | - | 655,432 | ||||||||||||||||||||||||
Total assets (6) | 1,136,731 | 591,516 | 390,013 | 56,742 | (1,400 | ) | 2,173,602 | ||||||||||||||||||||||||
Capital expenditures (7) | 180,458 | 42,040 | 2,426 | 10,136 | - | 235,060 | |||||||||||||||||||||||||
Reportable segment results as of and for the nine months ended September 30, 2013 were as follows: | |||||||||||||||||||||||||||||||
Total revenues (2) | $ | 1,210,806 | $ | 367,733 | $ | 566 | $ | 74,559 | $ | (14,809 | ) | $ | 1,638,855 | ||||||||||||||||||
Segment Adjusted EBITDA Expense (3) | 707,810 | 282,056 | 1,074 | 66,955 | (14,809 | ) | 1,043,086 | ||||||||||||||||||||||||
Segment Adjusted EBITDA (4)(5) | 488,634 | 76,581 | (16,777 | ) | 8,316 | - | 556,754 | ||||||||||||||||||||||||
Total assets (6) | 1,064,268 | 605,759 | 306,002 | 71,484 | (865 | ) | 2,046,648 | ||||||||||||||||||||||||
Capital expenditures (7) | 163,595 | 58,947 | 35,502 | 5,927 | - | 263,971 | |||||||||||||||||||||||||
-1 | The elimination column represents the elimination of intercompany transactions and is primarily comprised of sales from the Matrix Group to our mining operations and coal sales and purchases between mining operations (2013 only). | ||||||||||||||||||||||||||||||
-2 | Revenues included in the Other and Corporate column are primarily attributable to the Matrix Group revenues, Mt. Vernon transloading revenues, administrative service revenues from affiliates, brokerage sales and Pontiki’s coal sales revenue (primarily 2013). | ||||||||||||||||||||||||||||||
-3 | Segment Adjusted EBITDA Expense includes operating expenses, outside coal purchases and other income. Transportation expenses are excluded as these expenses are passed through to our customers and consequently we do not realize any gain or loss on transportation revenues. We review Segment Adjusted EBITDA Expense per ton for cost trends. | ||||||||||||||||||||||||||||||
The following is a reconciliation of consolidated Segment Adjusted EBITDA Expense to operating expenses (excluding depreciation, depletion and amortization) (in thousands): | |||||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||||||||
Segment Adjusted EBITDA Expense | $ | 348,624 | $ | 346,309 | $ | 1,023,134 | $ | 1,043,086 | |||||||||||||||||||||||
Outside coal purchases | (3 | ) | (636 | ) | (7 | ) | (2,028 | ) | |||||||||||||||||||||||
Other income | 549 | 372 | 1,178 | 999 | |||||||||||||||||||||||||||
Operating expenses (excluding depreciation, depletion and amortization) | $ | 349,170 | $ | 346,045 | $ | 1,024,305 | $ | 1,042,057 | |||||||||||||||||||||||
-4 | Segment Adjusted EBITDA is defined as net income before net interest expense, income taxes, depreciation, depletion and amortization and general and administrative expenses. Management therefore is able to focus solely on the evaluation of segment operating profitability as it relates to our revenues and operating expenses, which are primarily controlled by our segments. Consolidated Segment Adjusted EBITDA is reconciled to net income as follows (in thousands): | ||||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||||||||
Consolidated Segment Adjusted EBITDA | $ | 214,771 | $ | 173,376 | $ | 655,432 | $ | 556,754 | |||||||||||||||||||||||
General and administrative | (16,995 | ) | (14,893 | ) | (54,201 | ) | (46,736 | ) | |||||||||||||||||||||||
Depreciation, depletion and amortization | (69,646 | ) | (66,099 | ) | (203,539 | ) | (198,688 | ) | |||||||||||||||||||||||
Interest expense, net | (8,152 | ) | (5,916 | ) | (24,157 | ) | (18,440 | ) | |||||||||||||||||||||||
Income tax benefit | - | 718 | - | 1,307 | |||||||||||||||||||||||||||
Net income | $ | 119,978 | $ | 87,186 | $ | 373,535 | $ | 294,197 | |||||||||||||||||||||||
-5 | Segment Adjusted EBITDA attributable to the White Oak segment includes equity in income (loss) of affiliates for the three and nine months ended September 30, 2014 of $39,000 and $(13.8) million, respectively, and $0.2 million and $0.3 million, respectively, included in the Other and Corporate segment. Segment Adjusted EBITDA includes equity in income (loss) of affiliates for the three and nine months ended September 30, 2013 of $(6.2) million and $(16.3) million, respectively, included in the White Oak segment and $0.1 million and $0.7 million, respectively, included in the Other and Corporate segment. | ||||||||||||||||||||||||||||||
-6 | Total assets for the White Oak and Other and Corporate segments include investments in affiliate of $200.1 million and $1.5 million, respectively, at September 30, 2014 and $122.7 million and $1.6 million, respectively, at September 30, 2013. | ||||||||||||||||||||||||||||||
-7 | Capital expenditures shown above include funding to White Oak of $1.4 million for the nine months ended September 30, 2014, no funding for the three months ended September 30, 2014 and $2.5 million and $21.3 million of funding, respectively, for the three and nine months ended September 30, 2013, for the acquisition and development of coal reserves from White Oak (Note 6), which is described as “Payments to affiliate for acquisition and development of coal reserves” in our condensed consolidated statements of cash flow. | ||||||||||||||||||||||||||||||
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2014 | |
SUBSEQUENT EVENTS | ' |
SUBSEQUENT EVENTS | ' |
12.SUBSEQUENT EVENTS | |
On October 27, 2014, we declared a quarterly distribution for the quarter ended September 30, 2014, of $0.6375 per unit, on all common units outstanding, totaling approximately $81.8 million (which includes our managing general partner’s incentive distributions), payable on November 14, 2014 to all unitholders of record as of November 7, 2014. | |
ORGANIZATION_AND_PRESENTATION_
ORGANIZATION AND PRESENTATION (Policies) | 9 Months Ended |
Sep. 30, 2014 | |
ORGANIZATION AND PRESENTATION | ' |
Basis of Presentation | ' |
Basis of Presentation | |
The accompanying condensed consolidated financial statements include the accounts and operations of the ARLP Partnership and present our financial position as of September 30, 2014 and December 31, 2013, the results of our operations and comprehensive income for the three and nine months ended September 30, 2014 and 2013 and the cash flows for the nine months ended September 30, 2014 and 2013. All of our intercompany transactions and accounts have been eliminated. | |
These condensed consolidated financial statements and notes are unaudited. However, in the opinion of management, these financial statements reflect all adjustments (which include only normal recurring adjustments) necessary for a fair presentation of the results for the periods presented. Results for interim periods are not necessarily indicative of results for a full year. | |
These condensed consolidated financial statements and notes are prepared pursuant to the rules and regulations of the Securities and Exchange Commission for interim reporting and should be read in conjunction with the consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2013. | |
On June 16, 2014, we completed a two-for-one split of our common units, whereby holders of record as of May 30, 2014 received a one unit distribution on each unit outstanding on that date. The unit split resulted in the issuance of 37,030,317 common units. All references to the number of units and per unit net income and distribution amounts included in this report have been adjusted to give effect for this unit split for all periods presented. Also, ARLP’s partnership agreement was amended effective June 16, 2014, to reduce by half the target thresholds for the incentive distribution rights per unit. | |
Use of Estimates | ' |
Use of Estimates | |
The preparation of the ARLP Partnership’s condensed consolidated financial statements in conformity with generally accepted accounting principles (“GAAP”) of the United States (“U.S.”) requires management to make estimates and assumptions that affect the reported amounts and disclosures in our condensed consolidated financial statements. Actual results could differ from those estimates. | |
LONGTERM_DEBT_Tables
LONG-TERM DEBT (Tables) | 9 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
LONG-TERM DEBT | ' | ||||||||||
Schedule of Long-Term Debt Instruments | ' | ||||||||||
Long-term debt consists of the following (in thousands): | |||||||||||
September 30, | December 31, | ||||||||||
2014 | 2013 | ||||||||||
Revolving Credit facility | $ | 170,000 | $ | 250,000 | |||||||
Senior notes | - | 18,000 | |||||||||
Series A senior notes | 205,000 | 205,000 | |||||||||
Series B senior notes | 145,000 | 145,000 | |||||||||
Term loan | 237,500 | 250,000 | |||||||||
757,500 | 868,000 | ||||||||||
Less current maturities | (230,000 | ) | (36,750 | ) | |||||||
Total long-term debt | $ | 527,500 | $ | 831,250 | |||||||
NET_INCOME_PER_LIMITED_PARTNER1
NET INCOME PER LIMITED PARTNER UNIT (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
NET INCOME PER LIMITED PARTNER UNIT | ' | ||||||||||||
Reconciliation of net Income | ' | ||||||||||||
The following is a reconciliation of net income used for calculating basic earnings per unit and the weighted average units used in computing EPU for the three and nine months ended September 30, 2014 and 2013 (in thousands, except per unit data): | |||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||
September 30, | September 30, | ||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||
Net income | $ | 119,978 | $ | 87,186 | $ | 373,535 | $ | 294,197 | |||||
Adjustments: | |||||||||||||
Managing general partner’s priority distributions | -33,588 | -29,906 | -97,954 | -87,275 | |||||||||
General partners’ 2% equity ownership | -1,728 | -1,146 | -5,511 | -4,139 | |||||||||
Limited partners’ interest in net income | 84,662 | 56,134 | 270,070 | 202,783 | |||||||||
Less: | |||||||||||||
Distributions to participating securities | -751 | -597 | -2,188 | -1,749 | |||||||||
Undistributed earnings attributable to participating securities | -585 | -167 | -2,027 | -1,012 | |||||||||
Net income available to limited partners | $ | 83,326 | $ | 55,370 | $ | 265,855 | $ | 200,022 | |||||
Weighted average limited partner units outstanding – basic and diluted | 74,061 | 73,926 | 74,039 | 73,897 | |||||||||
Basic and diluted net income per limited partner unit (1) | $ | 1.13 | $ | 0.75 | $ | 3.59 | $ | 2.71 | |||||
-1 | Diluted EPU gives effect to all dilutive potential common units outstanding during the period using the treasury stock method. Diluted EPU excludes all dilutive potential units calculated under the treasury stock method if their effect is anti-dilutive. For the three and nine months ended September 30, 2014 and 2013, the combined total of LTIP, SERP and Deferred Compensation Plan units of 843,976, 710,518, 776,094 and 656,628 respectively, were considered anti-dilutive under the treasury stock method. | ||||||||||||
WORKERS_COMPENSATION_AND_PNEUM1
WORKERS' COMPENSATION AND PNEUMOCONIOSIS (Tables) | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||
Accrued Workers Compensation And Pneumoconiosis Benefits | ' | ||||||||||||||||||||
Reconciliation of Changes in Workers Compensation Liability | ' | ||||||||||||||||||||
The changes in the workers’ compensation liability (including current and long-term liability balances) for each of the periods presented were as follows (in thousands): | |||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||
Beginning balance | $ | 61,515 | $ | 80,630 | $ | 62,909 | $ | 77,046 | |||||||||||||
Accruals increase | 1,291 | 452 | 8,755 | 8,399 | |||||||||||||||||
Payments | (2,667 | ) | (2,553 | ) | (8,194 | ) | (8,156 | ) | |||||||||||||
Interest accretion | 646 | 621 | 1,939 | 1,861 | |||||||||||||||||
Valuation gain (1) | - | - | (4,624 | ) | - | ||||||||||||||||
Ending balance | $ | 60,785 | $ | 79,150 | $ | 60,785 | $ | 79,150 | |||||||||||||
-1 | Our liability for the estimated present value of current workers' compensation benefits is based on our actuarial estimates. Our actuarial calculations are based on a blend of actuarial projection methods and numerous assumptions including claim development patterns, mortality, medical costs and interest rates. We conducted a mid-year review of our actuarial assumptions which resulted in a valuation gain in June 2014 primarily attributable to favorable changes in claims development, offset partially by a decrease in the discount rate used to calculate the estimated present value of future obligations from 4.11% at December 31, 2013 to 3.67% at June 30, 2014. | ||||||||||||||||||||
Pneumoconiosis benefits | ' | ||||||||||||||||||||
Accrued Workers Compensation And Pneumoconiosis Benefits | ' | ||||||||||||||||||||
Components of Net Periodic Benefit Cost | ' | ||||||||||||||||||||
Components of the net periodic benefit cost for each of the periods presented are as follows (in thousands): | |||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||
Service cost | $ | 857 | $ | 953 | $ | 2,571 | $ | 2,858 | |||||||||||||
Interest cost | 566 | 563 | 1,697 | 1,690 | |||||||||||||||||
Amortization of net (gain)/loss (1) | (263 | ) | 168 | (789 | ) | 503 | |||||||||||||||
Net periodic benefit cost | $ | 1,160 | $ | 1,684 | $ | 3,479 | $ | 5,051 | |||||||||||||
-1 | Amortization of net (gain)/loss is included in the operating expenses line item within our condensed consolidated statements of income. | ||||||||||||||||||||
COMPONENTS_OF_PENSION_PLAN_NET1
COMPONENTS OF PENSION PLAN NET PERIODIC BENEFIT COSTS (Tables) (Pension Plan) | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||
Pension Plan | ' | ||||||||||||||||||||
Employee Benefit Plans | ' | ||||||||||||||||||||
Components of Net Periodic Benefit Cost | ' | ||||||||||||||||||||
Components of the net periodic benefit cost for each of the periods presented are as follows (in thousands): | |||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||
Service cost | $ | 543 | $ | 674 | $ | 1,630 | $ | 2,108 | |||||||||||||
Interest cost | 1,019 | 929 | 3,056 | 2,710 | |||||||||||||||||
Expected return on plan assets | (1,368 | ) | (930 | ) | (4,106 | ) | (3,094 | ) | |||||||||||||
Amortization of net loss (1) | 193 | 557 | 580 | 1,675 | |||||||||||||||||
Net periodic benefit cost | $ | 387 | $ | 1,230 | $ | 1,160 | $ | 3,399 | |||||||||||||
(1)Amortization of net loss is included in the operating expenses line item within our condensed consolidated statements of income. | |||||||||||||||||||||
SEGMENT_INFORMATION_Tables
SEGMENT INFORMATION (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||||||||
SEGMENT INFORMATION | ' | ||||||||||||||||||||||||||||||
Schedule of results of reportable segment | ' | ||||||||||||||||||||||||||||||
Illinois | Appalachia | White Oak | Other and | Elimination | Consolidated | ||||||||||||||||||||||||||
Basin | Corporate | -1 | |||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||
Reportable segment results for the three months ended September 30, 2014 were as follows: | |||||||||||||||||||||||||||||||
Total revenues (2) | $ | 392,401 | $ | 167,391 | $ | 3,583 | $ | 7,730 | $ | (1,777 | ) | $ | 569,328 | ||||||||||||||||||
Segment Adjusted EBITDA Expense (3) | 245,481 | 95,956 | 2,144 | 6,820 | (1,777 | ) | 348,624 | ||||||||||||||||||||||||
Segment Adjusted EBITDA (4)(5) | 143,854 | 68,501 | 1,401 | 1,015 | - | 214,771 | |||||||||||||||||||||||||
Capital expenditures (7) | 62,583 | 13,371 | 247 | 2,880 | - | 79,081 | |||||||||||||||||||||||||
Reportable segment results for the three months ended September 30, 2013 were as follows: | |||||||||||||||||||||||||||||||
Total revenues (2) | $ | 405,597 | $ | 111,789 | $ | 566 | $ | 23,530 | $ | (4,253 | ) | $ | 537,229 | ||||||||||||||||||
Segment Adjusted EBITDA Expense (3) | 239,962 | 89,578 | 546 | 20,476 | (4,253 | ) | 346,309 | ||||||||||||||||||||||||
Segment Adjusted EBITDA (4)(5) | 156,790 | 19,504 | (6,190 | ) | 3,272 | - | 173,376 | ||||||||||||||||||||||||
Capital expenditures (7) | 58,569 | 14,528 | 6,632 | 2,352 | - | 82,081 | |||||||||||||||||||||||||
Reportable segment results as of and for the nine months ended September 30, 2014 were as follows: | |||||||||||||||||||||||||||||||
Total revenues (2) | $ | 1,213,426 | $ | 468,671 | $ | 11,451 | $ | 23,660 | $ | (7,280 | ) | $ | 1,709,928 | ||||||||||||||||||
Segment Adjusted EBITDA Expense (3) | 731,014 | 275,446 | 5,160 | 18,794 | (7,280 | ) | 1,023,134 | ||||||||||||||||||||||||
Segment Adjusted EBITDA (4)(5) | 473,362 | 184,460 | (7,511 | ) | 5,121 | - | 655,432 | ||||||||||||||||||||||||
Total assets (6) | 1,136,731 | 591,516 | 390,013 | 56,742 | (1,400 | ) | 2,173,602 | ||||||||||||||||||||||||
Capital expenditures (7) | 180,458 | 42,040 | 2,426 | 10,136 | - | 235,060 | |||||||||||||||||||||||||
Reportable segment results as of and for the nine months ended September 30, 2013 were as follows: | |||||||||||||||||||||||||||||||
Total revenues (2) | $ | 1,210,806 | $ | 367,733 | $ | 566 | $ | 74,559 | $ | (14,809 | ) | $ | 1,638,855 | ||||||||||||||||||
Segment Adjusted EBITDA Expense (3) | 707,810 | 282,056 | 1,074 | 66,955 | (14,809 | ) | 1,043,086 | ||||||||||||||||||||||||
Segment Adjusted EBITDA (4)(5) | 488,634 | 76,581 | (16,777 | ) | 8,316 | - | 556,754 | ||||||||||||||||||||||||
Total assets (6) | 1,064,268 | 605,759 | 306,002 | 71,484 | (865 | ) | 2,046,648 | ||||||||||||||||||||||||
Capital expenditures (7) | 163,595 | 58,947 | 35,502 | 5,927 | - | 263,971 | |||||||||||||||||||||||||
-1 | The elimination column represents the elimination of intercompany transactions and is primarily comprised of sales from the Matrix Group to our mining operations and coal sales and purchases between mining operations (2013 only). | ||||||||||||||||||||||||||||||
-2 | Revenues included in the Other and Corporate column are primarily attributable to the Matrix Group revenues, Mt. Vernon transloading revenues, administrative service revenues from affiliates, brokerage sales and Pontiki’s coal sales revenue (primarily 2013). | ||||||||||||||||||||||||||||||
-3 | Segment Adjusted EBITDA Expense includes operating expenses, outside coal purchases and other income. Transportation expenses are excluded as these expenses are passed through to our customers and consequently we do not realize any gain or loss on transportation revenues. We review Segment Adjusted EBITDA Expense per ton for cost trends. | ||||||||||||||||||||||||||||||
The following is a reconciliation of consolidated Segment Adjusted EBITDA Expense to operating expenses (excluding depreciation, depletion and amortization) (in thousands): | |||||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||||||||
Segment Adjusted EBITDA Expense | $ | 348,624 | $ | 346,309 | $ | 1,023,134 | $ | 1,043,086 | |||||||||||||||||||||||
Outside coal purchases | (3 | ) | (636 | ) | (7 | ) | (2,028 | ) | |||||||||||||||||||||||
Other income | 549 | 372 | 1,178 | 999 | |||||||||||||||||||||||||||
Operating expenses (excluding depreciation, depletion and amortization) | $ | 349,170 | $ | 346,045 | $ | 1,024,305 | $ | 1,042,057 | |||||||||||||||||||||||
-4 | Segment Adjusted EBITDA is defined as net income before net interest expense, income taxes, depreciation, depletion and amortization and general and administrative expenses. Management therefore is able to focus solely on the evaluation of segment operating profitability as it relates to our revenues and operating expenses, which are primarily controlled by our segments. Consolidated Segment Adjusted EBITDA is reconciled to net income as follows (in thousands): | ||||||||||||||||||||||||||||||
Consolidated Segment Adjusted EBITDA is reconciled to net income as follows (in thousands): | |||||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||||||||
Consolidated Segment Adjusted EBITDA | $ | 214,771 | $ | 173,376 | $ | 655,432 | $ | 556,754 | |||||||||||||||||||||||
General and administrative | (16,995 | ) | (14,893 | ) | (54,201 | ) | (46,736 | ) | |||||||||||||||||||||||
Depreciation, depletion and amortization | (69,646 | ) | (66,099 | ) | (203,539 | ) | (198,688 | ) | |||||||||||||||||||||||
Interest expense, net | (8,152 | ) | (5,916 | ) | (24,157 | ) | (18,440 | ) | |||||||||||||||||||||||
Income tax benefit | - | 718 | - | 1,307 | |||||||||||||||||||||||||||
Net income | $ | 119,978 | $ | 87,186 | $ | 373,535 | $ | 294,197 | |||||||||||||||||||||||
-5 | Segment Adjusted EBITDA attributable to the White Oak segment includes equity in income (loss) of affiliates for the three and nine months ended September 30, 2014 of $39,000 and $(13.8) million, respectively, and $0.2 million and $0.3 million, respectively, included in the Other and Corporate segment. Segment Adjusted EBITDA includes equity in income (loss) of affiliates for the three and nine months ended September 30, 2013 of $(6.2) million and $(16.3) million, respectively, included in the White Oak segment and $0.1 million and $0.7 million, respectively, included in the Other and Corporate segment. | ||||||||||||||||||||||||||||||
-6 | Total assets for the White Oak and Other and Corporate segments include investments in affiliate of $200.1 million and $1.5 million, respectively, at September 30, 2014 and $122.7 million and $1.6 million, respectively, at September 30, 2013. | ||||||||||||||||||||||||||||||
-7 | Capital expenditures shown above include funding to White Oak of $1.4 million for the nine months ended September 30, 2014, no funding for the three months ended September 30, 2014 and $2.5 million and $21.3 million of funding, respectively, for the three and nine months ended September 30, 2013, for the acquisition and development of coal reserves from White Oak (Note 6), which is described as “Payments to affiliate for acquisition and development of coal reserves” in our condensed consolidated statements of cash flow. | ||||||||||||||||||||||||||||||
Schedule of reconciliation of consolidated Segment Adjusted EBITDA Expense to operating expenses (excluding depreciation, depletion and amortization) | ' | ||||||||||||||||||||||||||||||
The following is a reconciliation of consolidated Segment Adjusted EBITDA Expense to operating expenses (excluding depreciation, depletion and amortization) (in thousands): | |||||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||||||||
Segment Adjusted EBITDA Expense | $ | 348,624 | $ | 346,309 | $ | 1,023,134 | $ | 1,043,086 | |||||||||||||||||||||||
Outside coal purchases | (3 | ) | (636 | ) | (7 | ) | (2,028 | ) | |||||||||||||||||||||||
Other income | 549 | 372 | 1,178 | 999 | |||||||||||||||||||||||||||
Operating expenses (excluding depreciation, depletion and amortization) | $ | 349,170 | $ | 346,045 | $ | 1,024,305 | $ | 1,042,057 | |||||||||||||||||||||||
Schedule of reconciliation of consolidated Segment Adjusted EBITDA to net income | ' | ||||||||||||||||||||||||||||||
Consolidated Segment Adjusted EBITDA is reconciled to net income as follows (in thousands): | |||||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||||||||
Consolidated Segment Adjusted EBITDA | $ | 214,771 | $ | 173,376 | $ | 655,432 | $ | 556,754 | |||||||||||||||||||||||
General and administrative | (16,995 | ) | (14,893 | ) | (54,201 | ) | (46,736 | ) | |||||||||||||||||||||||
Depreciation, depletion and amortization | (69,646 | ) | (66,099 | ) | (203,539 | ) | (198,688 | ) | |||||||||||||||||||||||
Interest expense, net | (8,152 | ) | (5,916 | ) | (24,157 | ) | (18,440 | ) | |||||||||||||||||||||||
Income tax benefit | - | 718 | - | 1,307 | |||||||||||||||||||||||||||
Net income | $ | 119,978 | $ | 87,186 | $ | 373,535 | $ | 294,197 | |||||||||||||||||||||||
ORGANIZATION_AND_PRESENTATION_1
ORGANIZATION AND PRESENTATION (Details) | 0 Months Ended | 3 Months Ended | 9 Months Ended | ||
Jun. 16, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Ownership interests | ' | ' | ' | ' | ' |
Ownership percentage by general partners | ' | 2.00% | 2.00% | 2.00% | 2.00% |
Unit split ratio | 2 | ' | ' | ' | ' |
Units issued due to split | 37,030,317 | ' | ' | ' | ' |
ARLP | SGP | ' | ' | ' | ' | ' |
Ownership interests | ' | ' | ' | ' | ' |
Ownership percentage by general partners | ' | ' | ' | 0.01% | ' |
ARLP | MGP | ' | ' | ' | ' | ' |
Ownership interests | ' | ' | ' | ' | ' |
Ownership percentage by general partners | ' | ' | ' | 0.99% | ' |
ARLP | AHGP | ' | ' | ' | ' | ' |
Ownership interests | ' | ' | ' | ' | ' |
Ownership percentage of managing general partner by parent | ' | ' | ' | 100.00% | ' |
Units owned by parent | ' | 31,088,338 | ' | 31,088,338 | ' |
Intermediate Partnership | SGP | ' | ' | ' | ' | ' |
Ownership interests | ' | ' | ' | ' | ' |
Ownership percentage by general partners | ' | ' | ' | 0.01% | ' |
Intermediate Partnership | MGP | ' | ' | ' | ' | ' |
Ownership interests | ' | ' | ' | ' | ' |
Ownership percentage by general partners | ' | ' | ' | 1.00% | ' |
Alliance Coal | MGP | ' | ' | ' | ' | ' |
Ownership interests | ' | ' | ' | ' | ' |
Ownership percentage by general partners | ' | ' | ' | 0.00% | ' |
FAIR_VALUE_MEASUREMENTS_Detail
FAIR VALUE MEASUREMENTS (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
FAIR VALUE MEASUREMENTS | ' | ' |
Fair value of long-term debt, including current maturities (Level 2) | $776.10 | $884.80 |
LONGTERM_DEBT_Details
LONG-TERM DEBT (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Long-Term Debt | ' | ' |
Long-term debt including current and non-current | $757,500 | $868,000 |
Less current maturities | -230,000 | -36,750 |
Total long-term debt | 527,500 | 831,250 |
Revolving Credit facility | ' | ' |
Long-Term Debt | ' | ' |
Long-term debt including current and non-current | 170,000 | 250,000 |
Senior notes | ' | ' |
Long-Term Debt | ' | ' |
Long-term debt including current and non-current | ' | 18,000 |
Series A Senior Notes | ' | ' |
Long-Term Debt | ' | ' |
Long-term debt including current and non-current | 205,000 | 205,000 |
Series B Senior Notes | ' | ' |
Long-Term Debt | ' | ' |
Long-term debt including current and non-current | 145,000 | 145,000 |
Term Loan | ' | ' |
Long-Term Debt | ' | ' |
Long-term debt including current and non-current | $237,500 | $250,000 |
LONGTERM_DEBT_Details_2
LONG-TERM DEBT (Details 2) (USD $) | 9 Months Ended | 12 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2014 |
ARLP Debt Arrangements | ' | ' |
Long-Term Debt | ' | ' |
ARLP debt arrangements requirements, period over which the ratios are required to be maintained | '1 year | ' |
Actual debt to cash flow ratio for trailing twelve months | ' | 0.97 |
Actual cash flow to interest expense ratio for trailing twelve months | ' | 22.9 |
ARLP Debt Arrangements | Maximum | ' | ' |
Long-Term Debt | ' | ' |
ARLP debt arrangements requirements, debt to cash flow ratio | ' | 3 |
ARLP Debt Arrangements | Minimum | ' | ' |
Long-Term Debt | ' | ' |
ARLP debt arrangements requirements, cash flow to interest expense ratio | ' | 3 |
Revolving Credit facility | ' | ' |
Long-Term Debt | ' | ' |
Revolving credit facility | 700 | 700 |
Letters of credit outstanding | 5.4 | 5.4 |
Line of credit facility, available for borrowing capacity | 524.6 | 524.6 |
Annual commitment fee percentage, undrawn portion | 0.25% | ' |
Frequency of commitment fee on undrawn portion | 'annual | ' |
WHITE_OAK_TRANSACTIONS_Details
WHITE OAK TRANSACTIONS (Details) (USD $) | 9 Months Ended | 27 Months Ended | 0 Months Ended | 3 Months Ended | 9 Months Ended | 36 Months Ended | 0 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | 12 Months Ended | 15 Months Ended | 36 Months Ended | 0 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||
Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Sep. 22, 2011 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 22, 2011 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 22, 2011 | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 22, 2011 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
White Oak | White Oak | White Oak | White Oak | White Oak | White Oak | White Oak | White Oak | White Oak | White Oak | White Oak | White Oak | White Oak | White Oak | White Oak | White Oak | White Oak | White Oak | White Oak | White Oak | White Oak | ||||
Minimum | Minimum | Maximum | Reserve Acquisition | Reserve Acquisition | Reserve Acquisition | Reserve Acquisition | Reserve Acquisition | Reserve Acquisition, rights purchased on Transaction Date | Reserve Acquisition, rights purchased during fiscal year 2013 and 2014 | Services Agreement | Services Agreement | Services Agreement | Services Agreement | Services Agreement | ||||||||||
T | T | T | T | T | T | |||||||||||||||||||
White oak transactions | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount funded by partnership | ' | ' | ' | $69,500,000 | ' | ' | ' | ' | $303,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total expected funding by partnership | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 395,500,000 | 435,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Coal reserves, rights purchased (in tons) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 204,900,000 | 5,100,000 | 90,100,000 | ' | 300,100,000 | ' | ' | ' | ' | ' | ' | ' |
Coal reserves developed for future mining (in tons) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 105,200,000 | 48,500,000 | ' | ' | ' | ' | ' |
Payment for acquisition and development of coal reserves | 1,401,000 | 21,318,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 112,100,000 | ' | ' | ' | ' | ' | ' | ' |
Payment for acquisition of coal reserves and other assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 33,800,000 | 1,400,000 | 25,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Payment for development of acquired coal reserves | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 51,600,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Commitment for additional coal reserve acquisitions | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 27,900,000 | ' | ' | 27,900,000 | ' | ' | ' | ' | ' | ' | ' |
Purchase of equity investment | ' | ' | 129,300,000 | 35,700,000 | ' | ' | 85,300,000 | ' | 250,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Equity investment commitment | ' | ' | ' | ' | ' | ' | ' | ' | ' | 150,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Voting Interest (as a percent) | ' | ' | ' | ' | 37.50% | ' | 37.50% | ' | 37.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Equity method investment, net | ' | ' | ' | ' | 250,300,000 | ' | 250,300,000 | ' | 250,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Distributions from White Oak | ' | ' | ' | ' | ' | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Allocated losses | ' | ' | ' | ' | 39,000 | 6,200,000 | 13,800,000 | 16,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Throughput fees | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,700,000 | 600,000 | 10,100,000 | 600,000 |
Additional commitment for construction loan | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,500,000 | ' | ' | ' | ' |
Term of construction loan | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '20 years | ' |
Construction Loan utilized | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $10,500,000 | ' | $10,500,000 | ' |
NET_INCOME_PER_LIMITED_PARTNER2
NET INCOME PER LIMITED PARTNER UNIT (Details) (USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Excess Of $0.1375 Per Unit | ' |
Incentive distributions | ' |
General partner incentive distribution percentage | 15.00% |
Threshold distribution of net income per unit (in dollars per unit) | $0.14 |
Excess Of $0.15625 Per Unit | ' |
Incentive distributions | ' |
General partner incentive distribution percentage | 25.00% |
Threshold distribution of net income per unit (in dollars per unit) | $0.16 |
Excess Of $0.1875 Per Unit | ' |
Incentive distributions | ' |
General partner incentive distribution percentage | 50.00% |
Threshold distribution of net income per unit (in dollars per unit) | $0.19 |
NET_INCOME_PER_LIMITED_PARTNER3
NET INCOME PER LIMITED PARTNER UNIT (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | ||||||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | ||||
NET INCOME PER LIMITED PARTNER UNIT | ' | ' | ' | ' | ||||
Net income | $119,978 | $87,186 | $373,535 | $294,197 | ||||
Managing general partner's priority distributions | -33,588 | -29,906 | -97,954 | -87,275 | ||||
General partners' 2% equity ownership | -1,728 | -1,146 | -5,511 | -4,139 | ||||
LIMITED PARTNERS' INTEREST IN NET INCOME | 84,662 | 56,134 | 270,070 | 202,783 | ||||
Distributions to participating securities | -751 | -597 | -2,188 | -1,749 | ||||
Undistributed earnings attributable to participating securities | -585 | -167 | -2,027 | -1,012 | ||||
Net income available to limited partners | $83,326 | $55,370 | $265,855 | $200,022 | ||||
Weighted average limited partner units outstanding - Basic and Diluted (in units) | 74,060,634 | 73,926,108 | 74,038,952 | 73,897,062 | ||||
Basic and Diluted Net income per limited partner unit (in dollars per unit) | $1.13 | [1] | $0.75 | [1] | $3.59 | [1] | $2.71 | [1] |
Ownership percentage by general partners | 2.00% | 2.00% | 2.00% | 2.00% | ||||
Anti-dilutive under the treasury stock method (in units) | 843,976 | 710,518 | 776,094 | 656,628 | ||||
[1] | Diluted EPU gives effect to all dilutive potential common units outstanding during the period using the treasury stock method. Diluted EPU excludes all dilutive potential units calculated under the treasury stock method if their effect is anti-dilutive. For the three and nine months ended September 30, 2014 and 2013, the combined total of LTIP, SERP and Deferred Compensation Plan units of 843,976, 710,518, 776,094, and 656,628 respectively, were considered anti-dilutive under the treasury stock method. |
WORKERS_COMPENSATION_AND_PNEUM2
WORKERS' COMPENSATION AND PNEUMOCONIOSIS (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Reconciliation of the changes in workers' compensation liability | ' | ' | ' | ' | |
Beginning balance | $61,515 | $80,630 | $62,909 | $77,046 | |
Accruals increase | 1,291 | 452 | 8,755 | 8,399 | |
Payments | -2,667 | -2,553 | -8,194 | -8,156 | |
Interest accretion | 646 | 621 | 1,939 | 1,861 | |
Valuation gain | ' | ' | -4,624 | [1] | ' |
Ending balance | $60,785 | $79,150 | $60,785 | $79,150 | |
[1] | Our liability for the estimated present value of current workersb2 compensation benefits is based on our actuarial estimates. Our actuarial calculations are based on a blend of actuarial projection methods and numerous assumptions including claim development patterns, mortality, medical costs and interest rates. We conducted a mid-year review of our actuarial assumptions which resulted in a valuation gain in June 2014 primarily attributable to favorable changes in claims development, offset partially by a decrease in the discount rate used to calculate the estimated present value of future obligations from 4.11% at December 31, 2013 to 3.67% at June 30, 2014. |
WORKERS_COMPENSATION_AND_PNEUM3
WORKERS' COMPENSATION AND PNEUMOCONIOSIS (Details 2) (Pneumoconiosis benefits, USD $) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Jun. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | ||||
Pneumoconiosis benefits | ' | ' | ' | ' | ' | ' | ||||
Accrued Workers Compensation And Pneumoconiosis Benefits | ' | ' | ' | ' | ' | ' | ||||
Workers' compensation discount rate (as a percent) | ' | ' | 3.67% | ' | ' | 4.11% | ||||
Service cost | $857 | $953 | ' | $2,571 | $2,858 | ' | ||||
Interest cost | 566 | 563 | ' | 1,697 | 1,690 | ' | ||||
Amortization of net (gain)/loss | -263 | [1] | 168 | [1] | ' | -789 | [1] | 503 | [1] | ' |
Net periodic benefit cost | $1,160 | $1,684 | ' | $3,479 | $5,051 | ' | ||||
[1] | Amortization of net (gain)/loss is included in the operating expenses line item within our condensed consolidated statements of income. |
COMPENSATION_PLANS_Details
COMPENSATION PLANS (Details) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | 36 Months Ended | 0 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||
In Millions, except Share data, unless otherwise specified | Feb. 14, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Jan. 22, 2014 | Jan. 02, 2014 | Dec. 31, 2013 | Feb. 14, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
ARLP LTIP | ARLP LTIP | ARLP LTIP | ARLP LTIP | ARLP LTIP | ARLP LTIP | ARLP LTIP | ARLP LTIP | ARLP LTIP | SERP and Deferred Compensation Plans | SERP and Deferred Compensation Plans | SERP and Deferred Compensation Plans | SERP and Deferred Compensation Plans | SERP and Deferred Compensation Plans | SERP and Deferred Compensation Plans | SERP and Deferred Compensation Plans | |
Phantom Share Units (PSUs) | Phantom Share Units (PSUs) | Phantom Share Units (PSUs) | Phantom Share Units (PSUs) | Phantom Share Units (PSUs) | Phantom Share Units (PSUs) | |||||||||||
2011 Grants | 2011 Grants | |||||||||||||||
Compensation Plans | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Units for which vesting requirements were deemed satisfied | ' | ' | ' | ' | ' | ' | ' | 202,742 | ' | ' | ' | ' | ' | ' | ' | ' |
Forfeited (in units) | ' | ' | ' | ' | ' | ' | ' | ' | 14,090 | ' | ' | ' | ' | ' | ' | ' |
Common units issued upon vesting | 128,610 | ' | ' | ' | ' | ' | ' | ' | ' | 5,916 | ' | ' | ' | ' | ' | ' |
Additional grants authorized (in units) | ' | ' | ' | ' | ' | ' | 370,410 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Units granted | ' | ' | ' | ' | ' | 356,154 | ' | ' | ' | ' | ' | ' | ' | ' | 15,860 | 21,670 |
Fair value as intrinsic value at date of grant (in dollars per unit) | ' | ' | ' | ' | ' | $40.72 | ' | ' | ' | ' | ' | ' | ' | ' | $44.47 | $34.16 |
Share based compensation expense | ' | $2.50 | $1.80 | $7.10 | $5.40 | ' | ' | ' | ' | ' | $0.30 | $0.30 | $0.90 | $0.90 | ' | ' |
Units available for grant | ' | 3,900,000 | ' | 3,900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unrecognized compensation expense | ' | 15.1 | ' | 15.1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted-average period for recognition of expense | ' | ' | ' | '1 year 4 months 24 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Intrinsic value of outstanding grants | ' | ' | ' | ' | ' | 36.3 | ' | ' | ' | ' | ' | ' | ' | ' | 15.3 | ' |
Total unit based obligation recorded | ' | $15.40 | ' | $15.40 | ' | ' | ' | ' | ' | ' | $12 | ' | $12 | ' | ' | ' |
Units outstanding | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 357,264 | ' |
COMPONENTS_OF_PENSION_PLAN_NET2
COMPONENTS OF PENSION PLAN NET PERIODIC BENEFIT COSTS (Details) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2014 | Sep. 30, 2014 | Oct. 15, 2014 | Sep. 30, 2014 | |||||
Pension Plan | Pension Plan | Pension Plan | Pension Plan | Pension Plan | Pension Plan | 2013 plan year | 2014 plan year | 2014 plan year | |||||
Forecast | |||||||||||||
Components of net periodic benefit cost: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Service cost | $543,000 | $674,000 | $1,630,000 | $2,108,000 | ' | ' | ' | ' | ' | ||||
Interest cost | 1,019,000 | 929,000 | 3,056,000 | 2,710,000 | ' | ' | ' | ' | ' | ||||
Expected return on plan assets | -1,368,000 | -930,000 | -4,106,000 | -3,094,000 | ' | ' | ' | ' | ' | ||||
Amortization of net (gain)/loss | 193,000 | [1] | 557,000 | [1] | 580,000 | [1] | 1,675,000 | [1] | ' | ' | ' | ' | ' |
Net periodic benefit cost | 387,000 | 1,230,000 | 1,160,000 | 3,399,000 | ' | ' | ' | ' | ' | ||||
Employer contribution | ' | ' | ' | ' | ' | 2,700,000 | 800,000 | 200,000 | 1,700,000 | ||||
Expected contribution for pension plan in 2014 | ' | ' | ' | ' | $3,600,000 | ' | ' | ' | ' | ||||
[1] | Amortization of net loss is included in the operating expenses line item within our condensed consolidated statements of income. |
SEGMENT_INFORMATION_Details
SEGMENT INFORMATION (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | |||||
segment | |||||||||
Segment Information | ' | ' | ' | ' | ' | ||||
Number of reportable segments | ' | ' | 4 | ' | ' | ||||
Number of reportable segments corresponding to major coal producing regions in the eastern U.S. | ' | ' | 2 | ' | ' | ||||
Reportable segment results | ' | ' | ' | ' | ' | ||||
Total revenues | $569,328,000 | [1] | $537,229,000 | [1] | $1,709,928,000 | [1] | $1,638,855,000 | [1] | ' |
Segment Adjusted EBITDA Expense | 348,624,000 | [2] | 346,309,000 | [2] | 1,023,134,000 | [2] | 1,043,086,000 | [2] | ' |
Segment Adjusted EBITDA | 214,771,000 | [3],[4] | 173,376,000 | [3],[4] | 655,432,000 | [3],[4] | 556,754,000 | [3],[4] | ' |
Total assets | 2,173,602,000 | [5] | 2,046,648,000 | [5] | 2,173,602,000 | [5] | 2,046,648,000 | [5] | 2,121,898,000 |
Capital expenditures | 79,081,000 | [6] | 82,081,000 | [6] | 235,060,000 | [6] | 263,971,000 | [6] | ' |
Additional information | ' | ' | ' | ' | ' | ||||
Equity in income (loss) of affiliates, net | 68,000 | -5,990,000 | -13,546,000 | -15,556,000 | ' | ||||
Investments in affiliate | 201,624,000 | ' | 201,624,000 | ' | 130,410,000 | ||||
Payments to affiliate for acquisition and development of coal reserves | ' | ' | 1,401,000 | 21,318,000 | ' | ||||
White Oak | ' | ' | ' | ' | ' | ||||
Segment Information | ' | ' | ' | ' | ' | ||||
Number of operating segments within the reportable segment | ' | ' | 2 | ' | ' | ||||
Operating segments | Illinois Basin | ' | ' | ' | ' | ' | ||||
Reportable segment results | ' | ' | ' | ' | ' | ||||
Total revenues | 392,401,000 | [1] | 405,597,000 | [1] | 1,213,426,000 | [1] | 1,210,806,000 | [1] | ' |
Segment Adjusted EBITDA Expense | 245,481,000 | [2] | 239,962,000 | [2] | 731,014,000 | [2] | 707,810,000 | [2] | ' |
Segment Adjusted EBITDA | 143,854,000 | [3],[4] | 156,790,000 | [3],[4] | 473,362,000 | [3],[4] | 488,634,000 | [3],[4] | ' |
Total assets | 1,136,731,000 | [5] | 1,064,268,000 | [5] | 1,136,731,000 | [5] | 1,064,268,000 | [5] | ' |
Capital expenditures | 62,583,000 | [6] | 58,569,000 | [6] | 180,458,000 | [6] | 163,595,000 | [6] | ' |
Operating segments | Appalachia | ' | ' | ' | ' | ' | ||||
Reportable segment results | ' | ' | ' | ' | ' | ||||
Total revenues | 167,391,000 | [1] | 111,789,000 | [1] | 468,671,000 | [1] | 367,733,000 | [1] | ' |
Segment Adjusted EBITDA Expense | 95,956,000 | [2] | 89,578,000 | [2] | 275,446,000 | [2] | 282,056,000 | [2] | ' |
Segment Adjusted EBITDA | 68,501,000 | [3],[4] | 19,504,000 | [3],[4] | 184,460,000 | [3],[4] | 76,581,000 | [3],[4] | ' |
Total assets | 591,516,000 | [5] | 605,759,000 | [5] | 591,516,000 | [5] | 605,759,000 | [5] | ' |
Capital expenditures | 13,371,000 | [6] | 14,528,000 | [6] | 42,040,000 | [6] | 58,947,000 | [6] | ' |
Operating segments | White Oak | ' | ' | ' | ' | ' | ||||
Reportable segment results | ' | ' | ' | ' | ' | ||||
Total revenues | 3,583,000 | [1] | 566,000 | [1] | 11,451,000 | [1] | 566,000 | [1] | ' |
Segment Adjusted EBITDA Expense | 2,144,000 | [2] | 546,000 | [2] | 5,160,000 | [2] | 1,074,000 | [2] | ' |
Segment Adjusted EBITDA | 1,401,000 | [3],[4] | -6,190,000 | [3],[4] | -7,511,000 | [3],[4] | -16,777,000 | [3],[4] | ' |
Total assets | 390,013,000 | [5] | 306,002,000 | [5] | 390,013,000 | [5] | 306,002,000 | [5] | ' |
Capital expenditures | 247,000 | [6] | 6,632,000 | [6] | 2,426,000 | [6] | 35,502,000 | [6] | ' |
Additional information | ' | ' | ' | ' | ' | ||||
Equity in income (loss) of affiliates, net | 39,000 | -6,200,000 | -13,800,000 | -16,300,000 | ' | ||||
Investments in affiliate | 200,100,000 | 122,700,000 | 200,100,000 | 122,700,000 | ' | ||||
Payments to affiliate for acquisition and development of coal reserves | 0 | 2,500,000 | 1,400,000 | 21,300,000 | ' | ||||
Operating segments | Other And Corporate | ' | ' | ' | ' | ' | ||||
Reportable segment results | ' | ' | ' | ' | ' | ||||
Total revenues | 7,730,000 | [1] | 23,530,000 | [1] | 23,660,000 | [1] | 74,559,000 | [1] | ' |
Segment Adjusted EBITDA Expense | 6,820,000 | [2] | 20,476,000 | [2] | 18,794,000 | [2] | 66,955,000 | [2] | ' |
Segment Adjusted EBITDA | 1,015,000 | [3],[4] | 3,272,000 | [3],[4] | 5,121,000 | [3],[4] | 8,316,000 | [3],[4] | ' |
Total assets | 56,742,000 | [5] | 71,484,000 | [5] | 56,742,000 | [5] | 71,484,000 | [5] | ' |
Capital expenditures | 2,880,000 | [6] | 2,352,000 | [6] | 10,136,000 | [6] | 5,927,000 | [6] | ' |
Additional information | ' | ' | ' | ' | ' | ||||
Equity in income (loss) of affiliates, net | 200,000 | 100,000 | 300,000 | 700,000 | ' | ||||
Investments in affiliate | 1,500,000 | 1,600,000 | 1,500,000 | 1,600,000 | ' | ||||
Elimination | ' | ' | ' | ' | ' | ||||
Reportable segment results | ' | ' | ' | ' | ' | ||||
Total revenues | -1,777,000 | [1],[7] | -4,253,000 | [1],[7] | -7,280,000 | [1],[7] | -14,809,000 | [1],[7] | ' |
Segment Adjusted EBITDA Expense | -1,777,000 | [2],[7] | -4,253,000 | [2],[7] | -7,280,000 | [2],[7] | -14,809,000 | [2],[7] | ' |
Total assets | ($1,400,000) | [5],[7] | ($865,000) | [5],[7] | ($1,400,000) | [5],[7] | ($865,000) | [5],[7] | ' |
[1] | Revenues included in the Other and Corporate column are primarily attributable to the Matrix Group revenues, Mt. Vernon transloading revenues, administrative service revenues from affiliates, brokerage sales and Pontikibs coal sales revenue (primarily 2013). | ||||||||
[2] | Segment Adjusted EBITDA Expense includes operating expenses, outside coal purchases and other income. Transportation expenses are excluded as these expenses are passed through to our customers and consequently we do not realize any gain or loss on transportation revenues. We review Segment Adjusted EBITDA Expense per ton for cost trends. | ||||||||
[3] | Segment Adjusted EBITDA is defined as net income before net interest expense, income taxes, depreciation, depletion and amortization and general and administrative expenses. Management therefore is able to focus solely on the evaluation of segment operating profitability as it relates to our revenues and operating expenses, which are primarily controlled by our segments. Consolidated Segment Adjusted EBITDA is reconciled to net income as follows (in thousands): | ||||||||
[4] | Segment Adjusted EBITDA attributable to the White Oak segment includes equity in income (loss) of affiliates for the three and nine months ended September 30, 2014 of $39,000 and $(13.8) million, respectively, and $0.2 million and $0.3 million, respectively, included in the Other and Corporate segment. Segment Adjusted EBITDA includes equity in income (loss) of affiliates for the three and nine months ended September 30, 2013 of $(6.2) million and $(16.3) million, respectively, included in the White Oak segment and $0.1 million and $0.7 million, respectively, included in the Other and Corporate segment. | ||||||||
[5] | Total assets for the White Oak and Other and Corporate segments include investments in affiliate of $200.1 million and $1.5 million, respectively, at September 30, 2014 and $122.7 million and $1.6 million, respectively, at September 30, 2013. | ||||||||
[6] | Capital expenditures shown above include funding to White Oak of $1.4 million for the nine months ended September 30, 2014, no funding for the three months ended September 30, 2014 and $2.5 million and $21.3 million of funding, respectively, for the three and nine months ended September 30, 2013, for the acquisition and development of coal reserves from White Oak (Note 6), which is described as "Payments to affiliate for acquisition and development of coal reserves" in our condensed consolidated statements of cash flow. | ||||||||
[7] | The elimination column represents the elimination of intercompany transactions and is primarily comprised of sales from the Matrix Group to our mining operations and coal sales and purchases between mining operations (2013 only). |
SEGMENT_INFORMATION_Details_2
SEGMENT INFORMATION (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | ||||||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | ||||
Reconciliation of consolidated Segment Adjusted EBITDA Expense to operating expenses (excluding depreciation, depletion and amortization) | ' | ' | ' | ' | ||||
Segment Adjusted EBITDA Expense | $348,624 | [1] | $346,309 | [1] | $1,023,134 | [1] | $1,043,086 | [1] |
Outside coal purchases | -3 | -636 | -7 | -2,028 | ||||
Other income | 549 | 372 | 1,178 | 999 | ||||
Operating expenses (excluding depreciation, depletion and amortization) | $349,170 | $346,045 | $1,024,305 | $1,042,057 | ||||
[1] | Segment Adjusted EBITDA Expense includes operating expenses, outside coal purchases and other income. Transportation expenses are excluded as these expenses are passed through to our customers and consequently we do not realize any gain or loss on transportation revenues. We review Segment Adjusted EBITDA Expense per ton for cost trends. |
SEGMENT_INFORMATION_Details_3
SEGMENT INFORMATION (Details 3) (USD $) | 3 Months Ended | 9 Months Ended | ||||||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | ||||
Reconciliation of consolidated Segment Adjusted EBITDA to net income | ' | ' | ' | ' | ||||
Consolidated Segment Adjusted EBITDA | $214,771 | [1],[2] | $173,376 | [1],[2] | $655,432 | [1],[2] | $556,754 | [1],[2] |
General and administrative | -16,995 | -14,893 | -54,201 | -46,736 | ||||
Depreciation, depletion and amortization | -69,646 | -66,099 | -203,539 | -198,688 | ||||
Interest expense, net | -8,152 | -5,916 | -24,157 | -18,440 | ||||
Income tax benefit | ' | 718 | ' | 1,307 | ||||
NET INCOME | $119,978 | $87,186 | $373,535 | $294,197 | ||||
[1] | Segment Adjusted EBITDA is defined as net income before net interest expense, income taxes, depreciation, depletion and amortization and general and administrative expenses. Management therefore is able to focus solely on the evaluation of segment operating profitability as it relates to our revenues and operating expenses, which are primarily controlled by our segments. Consolidated Segment Adjusted EBITDA is reconciled to net income as follows (in thousands): | |||||||
[2] | Segment Adjusted EBITDA attributable to the White Oak segment includes equity in income (loss) of affiliates for the three and nine months ended September 30, 2014 of $39,000 and $(13.8) million, respectively, and $0.2 million and $0.3 million, respectively, included in the Other and Corporate segment. Segment Adjusted EBITDA includes equity in income (loss) of affiliates for the three and nine months ended September 30, 2013 of $(6.2) million and $(16.3) million, respectively, included in the White Oak segment and $0.1 million and $0.7 million, respectively, included in the Other and Corporate segment. |
SUBSEQUENT_EVENTS_Details
SUBSEQUENT EVENTS (Details) (Subsequent event, USD $) | 0 Months Ended |
In Millions, except Per Share data, unless otherwise specified | Oct. 27, 2014 |
Subsequent event | ' |
Subsequent Event | ' |
Distributions declared per unit | $0.64 |
Approximate distribution to be paid, including incentive distributions | $81.80 |