Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Feb. 27, 2015 | Jun. 30, 2014 | |
Document and Entity Information | |||
Entity Registrant Name | ALLIANCE RESOURCE PARTNERS LP | ||
Entity Central Index Key | 1086600 | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Amendment Flag | FALSE | ||
Current Fiscal Year End Date | -19 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $1,954,760,489 | ||
Entity Common Units Outstanding | 74,188,784 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | ||
In Thousands, unless otherwise specified | ||||
CURRENT ASSETS: | ||||
Cash and cash equivalents | $24,601 | $93,654 | ||
Trade receivables | 184,187 | 153,662 | ||
Other receivables | 1,025 | 776 | ||
Due from affiliates | 7,221 | 1,964 | ||
Inventories | 83,155 | 44,214 | ||
Advance royalties | 9,416 | 11,454 | ||
Prepaid expenses and other assets | 31,283 | 16,186 | ||
Total current assets | 340,888 | 321,910 | ||
PROPERTY, PLANT AND EQUIPMENT: | ||||
Property, plant and equipment, at cost | 2,815,620 | 2,645,872 | ||
Less accumulated depreciation, depletion and amortization | -1,150,414 | -1,031,493 | ||
Total property, plant and equipment, net | 1,665,206 | 1,614,379 | ||
OTHER ASSETS: | ||||
Advance royalties | 15,895 | 18,813 | ||
Due from affiliate | 11,047 | 11,560 | ||
Equity investments in affiliates | 224,611 | 130,410 | ||
Other long-term assets | 27,412 | 24,826 | ||
Total other assets | 278,965 | 185,609 | ||
TOTAL ASSETS | 2,285,059 | [1] | 2,121,898 | [1] |
CURRENT LIABILITIES: | ||||
Accounts payable | 85,843 | 79,371 | ||
Due to affiliates | 370 | 290 | ||
Accrued taxes other than income taxes | 19,426 | 19,061 | ||
Accrued payroll and related expenses | 57,656 | 47,105 | ||
Accrued interest | 318 | 996 | ||
Workers' compensation and pneumoconiosis benefits | 8,868 | 9,065 | ||
Current capital lease obligations | 1,305 | 1,288 | ||
Other current liabilities | 17,109 | 18,625 | ||
Current maturities, long-term debt | 230,000 | 36,750 | ||
Total current liabilities | 420,895 | 212,551 | ||
LONG-TERM LIABILITIES: | ||||
Long-term debt, excluding current maturities | 591,250 | 831,250 | ||
Pneumoconiosis benefits | 55,278 | 48,455 | ||
Accrued pension benefit | 40,105 | 18,182 | ||
Workers' compensation | 49,797 | 54,949 | ||
Asset retirement obligations | 91,085 | 80,807 | ||
Long-term capital lease obligations | 15,624 | 17,135 | ||
Other liabilities | 5,978 | 7,332 | ||
Total long-term liabilities | 849,117 | 1,058,110 | ||
Total liabilities | 1,270,012 | 1,270,661 | ||
COMMITMENTS AND CONTINGENCIES | ||||
Alliance Resource Partners, L.P. ("ARLP") Partners' Capital: | ||||
Limited Partners - Common Unitholders 74,060,634 and 73,926,108 units outstanding, respectively | 1,310,517 | 1,128,519 | ||
General Partners' deficit | -260,088 | -267,563 | ||
Accumulated other comprehensive loss | -35,847 | -9,719 | ||
Total ARLP Partners' Capital | 1,014,582 | 851,237 | ||
Noncontrolling interest | 465 | |||
Total Partners' Capital | 1,015,047 | 851,237 | ||
TOTAL LIABILITIES AND PARTNERS' CAPITAL | $2,285,059 | $2,121,898 | ||
[1] | Total assets at December 31, 2014, 2013 and 2012 include investments in affiliate of $211.7 million, $128.7 million and $86.8 million, respectively, for the White Oak segment and $12.9 million, $1.7 million and $1.7 million, respectively, for the Other and Corporate segment. |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) | Dec. 31, 2014 | Dec. 31, 2013 |
CONSOLIDATED BALANCE SHEETS | ||
Limited Partners, Common Unitholders, units outstanding | 74,060,634 | 73,926,108 |
CONSOLIDATED_STATEMENTS_OF_INC
CONSOLIDATED STATEMENTS OF INCOME (USD $) | 12 Months Ended | |||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
SALES AND OPERATING REVENUES: | ||||||
Coal sales | $2,208,611 | $2,137,449 | $1,979,437 | |||
Transportation revenues | 26,021 | 32,642 | 22,034 | |||
Other sales and operating revenues | 66,089 | 35,470 | 32,830 | |||
Total revenues | 2,300,721 | [1] | 2,205,561 | [1] | 2,034,301 | [1] |
EXPENSES: | ||||||
Operating expenses (excluding depreciation, depletion and amortization) | 1,383,360 | 1,398,763 | 1,303,291 | |||
Transportation expenses | 26,021 | 32,642 | 22,034 | |||
Outside coal purchases | 14 | 2,030 | 38,607 | |||
General and administrative | 72,552 | 63,697 | 58,737 | |||
Depreciation, depletion and amortization | 274,566 | 264,911 | 218,122 | |||
Asset impairment charge | 0 | 0 | 19,031 | |||
Total operating expenses | 1,756,513 | 1,762,043 | 1,659,822 | |||
INCOME FROM OPERATIONS | 544,208 | 443,518 | 374,479 | |||
Interest expense (net of interest capitalized of $833, $8,992 and $8,436, respectively) | -33,584 | -27,044 | -28,684 | |||
Interest income | 1,671 | 962 | 229 | |||
Equity in income (loss) of affiliates, net | -16,648 | -24,441 | -14,650 | |||
Other income | 1,566 | 1,891 | 3,115 | |||
INCOME BEFORE INCOME TAXES | 497,213 | 394,886 | 334,489 | |||
INCOME TAX EXPENSE (BENEFIT) | 1,396 | -1,082 | ||||
NET INCOME | 497,213 | 393,490 | 335,571 | |||
LESS: NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTEREST | 16 | |||||
NET INCOME ATTRIBUTABLE TO ALLIANCE RESOURCE PARTNERS, L.P. ("NET INCOME OF ARLP") | 497,229 | 393,490 | 335,571 | |||
GENERAL PARTNERS' INTEREST IN NET INCOME OF ARLP | 138,274 | 121,349 | 106,837 | |||
LIMITED PARTNERS' INTEREST IN NET INCOME OF ARLP | $358,955 | $272,141 | $228,734 | |||
BASIC AND DILUTED NET INCOME PER LIMITED PARTNER UNIT (in dollars per unit) | $4.77 | [2] | $3.63 | [2] | $3.06 | [2] |
DISTRIBUTIONS PAID PER LIMITED PARTNER UNIT (in dollars per unit) | $2.47 | $2.28 | $2.08 | |||
WEIGHTED AVERAGE NUMBER OF UNITS OUTSTANDING - BASIC AND DILUTED (in units) | 74,044,417 | [2] | 73,904,384 | [2] | 73,726,044 | [2] |
[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 Pontiki's coal sales revenue (2013 only). Also included in the Other and Corporate column are Wildcat Insurance revenues, which are eliminated upon consolidation. | |||||
[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 year ended December 31, 2014, 2013 and 2012, the combined total of LTIP, SERP and Deferred Compensation Plan units of 798,701, 682,732 and 689,912, respectively, were considered anti-dilutive. |
CONSOLIDATED_STATEMENTS_OF_INC1
CONSOLIDATED STATEMENTS OF INCOME (Parenthetical) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
CONSOLIDATED STATEMENTS OF INCOME | |||
Interest expense, interest capitalized | $833 | $8,992 | $8,436 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
NET INCOME | $497,213 | $393,490 | $335,571 | |||
OTHER COMPREHENSIVE INCOME (LOSS): | ||||||
Total recognized in accumulated other comprehensive (loss) income | -26,128 | 32,545 | -1,804 | |||
COMPREHENSIVE INCOME | 471,085 | 426,035 | 333,767 | |||
Less: Comprehensive loss attributable to noncontrolling interest | 16 | |||||
COMPREHENSIVE INCOME ATTRIBUTABLE TO ARLP | 471,101 | 426,035 | 333,767 | |||
Pension Plan | ||||||
OTHER COMPREHENSIVE INCOME (LOSS): | ||||||
Net actuarial (loss) gain | -23,821 | 12,472 | -6,524 | |||
Amortization of actuarial (gain) loss (1) | 773 | [1] | 2,653 | [1] | 1,788 | [1] |
Total recognized in accumulated other comprehensive (loss) income | -23,048 | 15,125 | -4,736 | |||
Pneumoconiosis benefits | ||||||
OTHER COMPREHENSIVE INCOME (LOSS): | ||||||
Net actuarial (loss) gain | -2,029 | 16,750 | 2,156 | |||
Amortization of actuarial (gain) loss (1) | -1,051 | [1] | 670 | [1] | 776 | [1] |
Total recognized in accumulated other comprehensive (loss) income | ($3,080) | $17,420 | $2,932 | |||
[1] | Amortization of actuarial gain or loss is included in the computation of net periodic benefit cost (see Notes 14 and 18 for additional details). |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income (loss) | $497,213 | $393,490 | $335,571 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation, depletion and amortization | 274,566 | 264,911 | 218,122 |
Non-cash compensation expense | 11,250 | 8,896 | 7,428 |
Asset retirement obligations | 2,730 | 3,004 | 2,853 |
Coal inventory adjustment to market | 377 | 2,811 | 2,978 |
Equity in loss of affiliates, net | 16,648 | 24,441 | 14,650 |
Net (gain) loss on sale of property, plant and equipment | -4,409 | 3,475 | 147 |
Asset impairment charge | 0 | 0 | 19,031 |
Valuation allowance of deferred tax assets | 1,636 | 3,483 | |
Other | -5,151 | -6,251 | -3,815 |
Changes in operating assets and liabilities: | |||
Trade receivables | -30,525 | 19,062 | -44,081 |
Other receivables | 16 | 243 | 1,960 |
Inventories | -39,103 | -795 | -16,119 |
Prepaid expenses and other assets | 856 | 4,290 | -8,531 |
Advance royalties | 4,956 | 4,492 | 765 |
Accounts payable | 8,742 | -17,755 | 7,312 |
Due to affiliates | -3,104 | -1,343 | 4,291 |
Accrued taxes other than income taxes | 365 | -937 | 4,125 |
Accrued payroll and related benefits | 10,551 | 8,604 | 2,625 |
Pneumoconiosis benefits | 3,743 | 5,944 | 5,961 |
Workers' compensation | -5,349 | -14,092 | 4,075 |
Other | -6,807 | -1,321 | -3,492 |
Total net adjustments | 241,988 | 311,162 | 220,285 |
Net cash provided by operating activities | 739,201 | 704,652 | 555,856 |
Property, plant and equipment: | |||
Capital expenditures | -307,387 | -329,151 | -424,631 |
Changes in accounts payable and accrued liabilities | -2,270 | -3,048 | -4,007 |
Proceeds from sale of property, plant and equipment | 381 | 1,520 | 114 |
Proceeds from insurance settlement for property, plant and equipment | 4,512 | ||
Purchases of equity investments in affiliate | -111,376 | -62,500 | -59,800 |
Payment for acquisition of business | -100,000 | ||
Payments to affiliate for acquisition and development of coal reserves | -4,082 | -25,272 | -34,601 |
Payment for acquisition of customer contracts | -11,687 | ||
Advances/loans to affiliate | -7,500 | -5,229 | |
Payments from affiliate | 4,229 | ||
Other | -9,313 | 546 | |
Net cash used in investing activities | -441,222 | -425,951 | -623,379 |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Borrowings under securitization facility | 100,000 | ||
Borrowings under term loan | 250,000 | ||
Payments on term loans | -18,750 | -300,000 | |
Borrowings under revolving credit facilities | 341,800 | 386,000 | 278,800 |
Payments under revolving credit facilities | -451,800 | -291,000 | -123,800 |
Payments on long-term debt | -18,000 | -18,000 | -18,000 |
Payments on capital lease obligations | -1,494 | -1,190 | -943 |
Payment of debt issuance costs | -263 | -4,272 | |
Contributions to consolidated company from affiliate noncontrolling interest | 481 | ||
Net settlement of employee withholding taxes on vesting of Long-Term Incentive Plan | -2,991 | -3,015 | -3,734 |
Cash contributions by General Partners | 1,611 | 2,314 | 2,150 |
Distributions paid to Partners | -317,626 | -288,439 | -257,923 |
Net cash used in financing activities | -367,032 | -213,330 | -177,722 |
NET CHANGE IN CASH AND CASH EQUIVALENTS | -69,053 | 65,371 | -245,245 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 93,654 | 28,283 | 273,528 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $24,601 | $93,654 | $28,283 |
CONSOLIDATED_STATEMENT_OF_PART
CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL (USD $) | Limited Partners' Capital | General Partners' Capital (Deficit) | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interest | Total |
In Thousands, except Share data, unless otherwise specified | |||||
Balance at Dec. 31, 2011 | $943,325 | ($279,107) | ($40,460) | $623,758 | |
Balance (in units) at Dec. 31, 2011 | 73,551,482 | ||||
Comprehensive income: | |||||
Net income (loss) | 228,734 | 106,837 | 335,571 | ||
Actuarially determined long-term liability adjustments | -1,804 | -1,804 | |||
COMPREHENSIVE INCOME | 333,767 | ||||
Issuance of units to Long-Term Incentive Plan participants upon vesting | -3,734 | -3,734 | |||
Issuance of units to Long-Term Incentive Plan participants upon vesting (in units) | 198,416 | ||||
Common unit-based compensation | 7,428 | 7,428 | |||
Distributions on common unit-based compensation | -1,536 | -1,536 | |||
General Partners contributions (Note 13) | 2,150 | 2,150 | |||
Distributions to Partners | -153,394 | -102,993 | -256,387 | ||
Balance at Dec. 31, 2012 | 1,020,823 | -273,113 | -42,264 | 705,446 | |
Balance (in units) at Dec. 31, 2012 | 73,749,898 | ||||
Comprehensive income: | |||||
Net income (loss) | 272,141 | 121,349 | 393,490 | ||
Actuarially determined long-term liability adjustments | 32,545 | 32,545 | |||
COMPREHENSIVE INCOME | 426,035 | ||||
Issuance of units to Long-Term Incentive Plan participants upon vesting | -3,015 | -3,015 | |||
Issuance of units to Long-Term Incentive Plan participants upon vesting (in units) | 176,210 | ||||
Common unit-based compensation | 8,896 | 8,896 | |||
Distributions on common unit-based compensation | -1,688 | -1,688 | |||
General Partners contributions (Note 13) | 2,314 | 2,314 | |||
Distributions to Partners | -168,638 | -118,113 | -286,751 | ||
Balance at Dec. 31, 2013 | 1,128,519 | -267,563 | -9,719 | 851,237 | |
Balance (in units) at Dec. 31, 2013 | 73,926,108 | 73,926,108 | |||
Comprehensive income: | |||||
Net income (loss) | 358,955 | 138,274 | -16 | 497,213 | |
Actuarially determined long-term liability adjustments | -26,128 | -26,128 | |||
COMPREHENSIVE INCOME | 471,085 | ||||
Issuance of units to Long-Term Incentive Plan participants upon vesting | -2,991 | -2,991 | |||
Issuance of units to Long-Term Incentive Plan participants upon vesting (in units) | 134,526 | ||||
Common unit-based compensation | 11,250 | 11,250 | |||
Distributions on common unit-based compensation | -2,182 | -2,182 | |||
General Partners contributions (Note 13) | 1,611 | 1,611 | |||
Contributions to consolidated company from affiliate noncontrolling interest (Note 11) | 481 | 481 | |||
Distributions to Partners | -183,034 | -132,410 | -315,444 | ||
Balance at Dec. 31, 2014 | $1,310,517 | ($260,088) | ($35,847) | $465 | $1,015,047 |
Balance (in units) at Dec. 31, 2014 | 74,060,634 | 74,060,634 |
ORGANIZATION_AND_PRESENTATION
ORGANIZATION AND PRESENTATION | 12 Months Ended | |||
Dec. 31, 2014 | ||||
ORGANIZATION AND PRESENTATION | ||||
ORGANIZATION AND PRESENTATION | ||||
1.ORGANIZATION AND PRESENTATION | ||||
Significant Relationships Referenced in Notes to 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 (“AHGP IPO”) 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. | ||||
The Delaware limited partnership, limited liability companies and corporation that comprise our subsidiaries are as follows: Intermediate Partnership, Alliance Coal, Alliance Design Group, LLC, (“Alliance Design”), Alliance Land, LLC, Alliance Minerals, LLC (“Alliance Minerals”), Alliance Properties, LLC, Alliance Resource Properties, LLC, (“Alliance Resource Properties”), AROP Funding, LLC (“AROP Funding”), ARP Sebree, LLC (“ARP Sebree), ARP Sebree South, LLC, Alliance WOR Properties, LLC (“WOR Properties”), Alliance Service, Inc. (“ASI”), Alliance WOR Processing, LLC (“WOR Processing”), Backbone Mountain, LLC, Cavalier Minerals JV, LLC (“Cavalier Minerals”), CR Services, LLC, Excel Mining, LLC, Gibson County Coal, LLC (“Gibson County Coal”), Hopkins County Coal, LLC (“Hopkins County Coal”), Matrix Design Group, LLC (“Matrix Design”), MC Mining, LLC (“MC Mining”), Mettiki Coal, LLC (“Mettiki (MD)”), Mettiki Coal (WV), LLC (“Mettiki (WV)”), Mt. Vernon Transfer Terminal, LLC (“Mt. Vernon”), Penn Ridge Coal, LLC (“Penn Ridge”), Pontiki Coal, LLC (“Pontiki”), River View Coal, LLC (“River View”), Sebree Mining, LLC (“Sebree Mining”), Steamport, LLC, Tunnel Ridge, LLC (“Tunnel Ridge”), UC Coal, LLC, UC Mining, LLC, UC Processing, LLC, Warrior Coal, LLC (“Warrior”), Webster County Coal, LLC (“Webster County Coal”), White County Coal, LLC (“White County Coal”) and Wildcat Insurance, LLC (“Wildcat Insurance”). | ||||
The accompanying consolidated financial statements include the accounts and operations of the ARLP Partnership and present our financial position as of December 31, 2014 and 2013, and results of our operations, comprehensive income, cash flows and changes in partners’ capital for each of the three years in the period ended December 31, 2014. All of our intercompany transactions and accounts have been eliminated. | ||||
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 of ARLP 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. | ||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||||||||||
2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||||||||||
Estimates—The preparation of 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 the consolidated financial statements. Actual results could differ from those estimates. | ||||||||||||||||||||
Fair Value of Financial Instruments—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 December 31, 2014 and 2013, the estimated fair value of our long-term debt, including current maturities, was approximately $833.4 million and $884.8 million, respectively (Note 8). | ||||||||||||||||||||
Cash and Cash Equivalents—Cash and cash equivalents include cash on hand and on deposit, including highly liquid investments with maturities of three months or less. We had $0.4 million restricted cash and cash equivalents at December 31, 2014 and no restricted cash or cash equivalents at December 31, 2013. | ||||||||||||||||||||
Cash Management—The cash flows from operating activities section of our Consolidated Statements of Cash Flows reflects an adjustment for $1.7 million and $10.3 million representing book overdrafts at December 31, 2014 and 2012, respectively. We had no book overdrafts at December 31, 2013. | ||||||||||||||||||||
Business Combinations—For purchase acquisitions accounted for as a business combination, we are required to record the assets acquired, including identified intangible assets and liabilities assumed at their fair value, which in many instances involves estimates based on third party valuations, such as appraisals, or internal valuations based on discounted cash flow analyses or other valuation techniques. | ||||||||||||||||||||
Inventories—Coal inventories are stated at the lower of cost or market on a first-in, first-out basis. Supply inventories are stated at an average cost basis, less a reserve for obsolete and surplus items. | ||||||||||||||||||||
Property, Plant and Equipment—Expenditures which extend the useful lives of existing plant and equipment assets are capitalized. Interest costs associated with major asset additions are capitalized during the construction period. Maintenance and repairs that do not extend the useful life or increase productivity of the asset are charged to operating expense as incurred. Exploration expenditures are charged to operating expense as incurred, including costs related to drilling and study costs incurred to convert or upgrade mineral resources to reserves. Preparation plants and processing facilities are depreciated using the units-of-production method. Other plant and equipment assets are depreciated principally using the straight-line method over the estimated useful lives of the assets, ranging from 1 to 16 years, limited by the remaining estimated life of each mine. Depreciable lives for mining equipment range from 1 to 16 years. Depreciable lives for buildings, office equipment and improvements range from 2 to 16 years. Gains or losses arising from retirements are included in operating expenses. Depletable lives for mineral rights, assuming current production expectations, range from 1 to 16 years. Depletion of mineral rights is provided on the basis of tonnage mined in relation to estimated recoverable tonnage, which equals estimated proven and probable reserves. Therefore, our mineral rights are depleted based on only proven and probable reserves derived in accordance with Industry Guide 7. At December 31, 2014 and 2013, land and mineral rights include $53.2 million and $45.5 million, respectively, representing the carrying value of coal reserves attributable to properties where we or a third-party to which we lease reserves are not currently engaged in mining operations or leasing to third parties, and therefore, the coal reserves are not currently being depleted. We believe that the carrying value of these reserves will be recovered. | ||||||||||||||||||||
Mine Development Costs—Mine development costs are capitalized until production, other than production incidental to the mine development process, commences and are amortized on a units of production method based on the estimated proven and probable reserves. Mine development costs represent costs incurred in establishing access to mineral reserves and include costs associated with sinking or driving shafts and underground drifts, permanent excavations, roads and tunnels. The end of the development phase and the beginning of the production phase takes place when construction of the mine for economic extraction is substantially complete. Coal extracted during the development phase is incidental to the mine’s production capacity and is not considered to shift the mine into the production phase. At December 31, 2014 and 2013, capitalized mine development costs were $7.0 million and $33.1 million, respectively, representing the carrying value of development costs attributable to properties where we have not reached the production stage of mining operations or leasing to third parties, and therefore, the mine development costs are not currently being amortized. We believe that the carrying value of these development costs will be recovered. | ||||||||||||||||||||
Long-Lived Assets—We review the carrying value of long-lived assets and certain identifiable intangibles whenever events or changes in circumstances indicate that the carrying amount may not be recoverable based upon estimated undiscounted future cash flows. To the extent the carrying amount is not recoverable based on undiscounted cash flows, the amount of impairment is measured by the difference between the carrying value and the fair value of the asset. We recorded an asset impairment charge of $19.0 million in 2012 (Note 4). No impairment charges were recorded in 2014 and 2013. | ||||||||||||||||||||
Intangible Assets—Intangible assets subject to amortization include contracts with covenants not to compete, customer contracts acquired from other parties and mining permits. Intangible assets are amortized on a straight-line basis over their useful life. Intangible assets for customer contracts are amortized on a per unit basis over the terms of the contracts. Amortization expense attributable to intangible assets was $3.0 million, $3.0 million and $2.6 million for the years ending December 31, 2014, 2013 and 2012, respectively. Our intangible assets are included in prepaid expenses and other assets and other long-term assets on our consolidated balance sheets at December 31, 2014 and 2013. Our intangible assets at December 31 are summarized as follows (in thousands): | ||||||||||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||||||||||
Original Cost | Accumulated | Intangibles, | Original Cost | Accumulated | Intangibles, | |||||||||||||||
Amortization | Net | Amortization | Net | |||||||||||||||||
Non-compete agreements | $ | 15,152 | $ | -8,545 | $ | 6,607 | $ | 15,236 | $ | -7,002 | $ | 8,234 | ||||||||
Customer contracts | 17,859 | -3,599 | 14,260 | 6,171 | -2,301 | 3,870 | ||||||||||||||
Mining permits | 3,843 | -182 | 3,661 | 3,843 | -116 | 3,727 | ||||||||||||||
Total | $ | 36,854 | $ | -12,326 | $ | 24,528 | $ | 25,250 | $ | -9,419 | $ | 15,831 | ||||||||
Amortization expense attributable to intangible assets is estimated to be $9.6 million in 2015, $6.1 million in 2016, $3.2 million in 2017 and $1.0 million in both 2018 and 2019. The increase in 2015 and 2016 is due to amortization of customer contract intangibles that were acquired at December 31, 2014 and, therefore, had no amortization expense in the periods presented (Note 3). | ||||||||||||||||||||
Advance Royalties—Rights to coal mineral leases are often acquired and/or maintained through advance royalty payments. Where royalty payments represent prepayments recoupable against future production, they are recorded as an asset, with amounts expected to be recouped within one year classified as a current asset. As mining occurs on these leases, the royalty prepayments are charged to operating expenses. We assess the recoverability of royalty prepayments based on estimated future production. Royalty prepayments estimated to be nonrecoverable are expensed. Our advance royalties at December 31 are summarized as follows (in thousands): | ||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||
Advance royalties, affiliates (Note 19) | $ | 10,706 | $ | 17,840 | ||||||||||||||||
Advance royalties, third-parties | 14,605 | 12,427 | ||||||||||||||||||
Total advance royalties | $ | 25,311 | $ | 30,267 | ||||||||||||||||
Asset Retirement Obligations—We record a liability for the estimated cost of future mine asset retirement and closing procedures on a present value basis when incurred or acquired and a corresponding amount is capitalized by increasing the carrying amount of the related long lived asset. Those costs relate to permanently sealing portals at underground mines and to reclaiming the final pits and support acreage at surface mines. Examples of these types of costs, common to both types of mining, include, but are not limited to, removing or covering refuse piles and settling ponds, water treatment obligations, and dismantling preparation plants, other facilities and roadway infrastructure. Accounting for asset retirement obligations also requires depreciation of the capitalized asset retirement cost and accretion of the asset retirement obligation over time. The depreciation is generally determined on a units of production basis and accretion is generally recognized over the life of the producing assets (Note 17). As changes in estimates occur (such as mine plan revisions, changes in estimated costs or changes in timing of the performance of reclamation activities), the revisions to the obligation and asset are recognized at the appropriate credit-adjusted, risk-free interest rate. | ||||||||||||||||||||
Workers’ Compensation and Pneumoconiosis (Black Lung) Benefits—We are generally self-insured for workers’ compensation benefits, including black lung benefits. We accrue a workers’ compensation liability for the estimated present value of workers’ compensation and black lung benefits based on our actuarially determined calculations (Note 18). | ||||||||||||||||||||
Income Taxes—We are not a taxable entity for federal or state income tax purposes; the tax effect of our activities accrues to the unitholders. Although publicly traded partnerships as a general rule will be taxed as corporations, we qualify for an exemption because at least 90% of our income consists of qualifying income, as defined in Section 7704(c) of the Internal Revenue Code. Net income for financial statement purposes may differ significantly from taxable income reportable to unitholders as a result of differences between the tax basis and financial reporting basis of assets and liabilities and the taxable income allocation requirements under our partnership agreement. Individual unitholders have different investment bases depending upon the timing and price of acquisition of their partnership units. Furthermore, each unitholder’s tax accounting, which is partially dependent upon the unitholder’s tax position, differs from the accounting followed in our consolidated financial statements. Accordingly, the aggregate difference in the basis of our net assets for financial and tax reporting purposes cannot be readily determined because information regarding each unitholder’s tax attributes in our partnership is not available to us. Our subsidiaries, ASI and Wildcat Insurance, are subject to federal and state income taxes. A valuation allowance is established if it is more likely than not that a deferred tax asset will not be realized. | ||||||||||||||||||||
Our tax counsel has provided an opinion that ARLP, the Intermediate Partnership and Alliance Coal will each be treated as a partnership. However, as is customary, no ruling has been or will be requested from the Internal Revenue Service (“IRS”) regarding our classification as a partnership for federal income tax purposes. | ||||||||||||||||||||
Revenue Recognition—Revenues from coal sales are recognized when title passes to the customer as the coal is shipped. Some coal supply agreements provide for price adjustments based on variations in quality characteristics of the coal shipped. In certain cases, a customer’s analysis of the coal quality is binding and the results of the analysis are received on a delayed basis. In these cases, we estimate the amount of the quality adjustment and adjust the estimate to actual when the information is provided by the customer. Historically, such adjustments have not been material. Non-coal sales revenues primarily consist of transloading fees, administrative service revenues from our affiliates, mine safety services and products, royalties and throughput fees earned from White Oak Resources LLC (“White Oak”) (Note 12), other coal contract fees and other handling and service fees. Transportation revenues are recognized in connection with us incurring the corresponding costs of transporting coal to customers through third-party carriers for which we are directly reimbursed through customer billings. We had no allowance for doubtful accounts for trade receivables at December 31, 2014 and 2013. | ||||||||||||||||||||
Pension Benefits—Our defined benefit pension obligation and the related benefit cost are accounted for in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 715, Compensation-Retirement Benefits. Pension cost and obligations are actuarially determined and are affected by assumptions including expected return on plan assets, discount rates, mortality assumptions, employee turnover rates and retirement dates. We evaluate our assumptions periodically and make adjustments to these assumptions and the recorded liability as necessary (Note 14). | ||||||||||||||||||||
Common Unit-Based Compensation—We account for compensation expense attributable to restricted common units granted under the Long-Term Incentive Plan (“LTIP”), Supplemental Executive Retirement Plan (“SERP”) and the MGP Amended and Restated Deferred Compensation Plan for Directors (“Deferred Compensation Plan”) based on the requirements of FASB ASC 718, Compensation-Stock Compensation. Accordingly, the fair value of award grants are determined on the grant date of the award and this value is recognized as compensation expense on a pro rata basis for LTIP and SERP awards, as appropriate, over the requisite service period. Compensation expense is fully recognized on the grant date for quarterly distributions credited to SERP accounts and Deferred Compensation Plan awards. The corresponding liability is classified as equity and included in limited partners’ capital in the consolidated financial statements (Note 15). | ||||||||||||||||||||
Net Income of ARLP Per Unit—Basic net income of ARLP per limited partner unit is determined by dividing net income of ARLP available to Limited Partners by the weighted-average number of outstanding common units. Diluted net income of ARLP per unit is based on the combined weighted-average number of common units and common unit equivalents outstanding unless the effect is anti-dilutive (Note 13). | ||||||||||||||||||||
Investments—Investments and ownership interests are accounted for under the equity method of accounting if we have the ability to exercise significant influence, but not control, over the entity. Investments accounted for under the equity method are initially recorded at cost, and the difference between the basis of our investment and the underlying equity in the net assets of the joint venture at the investment date, if any, is amortized over the lives of the related assets that gave rise to the difference. In the event our ownership entitles us to a disproportionate sharing of income or loss, our equity in earnings or losses of affiliates is allocated based on the hypothetical liquidation at book value (“HLBV”) method of accounting. Under the HLBV method, equity in earnings or losses of affiliates is allocated based on the difference between our claim on the net assets of the equity method investee at the end and beginning of the period with consideration of certain eliminating entries regarding differences of accounting for various related party transactions, after taking into account contributions and distributions, if any. Our share of the net assets of the equity method investee is calculated as the amount we would receive if the equity method investee were to liquidate all of its assets at net book value and distribute the resulting cash to creditors, other investors and us according to the respective priorities. Our share of earnings or losses under the HLBV method of accounting from equity method investments and basis difference amortization is reported in the consolidated statements of income as “Equity in loss of affiliates, net.” We review our investments and ownership interests accounted for under the equity method of accounting for impairment whenever events or changes in circumstances indicate a loss in the value of the investment may be other than temporary. For 2014 and 2013, we determined there were no such material events or changes in circumstances that would indicate the carrying amounts of such investments were not recoverable. Our equity method investments include our ownership interests in White Oak, AllDale Minerals, L.P. (“AllDale Minerals”) and Mid-America Carbonates, LLC (“MAC”) (Note 12). | ||||||||||||||||||||
Variable Interest Entities (“VIEs”)—VIEs are primarily entities that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders, as a group, lack one or more of the following characteristics: (a) direct or indirect ability to make decisions, (b) obligation to absorb expected losses or (c) right to receive expected residual returns. VIEs must be evaluated quantitatively and qualitatively to determine the primary beneficiary, which is the reporting entity that has (a) the power to direct activities of a VIE that most significantly impact the VIEs economic performance and (b) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. The primary beneficiary is required to consolidate the VIE for financial reporting purposes. | ||||||||||||||||||||
To determine a VIE’s primary beneficiary, we perform a qualitative assessment to determine which party, if any, has the power to direct activities of the VIE and the obligation to absorb losses and/or receive its benefits. This assessment involves identifying the activities that most significantly impact the VIE’s economic performance and determine whether it, or another party, has the power to direct those activities. When evaluating whether we are the primary beneficiary of a VIE, we perform a qualitative analysis that considers the design of the VIE, the nature of our involvement and the variable interests held by other parties. | ||||||||||||||||||||
New Accounting Standards Issued and Not Yet Adopted–In April 2014, the FASB issued 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. | ||||||||||||||||||||
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. | ||||||||||||||||||||
ACQUISITIONS
ACQUISITIONS | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
ACQUISITIONS | |||||
ACQUISITIONS | |||||
3.ACQUISITIONS | |||||
CONSOL Energy Inc. | |||||
In June 2013, our subsidiary, Alliance Resource Properties acquired the rights to approximately 11.6 million tons of proven and probable medium-sulfur coal reserves, and an additional 5.9 million resource tons, in Grant and Tucker Counties, West Virginia from Laurel Run Mining Company, a subsidiary of CONSOL Energy Inc. (“CONSOL”). The purchase price of $25.2 million was allocated to owned and leased coal rights and was financed using existing cash on hand. As a result of the coal reserve purchase, we reclassified certain tons of medium-sulfur, non-reserve coal deposits as reserves, which together with the reserves purchased above, extended the expected life of Mettiki (WV)’s Mountain View mine. | |||||
In November 2014, Alliance Resource Properties acquired the rights to approximately 124.2 million tons of proven and probable high-sulfur coal reserves, most of which are leased reserves, and various surface properties in western Kentucky from CNX RCPC, LLC (“CNX RCPC”) and Island Creek Coal Company (“Island Creek”), both subsidiaries of CONSOL. The purchase price of $11.6 million was financed using existing cash on hand and allocated to the owned and leased coal rights and surface properties acquired. We also assumed reclamation liabilities totaling $6.0 million. | |||||
In conjunction with this acquisition, WKY CoalPlay, LLC (“WKY CoalPlay”), an entity owned by SGP Land, LLC (“SGP Land”) and two limited liability companies owned by irrevocable trusts established by our President and Chief Executive Officer (“Craft Companies”), acquired approximately 86.6 million tons of proven and probable high-sulfur owned coal reserves in western Kentucky and southern Indiana through its purchase of two wholly owned subsidiaries of CNX RCPC and Island Creek for $57.2 million. In December 2014, WKY CoalPlay’s subsidiaries leased 72.3 million tons of the acquired reserves to us and, as partial consideration for entering the leases, conveyed the remaining 14.3 million tons of its acquired reserves to us. The conveyed reserves have minimal value as a result of uncertainty regarding inclusion in a mine plan. See Note 19 for further information on our related party transactions and lease terms with WKY CoalPlay. The reserves described in this paragraph extended the expected lives of our River View and Dotiki mines and provide potential greenfield mining opportunities. | |||||
Peabody Energy Corporation | |||||
In December 2014, Alliance Resource Properties acquired the rights to approximately 86.2 million tons of proven and probable high-sulfur leased coal reserves in western Kentucky from Midwest Coal Reserves of Kentucky, LLC (“Midwest”) and Cyprus Creek Land Company, both subsidiaries of Peabody Energy Corporation (“Peabody”), in exchange for an overriding royalty to be paid to Peabody based on a percentage of the sales price of coal mined from the reserves acquired. In addition, WKY CoalPlay acquired the rights to approximately 54.1 million tons of owned coal reserves in western Kentucky, through its purchase of a wholly owned subsidiary of Midwest for $29.6 million cash paid at closing. In conjunction with this acquisition, WKY CoalPlay’s subsidiary leased 22.6 million tons of the acquired reserves to us and, as partial consideration for entering the lease, conveyed the remaining 31.5 million tons to us. The conveyed reserves have minimal value as a result of uncertainty regarding inclusion in a mine plan. See Note 19 for further information on our related party transactions and lease terms with WKY CoalPlay. This transaction allowed us to extend the expected life of our River View mine and provides potential greenfield mining opportunities. | |||||
Patriot Coal Corporation | |||||
On December 31, 2014 (the “Initial Closing Date”), we entered into asset purchase agreements with Patriot Coal Corporation (“Patriot”) regarding certain assets relating to two of Patriot’s western Kentucky mining operations, including certain coal sales agreements, unassigned coal reserves and underground mining equipment and infrastructure. Both of the mining operations – the former Dodge Hill and Highland mining operations – were closed by Patriot in late 2014 prior to entering into these agreements. Also on December 31, 2014, Patriot affiliates entered into agreements to sell other assets from Highland to a third party. Additional details of the transactions are discussed below. | |||||
On the Initial Closing Date, our subsidiary, Alliance Coal acquired the rights to certain coal supply agreements from an affiliate of Patriot for approximately $21.0 million. Of the $21.0 million purchase price, $9.3 million was paid into escrow subject to obtaining certain consents and is included in “Other” cash flows from investing activities on our consolidated statements of cash flows and in “Prepaid expenses and other assets” on our consolidated balance sheets. In February 2015, $7.5 million of the escrowed amount was released to Patriot for a consent received and $1.8 million was returned to Alliance Coal as a result of a consent not received, reducing our purchase price to $19.2 million. The acquired agreements provide for delivery of approximately 5.1 million tons of coal from 2015 through 2017. | |||||
On February 3, 2015 (the “Subsequent Closing Date”), Alliance Coal and Alliance Resource Properties acquired from Patriot an estimated 84.1 million tons of proven and probable high-sulfur coal reserves in western Kentucky (substantially all of which was leased by Patriot), and substantially all of Dodge Hill’s assets related to its former coal mining operation in western Kentucky, which principally included underground mining equipment and an estimated 43.2 million tons of non-reserve coal deposits (substantially all of which was leased by Dodge Hill). In addition, we assumed Dodge Hill’s reclamation liabilities totaling $2.5 million. Also on the Subsequent Closing Date, the Intermediate Partnership’s newly formed subsidiaries, UC Mining, LLC and UC Processing, LLC, acquired certain underground mining equipment and spare parts inventory from Patriot’s former Highland mining operation. | |||||
The mining and reserve assets acquired from Patriot described above are located in Union and Henderson Counties, Kentucky. The mining equipment, spare parts and underground infrastructure that we acquired from Patriot will be dispersed to our existing operations in the Illinois Basin region in accordance with their highest and best use. Our purchase price of $19.2 million and $20.5 million paid on the Initial Closing Date and the Subsequent Closing Date, respectively, described above was financed using existing cash on hand. As we have no intentions of operating the former Dodge Hill mining complex as a business and only acquired certain assets of Highland, we believe unaudited pro forma information of revenue and earnings is not meaningful as it relates to the acquisition of Patriot assets described above and furthermore not materially different than revenue and earnings as presented in our consolidated statements of income. The primary ongoing benefit derived from the transaction relates to the coal supply agreements acquired, which would have permitted the sale of 3.2 million tons at average pricing of $46.67 per ton sold during 2014 based on the contract price and sales volumes, if we had owned the contracts during 2014. | |||||
In conjunction with our acquisitions on the Subsequent Closing Date, WKY CoalPlay acquired approximately 39.1 million tons of proven and probable high-sulfur owned coal reserves located in Henderson and Union Counties, Kentucky from Central States Coal Reserves of Kentucky, LLC (“Central States”), a wholly owned subsidiary of Patriot, for $25.0 million and in turn leased those reserves to us (Note 19). Also on the Subsequent Closing Date, Patriot sold certain mining equipment at Highland that we did not acquire to a third party. We anticipate that later in 2015, Patriot will complete the sale of reserves and surface and underground facilities at the former Highland mining operation to this same third party. | |||||
The following table summarizes the consideration paid by us to Patriot on the Initial and Subsequent Closing Dates and the preliminary fair value allocation of assets acquired and liabilities assumed as valued at the respective acquisition dates (in thousands): | |||||
Consideration paid | $ | 39,688 | |||
Recognized amounts of net tangible and intangible assets acquired and liabilities assumed: | |||||
Inventories | 3,255 | ||||
Property, plant and equipment, including mineral rights and leased equipment | 19,740 | ||||
Customer contracts, net | 19,193 | ||||
Asset retirement obligation | (2,500 | ) | |||
Net tangible and intangible assets acquired | $ | 39,688 | |||
Intangible assets related to coal supply agreements will be amortized over the weighted-average term of the contracts. We are currently in the process of evaluating the fair values of the assets acquired and liabilities assumed from Patriot. As a result, the purchase price allocation above is preliminary pending completion of our final evaluation of all assets acquired and liabilities assumed. | |||||
With the reserve acquisitions made in 2014 and 2015 discussed above, we were able to reclassify approximately 85.0 million tons of controlled non-reserve coal deposits to reserves, resulting in a total increase of coal reserves of approximately 537.2 million tons. These acquisitions provide for potential greenfield mining opportunities and extend the expected lives of our River View and Dotiki mines. Depreciation, depletion and amortization of certain assets at these mines will be adjusted as appropriate to reflect the extended lives. | |||||
Green River Collieries, LLC | |||||
On April 2, 2012, we acquired substantially all of Green River Collieries, LLC’s (“Green River”) assets related to its coal mining business and operations located in Webster and Hopkins Counties, Kentucky. The transaction includes the Onton No. 9 mining complex (“Onton mine”), which includes the mine, a dock, tugboat, and a lease for the preparation plant, and an estimated 40.0 million tons of coal reserves in the West Kentucky No. 9 coal seam. The Green River acquisition is consistent with our general business strategy and complements our current coal mining operations. | |||||
The following table summarizes the consideration paid to Green River and the final fair value allocation of assets acquired and liabilities assumed at the acquisition date (in thousands): | |||||
Consideration paid | $ | 100,000 | |||
Recognized amounts of net tangible and intangible assets acquired and liabilities assumed: | |||||
Inventories | 547 | ||||
Advance royalties | 888 | ||||
Property, plant and equipment, including mineral rights and leased facilities | 117,110 | ||||
Noncompete agreement | 1,200 | ||||
Customer contracts, net | 4,955 | ||||
Permits | 843 | ||||
Capital lease obligation | (17,384 | ) | |||
Asset retirement obligation | (6,032 | ) | |||
Pneumoconiosis benefits | (2,127 | ) | |||
Net tangible and intangible assets acquired | $ | 100,000 | |||
During the quarter ended September 30, 2012, we finalized the purchase price allocation related to the assets acquired and liabilities assumed from Green River. The adjustments to the preliminary fair values resulted from additional information obtained about facts in existence on April 2, 2012. Prior financial statements have not been retrospectively adjusted due to immateriality. | |||||
Intangible assets and liabilities related to coal supply agreements are being amortized over the average term of the contracts. Mine permits will be amortized over the estimated useful life of the Onton mine and the noncompete agreement will be amortized over the term of the agreement. | |||||
As the Green River acquisition occurred on April 2, 2012, we believe unaudited pro forma information of revenue and earnings is not materially different than revenue and earnings as presented in our consolidated statements of income. | |||||
ASSET_IMPAIRMENT_CHARGE
ASSET IMPAIRMENT CHARGE | 12 Months Ended |
Dec. 31, 2014 | |
ASSET IMPAIRMENT CHARGE | |
ASSET IMPAIRMENT CHARGE | |
4.ASSET IMPAIRMENT CHARGE | |
Pontiki’s mining complex in Martin County, Kentucky was idled from August 29, 2012 to November 25, 2012 following an Mine Safety and Health Administration (“MSHA”) closure order. This idling together with ongoing market uncertainty and the likelihood of future cost increases arising from stringent regulatory oversight placed the long-term viability of Pontiki at significant risk. As a result of these events, we recorded an asset impairment charge of $19.0 million during the quarter ended September 30, 2012 to reduce the carrying value of the asset group representing the Pontiki mining complex (“Pontiki Assets”) to an estimated fair value of $16.1 million which was determined using the market and cost valuation techniques and represents a Level 3 fair value measurement. Although the Pontiki mining complex resumed production operations, we subsequently ceased operations at the Pontiki mining complex in late November 2013. Many of Pontiki’s employees and some of its equipment were migrated to our MC Mining and other operations. No additional impairment was required related to the closure of the mine in 2013. We sold most of the remaining assets at the Pontiki mining complex in May 2014. | |
INVENTORIES
INVENTORIES | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
INVENTORIES | ||||||||
INVENTORIES | ||||||||
5.INVENTORIES | ||||||||
Inventories consist of the following at December 31, (in thousands): | ||||||||
2014 | 2013 | |||||||
Coal | $ | 50,130 | $ | 12,791 | ||||
Supplies (net of reserve for obsolescence of $2,935 and $3,150, respectively) | 33,025 | 31,423 | ||||||
Total inventory | $ | 83,155 | $ | 44,214 | ||||
PROPERTY_PLANT_AND_EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
PROPERTY, PLANT AND EQUIPMENT | ||||||||
PROPERTY, PLANT AND EQUIPMENT | ||||||||
6.PROPERTY, PLANT AND EQUIPMENT | ||||||||
Property, plant and equipment consist of the following at December 31, (in thousands): | ||||||||
2014 | 2013 | |||||||
Mining equipment and processing facilities | $ | 1,757,772 | $ | 1,583,329 | ||||
Land and mineral rights | 376,937 | 369,347 | ||||||
Buildings, office equipment and improvements | 278,283 | 226,672 | ||||||
Construction and mine development in progress | 82,530 | 194,221 | ||||||
Mine development costs | 320,098 | 272,303 | ||||||
Property, plant and equipment, at cost | 2,815,620 | 2,645,872 | ||||||
Less accumulated depreciation, depletion and amortization | -1,150,414 | -1,031,493 | ||||||
Total property, plant and equipment, net | $ | 1,665,206 | $ | 1,614,379 | ||||
Equipment leased by us under lease agreements which are determined to be capital leases are stated at an amount equal to the present value of the minimum lease payments during the lease term, less accumulated amortization. Equipment under capital leases totaling $20.9 million included in mining equipment and processing facilities is amortized on the straight-line method over the shorter of its useful life or the related lease term. The provision for amortization of leased properties is included in depreciation, depletion and amortization expense. Accumulated amortization related to our capital leases was $5.6 million and $5.8 million as of December 31, 2014 and 2013, respectively, and amortization expense was $1.6 million, $2.0 million and $1.9 million for the years ended December 31, 2014, 2013 and 2012, respectively. For information regarding the impairment of assets at the Pontiki mine, please see Note 4. | ||||||||
LONGTERM_DEBT
LONG-TERM DEBT | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
LONG-TERM DEBT | ||||||||
LONG-TERM DEBT | 7.LONG-TERM DEBT | |||||||
Long-term debt consists of the following at December 31, (in thousands): | ||||||||
2014 | 2013 | |||||||
Revolving Credit facility | $ | 140,000 | $ | 250,000 | ||||
Senior notes | - | 18,000 | ||||||
Series A senior notes | 205,000 | 205,000 | ||||||
Series B senior notes | 145,000 | 145,000 | ||||||
Term loan | 231,250 | 250,000 | ||||||
Securitization facility | 100,000 | - | ||||||
821,250 | 868,000 | |||||||
Less current maturities | -230,000 | -36,750 | ||||||
Total long-term debt | $ | 591,250 | $ | 831,250 | ||||
Credit Facility. On May 23, 2012, our Intermediate Partnership entered into a credit agreement (the “Credit Agreement”) with various financial institutions for a revolving credit facility (the “Revolving Credit Facility”) of $700.0 million and a term loan (the “Term Loan”) in the aggregate principal amount of $250.0 million (collectively, the Revolving Credit Facility and Term Loan are referred to as the “Credit Facility”). Borrowings under the Credit Agreement bear interest at a Base Rate or Eurodollar Rate, at our election, plus an applicable margin that fluctuates depending upon the ratio of Consolidated Debt to Consolidated Cash Flow (each as defined in the Credit Agreement). We have elected a Eurodollar Rate, which, with applicable margin, was 1.57% on borrowings outstanding as of December 31, 2014. The Credit Facility matures May 23, 2017, at which time all amounts then outstanding are required to be repaid. Interest is payable quarterly, with principal of the Term Loan due as follows: for each quarter commencing June 30, 2014 and ending March 31, 2016, quarterly principal payments in an amount per quarter equal to 2.50% of the aggregate amount of the Term Loan advances outstanding; for each quarter beginning June 30, 2016 through December 31, 2016, 20% of the aggregate amount of the Term Loan advances outstanding; and the remaining balance of the Term Loan advances at maturity. In June 2014, we began making quarterly principal payments on the Term Loan, leaving a balance of $231.3 million at December 31, 2014. We have the option to prepay the Term Loan at any time in whole or in part subject to terms and conditions described in the Credit Agreement. Upon a “change of control” (as defined in the Credit Agreement), the unpaid principal amount of the Credit Facility, all interest thereon and all other amounts payable under the Credit Agreement would become due and payable. | ||||||||
At December 31, 2014, we had borrowings of $140.0 million and $5.4 million of letters of credit outstanding with $554.6 million available for borrowing under the Revolving Credit Facility. We utilize the Revolving Credit Facility, as appropriate, for working capital requirements, capital expenditures, debt payments and distribution payments. We incur an annual commitment fee of 0.20% on the undrawn portion of the Revolving Credit Facility. | ||||||||
We incurred debt issuance costs of approximately $4.3 million in 2012 associated with the Credit Agreement, which have been deferred and are being amortized as a component of interest expense over the duration of the Credit Agreement. We also expensed $1.1 million in 2012 of previously deferred debt issuance cost associated with our previous $300 million term loan. | ||||||||
Series A Senior Notes. On June 26, 2008, our Intermediate Partnership entered into a Note Purchase Agreement (the “2008 Note Purchase Agreement”) with a group of institutional investors in a private placement offering. We issued $205.0 million of Series A senior notes, which bear interest at 6.28% and mature on June 26, 2015 with interest payable semi-annually. | ||||||||
Series B Senior Notes. On June 26, 2008, we issued under the 2008 Note Purchase Agreement $145.0 million of Series B senior notes (together with the Series A senior notes, the “2008 Senior Notes”), which bear interest at 6.72% and mature on June 26, 2018 with interest payable semi-annually. | ||||||||
The 2008 Senior Notes and the Credit Facility described above (collectively, “ARLP Debt Arrangements”) are guaranteed by all of the material direct and indirect subsidiaries of our Intermediate Partnership. 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 1.01 to 1.0 and 24.0 to 1.0, respectively, for the trailing twelve months ended December 31, 2014. We were in compliance with the covenants of the ARLP Debt Arrangements as of December 31, 2014. | ||||||||
Accounts Receivable Securitization. On December 5, 2014, certain direct and indirect wholly owned subsidiaries of our Intermediate Partnership entered into a $100.0 million accounts receivable securitization facility (“Securitization Facility”) providing additional liquidity and funding. Under the Securitization Facility, certain subsidiaries sell trade receivables on an ongoing basis to our Intermediate Partnership, which then sells the trade receivables to AROP Funding, a wholly owned bankruptcy-remote special purpose subsidiary of our Intermediate Partnership, which in turn borrows on a revolving basis up to $100.0 million secured by the trade receivables. After the sale, Alliance Coal, as servicer of the assets, collects the receivables on behalf of AROP Funding. The Securitization Facility bears interest based on a Eurodollar Rate. The Securitization Facility has an initial term of 364 days, however we have the contractual ability and the intent to extend the term for an additional 364 days. At December 31, 2014, we had $100.0 million outstanding under the Securitization Facility. Debt issuance costs were immaterial for the transaction. | ||||||||
Other. In addition to the letters of credit available under the Credit Facility discussed above, we also have agreements with two banks to provide additional letters of credit in an aggregate amount of $31.1 million to maintain surety bonds to secure certain asset retirement obligations and our obligations for workers’ compensation benefits. At December 31, 2014, we had $30.7 million in letters of credit outstanding under agreements with these two banks. | ||||||||
Aggregate maturities of long-term debt are payable as follows (in thousands): | ||||||||
Year Ending | ||||||||
December 31, | ||||||||
2015 | $ | 230,000 | ||||||
2016 | 256,250 | |||||||
2017 | 190,000 | |||||||
2018 | 145,000 | |||||||
2019 | - | |||||||
Thereafter | - | |||||||
$ | 821,250 | |||||||
FAIR_VALUE_MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended | |||
Dec. 31, 2014 | ||||
FAIR VALUE MEASUREMENTS | ||||
FAIR VALUE MEASUREMENTS | ||||
8.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 December 31, 2014 and 2013, the estimated fair value of our long-term debt, including current maturities, was approximately $833.4 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 (see Note 7). 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. | ||||
DISTRIBUTIONS_OF_AVAILABLE_CAS
DISTRIBUTIONS OF AVAILABLE CASH | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
DISTRIBUTIONS OF AVAILABLE CASH | ||||||||
DISTRIBUTIONS OF AVAILABLE CASH | ||||||||
9.DISTRIBUTIONS OF AVAILABLE CASH | ||||||||
We distribute 100% of our available cash within 45 days after the end of each quarter to unitholders of record and to our general partners. Available cash is generally defined in the partnership agreement as all cash and cash equivalents on hand at the end of each quarter less reserves established by our managing general partner in its reasonable discretion for future cash requirements. These reserves are retained to provide for the conduct of our business, the payment of debt principal and interest and to provide funds for future distributions. | ||||||||
As quarterly distributions of available cash exceed the target distribution levels established in our partnership agreement, our managing general partner receives distributions based on specified increasing percentages of the available cash that exceeds the target distribution levels. The target distribution levels are based on the amounts of available cash from our operating surplus distributed for a given quarter that exceed the minimum quarterly distribution (“MQD”) and common unit arrearages, if any. Our partnership agreement defines the MQD as $0.125 per unit ($0.50 per unit on an annual basis). | ||||||||
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. For the years ended December 31, 2014, 2013 and 2012, we allocated to our managing general partner incentive distributions of $129.8 million, $115.6 million and $102.1 million, respectively. The following table summarizes the quarterly per unit distribution paid during the respective quarter: | ||||||||
Year | ||||||||
2014 | 2013 | 2012 | ||||||
First Quarter | $ | $ | $ | |||||
0.59875 | 0.55375 | 0.49500 | ||||||
Second Quarter | $ | $ | $ | |||||
0.61125 | 0.56500 | 0.51250 | ||||||
Third Quarter | $ | $ | $ | |||||
0.62500 | 0.57625 | 0.53125 | ||||||
Fourth Quarter | $ | $ | $ | |||||
0.63750 | 0.58750 | 0.54250 | ||||||
On January 28, 2015, we declared a quarterly distribution of $0.65 per unit, totaling approximately $83.6 million (which includes our managing general partner’s incentive distributions), on all our common units outstanding, which was paid on February 13, 2015, to all unitholders of record on February 6, 2015. | ||||||||
INCOME_TAXES
INCOME TAXES | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
INCOME TAXES | ||||||||||||
INCOME TAXES | ||||||||||||
10.INCOME TAXES | ||||||||||||
Our subsidiaries, ASI and Wildcat Insurance, are subject to federal and state income taxes. Wildcat Insurance’s income is due to insurance premiums provided by our other subsidiaries. ASI’s income is principally due to its subsidiary, Matrix Design. There are minor temporary differences between our taxable entities financial reporting basis and the tax basis of their assets and liabilities. Components of income tax expense (benefit) are as follows (in thousands): | ||||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Current: | ||||||||||||
Federal | $ | - | $ | 7 | $ | -37 | ||||||
State | - | 16 | -183 | |||||||||
- | 23 | -220 | ||||||||||
Deferred: | ||||||||||||
Federal | - | 1,022 | -753 | |||||||||
State | - | 351 | -109 | |||||||||
- | 1,373 | -862 | ||||||||||
Income tax expense (benefit) | $ | - | $ | 1,396 | $ | -1,082 | ||||||
We have deferred tax assets due to net operating losses and research and development credits associated with ASI’s operations in the amount of $6.5 million, partially offset by liabilities of $1.3 million. State and federal valuation allowances have been established to reduce these deferred tax assets to an amount that will, more likely than not, be realized. During 2014, the federal and state valuation allowances increased to $4.0 million and $1.2 million, respectively, primarily due to the ongoing evaluation process of the losses and credits anticipated to be realized in future years. | ||||||||||||
Reconciliations from the provision for income taxes at the U.S. federal statutory tax rate to the effective tax rate for the provision for income taxes are as follows (in thousands): | ||||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Income taxes at statutory rate | $ | 174,024 | $ | 138,210 | $ | 117,057 | ||||||
Less: Income taxes at statutory rate on Partnership income not subject to income taxes | -174,912 | -139,771 | -117,767 | |||||||||
Increase/(decrease) resulting from: | ||||||||||||
State taxes, net of federal income tax | -112 | -192 | -83 | |||||||||
Change in valuation allowance of deferred tax assets | 1,636 | 3,483 | - | |||||||||
Other | -636 | -334 | -289 | |||||||||
Income tax expense (benefit) | $ | - | $ | 1,396 | $ | -1,082 | ||||||
NONCONTROLLING_INTEREST
NONCONTROLLING INTEREST | 12 Months Ended |
Dec. 31, 2014 | |
NONCONTROLLING INTEREST | |
NONCONTROLLING INTEREST | |
11.NONCONTROLLING INTEREST | |
On November 10, 2014 (the “Cavalier Formation Date”), our wholly owned subsidiary, Alliance Minerals and Bluegrass Minerals Management, LLC (“Bluegrass Minerals”) entered into a limited liability company agreement (the “Cavalier Agreement”) to form Cavalier Minerals. Cavalier Minerals was formed to indirectly acquire oil and gas mineral interests through its noncontrolling ownership interest in AllDale Minerals. Alliance Minerals and Bluegrass Minerals committed funding of $48.0 million and $2.0 million, respectively, to Cavalier Minerals. Alliance Minerals’ contributions through December 31, 2014 to Cavalier Minerals totaled $11.5 million, leaving a remaining commitment to Cavalier Minerals of $36.5 million at December 31, 2014, which we expect to fund over the next two to four years. We expect to fund this additional commitment utilizing existing cash balances, future cash flows from operations, borrowings under credit and securitization facilities and cash provided from the issuance of debt or equity. Bluegrass Minerals, which is owned and controlled by an officer of ARH and is Cavalier Minerals’ managing member, contributed $0.5 million as of December 31, 2014 and has a remaining commitment of $1.5 million. Cavalier Minerals has committed to provide funding of $49.0 million to AllDale Minerals. Cavalier Minerals has and will continue to provide funding to AllDale Minerals using contributions from Alliance Minerals and Bluegrass Minerals (Note 12). | |
In accordance with the Cavalier Agreement, Bluegrass Minerals is entitled to receive an incentive distribution from Cavalier Minerals equal to 25.0% of all distributions (including in liquidation) after return of members’ capital reduced by certain distributions received by Bluegrass Minerals or its owner from AllDale Minerals Management, LLC (“AllDale Minerals Management”) (Note 12). Alliance Minerals’ ownership interest in Cavalier Minerals at December 31, 2014 was 96.0%. The remainder of the equity ownership is held by Bluegrass Minerals. As of December 31, 2014, Cavalier Minerals had not made any distributions to its owners. We have consolidated Cavalier Minerals’ financial results in accordance with FASB ASC 810, Consolidation. Based on the guidance in FASB ASC 810, we concluded that Cavalier Minerals is a VIE and we are the primary beneficiary because our consent is required for significant activities of Cavalier Minerals and due to Bluegrass Minerals’ relationship to us as described above. Bluegrass Minerals equity ownership of Cavalier Minerals is accounted for as noncontrolling ownership interest in our consolidated balance sheets. In addition, earnings attributable to Bluegrass Minerals is recognized as noncontrolling ownership interest in our consolidated statements of income. | |
EQUITY_INVESTMENTS
EQUITY INVESTMENTS | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
EQUITY INVESTMENTS | |||||||||||
EQUITY INVESTMENTS | |||||||||||
12.EQUITY INVESTMENTS | |||||||||||
White Oak | |||||||||||
On September 22, 2011 (the “Transaction Date”), we entered into a series of transactions with 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 $320.5 million between the Transaction Date and December 31, 2014. Inclusive of this funding, we expect to fund to White Oak a total of approximately $395.5 million to $415.5 million from the Transaction Date through December 31, 2015. We expect to fund additional commitments utilizing existing cash balances, future cash flows from operations, borrowings under credit and securitization 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, 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 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 twelve months ended December 31, 2014, WOR Properties acquired from White Oak, for $4.1 million cash paid at various closings, an additional 14.6 million tons of reserves. Of the additional tons acquired in 2014 and 2013, 53.4 million tons have been developed for mining by White Oak. At December 31, 2014, WOR Properties had provided $114.8 million to acquire a total of 309.6 million tons of coal reserves and fund the development of the acquired reserves. WOR Properties has a remaining commitment of $25.2 million for additional coal reserve acquisitions. In conjunction with the Reserve Acquisition and the additional reserve acquisitions discussed above, WOR Properties entered into leases with White Oak, which provide White Oak the rights to develop and mine the acquired reserves. The leases require, in consideration of the lease-back of the coal reserves and the funding of development of those coal reserves, White Oak to pay WOR Properties earned royalties and, during the period beginning January 1, 2015 and ending December 31, 2034, fully recoupable minimum royalty totaling $2.1 million per month. The lease terms are through December 31, 2034, subject to certain renewal options for White Oak. In December 2014, we received the first minimum royalty payment of $2.1 million from White Oak, against which earned royalties for the period prior to January 1, 2015 will be credited. Unearned minimum royalty payments from White Oak are reflected in the “Other current liabilities” and “Other liabilities” line items in our consolidated balance sheets. | |||||||||||
Series A Units | |||||||||||
Concurrent with the Reserve Acquisition, WOR Processing made an initial equity investment of $35.7 million in White Oak to purchase Series A Units representing ownership in White Oak. White Oak and WOR Processing agreed to an additional investment in Series A Units by WOR Processing of at least $114.3 million (for a minimum total of $150.0 million), and WOR Processing committed to invest up to an additional $125.0 million in Series A Units (for a maximum total of $275.0 million) to the extent required for development or operation of the White Oak Mine No. 1 mine, and subject to certain rights and obligations of other White Oak owners to participate in such investment. WOR Processing purchased $129.3 million of additional Series A Units between the Transaction Date and December 31, 2013, fulfilling WOR Processing’s minimum initial commitment of $150.0 million. During the year ended December 31, 2014, WOR Processing purchased $99.8 million of additional Series A units, bringing our total investment in Series A units to $264.8 million at December 31, 2014. Additional equity investments in Series A and B units of $39.8 million and $45.9 million were made by another White Oak owner in 2014 and 2013, respectively. In 2015, through February 13, 2015, WOR Processing has purchased $6.0 million of additional Series A Units. | |||||||||||
The Series A Units are entitled to receive 100% of all distributions made by White Oak until such time as the Series A Units have realized a defined minimum return, after which the Series A Units will receive distributions based on a participation percentage determined in accordance with the White Oak operating agreement. In addition, the Series A Units contain certain liquidation preferences that require, upon an event of liquidation, the minimum return provision must be satisfied on a priority basis over other classes of White Oak equity. WOR Processing’s ownership interest and distribution participation percentage in White Oak may increase with additional investments in the Series A Units up to a maximum of 40.0% for an investment of $275.0 million in the Series A Units. WOR Processing’s ownership and member’s voting interest in White Oak at December 31, 2014 and 2013 was 39.0% and 21.6%, respectively, 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. | |||||||||||
There are four primary activities we believe most significantly impact White Oak’s economic performance. These primary activities are associated with financing, capital, operating and marketing of White Oak’s development and operation of the mine areas covered by the agreements. We have various protective or participating rights related to these primary activities, such as minority representation on White Oak’s board of directors, restrictions on indebtedness and other obligations, the ability to assume control of White Oak’s board of directors in certain circumstances, such as an event of default by White Oak, and the right to approve certain coal sales agreements that represent a significant concentration of White Oak’s coal sales, among others. Currently, we have two representatives on White Oak’s board of directors, which consists of five board members. 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. However, the agreements provide us the ability to exert significant influence over these activities. As such, we recognize WOR Processing’s interest in White Oak as an equity investment in affiliate in our consolidated balance sheets. We account for WOR Processing’s ownership interest in White Oak under the equity method of accounting, with recognition of its ownership interest in the income or loss of White Oak as equity in income/(loss) in our consolidated statements of income. As of December 31, 2014, WOR Processing had invested $264.8 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. As of December 31, 2014, White Oak has made no distributions to us. | |||||||||||
We record WOR Processing’s equity in income or losses of affiliates under the HLBV method of accounting due to the preferences to which WOR Processing is entitled to receive on distributions. Under the HLBV method, we determine WOR Processing’s share of White Oak income or losses by determining the difference between its claim to White Oak’s book value at the end of the period as compared to the beginning of the period with consideration of certain eliminating entries regarding differences of accounting for various related party transactions between us and White Oak. WOR Processing’s claim on White Oak’s book value is calculated as the amount it would receive if White Oak were to liquidate all of its assets at recorded amounts determined in accordance with GAAP and distribute the resulting cash to creditors, other investors and WOR Processing according to the respective priorities. For the twelve months ended December 31, 2014 and 2013, we were allocated losses of $16.6 million and $25.3 million, respectively. Allocated losses from White Oak in 2014 were reduced by, and are reflected net of $11.6 million due to the impact of purchases of Series A Units during the period by another White Oak owner. 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. | |||||||||||
Services Agreement | |||||||||||
Simultaneous with the closing of the Reserve Acquisition, WOR Processing entered into a Coal Handling and Preparation Agreement (“Services 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 Mine No. 1. The Services Agreement requires White Oak to pay a throughput fee for these services of $5.00 per ton of feedstock coal processed through the preparation plant up to a minimum throughput quantity (and, beginning in January 2015, to pay any deficiency if less than the minimum tonnage is throughput) and $2.40 per ton for quantities in excess of the minimum throughput quantity. The minimum throughput quantity is 666,667 tons of feedstock coal per month. The term of the Services Agreement is through December 31, 2034. During the year ended December 31, 2013, WOR Processing began processing and loading coal through the facilities. WOR Processing earned throughput fees of $19.6 million and $2.1 million for the years ended December 31, 2014 and 2013, respectively, for processing and loading coal through the facilities. Throughput fees earned from White Oak are included in “Other sales and operating revenues” on our 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 December 31, 2014. | |||||||||||
Equipment Financing Commitment | |||||||||||
Also on the Transaction Date, the Intermediate Partnership committed to provide $100.0 million of fully collateralized equipment financing with a five-year term to White Oak for the purchase of coal mining equipment should other third-party funding sources not be available. During the second quarter of 2012, White Oak obtained third-party financing for the purchase of coal mining equipment, and on June 18, 2012, repaid the Intermediate Partnership the outstanding amount of $2.2 million for previous advances and interest due. White Oak also terminated early the equipment financing agreement with the Intermediate Partnership, and as part of the termination, paid the Intermediate Partnership a $2.0 million cancellation fee on June 18, 2012. | |||||||||||
AllDale Minerals | |||||||||||
On the Cavalier Formation Date, Cavalier Minerals (Note 11) contributed $7.4 million in return for a limited partner interest in AllDale Minerals, an entity created to purchase oil and gas mineral interests in various geographic locations within producing basins in the continental U.S. Between the Cavalier Formation Date and December 31, 2014, Cavalier Minerals’ contributed $4.2 million to AllDale Minerals. Cavalier Minerals has a remaining commitment to AllDale Minerals of $37.4 million at December 31, 2014, which it expects to fund over the next two to four years. AllDale Minerals is managed and controlled by its general partner, AllDale Minerals Management. AllDale Minerals Management is owned by four members, consisting of three parties unrelated to us or our affiliates and Bluegrass Minerals, which as noted above is owned by an officer of ARH. Bluegrass Minerals does not individually possess the controlling interest of AllDale Minerals Management. Due to Cavalier Minerals’ significant ownership interest in AllDale Minerals, we have recognized Cavalier Minerals’ limited partner interest in AllDale Minerals as an equity investment in affiliate in our consolidated balance sheets. We account for Cavalier Minerals’ ownership interest in the income or loss of AllDale Minerals as equity income or loss in our consolidated statements of income. We record equity income or loss based on AllDale Minerals’ distribution structure. Cavalier Minerals’ limited partner interest in AllDale Minerals was 71.7% at December 31, 2014. The remainder of the equity ownership is held by other limited partners and AllDale Minerals Management. For the period from the Cavalier Formation Date through December 31, 2014, we have been allocated losses of $0.4 million from AllDale Minerals. | |||||||||||
In accordance with AllDale Minerals’ partnership agreement, limited partners, such as Cavalier Minerals, will initially receive all distributions of proceeds from certain producing basins based upon the greater of the limited partner’s cumulative contributions plus 25.0% or an amount sufficient to cause the limited partner to receive an effective internal rate of return of 10.0%. Afterwards, 20.0% of all distributions will be allocated to AllDale Minerals Management, as an incentive distribution to the general partner, with the remaining 80.0% allocated to limited partners based upon ownership percentages. In addition, upon an event of liquidation, any proceeds will be distributed using the same methodology. As of December 31, 2014, AllDale Minerals has not made any distributions to its owners. | |||||||||||
MAC | |||||||||||
In March 2006, White County Coal, and Alexander J. House entered into a limited liability company agreement to form MAC. MAC was formed to engage in the development and operation of a rock dust mill and to manufacture and sell rock dust. White County Coal initially invested $1.0 million in exchange for a 50% equity interest in MAC. Our equity investment in MAC was $1.6 million at December 31, 2014. Effective on January 1, 2015, we purchased the remaining 50.0% equity interest in MAC from Mr. House for $5.5 million cash paid at closing. | |||||||||||
Summarized Financial Information | |||||||||||
White Oak’s results for the years ended December 31, 2014, 2013 and 2012, are summarized as follows (in thousands): | |||||||||||
2014 | 2013 | 2012 | |||||||||
Total revenues | $ | 42,748 | $ | - | $ | - | |||||
Gross loss | -1,134 | -5,404 | -7 | ||||||||
Loss from operations | -21,018 | -24,103 | -16,037 | ||||||||
Net loss | -46,324 | -30,263 | -16,884 | ||||||||
White Oak’s financial position for the years ended December 31, 2014 and 2013 are summarized as follows (in thousands): | |||||||||||
2014 | 2013 | ||||||||||
Current assets | $ | 37,105 | $ | 11,228 | |||||||
Noncurrent assets | 639,953 | 533,696 | |||||||||
Current liabilities | 71,489 | 50,668 | |||||||||
Noncurrent liabilities | 372,507 | 354,597 | |||||||||
NET_INCOME_OF_ARLP_PER_LIMITED
NET INCOME OF ARLP PER LIMITED PARTNER UNIT | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
NET INCOME OF ARLP PER LIMITED PARTNER UNIT | |||||||||||
NET INCOME OF ARLP PER LIMITED PARTNER UNIT | |||||||||||
13.NET INCOME OF ARLP PER LIMITED PARTNER UNIT | |||||||||||
We apply the provisions of FASB ASC 260, Earnings Per Share. As required by FASB ASC 260, we apply the two-class method in calculating earnings per unit (“EPU”). Net income of ARLP 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 (Note 9). 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 and therefore, undistributed earnings of the ARLP Partnership are not allocated to the IDR holder. In addition, our outstanding unvested awards under our LTIP, SERP and Deferred Compensation Plan contain rights to nonforfeitable distributions and are therefore considered participating securities. As such, we allocate undistributed and distributed earnings to the outstanding awards in our calculation of EPU. | |||||||||||
The following is a reconciliation of net income of ARLP and net income used for calculating EPU and the weighted-average units used in computing EPU for the years ended December 31, 2014, 2013 and 2012, respectively (in thousands, except per unit data): | |||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Net income of ARLP | $ | 497,229 | $ | 393,490 | $ | 335,571 | |||||
Adjustments: | |||||||||||
Managing general partner priority distributions | -132,449 | -117,995 | -104,168 | ||||||||
General partners’ 2% equity ownership | -7,325 | -5,554 | -4,669 | ||||||||
General partners’ special allocation of certain general and administrative expenses | 1,500 | 2,200 | 2,000 | ||||||||
Limited partners’ interest in Net income of ARLP | 358,955 | 272,141 | 228,734 | ||||||||
Less: | |||||||||||
Distributions to participating securities | -2,956 | -2,362 | -2,095 | ||||||||
Undistributed earnings attributable to participating securities | -2,669 | -1,350 | -922 | ||||||||
Net income of ARLP available to limited partners | $ | 353,330 | $ | 268,429 | $ | 225,717 | |||||
Weighted-average limited partner units outstanding – Basic and Diluted (1) | 74,044 | 73,904 | 73,726 | ||||||||
Basic and Diluted Net income of ARLP per limited partner unit (1) | $ | 4.77 | $ | 3.63 | $ | 3.06 | |||||
-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 year ended December 31, 2014, 2013 and 2012, the combined total of LTIP, SERP and Deferred Compensation Plan units of 798,701, 682,732 and 689,912, respectively, were considered anti-dilutive. | ||||||||||
During 2014, 2013 and 2012, our managing general partner made a capital contribution of $1.5 million, $2.2 million and $2.0 million, respectively, to us for certain general and administrative expenses. A special allocation of general and administrative expenses equal to the amount of our managing general partner’s contribution was made to them. Net income of ARLP allocated to the limited partners was not burdened by this expense (Note 19). | |||||||||||
EMPLOYEE_BENEFIT_PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||
EMPLOYEE BENEFIT PLANS | |||||||||||||||||||
EMPLOYEE BENEFIT PLANS | |||||||||||||||||||
14.EMPLOYEE BENEFIT PLANS | |||||||||||||||||||
Defined Contribution Plans—Our eligible employees currently participate in a defined contribution profit sharing and savings plan (“PSSP”) that we sponsor. The PSSP covers substantially all regular full-time employees. PSSP participants may elect to make voluntary contributions to this plan up to a specified amount of their compensation. We make matching contributions based on a percent of an employee’s eligible compensation and also make an additional nonmatching contribution. Our contribution expense for the PSSP was approximately $21.8 million, $20.4 million and $18.9 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||||||||
Defined Benefit Plan—Eligible employees at certain of our mining operations participate in a defined benefit plan (the “Pension Plan”) that we sponsor. The Pension Plan is currently closed to new applicants; however, participants in the plan continue to accrue benefits. The benefit formula for the Pension Plan is a fixed-dollar unit based on years of service. | |||||||||||||||||||
The following sets forth changes in benefit obligations and plan assets for the years ended December 31, 2014 and 2013 and the funded status of the Pension Plan reconciled with the amounts reported in our consolidated financial statements at December 31, 2014 and 2013, respectively (dollars in thousands): | |||||||||||||||||||
2014 | 2013 | ||||||||||||||||||
Change in benefit obligations: | |||||||||||||||||||
Benefit obligations at beginning of year | $ | 85,662 | $ | 86,468 | |||||||||||||||
Service cost | 2,174 | 2,783 | |||||||||||||||||
Interest cost | 4,074 | 3,640 | |||||||||||||||||
Actuarial loss (gain) | 19,841 | -5,479 | |||||||||||||||||
Benefits paid | -2,125 | -1,750 | |||||||||||||||||
Benefit obligations at end of year | 109,626 | 85,662 | |||||||||||||||||
Change in plan assets: | |||||||||||||||||||
Fair value of plan assets at beginning of year | 67,480 | 55,390 | |||||||||||||||||
Employer contribution | 2,671 | 2,400 | |||||||||||||||||
Actual return on plan assets | 1,495 | 11,440 | |||||||||||||||||
Benefits paid | -2,125 | -1,750 | |||||||||||||||||
Fair value of plan assets at end of year | 69,521 | 67,480 | |||||||||||||||||
Funded status at the end of year | $ | -40,105 | $ | -18,182 | |||||||||||||||
Amounts recognized in balance sheet: | |||||||||||||||||||
Non-current liability | $ | -40,105 | $ | -18,182 | |||||||||||||||
$ | -40,105 | $ | -18,182 | ||||||||||||||||
Amounts recognized in accumulated other comprehensive income consists of: | |||||||||||||||||||
Net actuarial loss | $ | -41,278 | $ | -18,230 | |||||||||||||||
Weighted-average assumptions to determine benefit obligations as of December 31, | |||||||||||||||||||
Discount rate | 3.92% | 4.89% | |||||||||||||||||
Expected rate of return on plan assets | 8.00% | 8.00% | |||||||||||||||||
Weighted-average assumptions used to determine net periodic benefit cost for the year ended December 31, | |||||||||||||||||||
Discount rate | 4.89% | 3.99% | |||||||||||||||||
Expected return on plan assets | 8.00% | 8.00% | |||||||||||||||||
The actuarial loss component of the change in benefit obligation in 2014 was primarily attributable to a decrease in the discount rate and the actual rate of return on plan assets compared to December 31, 2013, adoption of newly issued mortality tables reflecting improved life expectancies and updated retirement and withdrawal rate estimates. The actuarial gain component of the change in benefit obligation in 2013 was primarily attributable to an increase in the discount rate and an increase in the actual rate of return on plan assets compared to December 31, 2012, offset in part by an update to future benefit payment estimates. | |||||||||||||||||||
The expected long-term rate of return assumption is based on broad equity and bond indices, the investment goals and objectives, the target investment allocation and on the long-term historical rates of return for each asset class. The expected long-term rate of return used to determine our pension liability was 8.0% based on the above factors and an asset allocation assumption of 70.0% invested in domestic equity securities with an expected long-term rate of return of 9.9%, 10.0% invested in international equities with an expected long-term rate of return of 5.6% and 20.0% invested in fixed income securities with an expected long-term rate of return of 5.7%. Expected long-term rate of return is based on a 20-year-average annual total return for each investment group. | |||||||||||||||||||
The actual return on plan assets was 5.4% and 22.7% for the years ended December 31, 2014 and 2013, respectively. | |||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||
(in thousands) | |||||||||||||||||||
Components of net periodic benefit cost: | |||||||||||||||||||
Service cost | $ | 2,174 | $ | 2,783 | $ | 2,682 | |||||||||||||
Interest cost | 4,074 | 3,640 | 3,246 | ||||||||||||||||
Expected return on plan assets | -5,475 | -4,446 | -3,882 | ||||||||||||||||
Amortization of net loss | 773 | 2,653 | 1,788 | ||||||||||||||||
Net periodic benefit cost | $ | 1,546 | $ | 4,630 | $ | 3,834 | |||||||||||||
2014 | 2013 | ||||||||||||||||||
(in thousands) | |||||||||||||||||||
Other changes in plan assets and benefit obligation recognized in accumulated other comprehensive income: | |||||||||||||||||||
Net actuarial (loss) gain | $ | -23,821 | $ | 12,472 | |||||||||||||||
Reversal of amortization item: | |||||||||||||||||||
Net actuarial loss | 773 | 2,653 | |||||||||||||||||
Total recognized in accumulated other comprehensive (loss) income | -23,048 | 15,125 | |||||||||||||||||
Net periodic benefit cost | -1,546 | -4,630 | |||||||||||||||||
Total recognized in net periodic benefit cost and accumulated other comprehensive (loss) income | $ | -24,594 | $ | 10,495 | |||||||||||||||
Estimated future benefit payments as of December 31, 2014 are as follows (in thousands): | |||||||||||||||||||
Year Ending | |||||||||||||||||||
December 31, | |||||||||||||||||||
2015 | $ | 2,456 | |||||||||||||||||
2016 | 2,828 | ||||||||||||||||||
2017 | 3,222 | ||||||||||||||||||
2018 | 3,679 | ||||||||||||||||||
2019 | 4,118 | ||||||||||||||||||
2020-2024 | 27,416 | ||||||||||||||||||
$ | 43,719 | ||||||||||||||||||
We expect to contribute $3.1 million to the Pension Plan in 2015. The estimated net actuarial loss for the Pension Plan that will be amortized from AOCI into net periodic benefit cost during the 2015 fiscal year is $3.4 million. | |||||||||||||||||||
As permitted under ASC 715, Compensation—Retirement Benefits, the amortization of any prior service cost is determined using a straight-line amortization of the cost over the average remaining service period of employees expected to receive benefits under the Pension Plan. | |||||||||||||||||||
The compensation committee of our managing general partner (“Compensation Committee”) maintains a Funding and Investment Policy Statement (“Policy Statement”) for the Pension Plan. The Policy Statement provides that the assets of the Pension Plan be invested in a prudent manner based on the stated purpose of the Pension Plan and diversified among a broad range of investments including domestic and international equity securities, domestic fixed income securities and cash equivalents. The Pension Plan allows for the utilization of options in a “collar strategy” to limit potential exposure to market fluctuations. The investment goal of the Pension Plan is to ensure that the assets provide sufficient resources to meet or exceed the benefit obligations as determined under terms and conditions of the Pension Plan. The Policy Statement provides that the Pension Plan shall be funded by employer contributions in amounts determined in accordance with generally accepted actuarial standards. The investment objectives as established by the Policy Statement are, first, to increase the value of the assets under the Pension Plan and, second, to control the level of risk or volatility of investment returns associated with Pension Plan investments. | |||||||||||||||||||
We had unfunded benefit obligations of approximately $40.1 million and $18.2 million at December 31, 2014 and 2013, respectively. In general, increases in benefit obligations will be offset by employer contributions and market returns. However, general market conditions may result in market losses. When the Pension Plan experiences market losses, significant variations in the funded status of the Pension Plan can, and often do, occur. Actuarial methods utilized in determining required future employer contributions take into account the long-term effect of market losses and result in increased future employer contributions, thus offsetting such market losses. Conversely, the long-term effect of market gains will result in decreased future employer contributions. Total account performance is reviewed at least annually, using a dynamic benchmark approach to track investment performance. | |||||||||||||||||||
The Compensation Committee has selected an investment manager to implement the selection and on-going evaluation of Pension Plan investments. The investments shall be selected from the following assets classes (which may include mutual funds, collective funds, or the direct investment in individual stocks, bonds or cash equivalent investments): (a) money market accounts, (b) U.S. Government bonds, (c) corporate bonds, (d) large, mid, and small capitalization stocks, and (e) international stocks. The Policy Statement provides the following guidelines and limitations, subject to exceptions authorized by the Compensation Committee: (i) the maximum investment in any one stock should not exceed 10.0% of the total stock portfolio, (ii) the maximum investment in any one industry should not exceed 30.0% of the total stock portfolio, and (iii) the average credit quality of the bond portfolio should be at least AA with a maximum amount of non-investment grade debt of 10.0%. | |||||||||||||||||||
The Policy Statement’s asset allocation guidelines are as follows: | |||||||||||||||||||
Percentage of Total Portfolio | |||||||||||||||||||
Minimum | Target | Maximum | |||||||||||||||||
Domestic equity securities | 50% | 70% | 90% | ||||||||||||||||
Foreign equity securities | 0% | 10% | 20% | ||||||||||||||||
Fixed income securities/cash | 5% | 20% | 40% | ||||||||||||||||
Domestic equity securities primarily include investments in individual common stocks or registered investment companies that hold positions in companies that are based in the U.S. Foreign equity securities primarily include investments in individual common stocks or registered investment companies that hold positions in companies based outside the U.S. Fixed income securities primarily include individual bonds or registered investment companies that hold positions in U.S. Treasuries, U.S. government obligations, corporate bonds, mortgage-backed securities, and preferred stocks. Short-term market conditions may result in actual asset allocations that fall outside the minimum or maximum guidelines reflected in the Policy Statement. | |||||||||||||||||||
Asset allocations as of December 31, | 2014 | 2013 | |||||||||||||||||
Domestic equity securities | 71% | 71% | |||||||||||||||||
Foreign equity securities | 8% | 13% | |||||||||||||||||
Fixed income securities/cash | 21% | 16% | |||||||||||||||||
100% | 100% | ||||||||||||||||||
We consider multiple factors in our investment strategy. The following factors have been taken into consideration with respect to the Pension Plan’s long-term investment goals and objectives and in the establishment of the Pension Plan’s target investment allocation: | |||||||||||||||||||
· | The long-term nature of providing retirement income benefits to Pension Plan participants; | ||||||||||||||||||
· | The projected annual funding requirements necessary to meet the benefit obligations; | ||||||||||||||||||
· | The current level of benefit payments to Pension Plan participants and beneficiaries; and | ||||||||||||||||||
· | Ongoing analysis of economic conditions and investment markets. | ||||||||||||||||||
As required by FASB ASC 715, the following information discloses the fair values of our Pension Plan assets, by asset category, for the periods indicated (in thousands): | |||||||||||||||||||
December 31, 2014 | December 31, 2013 | ||||||||||||||||||
Quoted Prices | Significant | Significant | Quoted Prices | Significant | Significant | ||||||||||||||
in Active | Observable | Unobservable | in Active | Observable | Unobservable | ||||||||||||||
Markets for | Inputs | Inputs | Markets for | Inputs | Inputs | ||||||||||||||
Identical Assets | (Level 2) | (Level 3) | Identical Assets | (Level 2) | (Level 3) | ||||||||||||||
(Level 1) | (Level 1) | ||||||||||||||||||
Cash and cash equivalents | $ | 917 | $ | - | $ | - | $ | 1,625 | $ | - | $ | - | |||||||
Equity securities (a): | |||||||||||||||||||
U.S. large-cap growth | 19,147 | - | - | 9,406 | - | - | |||||||||||||
U.S. large-cap value | 19,196 | - | - | 17,731 | - | - | |||||||||||||
U.S. small/mid-cap blend | 8,681 | - | - | 10,512 | - | - | |||||||||||||
International large-cap core | 2,934 | - | - | 4,970 | - | - | |||||||||||||
Fixed income securities: | |||||||||||||||||||
U.S. Treasury securities (b) | 1,455 | - | - | 1,426 | - | - | |||||||||||||
Corporate bonds (c) | - | 1,802 | - | - | 1,623 | - | |||||||||||||
Preferred stock | - | 61 | - | - | 107 | - | |||||||||||||
Taxable municipal bonds (c) | - | 193 | - | - | 162 | - | |||||||||||||
International bonds (c) | - | 227 | - | - | 569 | - | |||||||||||||
Equity mutual funds (d): | |||||||||||||||||||
U.S. large-cap growth | - | - | - | - | 1,446 | - | |||||||||||||
U.S. large-cap value | - | - | - | - | 1,398 | - | |||||||||||||
U.S. mid-cap growth | - | 2,537 | - | - | 4,752 | - | |||||||||||||
U.S. small-cap growth | - | - | - | - | 1,389 | - | |||||||||||||
U.S. small-cap value | - | - | - | - | 1,331 | - | |||||||||||||
International | - | 2,856 | - | - | - | - | |||||||||||||
International small/mid-cap blend | - | - | - | - | 1,916 | - | |||||||||||||
Emerging Markets | - | - | - | - | 1,805 | - | |||||||||||||
Fixed income mutual funds (d): | |||||||||||||||||||
Corporate bond | - | 4,729 | - | - | 2,617 | - | |||||||||||||
Mortgage backed-securities | - | 1,226 | - | - | 1,075 | - | |||||||||||||
Short term investment grade bond | - | 1,417 | - | - | 1,009 | - | |||||||||||||
Intermediate investment grade bond | - | 1,013 | - | - | - | - | |||||||||||||
High yield bond | - | 689 | - | - | 684 | - | |||||||||||||
International bond | - | 296 | - | - | 207 | - | |||||||||||||
Stock market index options (e): | |||||||||||||||||||
Puts | - | 111 | - | - | 46 | - | |||||||||||||
Calls | - | -40 | - | - | -407 | - | |||||||||||||
Accrued income (f) | - | 74 | - | - | 81 | - | |||||||||||||
Total | $ | 52,330 | $ | 17,191 | $ | - | $ | 45,670 | $ | 21,810 | $ | - | |||||||
(a) | Equity securities include investments in publicly traded common stock and preferred stock. Publicly-traded common stocks are traded on a national securities exchange and investments in common and preferred stocks are valued using quoted market prices multiplied by the number of shares owned. | ||||||||||||||||||
(b) | U.S. Treasury securities include agency and treasury debt. These investments are valued using dealer quotes in an active market. | ||||||||||||||||||
(c) | Bonds are valued utilizing a market approach that includes various valuation techniques and sources such as value generation models, broker quotes in active and non-active markets, benchmark yields and securities, reported trades, issuer spreads, and/or other applicable reference data. The corporate bonds and notes category is primarily comprised of U.S. dollar denominated, investment grade securities. Less than 5 percent of the securities have a rating below investment grade. | ||||||||||||||||||
(d) | Mutual funds are valued daily in actively traded markets by an independent custodian for the investment manager. For purposes of calculating the value, portfolio securities and other assets for which market quotes are readily available are valued at market value. Market value is generally determined on a basis of last reported sales prices, or if no sales are reported, based on quotes obtained from a quotation reporting system, established market makers, or pricing services. Investments initially valued in currencies other than the U.S. dollars are converted to the U.S. dollar using exchange rates obtained from pricing services. | ||||||||||||||||||
(e) | Options are valued utilizing a market approach that includes various valuation techniques and sources such as value generation models, broker quotes in active and non-active markets, reported trades, issuer spreads, and/or other applicable reference data. | ||||||||||||||||||
(f) | Accrued income represents dividends declared, but not received, on equity securities owned at December 31, 2014. | ||||||||||||||||||
Pension Plan assets for which the fair value is based on quoted prices in active markets for identical assets are considered to be valued with Level 1 inputs in the fair value hierarchy. Pension Plan assets for which the fair value is based on quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active are considered to be valued with Level 2 inputs in the fair value hierarchy. | |||||||||||||||||||
COMPENSATION_PLANS
COMPENSATION PLANS | 12 Months Ended | |||
Dec. 31, 2014 | ||||
COMPENSATION PLANS | ||||
COMPENSATION PLANS | ||||
15.COMPENSATION PLANS | ||||
We have the LTIP for certain of our employees and officers of our managing general partner and its affiliates who perform services for us. The LTIP awards are 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 the review and approval of 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 was 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 LTIP participants. The remaining units were settled in cash to satisfy the tax withholding obligations for the LTIP participants. On January 26, 2015, the Compensation Committee determined that the vesting requirements for the 2012 grants of 202,778 restricted units (which was net of 11,450 forfeitures) had been satisfied as of January 1, 2015. As a result of this vesting, on February 11, 2015, we issued 128,150 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 26, 2015, the Compensation Committee authorized additional grants of 314,019 restricted units, of which 302,555 units were granted. During the years ended December 31, 2014 and 2013, we issued grants of 356,154 units and 293,450 units, respectively. Grants issued during the year ending December 31, 2015 vest on January 1, 2018. Grants issued during the year ended December 31, 2014 vest on January 1, 2017. Grants issued during the year ended December 31, 2013 vest on January 1, 2016. Vesting of all grants is subject to the satisfaction of certain financial tests, which management currently believes is probable. As of December 31, 2014, 20,492 of these outstanding LTIP grants have been forfeited. After consideration of the January 1, 2015 vesting and subsequent issuance of 128,150 common units, 4.0 million units remain available for issuance in the future, assuming that all grants issued in 2013 and 2014 and currently outstanding are settled with common units, without reduction for tax withholding, and no future forfeitures occur. | ||||
For the years ended December 31, 2014, 2013 and 2012, our LTIP expense was $9.6 million, $7.4 million and $6.4 million, respectively. The total obligation associated with the LTIP as of December 31, 2014 and 2013 was $17.9 million and $14.7 million, respectively, and is included in limited partners’ capital in our consolidated balance sheets. | ||||
The fair value of the 2014, 2013 and 2012 grants is based upon the intrinsic value at the date of grant, which was $40.72, $31.51 and $38.86 per restricted unit, respectively, on a weighted-average basis. We expect to settle the non-vested LTIP grants by delivery of ARLP common units, except for the portion of the grants that will satisfy the minimum statutory tax withholding requirements. As provided under the distribution equivalent rights provision of the LTIP, all non-vested grants include contingent rights to receive quarterly cash distributions in an amount equal to the cash distribution we make to unitholders during the vesting period. | ||||
A summary of non-vested LTIP grants as of and for the year ended December 31, 2014 is as follows: | ||||
Non-vested grants at January 1, 2014 | 695,532 | |||
Granted | 356,154 | |||
Vested | (202,742 | ) | ||
Forfeited | (5,604 | ) | ||
Non-vested grants at December 31, 2014 | 843,340 | |||
As of December 31, 2014, there was $12.5 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 1.5 years. As of December 31, 2014, the intrinsic value of the non-vested LTIP grants was $36.3 million. | ||||
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 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 years ended December 31, 2014 and 2013, SERP and Deferred Compensation Plan participant notional account balances were credited with a total of 27,577 and 33,738 phantom units, respectively, and the fair value of these phantom units was $44.56 and $35.48, respectively, on a weighted-average basis. Total SERP and Deferred Compensation Plan expense was approximately $1.2 million, $1.2 million and $0.8 million for the years ended December 31, 2014, 2013 and 2012, respectively. | ||||
As of December 31, 2014, there were 368,981 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 $15.9 million. As of December 31, 2014 and 2013, the total obligation associated with the SERP and Deferred Compensation Plan was $12.6 million and $11.5 million, respectively, and is included in the partners’ capital-limited partners line item in our consolidated balance sheets. | ||||
SUPPLEMENTAL_CASH_FLOW_INFORMA
SUPPLEMENTAL CASH FLOW INFORMATION | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
SUPPLEMENTAL CASH FLOW INFORMATION | ||||||||||
SUPPLEMENTAL CASH FLOW INFORMATION | ||||||||||
16.SUPPLEMENTAL CASH FLOW INFORMATION | ||||||||||
Year Ended December 31, | ||||||||||
2014 | 2013 | 2012 | ||||||||
(in thousands) | ||||||||||
Cash Paid For: | ||||||||||
Interest | $ | 34,005 | $ | 35,362 | $ | 35,833 | ||||
Non-Cash Activity: | ||||||||||
Accounts payable for purchase of property, plant and equipment | $ | 15,654 | $ | 17,924 | $ | 20,972 | ||||
Market value of common units vested in Long-Term Incentive Plan and Deferred Compensation Plan before minimum statutory tax withholding requirements | $ | 8,417 | $ | 8,583 | $ | 11,070 | ||||
Acquisition of business: | ||||||||||
Fair value of assets assumed | $ | - | $ | - | $ | 126,639 | ||||
Cash paid | - | - | -100,000 | |||||||
Fair value of liabilities assumed | $ | - | $ | - | $ | 26,639 | ||||
Disposition of property, plant and equipment: | ||||||||||
Net change in assets | $ | 846 | $ | - | $ | - | ||||
Book value of liabilities transferred | -5,246 | - | - | |||||||
Gain recognized | $ | -4,400 | $ | - | $ | - | ||||
Liabilities assumed in asset acquisition | $ | 6,042 | $ | - | $ | - | ||||
ASSET_RETIREMENT_OBLIGATIONS
ASSET RETIREMENT OBLIGATIONS | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
ASSET RETIREMENT OBLIGATIONS | |||||||
ASSET RETIREMENT OBLIGATIONS | |||||||
17.ASSET RETIREMENT OBLIGATIONS | |||||||
The majority of our operations are governed by various state statutes and the Federal Surface Mining Control and Reclamation Act of 1977, which establish reclamation and mine closing standards. These regulations, among other requirements, require restoration of property in accordance with specified standards and an approved reclamation plan. We account for our asset retirement obligations in accordance with FASB ASC 410, Asset Retirement and Environmental Obligations, which requires the fair value of a liability for an asset retirement obligation to be recognized in the period in which it is incurred. We have estimated the costs and timing of future asset retirement obligations escalated for inflation, then discounted and recorded at the present value of those estimates. Federal and state laws require bonds to secure our obligations to reclaim lands used for mining and are typically renewable on a yearly basis. As of December 31, 2014 and 2013, we had approximately $142.3 million and $88.7 million, respectively, in surety bonds outstanding to secure the performance of our reclamation obligations. | |||||||
The impact of discounting our estimated cash flows resulted in reducing the accrual for asset retirement obligations by $88.8 million and $76.5 million at December 31, 2014 and 2013, respectively. Estimated payments of asset retirement obligations as of December 31, 2014 are as follows (in thousands): | |||||||
Year Ending | |||||||
December 31, | |||||||
2015 | $ | 2,055 | |||||
2016 | 2,127 | ||||||
2017 | 1,914 | ||||||
2018 | 1,964 | ||||||
2019 | 698 | ||||||
Thereafter | 173,135 | ||||||
Aggregate undiscounted asset retirement obligations | 181,893 | ||||||
Effect of discounting | (88,753 | ) | |||||
Total asset retirement obligations | 93,140 | ||||||
Less: current portion | (2,055 | ) | |||||
Asset retirement obligations | $ | 91,085 | |||||
The following table presents the activity affecting the asset retirement and mine closing liability (in thousands): | |||||||
Year ended December 31, | |||||||
2014 | 2013 | ||||||
Beginning balance | $ | 82,898 | $ | 84,836 | |||
Accretion expense | 2,730 | 3,004 | |||||
Payments | -1,134 | -2,242 | |||||
Assumption of existing liability | 6,042 | - | |||||
Disposition | -5,246 | - | |||||
Allocation of liability associated with acquisitions, mine development and change in assumptions | 7,850 | -2,700 | |||||
Ending balance | $ | 93,140 | $ | 82,898 | |||
For the year ended December 31, 2014, the allocation of liability associated with acquisition, mine development and change in assumptions is a net increase of $7.9 million. This increase was attributable to increased size of refuse sites primarily at our Onton, Gibson South, Tunnel Ridge, Dotiki and River View operations, offset in part by the net impact of overall general changes in inflation and discount rates, current estimates of the costs and scope of remaining reclamation work, reclamation work completed and fluctuations in other projected mine life estimates. The increase in the total liability was also attributed to the acquisition of additional property with certain existing reclamation liabilities (Note 3), offset in part by the sale of property associated with the Pontiki mine (Note 4). | |||||||
For the year ended December 31, 2013, the allocation of liability associated with acquisition, mine development and change in assumptions is a net decrease of $2.7 million, which was primarily attributable to extension of mine life estimate at our Mettiki operation as a result of the acquisition of additional reserves (Note 3), offset by increased refuse site reclamation disturbances primarily at our Tunnel Ridge, Warrior and Pattiki operations and new disturbances associated with the construction of the Gibson South mine, as well as the net impact of overall general changes in inflation and discount rates, current estimates of the costs and scope of remaining reclamation work, reclamation work completed and fluctuation in other projected mine life estimates. | |||||||
ACCRUED_WORKERS_COMPENSATION_A
ACCRUED WORKERS' COMPENSATION AND PNEUMOCONIOSIS BENEFITS | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
ACCRUED WORKERS' COMPENSATION AND PNEUMOCONIOSIS BENEFITS | ||||||||||||||
ACCRUED WORKERS' COMPENSATION AND PNEUMOCONIOSIS | ||||||||||||||
18.ACCRUED WORKERS’ COMPENSATION AND PNEUMOCONIOSIS BENEFITS | ||||||||||||||
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. In addition, we are liable for workers’ compensation benefits for traumatic injuries. Both black lung and traumatic claims are covered through our self-insured programs. | ||||||||||||||
Our black lung benefits liability is calculated using the service cost method that considers the calculation of the actuarial present value of the estimated black lung obligation. Our actuarial calculations are based on numerous assumptions including disability incidence, medical costs, mortality, death benefits, dependents and interest rates. Actuarial gains or losses are amortized over the remaining service period of active miners. | ||||||||||||||
We provide income replacement and medical treatment for work-related traumatic injury claims as required by applicable state laws. Workers' compensation laws also compensate survivors of workers who suffer employment related deaths. Our liability for traumatic injury claims is the estimated present value of current workers' compensation benefits, 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. The discount rate used to calculate the estimated present value of future obligations for black lung was 3.82%, 4.69% and 3.78% at December 31, 2014, 2013 and 2012, respectively, and for workers’ compensation was 3.41%, 4.11% and 3.22% at December 31, 2014, 2013 and 2012, respectively. | ||||||||||||||
The black lung and workers' compensation expense consists of the following components for the year ended December 31, 2014, 2013 and 2012 (in thousands): | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Black lung benefits: | ||||||||||||||
Service cost | $ | 3,424 | $ | 3,810 | $ | 3,758 | ||||||||
Interest cost | 2,262 | 2,253 | 2,372 | |||||||||||
Net amortization | -1,051 | 670 | 776 | |||||||||||
Total black lung | 4,635 | 6,733 | 6,906 | |||||||||||
Workers' compensation expense (benefit) | 7,776 | -110 | 17,572 | |||||||||||
Total expense | $ | 12,411 | $ | 6,623 | $ | 24,478 | ||||||||
The following is a reconciliation of the changes in the black lung benefit obligation recognized in AOCI for the years ended December 31, 2014 and 2013 (in thousands): | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Net actuarial (loss) gain | $ | -2,029 | $ | 16,750 | $ | 2,156 | ||||||||
Reversal of amortization item: | ||||||||||||||
Net actuarial (gain) loss | -1,051 | 670 | 776 | |||||||||||
Total recognized in accumulated other comprehensive income (loss) | $ | -3,080 | $ | 17,420 | $ | 2,932 | ||||||||
The following is a reconciliation of the changes in workers' compensation liability (including current and long-term liability balances) at December 31, 2014 and 2013 (in thousands): | ||||||||||||||
2014 | 2013 | |||||||||||||
Beginning balance | $ | 62,909 | $ | 77,046 | ||||||||||
Accruals | 14,978 | 18,544 | ||||||||||||
Payments | -10,563 | -10,639 | ||||||||||||
Interest accretion | 2,585 | 2,481 | ||||||||||||
Valuation gain | -12,352 | -24,523 | ||||||||||||
Ending balance | $ | 57,557 | $ | 62,909 | ||||||||||
The valuation gain component of the change in benefit obligation in 2014 was 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. The 2013 valuation gain was primarily attributable to favorable reserve adjustments for claims incurred in prior years and an increase in the discount rate used to calculate the estimated present value of future obligations. | ||||||||||||||
The following is a reconciliation of the changes in black lung benefit obligations at December 31, 2014 and 2013 (in thousands): | ||||||||||||||
2014 | 2013 | |||||||||||||
Benefit obligations at beginning of year | $ | 49,560 | $ | 60,991 | ||||||||||
Service cost | 3,424 | 3,810 | ||||||||||||
Interest cost | 2,262 | 2,253 | ||||||||||||
Actuarial loss (gain) | 2,029 | -16,750 | ||||||||||||
Benefits and expenses paid | -889 | -744 | ||||||||||||
Benefit obligations at end of year | $ | 56,386 | $ | 49,560 | ||||||||||
2014 | 2013 | 2012 | ||||||||||||
Amount recognized in accumulated other comprehensive income consist of: | ||||||||||||||
Net actuarial (gain) loss | $ (5,431 | ) | $ (8,511 | ) | $ 8,908 | |||||||||
The actuarial loss component of the change in benefit obligations in 2014 was primarily attributable to a decrease in the discount rate used to calculate the estimated present value of future obligations as well as unfavorable changes in claims development and disability incident rate assumptions. The 2013 valuation gain was primarily attributable to favorable reserve adjustments for claims incurred in prior years, as well as an increase in the discount rate used to calculate the estimated present value of future obligations. | ||||||||||||||
Summarized below is information about the amounts recognized in the accompanying consolidated balance sheets for black lung and workers' compensation benefits at December 31, 2014 and 2013 (in thousands): | ||||||||||||||
2014 | 2013 | |||||||||||||
Black lung claims | $ | 56,386 | $ | 49,560 | ||||||||||
Workers' compensation claims | 57,557 | 62,909 | ||||||||||||
Total obligations | 113,943 | 112,469 | ||||||||||||
Less current portion | -8,868 | -9,065 | ||||||||||||
Non-current obligations | $ | 105,075 | $ | 103,404 | ||||||||||
Both the black lung and workers' compensation obligations were unfunded at December 31, 2014 and 2013. | ||||||||||||||
As of December 31, 2014 and 2013, we had $79.3 million and $86.3 million, respectively, in surety bonds and letters of credit outstanding to secure workers' compensation obligations. | ||||||||||||||
RELATEDPARTY_TRANSACTIONS
RELATED-PARTY TRANSACTIONS | 12 Months Ended | |||
Dec. 31, 2014 | ||||
RELATED-PARTY TRANSACTIONS | ||||
RELATED-PARTY TRANSACTIONS | ||||
19.RELATED-PARTY TRANSACTIONS | ||||
The board of directors of our managing general partner (“Board of Directors”) and its conflicts committee (“Conflicts Committee”) review our related-party transactions that involve a potential conflict of interest between a general partner and ARLP or its subsidiaries or another partner to determine that such transactions reflect market-clearing terms and conditions customary in the coal industry. As a result of these reviews, the Board of Directors and the Conflicts Committee approved each of the transactions described below that had such potential conflict of interest as fair and reasonable to us and our limited partners. | ||||
Administrative Services—On April 1, 2010, effective January 1, 2010, ARLP entered into an Amended and Restated Administrative Services Agreement (the “Administrative Services Agreement”) with our managing general partner, our Intermediate Partnership, AHGP and its general partner AGP, and Alliance Resource Holdings II, Inc. (“ARH II”), the indirect parent of SGP. The Administrative Services Agreement superseded the administrative services agreement signed in connection with the AHGP IPO in 2006. Under the Administrative Services Agreement, certain employees, including some executive officers, provide administrative services to our managing general partner, AHGP, AGP, ARH II and their respective affiliates. We are reimbursed for services rendered by our employees on behalf of these affiliates as provided under the Administrative Services Agreement. We billed and recognized administrative service revenue under the Administrative Services Agreement of $0.4 million during each of the years ended December 31, 2014, 2013 and 2012 from AHGP and $0.1 million during each of the years ended December 31, 2014, 2013 and 2012 from ARH II, respectively. | ||||
Our partnership agreement provides that our managing general partner and its affiliates be reimbursed for all direct and indirect expenses incurred or payments made on behalf of us, including, but not limited to, director fees and expenses, management’s salaries and related benefits (including incentive compensation), and accounting, budgeting, planning, treasury, public relations, land administration, environmental, permitting, payroll, benefits, disability, workers' compensation management, legal and information technology services. Our managing general partner may determine in its sole discretion the expenses that are allocable to us. Total costs billed by our managing general partner and its affiliates to us were approximately $0.8 million, $0.8 million and $1.2 million for the years ended December 31, 2014, 2013 and 2012, respectively. | ||||
Managing General Partner Contributions—During December 2014, 2013 and 2012, an affiliated entity controlled by Mr. Craft contributed $1.5 million, $2.2 million and $2.0 million, respectively, to AHGP for the purpose of funding certain of our general and administrative expenses. Upon AHGP’s receipt of each contribution, it contributed the same to its subsidiary MGP, our managing general partner, which in turn contributed the same to our subsidiary, Alliance Coal. As provided under our partnership agreement, we made special allocations to our managing general partner of certain general and administrative expenses equal to its contributions (Note 13). | ||||
White Oak—On September 22, 2011, we entered into a series of transactions with 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 feature several components, including an equity investment containing certain distribution and liquidation preferences, the acquisition and lease-back of certain reserves and surface rights, a coal handling and services agreement and a loan for surface facilities. The transactions are expected to generate equity distributions and have begun generating royalties and throughput revenues. See Note 12 for further information on these related party transactions. | ||||
In addition to the agreements discussed above, White Oak also has agreements with our subsidiaries for the purchase of various services and products, including for coal handling services provided by our Mt. Vernon transloading facility. For the years ended December 31, 2014, 2013 and 2012, we recorded revenues of $3.9 million, $2.4 million and $1.0 million, respectively, for services and products provided by Mt. Vernon and Matrix Design to White Oak, which are included in “Other sales and operating revenues” on our consolidated statements of income. For information on royalties and throughput revenues, see Note 12. | ||||
SGP Land, LLC—On March 1, 2012, JC Air, LLC (“JC Air”), a wholly owned subsidiary of our special general partner, was acquired by and merged into our subsidiary, ASI. JC Air’s sole assets were two airplanes, one of which was previously subject to a time-sharing agreement between SGP Land, a subsidiary of SGP, and us. In consideration for this merger, we paid SGP approximately $8.0 million cash at closing. | ||||
ASI has agreements with JC Land LLC (“JC Land”), an entity owned by Mr. Craft, SGP Land and Mr. Craft, providing for the use of ASI’s aircraft. JC Land, SGP and Mr. Craft paid us $0.1 million for aircraft usage in each of the years ended December 31, 2014, 2013 and 2012, as a result of these agreements. In addition, Alliance Coal has an agreement with JC Land providing for the use of JC Land’s aircraft by Alliance Coal. As a result of this agreement, we paid JC Land $0.2 million, $0.3 million and $0.1 million for aircraft usage in the years ended December 31, 2014, 2013 and 2012, respectively. | ||||
Effective August 1, 2013, Alliance Coal entered into an expense reimbursement agreement with JC Land regarding pilots hired by Alliance Coal to operate aircraft owned by ASI and JC Land. In accordance with the expense reimbursement agreement, JC Land reimburses Alliance Coal for a portion of the compensation expense for its pilots. JC Land paid us $0.2 million and $0.1 million for the years ended December 31, 2014 and 2013, respectively, pursuant to this agreement. | ||||
We reimbursed SGP Land $0.3 million for the year ended December 31, 2012, in accordance with the provisions of the replaced time-sharing agreement, which ended on March 1, 2012 upon the merger of JC Air into ASI, as discussed above. | ||||
In 2001, SGP Land, as successor in interest to an unaffiliated third party, entered into an amended mineral lease with MC Mining. Under the terms of the lease, MC Mining has paid and will continue to pay an annual minimum royalty of $0.3 million until $6.0 million of cumulative annual minimum and/or earned royalty payments have been paid. MC Mining paid royalties of $0.9 million, $0.3 million and $0.3 million for the years ended December 31, 2014, 2013 and 2012, respectively. As of December 31, 2014, all advanced minimum royalties paid under the lease have been recouped. | ||||
SGP—In January 2005, we acquired Tunnel Ridge from ARH. In connection with this acquisition, we assumed a coal lease with SGP. Under the terms of the lease, Tunnel Ridge has paid and will continue to pay an annual minimum royalty of $3.0 million until the earlier of January 1, 2033 or the exhaustion of the mineable and merchantable leased coal. Tunnel Ridge paid advance minimum royalties of $3.0 million during each of the years ended December 31, 2014, 2013 and 2012. As of December 31, 2014, $10.7 million of advance minimum royalties paid under the lease is available for recoupment and management expects that it will be recouped against future production. | ||||
Tunnel Ridge also controls surface land and other tangible assets under a separate lease agreement with SGP. Under the terms of the lease agreement, Tunnel Ridge has paid and will continue to pay SGP an annual lease payment of $0.2 million. The lease agreement had an initial term of four years, which may be extended to match the term of the coal lease. Lease expense was $0.2 million for each of the years ended December 31, 2014, 2013 and 2012. | ||||
We have a noncancelable lease arrangement for the Gibson North mine’s coal preparation plant and ancillary facilities with SGP. The lease requires monthly payments of approximately $50,000 and extends through January 2017. Based on the lease arrangement, it is considered a capital lease. Lease payments for each of the years ended December 31, 2014, 2013 and 2012 were $0.6 million. | ||||
WKY CoalPlay—On November 17, 2014 (the “CoalPlay Formation Date”), SGP Land and the Craft Companies entered into a limited liability company agreement to form WKY CoalPlay. WKY CoalPlay was formed, in part, to purchase and lease coal reserves. WKY CoalPlay is managed by an entity controlled by an officer of ARH who is also a director of ARH II, the indirect parent of SGP, an employee of SGP Land and a trustee of the irrevocable trusts owning the Craft Companies. | ||||
In December 2014, WKY CoalPlay acquired approximately 86.6 million tons of proven and probable high-sulfur coal reserves in western Kentucky and southern Indiana through its purchase of two indirect subsidiaries of CONSOL Energy Inc. for $57.2 million. In December 2014, WKY CoalPlay’s subsidiaries leased 72.3 million tons of the acquired reserves to us and, as partial consideration for entering the leases, conveyed the remaining 14.3 million tons of its acquired reserves to us. The conveyed reserves have minimal value as a result of uncertainty regarding inclusion in a mine plan. The leases have initial terms ranging from 7 to 20 years and provide for earned royalty payments to WKY CoalPlay of 4.0% of the coal sales price and annual minimum royalty payments of $6.2 million. All annual minimum royalty payments are recoupable against earned royalty payments. WKY CoalPlay also granted to us an option to acquire the leased reserves at any time during a three-year period beginning in December 2017 for a purchase price that would provide WKY CoalPlay a 7.0% internal rate of return on its investment in these reserves taking into account payments previously made under the leases. We paid WKY CoalPlay $6.2 million in January 2015 for the initial annual minimum royalty payment. | ||||
In December 2014, WKY CoalPlay acquired approximately 54.1 million tons of proven and probable high-sulfur coal reserves in western Kentucky through its purchase of a subsidiary of Midwest for $29.6 million. In conjunction with this acquisition, WKY CoalPlay’s subsidiary leased 22.6 million tons of the acquired reserves to us and, as partial consideration for entering the lease, conveyed the remaining 31.5 million tons to us. The conveyed reserves have minimal value as a result of uncertainty regarding their inclusion in a mine plan. The lease has an initial term of 20 years and provides for earned royalty payments to WKY CoalPlay of 4.0% of the coal sales price and annual minimum royalty payments of $2.5 million. All annual minimum royalty payments are recoupable against earned royalty payments. WKY CoalPlay also granted to us an option to acquire the leased reserves at any time during a three-year period beginning in December 2017 for a purchase price that would provide WKY CoalPlay a 7.0% internal rate of return on its investment in these reserves taking into account payments previously made under the lease. We paid WKY CoalPlay $2.5 million in January 2015 for the initial annual minimum royalty payment. | ||||
In February 2015, WKY CoalPlay acquired approximately 39.1 million tons of proven and probable high-sulfur owned coal reserves located in Henderson and Union Counties, Kentucky from Central States, a subsidiary of Patriot, for $25.0 million and in turn leased those reserves to us. The lease has an initial term of 20 years and provides for earned royalty payments to WKY CoalPlay of 4.0% of the coal sales price and annual minimum royalty payments of $2.1 million. All annual minimum royalty payments are recoupable against earned royalty payments. An option was also granted to us to acquire the leased reserves at any time during a three-year period beginning in February 2018 for a purchase price that would provide WKY CoalPlay a 7.0% internal rate of return on its investment in these reserves taking into account payments previously made under the lease. We paid WKY CoalPlay $2.1 million in February 2015 for the initial annual minimum royalty payment. | ||||
Based on the guidance in FASB ASC 810, we concluded that WKY CoalPlay is a VIE because exercise of the options noted above is not within the control of the equity holders and, if it occurs, could potentially limit the expected residual return to the owners of WKY CoalPlay. We do not have any economic or governance rights related to WKY CoalPlay and our options that provide us with a variable interest in WKY CoalPlay’s reserve assets do not give us any rights that constitute power to direct the primary activities that most significantly impact WKY CoalPlay’s economic performance. SGP Land has the sole ability to replace the manager of WKY CoalPlay at its discretion and therefore has power to direct the activities of WKY CoalPlay. Consequently, we concluded that SGP Land is the primary beneficiary of WKY CoalPlay. | ||||
Total future minimum royalties from 2015 through 2019 under agreements with SGP Land, SGP and WKY CoalPlay as discussed above are expected to be the following (in thousands): | ||||
Year Ending December 31, | ||||
2015 | $ 14,118 | |||
2016 | 13,857 | |||
2017 | 13,818 | |||
2018 | 13,818 | |||
2019 | 13,818 | |||
Cavalier Minerals–On November 10, 2014, Cavalier Minerals contributed $7.4 million in return for a limited partner interest in AllDale Minerals, an entity created to purchase oil and gas mineral interests in various geographical locations within producing basins in the continental United States. Additional contributions totaling $4.2 million were made to AllDale Minerals prior to December 31, 2014 with the remaining commitment of $37.4 million expected to be paid over the next two to four years. At December 31, 2014, Cavalier Minerals’ limited partner interest in AllDale Minerals was 71.7%. AllDale Minerals is managed and controlled by its general partner, AllDale Minerals Management. AllDale Minerals Management is owned by four members, consisting of three parties unrelated to us or our affiliates and Bluegrass Minerals, which is owned by an officer of ARH. See Note 11 and 12 for further information. | ||||
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
COMMITMENTS AND CONTINGENCIES | |||||||||||||
COMMITMENTS AND CONTINGENCIES | |||||||||||||
20.COMMITMENTS AND CONTINGENCIES | |||||||||||||
Commitments—We lease buildings and equipment under operating lease agreements that provide for the payment of both minimum and contingent rentals. We also have a noncancelable lease with SGP (Note 19) and a noncancelable lease for equipment under a capital lease obligation. Future minimum lease payments are as follows (in thousands): | |||||||||||||
Other Operating Leases | |||||||||||||
Year Ending December 31, | Capital | Affiliate | Others | Total | |||||||||
Lease | |||||||||||||
2015 | $ | 2,054 | $ | 240 | $ | 1,416 | $ | 1,656 | |||||
2016 | 2,065 | - | 1,416 | 1,416 | |||||||||
2017 | 1,850 | - | 1,009 | 1,009 | |||||||||
2018 | 1,818 | - | 650 | 650 | |||||||||
2019 | 1,930 | - | - | - | |||||||||
Thereafter | 11,934 | - | - | - | |||||||||
Total future minimum lease payments | $ | 21,651 | $ | 240 | $ | 4,491 | $ | 4,731 | |||||
Less: amount representing interest | -4,722 | ||||||||||||
Present value of future minimum lease payments | 16,929 | ||||||||||||
Less: current portion | -1,305 | ||||||||||||
Long-term capital lease obligation | $ | 15,624 | |||||||||||
Rental expense (including rental expense incurred under operating lease agreements) was $4.7 million, $5.1 million and $5.1 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||
Contractual Commitments—In connection with planned capital projects, we have contractual commitments of approximately $50.8 million at December 31, 2014. As of December 31, 2014, we had no material commitments to purchase coal from external production sources in 2015. | |||||||||||||
On September 22, 2011, we entered into a series of transactions with White Oak and related entities to support development of a longwall mining operation. The initial longwall system commenced operation in late October 2014. At December 31, 2014, we have funded $390.0 million related to these transactions and, inclusive of this funding, we have committed to fund to White Oak a total of approximately $395.5 million to $415.5 million from the Transaction Date through December 31, 2015. Additional equity investments of $39.8 million and $45.9 million were contributed by another White Oak owner in 2014 and 2013, respectively. 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. We plan to utilize existing cash balances, future cash flows from operations, borrowings under revolving credit and securitization facilities and cash provided from the issuance of debt or equity to fund our commitments to the White Oak project. For more information on the White Oak transactions, please read Note 12. | |||||||||||||
On November 10, 2014, Cavalier Minerals purchased equity interests in AllDale Minerals, an entity created to purchase oil and gas mineral interests in various geographic locations within producing basins in the continental United States. Cavalier Minerals’ initial investment funding to AllDale Minerals at the Cavalier Formation Date was $7.4 million and it has funded an additional $4.2 million between the Cavalier Formation Date and December 31, 2014. Cavalier Minerals has a remaining commitment to AllDale Minerals of $37.4 million at December 31, 2014, which it expects to fund over the next two to four years. Alliance Minerals committed funding of $48.0 million to Cavalier Minerals, of which $11.5 million was funded as of December 31, 2014 and the balance we expect to fund over the same period. Bluegrass Minerals also provides funding to Cavalier Minerals. We plan to utilize existing cash balances, future cash flows from operations, borrowings under revolving credit and securitization facilities and cash provided from the issuance of debt or equity to fund Alliance Minerals’ commitments to Cavalier Minerals, which in turn principally uses this funding to fund its commitments to AllDale Minerals. For more information on these transactions, please read Note 11 and 12. | |||||||||||||
General Litigation—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. | |||||||||||||
Other—Effective October 1, 2014, we renewed our annual property and casualty insurance program. Our property insurance was procured from our wholly owned captive insurance company, Wildcat Insurance. Wildcat Insurance charged certain of our subsidiaries for the premiums on this program and in return purchased reinsurance for the program in the standard market at a reduced cost. The maximum limit in the commercial property program is $100.0 million per occurrence, excluding a $1.5 million deductible for property damage, a 90 or 120 day waiting period for underground business interruption depending on the mining complex and an additional $10.0 million overall aggregate deductible. We can make no assurances that we will not experience significant insurance claims in the future that could have a material adverse effect on our business, financial condition, results of operations and ability to purchase property insurance in the future. | |||||||||||||
CONCENTRATION_OF_CREDIT_RISK_A
CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS | ||||||||||||
CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS | ||||||||||||
21.CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS | ||||||||||||
We have significant long-term coal supply agreements, some of which contain prospective price adjustment provisions designed to reflect changes in market conditions, labor and other production costs and, in the infrequent circumstance when the coal is sold other than free on board the mine, changes in transportation rates. Total revenues from major customers, including transportation revenues, which are at least ten percent of total revenues, are as follows (in thousands): | ||||||||||||
Year Ended December 31, | ||||||||||||
Segment (Note 22) | 2014 | 2013 | 2012 | |||||||||
Customer A | Illinois Basin | $ | 301,191 | $ | 319,932 | $ | 336,560 | |||||
Customer B | Illinois Basin | 276,094 | 263,582 | 243,339 | ||||||||
Trade accounts receivable from these customers totaled approximately $43.5 million and $45.8 million at December 31, 2014 and 2013, respectively. Our bad debt experience has historically been insignificant. Financial conditions of our customers could result in a material change to our bad debt expense in future periods. The coal supply agreements with our significant customers expire in 2016. | ||||||||||||
SEGMENT_INFORMATION
SEGMENT INFORMATION | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||
SEGMENT INFORMATION | |||||||||||||||||||
SEGMENT INFORMATION | |||||||||||||||||||
22.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 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’s Dotiki mining complex, Gibson County Coal’s mining complex, which includes the Gibson North mine and Gibson South mine, Hopkins County Coal’s mining complex, which includes the Elk Creek mine and the Fies property, White County Coal’s Pattiki mining complex, Warrior’s mining complex, Sebree Mining’s mining complex, which includes the Onton mine, and River View’s mining complex. In April 2014, production began at the Gibson South mine. The Elk Creek mine is currently expected to cease production in early 2016. Illinois Basin reserves and other assets increased as a result of multiple acquisitions in 2014 and 2015 as discussed in Note 3. | |||||||||||||||||||
The Appalachia reportable segment is comprised of multiple operating segments, including the Mettiki mining complex, the Tunnel Ridge mining complex, the MC Mining mining complex and the Penn Ridge property. The Mettiki mining complex includes Mettiki Coal (WV)’s Mountain View mine, Mettiki Coal’s preparation plant and a small third-party mining operation, which has been idled since July 2013. In May 2012, longwall production began at the Tunnel Ridge mine. 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 12). | |||||||||||||||||||
The Other and Corporate segment includes marketing and administrative expenses, ASI and its subsidiary, Matrix Design, Alliance Design (collectively, Matrix Design and Alliance Design are referred to as the “Matrix Group”) and ASI’s ownership of aircraft (Note 19), the Mt. Vernon dock activities, coal brokerage activity, our equity investment in MAC, certain activities of Alliance Resource Properties, the Pontiki mining complex, which ceased operations in November 2013 and sold most of its assets in May 2014, Wildcat Insurance, Alliance Minerals, and its affiliate, Cavalier Minerals (Note 11), which holds an equity investment in AllDale Minerals (Note 12), and AROP Funding (Note 7). | |||||||||||||||||||
As a result of the cessation of operations at the Pontiki mine 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 and 2012 segment information have been made to conform to the 2014 presentation. These reclassifications include changes to the Appalachia segment and Other and Corporate segment as well as eliminations. | |||||||||||||||||||
Reportable segment results as of and for the years ended December 31, 2014, 2013 and 2012 are presented below. | |||||||||||||||||||
Illinois | Appalachia | White Oak | Other and | Elimination | Consolidated | ||||||||||||||
Basin | Corporate | -1 | |||||||||||||||||
(in thousands) | |||||||||||||||||||
Reportable segment results as of and for the year ended December 31, 2014 were as follows: | |||||||||||||||||||
Total revenues (2) | $ | 1,626,450 | $ | 630,452 | $ | 21,244 | $ | 34,090 | $ | -11,515 | $ | 2,300,721 | |||||||
Segment Adjusted EBITDA Expense (3) | 992,045 | 364,689 | 7,983 | 25,487 | -8,396 | 1,381,808 | |||||||||||||
Segment Adjusted EBITDA (4)(5) | 620,111 | 254,037 | -3,384 | 8,599 | -3,119 | 876,244 | |||||||||||||
Total assets (6) | 1,174,141 | 604,352 | 407,138 | 258,424 | -158,996 | 2,285,059 | |||||||||||||
Capital expenditures (7) | 237,953 | 56,840 | 5,214 | 11,462 | - | 311,469 | |||||||||||||
Reportable segment results as of and for the year ended December 31, 2013 were as follows: | |||||||||||||||||||
Total revenues (2) | $ | 1,629,089 | $ | 493,689 | $ | 2,194 | $ | 98,272 | $ | -17,683 | $ | 2,205,561 | |||||||
Segment Adjusted EBITDA Expense (3) | 951,686 | 375,923 | 2,112 | 86,864 | -17,683 | 1,398,902 | |||||||||||||
Segment Adjusted EBITDA (4)(5) | 657,404 | 105,123 | -25,229 | 12,278 | - | 749,576 | |||||||||||||
Total assets (6) | 1,077,231 | 594,466 | 317,361 | 133,915 | -1,075 | 2,121,898 | |||||||||||||
Capital expenditures (7) | 232,676 | 72,926 | 40,185 | 8,636 | - | 354,423 | |||||||||||||
Reportable segment results as of and for the year ended December 31, 2012 were as follows: | |||||||||||||||||||
Total revenues (2) | $ | 1,499,976 | $ | 444,993 | $ | - | $ | 105,860 | $ | -16,528 | $ | 2,034,301 | |||||||
Segment Adjusted EBITDA Expense (3) | 894,769 | 361,560 | -1,347 | 100,329 | -16,528 | 1,338,783 | |||||||||||||
Segment Adjusted EBITDA (4) (5) | 593,054 | 73,553 | -13,987 | 6,214 | - | 658,834 | |||||||||||||
Total assets (6) | 1,042,719 | 603,088 | 226,714 | 84,550 | -1,099 | 1,955,972 | |||||||||||||
Capital expenditures (7) | 219,029 | 137,336 | 85,671 | 17,196 | - | 459,232 | |||||||||||||
-1 | The elimination column represents the elimination of intercompany transactions and is primarily comprised of sales from the Matrix Group to our mining operations, coal sales and purchases between mining operations within different segments (2013 only), sales of receivables to AROP Funding and insurance premiums paid to Wildcat Insurance (2014 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 (2013 only). Also included in the Other and Corporate column are Wildcat Insurance revenues, which are eliminated upon consolidation. | ||||||||||||||||||
-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): | |||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||
Segment Adjusted EBITDA Expense | $ | 1,381,808 | $ | 1,398,902 | $ | 1,338,783 | |||||||||||||
Outside coal purchases | -14 | -2,030 | -38,607 | ||||||||||||||||
Other income | 1,566 | 1,891 | 3,115 | ||||||||||||||||
Operating expenses (excluding depreciation, depletion and amortization) | $ | 1,383,360 | $ | 1,398,763 | $ | 1,303,291 | |||||||||||||
-4 | Segment Adjusted EBITDA is defined as net income (prior to the allocation of noncontrolling interest) before net interest expense, income taxes, depreciation, depletion and amortization, asset impairment charge 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 below (in thousands): | ||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||
Consolidated Segment Adjusted EBITDA | $ | 876,244 | $ | 749,576 | $ | 658,834 | |||||||||||||
General and administrative | -72,552 | -63,697 | -58,737 | ||||||||||||||||
Depreciation, depletion and amortization | -274,566 | -264,911 | -218,122 | ||||||||||||||||
Asset impairment charge | - | - | -19,031 | ||||||||||||||||
Interest expense, net | -31,913 | -26,082 | -28,455 | ||||||||||||||||
Income tax (expense) benefit | - | -1,396 | 1,082 | ||||||||||||||||
Net income | $ | 497,213 | $ | 393,490 | $ | 335,571 | |||||||||||||
-5 | Includes equity in income (loss) of affiliates for the years ended December 31, 2014, 2013 and 2012 of $(16.6) million, $(25.3) million and $(15.3) million, respectively, for the White Oak segment and $(3) thousand, $0.9 million and $0.7 million, respectively, for the Other and Corporate segment. | ||||||||||||||||||
-6 | Total assets at December 31, 2014, 2013 and 2012 include investments in affiliate of $211.7 million, $128.7 million and $86.8 million, respectively, for the White Oak segment and $12.9 million, $1.7 million and $1.7 million, respectively, for the Other and Corporate segment. | ||||||||||||||||||
-7 | Capital expenditures shown above include funding to White Oak of $4.1 million, $25.3 million and $34.6 million, for the years ended December 31, 2014, 2013 and 2012, respectively, for the acquisition and development of coal reserves from White Oak (Note 12), which is described as “Payments to affiliate for acquisition and development of coal reserves” in our consolidated statements of cash flow. Capital expenditures shown above exclude the Green River acquisition in April 2012 (Note 3) and purchase of coal supply agreements from Patriot in December 2014 (Note 3). | ||||||||||||||||||
SELECTED_QUARTERLY_FINANCIAL_D
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | 12 Months Ended | ||||||||||||||
Dec. 31, 2014 | |||||||||||||||
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | |||||||||||||||
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | |||||||||||||||
23.SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | |||||||||||||||
A summary of our consolidated quarterly operating results in 2014 and 2013 is as follows (in thousands, except unit and per unit data): | |||||||||||||||
Quarter Ended | |||||||||||||||
March 31, | June 30, | September 30, | December 31, | ||||||||||||
2014 | 2014 (1) | 2014 | 2014 (1) | ||||||||||||
Revenues | $ | 542,038 | $ | 598,562 | $ | 569,328 | $ | 590,793 | |||||||
Income from operations | 129,513 | 153,034 | 127,513 | 134,148 | |||||||||||
Income before income taxes | 115,904 | 137,653 | 119,978 | 123,678 | |||||||||||
Net income of ARLP | 115,904 | 137,653 | 119,978 | 123,694 | |||||||||||
Basic and diluted net income of ARLP per limited partner unit | $ | 1.10 | $ | 1.37 | $ | 1.13 | $ | 1.18 | |||||||
Weighted-average number of units outstanding – basic and diluted | 73,994,866 | 74,060,634 | 74,060,634 | 74,060,634 | |||||||||||
Quarter Ended | |||||||||||||||
March 31, | June 30, | September 30, | December 31, | ||||||||||||
2013 | 2013 | 2013 | 2013 (1) | ||||||||||||
Revenues | $ | 548,055 | $ | 553,571 | $ | 537,229 | $ | 566,706 | |||||||
Income from operations | 112,316 | 115,569 | 98,002 | 117,631 | |||||||||||
Income before income taxes | 102,239 | 104,183 | 86,468 | 101,996 | |||||||||||
Net income of ARLP | 102,937 | 104,074 | 87,186 | 99,293 | |||||||||||
Basic and diluted net income of ARLP per limited partner unit | $ | 0.98 | $ | 0.98 | $ | 0.75 | $ | 0.93 | |||||||
Weighted-average number of units outstanding – basic and diluted | 73,838,004 | 73,926,108 | 73,926,108 | 73,926,108 | |||||||||||
-1 | The comparability of our December 31, 2013 quarterly results to other quarters presented was affected by a $12.9 million decrease in our workers’ compensation liability, excluding discount rate changes, due to the completion of our annual actuarial study, which reflected favorable development in our disability emergence patterns and claims estimates (Note 18). The comparability of our June 30, 2014 quarterly results to other quarters presented was affected by $7.0 million insurance settlement related to adverse geological events at the Onton mine in the third quarter of 2013 and a gain of $4.4 million recognized on the sale of Pontiki’s assets. | ||||||||||||||
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2014 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | |
24.SUBSEQUENT EVENTS | |
Other than those events described in Notes 3, 9, 12, 15 and 19, there were no subsequent events. | |
SCHEDULE_II_VALUATION_AND_QUAL
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS | ||||||||||||||
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS | ||||||||||||||
SCHEDULE II | ||||||||||||||
ALLIANCE RESOURCE PARTNERS, L.P. AND SUBSIDIARIES | ||||||||||||||
VALUATION AND QUALIFYING ACCOUNTS | ||||||||||||||
YEARS ENDED DECEMBER 31, 2014, 2013 AND 2012 | ||||||||||||||
Balance At | Additions | Deductions | Balance At | |||||||||||
Beginning | Charged to | End of Year | ||||||||||||
of Year | Income | |||||||||||||
(in thousands) | ||||||||||||||
2014 | ||||||||||||||
Allowance for doubtful accounts | $ | - | $ | - | $ | - | $ | - | ||||||
2013 | ||||||||||||||
Allowance for doubtful accounts | $ | - | $ | - | $ | - | $ | - | ||||||
2012 | ||||||||||||||
Allowance for doubtful accounts | $ | - | $ | - | $ | - | $ | - | ||||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||||||||||
Estimates | ||||||||||||||||||||
Estimates—The preparation of 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 the consolidated financial statements. Actual results could differ from those estimates. | ||||||||||||||||||||
Fair Value Of Financial Instruments | ||||||||||||||||||||
Fair Value of Financial Instruments—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 December 31, 2014 and 2013, the estimated fair value of our long-term debt, including current maturities, was approximately $833.4 million and $884.8 million, respectively (Note 8). | ||||||||||||||||||||
Cash And Cash Equivalents | ||||||||||||||||||||
Cash and Cash Equivalents—Cash and cash equivalents include cash on hand and on deposit, including highly liquid investments with maturities of three months or less. We had $0.4 million restricted cash and cash equivalents at December 31, 2014 and no restricted cash or cash equivalents at December 31, 2013. | ||||||||||||||||||||
Cash Management | ||||||||||||||||||||
Cash Management—The cash flows from operating activities section of our Consolidated Statements of Cash Flows reflects an adjustment for $1.7 million and $10.3 million representing book overdrafts at December 31, 2014 and 2012, respectively. We had no book overdrafts at December 31, 2013. | ||||||||||||||||||||
Business Combinations | ||||||||||||||||||||
Business Combinations—For purchase acquisitions accounted for as a business combination, we are required to record the assets acquired, including identified intangible assets and liabilities assumed at their fair value, which in many instances involves estimates based on third party valuations, such as appraisals, or internal valuations based on discounted cash flow analyses or other valuation techniques. | ||||||||||||||||||||
Inventories | ||||||||||||||||||||
Inventories—Coal inventories are stated at the lower of cost or market on a first-in, first-out basis. Supply inventories are stated at an average cost basis, less a reserve for obsolete and surplus items. | ||||||||||||||||||||
Property, Plant And Equipment | ||||||||||||||||||||
Property, Plant and Equipment—Expenditures which extend the useful lives of existing plant and equipment assets are capitalized. Interest costs associated with major asset additions are capitalized during the construction period. Maintenance and repairs that do not extend the useful life or increase productivity of the asset are charged to operating expense as incurred. Exploration expenditures are charged to operating expense as incurred, including costs related to drilling and study costs incurred to convert or upgrade mineral resources to reserves. Preparation plants and processing facilities are depreciated using the units-of-production method. Other plant and equipment assets are depreciated principally using the straight-line method over the estimated useful lives of the assets, ranging from 1 to 16 years, limited by the remaining estimated life of each mine. Depreciable lives for mining equipment range from 1 to 16 years. Depreciable lives for buildings, office equipment and improvements range from 2 to 16 years. Gains or losses arising from retirements are included in operating expenses. Depletable lives for mineral rights, assuming current production expectations, range from 1 to 16 years. Depletion of mineral rights is provided on the basis of tonnage mined in relation to estimated recoverable tonnage, which equals estimated proven and probable reserves. Therefore, our mineral rights are depleted based on only proven and probable reserves derived in accordance with Industry Guide 7. At December 31, 2014 and 2013, land and mineral rights include $53.2 million and $45.5 million, respectively, representing the carrying value of coal reserves attributable to properties where we or a third-party to which we lease reserves are not currently engaged in mining operations or leasing to third parties, and therefore, the coal reserves are not currently being depleted. We believe that the carrying value of these reserves will be recovered. | ||||||||||||||||||||
Mine Development Costs | ||||||||||||||||||||
Mine Development Costs—Mine development costs are capitalized until production, other than production incidental to the mine development process, commences and are amortized on a units of production method based on the estimated proven and probable reserves. Mine development costs represent costs incurred in establishing access to mineral reserves and include costs associated with sinking or driving shafts and underground drifts, permanent excavations, roads and tunnels. The end of the development phase and the beginning of the production phase takes place when construction of the mine for economic extraction is substantially complete. Coal extracted during the development phase is incidental to the mine’s production capacity and is not considered to shift the mine into the production phase. At December 31, 2014 and 2013, capitalized mine development costs were $7.0 million and $33.1 million, respectively, representing the carrying value of development costs attributable to properties where we have not reached the production stage of mining operations or leasing to third parties, and therefore, the mine development costs are not currently being amortized. We believe that the carrying value of these development costs will be recovered. | ||||||||||||||||||||
Long-Lived Assets | ||||||||||||||||||||
Long-Lived Assets—We review the carrying value of long-lived assets and certain identifiable intangibles whenever events or changes in circumstances indicate that the carrying amount may not be recoverable based upon estimated undiscounted future cash flows. To the extent the carrying amount is not recoverable based on undiscounted cash flows, the amount of impairment is measured by the difference between the carrying value and the fair value of the asset. We recorded an asset impairment charge of $19.0 million in 2012 (Note 4). No impairment charges were recorded in 2014 and 2013. | ||||||||||||||||||||
Intangible Assets | ||||||||||||||||||||
Intangible Assets—Intangible assets subject to amortization include contracts with covenants not to compete, customer contracts acquired from other parties and mining permits. Intangible assets are amortized on a straight-line basis over their useful life. Intangible assets for customer contracts are amortized on a per unit basis over the terms of the contracts. Amortization expense attributable to intangible assets was $3.0 million, $3.0 million and $2.6 million for the years ending December 31, 2014, 2013 and 2012, respectively. Our intangible assets are included in prepaid expenses and other assets and other long-term assets on our consolidated balance sheets at December 31, 2014 and 2013. Our intangible assets at December 31 are summarized as follows (in thousands): | ||||||||||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||||||||||
Original Cost | Accumulated | Intangibles, | Original Cost | Accumulated | Intangibles, | |||||||||||||||
Amortization | Net | Amortization | Net | |||||||||||||||||
Non-compete agreements | $ | 15,152 | $ | -8,545 | $ | 6,607 | $ | 15,236 | $ | -7,002 | $ | 8,234 | ||||||||
Customer contracts | 17,859 | -3,599 | 14,260 | 6,171 | -2,301 | 3,870 | ||||||||||||||
Mining permits | 3,843 | -182 | 3,661 | 3,843 | -116 | 3,727 | ||||||||||||||
Total | $ | 36,854 | $ | -12,326 | $ | 24,528 | $ | 25,250 | $ | -9,419 | $ | 15,831 | ||||||||
Amortization expense attributable to intangible assets is estimated to be $9.6 million in 2015, $6.1 million in 2016, $3.2 million in 2017 and $1.0 million in both 2018 and 2019. The increase in 2015 and 2016 is due to amortization of customer contract intangibles that were acquired at December 31, 2014 and, therefore, had no amortization expense in the periods presented (Note 3). | ||||||||||||||||||||
Advance Royalties | ||||||||||||||||||||
Advance Royalties—Rights to coal mineral leases are often acquired and/or maintained through advance royalty payments. Where royalty payments represent prepayments recoupable against future production, they are recorded as an asset, with amounts expected to be recouped within one year classified as a current asset. As mining occurs on these leases, the royalty prepayments are charged to operating expenses. We assess the recoverability of royalty prepayments based on estimated future production. Royalty prepayments estimated to be nonrecoverable are expensed. Our advance royalties at December 31 are summarized as follows (in thousands): | ||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||
Advance royalties, affiliates (Note 19) | $ | 10,706 | $ | 17,840 | ||||||||||||||||
Advance royalties, third-parties | 14,605 | 12,427 | ||||||||||||||||||
Total advance royalties | $ | 25,311 | $ | 30,267 | ||||||||||||||||
Asset Retirement Obligations | ||||||||||||||||||||
Asset Retirement Obligations—We record a liability for the estimated cost of future mine asset retirement and closing procedures on a present value basis when incurred or acquired and a corresponding amount is capitalized by increasing the carrying amount of the related long lived asset. Those costs relate to permanently sealing portals at underground mines and to reclaiming the final pits and support acreage at surface mines. Examples of these types of costs, common to both types of mining, include, but are not limited to, removing or covering refuse piles and settling ponds, water treatment obligations, and dismantling preparation plants, other facilities and roadway infrastructure. Accounting for asset retirement obligations also requires depreciation of the capitalized asset retirement cost and accretion of the asset retirement obligation over time. The depreciation is generally determined on a units of production basis and accretion is generally recognized over the life of the producing assets (Note 17). As changes in estimates occur (such as mine plan revisions, changes in estimated costs or changes in timing of the performance of reclamation activities), the revisions to the obligation and asset are recognized at the appropriate credit-adjusted, risk-free interest rate. | ||||||||||||||||||||
Workers' Compensation And Pneumoconiosis (Black Lung) Benefits | ||||||||||||||||||||
Workers’ Compensation and Pneumoconiosis (Black Lung) Benefits—We are generally self-insured for workers’ compensation benefits, including black lung benefits. We accrue a workers’ compensation liability for the estimated present value of workers’ compensation and black lung benefits based on our actuarially determined calculations (Note 18). | ||||||||||||||||||||
Income Taxes | ||||||||||||||||||||
Income Taxes—We are not a taxable entity for federal or state income tax purposes; the tax effect of our activities accrues to the unitholders. Although publicly traded partnerships as a general rule will be taxed as corporations, we qualify for an exemption because at least 90% of our income consists of qualifying income, as defined in Section 7704(c) of the Internal Revenue Code. Net income for financial statement purposes may differ significantly from taxable income reportable to unitholders as a result of differences between the tax basis and financial reporting basis of assets and liabilities and the taxable income allocation requirements under our partnership agreement. Individual unitholders have different investment bases depending upon the timing and price of acquisition of their partnership units. Furthermore, each unitholder’s tax accounting, which is partially dependent upon the unitholder’s tax position, differs from the accounting followed in our consolidated financial statements. Accordingly, the aggregate difference in the basis of our net assets for financial and tax reporting purposes cannot be readily determined because information regarding each unitholder’s tax attributes in our partnership is not available to us. Our subsidiaries, ASI and Wildcat Insurance, are subject to federal and state income taxes. A valuation allowance is established if it is more likely than not that a deferred tax asset will not be realized. | ||||||||||||||||||||
Our tax counsel has provided an opinion that ARLP, the Intermediate Partnership and Alliance Coal will each be treated as a partnership. However, as is customary, no ruling has been or will be requested from the Internal Revenue Service (“IRS”) regarding our classification as a partnership for federal income tax purposes. | ||||||||||||||||||||
Revenue Recognition | ||||||||||||||||||||
Revenue Recognition—Revenues from coal sales are recognized when title passes to the customer as the coal is shipped. Some coal supply agreements provide for price adjustments based on variations in quality characteristics of the coal shipped. In certain cases, a customer’s analysis of the coal quality is binding and the results of the analysis are received on a delayed basis. In these cases, we estimate the amount of the quality adjustment and adjust the estimate to actual when the information is provided by the customer. Historically, such adjustments have not been material. Non-coal sales revenues primarily consist of transloading fees, administrative service revenues from our affiliates, mine safety services and products, royalties and throughput fees earned from White Oak Resources LLC (“White Oak”) (Note 12), other coal contract fees and other handling and service fees. Transportation revenues are recognized in connection with us incurring the corresponding costs of transporting coal to customers through third-party carriers for which we are directly reimbursed through customer billings. We had no allowance for doubtful accounts for trade receivables at December 31, 2014 and 2013. | ||||||||||||||||||||
Pension Benefits | ||||||||||||||||||||
Pension Benefits—Our defined benefit pension obligation and the related benefit cost are accounted for in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 715, Compensation-Retirement Benefits. Pension cost and obligations are actuarially determined and are affected by assumptions including expected return on plan assets, discount rates, mortality assumptions, employee turnover rates and retirement dates. We evaluate our assumptions periodically and make adjustments to these assumptions and the recorded liability as necessary (Note 14). | ||||||||||||||||||||
Common Unit-Based Compensation | ||||||||||||||||||||
Common Unit-Based Compensation—We account for compensation expense attributable to restricted common units granted under the Long-Term Incentive Plan (“LTIP”), Supplemental Executive Retirement Plan (“SERP”) and the MGP Amended and Restated Deferred Compensation Plan for Directors (“Deferred Compensation Plan”) based on the requirements of FASB ASC 718, Compensation-Stock Compensation. Accordingly, the fair value of award grants are determined on the grant date of the award and this value is recognized as compensation expense on a pro rata basis for LTIP and SERP awards, as appropriate, over the requisite service period. Compensation expense is fully recognized on the grant date for quarterly distributions credited to SERP accounts and Deferred Compensation Plan awards. The corresponding liability is classified as equity and included in limited partners’ capital in the consolidated financial statements (Note 15). | ||||||||||||||||||||
Net Income of ARLP Per Unit | ||||||||||||||||||||
Net Income of ARLP Per Unit—Basic net income of ARLP per limited partner unit is determined by dividing net income of ARLP available to Limited Partners by the weighted-average number of outstanding common units. Diluted net income of ARLP per unit is based on the combined weighted-average number of common units and common unit equivalents outstanding unless the effect is anti-dilutive (Note 13). | ||||||||||||||||||||
Investments | ||||||||||||||||||||
Investments—Investments and ownership interests are accounted for under the equity method of accounting if we have the ability to exercise significant influence, but not control, over the entity. Investments accounted for under the equity method are initially recorded at cost, and the difference between the basis of our investment and the underlying equity in the net assets of the joint venture at the investment date, if any, is amortized over the lives of the related assets that gave rise to the difference. In the event our ownership entitles us to a disproportionate sharing of income or loss, our equity in earnings or losses of affiliates is allocated based on the hypothetical liquidation at book value (“HLBV”) method of accounting. Under the HLBV method, equity in earnings or losses of affiliates is allocated based on the difference between our claim on the net assets of the equity method investee at the end and beginning of the period with consideration of certain eliminating entries regarding differences of accounting for various related party transactions, after taking into account contributions and distributions, if any. Our share of the net assets of the equity method investee is calculated as the amount we would receive if the equity method investee were to liquidate all of its assets at net book value and distribute the resulting cash to creditors, other investors and us according to the respective priorities. Our share of earnings or losses under the HLBV method of accounting from equity method investments and basis difference amortization is reported in the consolidated statements of income as “Equity in loss of affiliates, net.” We review our investments and ownership interests accounted for under the equity method of accounting for impairment whenever events or changes in circumstances indicate a loss in the value of the investment may be other than temporary. For 2014 and 2013, we determined there were no such material events or changes in circumstances that would indicate the carrying amounts of such investments were not recoverable. Our equity method investments include our ownership interests in White Oak, AllDale Minerals, L.P. (“AllDale Minerals”) and Mid-America Carbonates, LLC (“MAC”) (Note 12). | ||||||||||||||||||||
Variable Interest Entities ("VIEs") | ||||||||||||||||||||
Variable Interest Entities (“VIEs”)—VIEs are primarily entities that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders, as a group, lack one or more of the following characteristics: (a) direct or indirect ability to make decisions, (b) obligation to absorb expected losses or (c) right to receive expected residual returns. VIEs must be evaluated quantitatively and qualitatively to determine the primary beneficiary, which is the reporting entity that has (a) the power to direct activities of a VIE that most significantly impact the VIEs economic performance and (b) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. The primary beneficiary is required to consolidate the VIE for financial reporting purposes. | ||||||||||||||||||||
To determine a VIE’s primary beneficiary, we perform a qualitative assessment to determine which party, if any, has the power to direct activities of the VIE and the obligation to absorb losses and/or receive its benefits. This assessment involves identifying the activities that most significantly impact the VIE’s economic performance and determine whether it, or another party, has the power to direct those activities. When evaluating whether we are the primary beneficiary of a VIE, we perform a qualitative analysis that considers the design of the VIE, the nature of our involvement and the variable interests held by other parties. | ||||||||||||||||||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||||||||||
Summary of Intangible Assets | Our intangible assets at December 31 are summarized as follows (in thousands): | |||||||||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||||||||||
Original Cost | Accumulated | Intangibles, | Original Cost | Accumulated | Intangibles, | |||||||||||||||
Amortization | Net | Amortization | Net | |||||||||||||||||
Non-compete agreements | $ | 15,152 | $ | -8,545 | $ | 6,607 | $ | 15,236 | $ | -7,002 | $ | 8,234 | ||||||||
Customer contracts | 17,859 | -3,599 | 14,260 | 6,171 | -2,301 | 3,870 | ||||||||||||||
Mining permits | 3,843 | -182 | 3,661 | 3,843 | -116 | 3,727 | ||||||||||||||
Total | $ | 36,854 | $ | -12,326 | $ | 24,528 | $ | 25,250 | $ | -9,419 | $ | 15,831 | ||||||||
Summary of Advance Royalties | ||||||||||||||||||||
Our advance royalties at December 31 are summarized as follows (in thousands): | ||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||
Advance royalties, affiliates (Note 19) | $ | 10,706 | $ | 17,840 | ||||||||||||||||
Advance royalties, third-parties | 14,605 | 12,427 | ||||||||||||||||||
Total advance royalties | $ | 25,311 | $ | 30,267 | ||||||||||||||||
ACQUISITIONS_Tables
ACQUISITIONS (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Patriot Coal Corporation | |||||
Summary of consideration paid and final purchase price allocation | The following table summarizes the consideration paid by us to Patriot on the Initial and Subsequent Closing Dates and the preliminary fair value allocation of assets acquired and liabilities assumed as valued at the respective acquisition dates (in thousands): | ||||
Consideration paid | $ | 39,688 | |||
Recognized amounts of net tangible and intangible assets acquired and liabilities assumed: | |||||
Inventories | 3,255 | ||||
Property, plant and equipment, including mineral rights and leased equipment | 19,740 | ||||
Customer contracts, net | 19,193 | ||||
Asset retirement obligation | (2,500 | ) | |||
Net tangible and intangible assets acquired | $ | 39,688 | |||
Green River Collieries, LLC | |||||
Summary of consideration paid and final purchase price allocation | |||||
The following table summarizes the consideration paid to Green River and the final fair value allocation of assets acquired and liabilities assumed at the acquisition date (in thousands): | |||||
Consideration paid | $ | 100,000 | |||
Recognized amounts of net tangible and intangible assets acquired and liabilities assumed: | |||||
Inventories | 547 | ||||
Advance royalties | 888 | ||||
Property, plant and equipment, including mineral rights and leased facilities | 117,110 | ||||
Noncompete agreement | 1,200 | ||||
Customer contracts, net | 4,955 | ||||
Permits | 843 | ||||
Capital lease obligation | (17,384 | ) | |||
Asset retirement obligation | (6,032 | ) | |||
Pneumoconiosis benefits | (2,127 | ) | |||
Net tangible and intangible assets acquired | $ | 100,000 | |||
INVENTORIES_Tables
INVENTORIES (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
INVENTORIES | ||||||||
Schedule of Inventories | ||||||||
Inventories consist of the following at December 31, (in thousands): | ||||||||
2014 | 2013 | |||||||
Coal | $ | 50,130 | $ | 12,791 | ||||
Supplies (net of reserve for obsolescence of $2,935 and $3,150, respectively) | 33,025 | 31,423 | ||||||
Total inventory | $ | 83,155 | $ | 44,214 | ||||
PROPERTY_PLANT_AND_EQUIPMENT_T
PROPERTY, PLANT AND EQUIPMENT (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
PROPERTY, PLANT AND EQUIPMENT | ||||||||
Schedule of Property, Plant And Equipment | ||||||||
Property, plant and equipment consist of the following at December 31, (in thousands): | ||||||||
2014 | 2013 | |||||||
Mining equipment and processing facilities | $ | 1,757,772 | $ | 1,583,329 | ||||
Land and mineral rights | 376,937 | 369,347 | ||||||
Buildings, office equipment and improvements | 278,283 | 226,672 | ||||||
Construction and mine development in progress | 82,530 | 194,221 | ||||||
Mine development costs | 320,098 | 272,303 | ||||||
Property, plant and equipment, at cost | 2,815,620 | 2,645,872 | ||||||
Less accumulated depreciation, depletion and amortization | -1,150,414 | -1,031,493 | ||||||
Total property, plant and equipment, net | $ | 1,665,206 | $ | 1,614,379 | ||||
LONGTERM_DEBT_Tables
LONG-TERM DEBT (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
LONG-TERM DEBT | ||||||||
Schedule of Long-Term Debt | ||||||||
Long-term debt consists of the following at December 31, (in thousands): | ||||||||
2014 | 2013 | |||||||
Revolving Credit facility | $ | 140,000 | $ | 250,000 | ||||
Senior notes | - | 18,000 | ||||||
Series A senior notes | 205,000 | 205,000 | ||||||
Series B senior notes | 145,000 | 145,000 | ||||||
Term loan | 231,250 | 250,000 | ||||||
Securitization facility | 100,000 | - | ||||||
821,250 | 868,000 | |||||||
Less current maturities | -230,000 | -36,750 | ||||||
Total long-term debt | $ | 591,250 | $ | 831,250 | ||||
Schedule of aggregate maturities of long-term debt | ||||||||
Aggregate maturities of long-term debt are payable as follows (in thousands): | ||||||||
Year Ending | ||||||||
December 31, | ||||||||
2015 | $ | 230,000 | ||||||
2016 | 256,250 | |||||||
2017 | 190,000 | |||||||
2018 | 145,000 | |||||||
2019 | - | |||||||
Thereafter | - | |||||||
$ | 821,250 | |||||||
DISTRIBUTIONS_OF_AVAILABLE_CAS1
DISTRIBUTIONS OF AVAILABLE CASH (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
DISTRIBUTIONS OF AVAILABLE CASH | ||||||||
Summary of quarterly per unit distribution paid | The following table summarizes the quarterly per unit distribution paid during the respective quarter: | |||||||
Year | ||||||||
2014 | 2013 | 2012 | ||||||
First Quarter | $ | $ | $ | |||||
0.59875 | 0.55375 | 0.49500 | ||||||
Second Quarter | $ | $ | $ | |||||
0.61125 | 0.56500 | 0.51250 | ||||||
Third Quarter | $ | $ | $ | |||||
0.62500 | 0.57625 | 0.53125 | ||||||
Fourth Quarter | $ | $ | $ | |||||
0.63750 | 0.58750 | 0.54250 | ||||||
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
INCOME TAXES | ||||||||||||
Components of Income Tax Expense (Benefit) | Components of income tax expense (benefit) are as follows (in thousands): | |||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Current: | ||||||||||||
Federal | $ | - | $ | 7 | $ | -37 | ||||||
State | - | 16 | -183 | |||||||||
- | 23 | -220 | ||||||||||
Deferred: | ||||||||||||
Federal | - | 1,022 | -753 | |||||||||
State | - | 351 | -109 | |||||||||
- | 1,373 | -862 | ||||||||||
Income tax expense (benefit) | $ | - | $ | 1,396 | $ | -1,082 | ||||||
Reconciliation of Effective Tax Rate for the Provision for Income Taxes | ||||||||||||
Reconciliations from the provision for income taxes at the U.S. federal statutory tax rate to the effective tax rate for the provision for income taxes are as follows (in thousands): | ||||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Income taxes at statutory rate | $ | 174,024 | $ | 138,210 | $ | 117,057 | ||||||
Less: Income taxes at statutory rate on Partnership income not subject to income taxes | -174,912 | -139,771 | -117,767 | |||||||||
Increase/(decrease) resulting from: | ||||||||||||
State taxes, net of federal income tax | -112 | -192 | -83 | |||||||||
Change in valuation allowance of deferred tax assets | 1,636 | 3,483 | - | |||||||||
Other | -636 | -334 | -289 | |||||||||
Income tax expense (benefit) | $ | - | $ | 1,396 | $ | -1,082 | ||||||
EQUITY_INVESTMENTS_Tables
EQUITY INVESTMENTS (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
EQUITY INVESTMENTS | |||||||||||
Summary of White Oak's equity method investments results and Financial Position | |||||||||||
White Oak’s results for the years ended December 31, 2014, 2013 and 2012, are summarized as follows (in thousands): | |||||||||||
2014 | 2013 | 2012 | |||||||||
Total revenues | $ | 42,748 | $ | - | $ | - | |||||
Gross loss | -1,134 | -5,404 | -7 | ||||||||
Loss from operations | -21,018 | -24,103 | -16,037 | ||||||||
Net loss | -46,324 | -30,263 | -16,884 | ||||||||
White Oak’s financial position for the years ended December 31, 2014 and 2013 are summarized as follows (in thousands): | |||||||||||
2014 | 2013 | ||||||||||
Current assets | $ | 37,105 | $ | 11,228 | |||||||
Noncurrent assets | 639,953 | 533,696 | |||||||||
Current liabilities | 71,489 | 50,668 | |||||||||
Noncurrent liabilities | 372,507 | 354,597 | |||||||||
NET_INCOME_OF_ARLP_PER_LIMITED1
NET INCOME OF ARLP PER LIMITED PARTNER UNIT (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
NET INCOME OF ARLP PER LIMITED PARTNER UNIT | |||||||||||
Reconciliation of net income and EPU calculations | |||||||||||
The following is a reconciliation of net income of ARLP and net income used for calculating EPU and the weighted-average units used in computing EPU for the years ended December 31, 2014, 2013 and 2012, respectively (in thousands, except per unit data): | |||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Net income of ARLP | $ | 497,229 | $ | 393,490 | $ | 335,571 | |||||
Adjustments: | |||||||||||
Managing general partner priority distributions | -132,449 | -117,995 | -104,168 | ||||||||
General partners’ 2% equity ownership | -7,325 | -5,554 | -4,669 | ||||||||
General partners’ special allocation of certain general and administrative expenses | 1,500 | 2,200 | 2,000 | ||||||||
Limited partners’ interest in Net income of ARLP | 358,955 | 272,141 | 228,734 | ||||||||
Less: | |||||||||||
Distributions to participating securities | -2,956 | -2,362 | -2,095 | ||||||||
Undistributed earnings attributable to participating securities | -2,669 | -1,350 | -922 | ||||||||
Net income of ARLP available to limited partners | $ | 353,330 | $ | 268,429 | $ | 225,717 | |||||
Weighted-average limited partner units outstanding – Basic and Diluted (1) | 74,044 | 73,904 | 73,726 | ||||||||
Basic and Diluted Net income of ARLP per limited partner unit (1) | $ | 4.77 | $ | 3.63 | $ | 3.06 | |||||
(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 year ended December 31, 2014, 2013 and 2012, the combined total of LTIP, SERP and Deferred Compensation Plan units of 798,701, 682,732 and 689,912, respectively, were considered anti-dilutive. | |||||||||||
EMPLOYEE_BENEFIT_PLANS_Tables
EMPLOYEE BENEFIT PLANS (Tables) (Pension Plan) | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||
Pension Plan | |||||||||||||||||||
Employee Benefit Plans | |||||||||||||||||||
Summary of Benefit Plans for Employees | The following sets forth changes in benefit obligations and plan assets for the years ended December 31, 2014 and 2013 and the funded status of the Pension Plan reconciled with the amounts reported in our consolidated financial statements at December 31, 2014 and 2013, respectively (dollars in thousands): | ||||||||||||||||||
2014 | 2013 | ||||||||||||||||||
Change in benefit obligations: | |||||||||||||||||||
Benefit obligations at beginning of year | $ | 85,662 | $ | 86,468 | |||||||||||||||
Service cost | 2,174 | 2,783 | |||||||||||||||||
Interest cost | 4,074 | 3,640 | |||||||||||||||||
Actuarial loss (gain) | 19,841 | -5,479 | |||||||||||||||||
Benefits paid | -2,125 | -1,750 | |||||||||||||||||
Benefit obligations at end of year | 109,626 | 85,662 | |||||||||||||||||
Change in plan assets: | |||||||||||||||||||
Fair value of plan assets at beginning of year | 67,480 | 55,390 | |||||||||||||||||
Employer contribution | 2,671 | 2,400 | |||||||||||||||||
Actual return on plan assets | 1,495 | 11,440 | |||||||||||||||||
Benefits paid | -2,125 | -1,750 | |||||||||||||||||
Fair value of plan assets at end of year | 69,521 | 67,480 | |||||||||||||||||
Funded status at the end of year | $ | -40,105 | $ | -18,182 | |||||||||||||||
Amounts recognized in balance sheet: | |||||||||||||||||||
Non-current liability | $ | -40,105 | $ | -18,182 | |||||||||||||||
$ | -40,105 | $ | -18,182 | ||||||||||||||||
Amounts recognized in accumulated other comprehensive income consists of: | |||||||||||||||||||
Net actuarial loss | $ | -41,278 | $ | -18,230 | |||||||||||||||
Weighted-average assumptions to determine benefit obligations as of December 31, | |||||||||||||||||||
Discount rate | 3.92% | 4.89% | |||||||||||||||||
Expected rate of return on plan assets | 8.00% | 8.00% | |||||||||||||||||
Weighted-average assumptions used to determine net periodic benefit cost for the year ended December 31, | |||||||||||||||||||
Discount rate | 4.89% | 3.99% | |||||||||||||||||
Expected return on plan assets | 8.00% | 8.00% | |||||||||||||||||
Components of Net Periodic Benefit Cost | |||||||||||||||||||
The actual return on plan assets was 5.4% and 22.7% for the years ended December 31, 2014 and 2013, respectively. | |||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||
(in thousands) | |||||||||||||||||||
Components of net periodic benefit cost: | |||||||||||||||||||
Service cost | $ | 2,174 | $ | 2,783 | $ | 2,682 | |||||||||||||
Interest cost | 4,074 | 3,640 | 3,246 | ||||||||||||||||
Expected return on plan assets | -5,475 | -4,446 | -3,882 | ||||||||||||||||
Amortization of net loss | 773 | 2,653 | 1,788 | ||||||||||||||||
Net periodic benefit cost | $ | 1,546 | $ | 4,630 | $ | 3,834 | |||||||||||||
Schedule of Other Changes in Plan Assets and Benefit Obligation Recognized in Accumulated Other Comprehensive Income | |||||||||||||||||||
2014 | 2013 | ||||||||||||||||||
(in thousands) | |||||||||||||||||||
Other changes in plan assets and benefit obligation recognized in accumulated other comprehensive income: | |||||||||||||||||||
Net actuarial (loss) gain | $ | -23,821 | $ | 12,472 | |||||||||||||||
Reversal of amortization item: | |||||||||||||||||||
Net actuarial loss | 773 | 2,653 | |||||||||||||||||
Total recognized in accumulated other comprehensive (loss) income | -23,048 | 15,125 | |||||||||||||||||
Net periodic benefit cost | -1,546 | -4,630 | |||||||||||||||||
Total recognized in net periodic benefit cost and accumulated other comprehensive (loss) income | $ | -24,594 | $ | 10,495 | |||||||||||||||
Schedule of Estimated Future Benefit Payments | |||||||||||||||||||
Estimated future benefit payments as of December 31, 2014 are as follows (in thousands): | |||||||||||||||||||
Year Ending | |||||||||||||||||||
December 31, | |||||||||||||||||||
2015 | $ | 2,456 | |||||||||||||||||
2016 | 2,828 | ||||||||||||||||||
2017 | 3,222 | ||||||||||||||||||
2018 | 3,679 | ||||||||||||||||||
2019 | 4,118 | ||||||||||||||||||
2020-2024 | 27,416 | ||||||||||||||||||
$ | 43,719 | ||||||||||||||||||
Schedule of Policy Statement's Asset Allocation Guidelines | |||||||||||||||||||
The Policy Statement’s asset allocation guidelines are as follows: | |||||||||||||||||||
Percentage of Total Portfolio | |||||||||||||||||||
Minimum | Target | Maximum | |||||||||||||||||
Domestic equity securities | 50% | 70% | 90% | ||||||||||||||||
Foreign equity securities | 0% | 10% | 20% | ||||||||||||||||
Fixed income securities/cash | 5% | 20% | 40% | ||||||||||||||||
Schedule of Actual Asset Allocations | |||||||||||||||||||
Asset allocations as of December 31, | 2014 | 2013 | |||||||||||||||||
Domestic equity securities | 71% | 71% | |||||||||||||||||
Foreign equity securities | 8% | 13% | |||||||||||||||||
Fixed income securities/cash | 21% | 16% | |||||||||||||||||
100% | 100% | ||||||||||||||||||
Schedule of Fair Value of Plan Assets | |||||||||||||||||||
As required by FASB ASC 715, the following information discloses the fair values of our Pension Plan assets, by asset category, for the periods indicated (in thousands): | |||||||||||||||||||
December 31, 2014 | December 31, 2013 | ||||||||||||||||||
Quoted Prices | Significant | Significant | Quoted Prices | Significant | Significant | ||||||||||||||
in Active | Observable | Unobservable | in Active | Observable | Unobservable | ||||||||||||||
Markets for | Inputs | Inputs | Markets for | Inputs | Inputs | ||||||||||||||
Identical Assets | (Level 2) | (Level 3) | Identical Assets | (Level 2) | (Level 3) | ||||||||||||||
(Level 1) | (Level 1) | ||||||||||||||||||
Cash and cash equivalents | $ | 917 | $ | - | $ | - | $ | 1,625 | $ | - | $ | - | |||||||
Equity securities (a): | |||||||||||||||||||
U.S. large-cap growth | 19,147 | - | - | 9,406 | - | - | |||||||||||||
U.S. large-cap value | 19,196 | - | - | 17,731 | - | - | |||||||||||||
U.S. small/mid-cap blend | 8,681 | - | - | 10,512 | - | - | |||||||||||||
International large-cap core | 2,934 | - | - | 4,970 | - | - | |||||||||||||
Fixed income securities: | |||||||||||||||||||
U.S. Treasury securities (b) | 1,455 | - | - | 1,426 | - | - | |||||||||||||
Corporate bonds (c) | - | 1,802 | - | - | 1,623 | - | |||||||||||||
Preferred stock | - | 61 | - | - | 107 | - | |||||||||||||
Taxable municipal bonds (c) | - | 193 | - | - | 162 | - | |||||||||||||
International bonds (c) | - | 227 | - | - | 569 | - | |||||||||||||
Equity mutual funds (d): | |||||||||||||||||||
U.S. large-cap growth | - | - | - | - | 1,446 | - | |||||||||||||
U.S. large-cap value | - | - | - | - | 1,398 | - | |||||||||||||
U.S. mid-cap growth | - | 2,537 | - | - | 4,752 | - | |||||||||||||
U.S. small-cap growth | - | - | - | - | 1,389 | - | |||||||||||||
U.S. small-cap value | - | - | - | - | 1,331 | - | |||||||||||||
International | - | 2,856 | - | - | - | - | |||||||||||||
International small/mid-cap blend | - | - | - | - | 1,916 | - | |||||||||||||
Emerging Markets | - | - | - | - | 1,805 | - | |||||||||||||
Fixed income mutual funds (d): | |||||||||||||||||||
Corporate bond | - | 4,729 | - | - | 2,617 | - | |||||||||||||
Mortgage backed-securities | - | 1,226 | - | - | 1,075 | - | |||||||||||||
Short term investment grade bond | - | 1,417 | - | - | 1,009 | - | |||||||||||||
Intermediate investment grade bond | - | 1,013 | - | - | - | - | |||||||||||||
High yield bond | - | 689 | - | - | 684 | - | |||||||||||||
International bond | - | 296 | - | - | 207 | - | |||||||||||||
Stock market index options (e): | |||||||||||||||||||
Puts | - | 111 | - | - | 46 | - | |||||||||||||
Calls | - | -40 | - | - | -407 | - | |||||||||||||
Accrued income (f) | - | 74 | - | - | 81 | - | |||||||||||||
Total | $ | 52,330 | $ | 17,191 | $ | - | $ | 45,670 | $ | 21,810 | $ | - | |||||||
(a) | Equity securities include investments in publicly traded common stock and preferred stock. Publicly-traded common stocks are traded on a national securities exchange and investments in common and preferred stocks are valued using quoted market prices multiplied by the number of shares owned. | ||||||||||||||||||
(b) | U.S. Treasury securities include agency and treasury debt. These investments are valued using dealer quotes in an active market. | ||||||||||||||||||
(c) | Bonds are valued utilizing a market approach that includes various valuation techniques and sources such as value generation models, broker quotes in active and non-active markets, benchmark yields and securities, reported trades, issuer spreads, and/or other applicable reference data. The corporate bonds and notes category is primarily comprised of U.S. dollar denominated, investment grade securities. Less than 5 percent of the securities have a rating below investment grade. | ||||||||||||||||||
(d) | Mutual funds are valued daily in actively traded markets by an independent custodian for the investment manager. For purposes of calculating the value, portfolio securities and other assets for which market quotes are readily available are valued at market value. Market value is generally determined on a basis of last reported sales prices, or if no sales are reported, based on quotes obtained from a quotation reporting system, established market makers, or pricing services. Investments initially valued in currencies other than the U.S. dollars are converted to the U.S. dollar using exchange rates obtained from pricing services. | ||||||||||||||||||
(e) | Options are valued utilizing a market approach that includes various valuation techniques and sources such as value generation models, broker quotes in active and non-active markets, reported trades, issuer spreads, and/or other applicable reference data. | ||||||||||||||||||
(f) | Accrued income represents dividends declared, but not received, on equity securities owned at December 31, 2014. | ||||||||||||||||||
COMPENSATION_PLANS_Tables
COMPENSATION PLANS (Tables) | 12 Months Ended | |||
Dec. 31, 2014 | ||||
COMPENSATION PLANS | ||||
Summary Of Non-Vested LTIP Grants | ||||
Non-vested grants at January 1, 2014 | 695,532 | |||
Granted | 356,154 | |||
Vested | (202,742 | ) | ||
Forfeited | (5,604 | ) | ||
Non-vested grants at December 31, 2014 | 843,340 | |||
SUPPLEMENTAL_CASH_FLOW_INFORMA1
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
SUPPLEMENTAL CASH FLOW INFORMATION | ||||||||||
Schedule of Supplemental Cash Flow Information | ||||||||||
Year Ended December 31, | ||||||||||
2014 | 2013 | 2012 | ||||||||
(in thousands) | ||||||||||
Cash Paid For: | ||||||||||
Interest | $ | 34,005 | $ | 35,362 | $ | 35,833 | ||||
Non-Cash Activity: | ||||||||||
Accounts payable for purchase of property, plant and equipment | $ | 15,654 | $ | 17,924 | $ | 20,972 | ||||
Market value of common units vested in Long-Term Incentive Plan and Deferred Compensation Plan before minimum statutory tax withholding requirements | $ | 8,417 | $ | 8,583 | $ | 11,070 | ||||
Acquisition of business: | ||||||||||
Fair value of assets assumed | $ | - | $ | - | $ | 126,639 | ||||
Cash paid | - | - | -100,000 | |||||||
Fair value of liabilities assumed | $ | - | $ | - | $ | 26,639 | ||||
Disposition of property, plant and equipment: | ||||||||||
Net change in assets | $ | 846 | $ | - | $ | - | ||||
Book value of liabilities transferred | -5,246 | - | - | |||||||
Gain recognized | $ | -4,400 | $ | - | $ | - | ||||
Liabilities assumed in asset acquisition | $ | 6,042 | $ | - | $ | - | ||||
ASSET_RETIREMENT_OBLIGATIONS_T
ASSET RETIREMENT OBLIGATIONS (Tables) | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
ASSET RETIREMENT OBLIGATIONS | |||||||
Schedule of Estimated Payments of Assets Retirement Obligations | |||||||
Estimated payments of asset retirement obligations as of December 31, 2014 are as follows (in thousands): | |||||||
Year Ending | |||||||
December 31, | |||||||
2015 | $ | 2,055 | |||||
2016 | 2,127 | ||||||
2017 | 1,914 | ||||||
2018 | 1,964 | ||||||
2019 | 698 | ||||||
Thereafter | 173,135 | ||||||
Aggregate undiscounted asset retirement obligations | 181,893 | ||||||
Effect of discounting | (88,753 | ) | |||||
Total asset retirement obligations | 93,140 | ||||||
Less: current portion | (2,055 | ) | |||||
Asset retirement obligations | $ | 91,085 | |||||
Schedule of Activity in Asset Retirement and Mine Closing Liability | |||||||
The following table presents the activity affecting the asset retirement and mine closing liability (in thousands): | |||||||
Year ended December 31, | |||||||
2014 | 2013 | ||||||
Beginning balance | $ | 82,898 | $ | 84,836 | |||
Accretion expense | 2,730 | 3,004 | |||||
Payments | -1,134 | -2,242 | |||||
Assumption of existing liability | 6,042 | - | |||||
Disposition | -5,246 | - | |||||
Allocation of liability associated with acquisitions, mine development and change in assumptions | 7,850 | -2,700 | |||||
Ending balance | $ | 93,140 | $ | 82,898 | |||
ACCRUED_WORKERS_COMPENSATION_A1
ACCRUED WORKERS' COMPENSATION AND PNEUMOCONIOSIS BENEFITS (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Accrued Workers Compensation And Pneumoconiosis Benefits | ||||||||||||||
Components of black lung and workers' compensation expense | ||||||||||||||
The black lung and workers' compensation expense consists of the following components for the year ended December 31, 2014, 2013 and 2012 (in thousands): | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Black lung benefits: | ||||||||||||||
Service cost | $ | 3,424 | $ | 3,810 | $ | 3,758 | ||||||||
Interest cost | 2,262 | 2,253 | 2,372 | |||||||||||
Net amortization | -1,051 | 670 | 776 | |||||||||||
Total black lung | 4,635 | 6,733 | 6,906 | |||||||||||
Workers' compensation expense (benefit) | 7,776 | -110 | 17,572 | |||||||||||
Total expense | $ | 12,411 | $ | 6,623 | $ | 24,478 | ||||||||
Reconciliation of changes in workers' compensation liability | ||||||||||||||
The following is a reconciliation of the changes in workers' compensation liability (including current and long-term liability balances) at December 31, 2014 and 2013 (in thousands): | ||||||||||||||
2014 | 2013 | |||||||||||||
Beginning balance | $ | 62,909 | $ | 77,046 | ||||||||||
Accruals | 14,978 | 18,544 | ||||||||||||
Payments | -10,563 | -10,639 | ||||||||||||
Interest accretion | 2,585 | 2,481 | ||||||||||||
Valuation gain | -12,352 | -24,523 | ||||||||||||
Ending balance | $ | 57,557 | $ | 62,909 | ||||||||||
Summary of amounts recognized in accumulated other comprehensive income | ||||||||||||||
Summarized below is information about the amounts recognized in the accompanying consolidated balance sheets for black lung and workers' compensation benefits at December 31, 2014 and 2013 (in thousands): | ||||||||||||||
2014 | 2013 | |||||||||||||
Black lung claims | $ | 56,386 | $ | 49,560 | ||||||||||
Workers' compensation claims | 57,557 | 62,909 | ||||||||||||
Total obligations | 113,943 | 112,469 | ||||||||||||
Less current portion | -8,868 | -9,065 | ||||||||||||
Non-current obligations | $ | 105,075 | $ | 103,404 | ||||||||||
Pneumoconiosis benefits | ||||||||||||||
Accrued Workers Compensation And Pneumoconiosis Benefits | ||||||||||||||
Reconciliation of changes in the black lung benefit obligation recognized in AOCI | ||||||||||||||
The following is a reconciliation of the changes in the black lung benefit obligation recognized in AOCI for the years ended December 31, 2014 and 2013 (in thousands): | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Net actuarial (loss) gain | $ | -2,029 | $ | 16,750 | $ | 2,156 | ||||||||
Reversal of amortization item: | ||||||||||||||
Net actuarial (gain) loss | -1,051 | 670 | 776 | |||||||||||
Total recognized in accumulated other comprehensive income (loss) | $ | -3,080 | $ | 17,420 | $ | 2,932 | ||||||||
Reconciliation of changes in black lung benefit obligation | ||||||||||||||
The following is a reconciliation of the changes in black lung benefit obligations at December 31, 2014 and 2013 (in thousands): | ||||||||||||||
2014 | 2013 | |||||||||||||
Benefit obligations at beginning of year | $ | 49,560 | $ | 60,991 | ||||||||||
Service cost | 3,424 | 3,810 | ||||||||||||
Interest cost | 2,262 | 2,253 | ||||||||||||
Actuarial loss (gain) | 2,029 | -16,750 | ||||||||||||
Benefits and expenses paid | -889 | -744 | ||||||||||||
Benefit obligations at end of year | $ | 56,386 | $ | 49,560 | ||||||||||
2014 | 2013 | 2012 | ||||||||||||
Amount recognized in accumulated other comprehensive income consist of: | ||||||||||||||
Net actuarial (gain) loss | $ (5,431 | ) | $ (8,511 | ) | $ 8,908 | |||||||||
RELATEDPARTY_TRANSACTIONS_Tabl
RELATED-PARTY TRANSACTIONS (Tables) | 12 Months Ended | |||
Dec. 31, 2014 | ||||
RELATED-PARTY TRANSACTIONS | ||||
Schedule of future minimum royalties payments | ||||
Total future minimum royalties from 2015 through 2019 under agreements with SGP Land, SGP and WKY CoalPlay as discussed above are expected to be the following (in thousands): | ||||
Year Ending December 31, | ||||
2015 | $ 14,118 | |||
2016 | 13,857 | |||
2017 | 13,818 | |||
2018 | 13,818 | |||
2019 | 13,818 | |||
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
COMMITMENTS AND CONTINGENCIES | |||||||||||||
Schedule of future minimum lease payments | Other Operating Leases | ||||||||||||
Year Ending December 31, | Capital | Affiliate | Others | Total | |||||||||
Lease | |||||||||||||
2015 | $ | 2,054 | $ | 240 | $ | 1,416 | $ | 1,656 | |||||
2016 | 2,065 | - | 1,416 | 1,416 | |||||||||
2017 | 1,850 | - | 1,009 | 1,009 | |||||||||
2018 | 1,818 | - | 650 | 650 | |||||||||
2019 | 1,930 | - | - | - | |||||||||
Thereafter | 11,934 | - | - | - | |||||||||
Total future minimum lease payments | $ | 21,651 | $ | 240 | $ | 4,491 | $ | 4,731 | |||||
Less: amount representing interest | -4,722 | ||||||||||||
Present value of future minimum lease payments | 16,929 | ||||||||||||
Less: current portion | -1,305 | ||||||||||||
Long-term capital lease obligation | $ | 15,624 | |||||||||||
CONCENTRATION_OF_CREDIT_RISK_A1
CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS | ||||||||||||
Schedule of Total Revenues from Major Customers | ||||||||||||
Total revenues from major customers, including transportation revenues, which are at least ten percent of total revenues, are as follows (in thousands): | ||||||||||||
Year Ended December 31, | ||||||||||||
Segment (Note 22) | 2014 | 2013 | 2012 | |||||||||
Customer A | Illinois Basin | $ | 301,191 | $ | 319,932 | $ | 336,560 | |||||
Customer B | Illinois Basin | 276,094 | 263,582 | 243,339 | ||||||||
SEGMENT_INFORMATION_Tables
SEGMENT INFORMATION (Tables) | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||
SEGMENT INFORMATION | |||||||||||||||||||
Schedule of reportable segment results | |||||||||||||||||||
Illinois | Appalachia | White Oak | Other and | Elimination | Consolidated | ||||||||||||||
Basin | Corporate | -1 | |||||||||||||||||
(in thousands) | |||||||||||||||||||
Reportable segment results as of and for the year ended December 31, 2014 were as follows: | |||||||||||||||||||
Total revenues (2) | $ | 1,626,450 | $ | 630,452 | $ | 21,244 | $ | 34,090 | $ | -11,515 | $ | 2,300,721 | |||||||
Segment Adjusted EBITDA Expense (3) | 992,045 | 364,689 | 7,983 | 25,487 | -8,396 | 1,381,808 | |||||||||||||
Segment Adjusted EBITDA (4)(5) | 620,111 | 254,037 | -3,384 | 8,599 | -3,119 | 876,244 | |||||||||||||
Total assets (6) | 1,174,141 | 604,352 | 407,138 | 258,424 | -158,996 | 2,285,059 | |||||||||||||
Capital expenditures (7) | 237,953 | 56,840 | 5,214 | 11,462 | - | 311,469 | |||||||||||||
Reportable segment results as of and for the year ended December 31, 2013 were as follows: | |||||||||||||||||||
Total revenues (2) | $ | 1,629,089 | $ | 493,689 | $ | 2,194 | $ | 98,272 | $ | -17,683 | $ | 2,205,561 | |||||||
Segment Adjusted EBITDA Expense (3) | 951,686 | 375,923 | 2,112 | 86,864 | -17,683 | 1,398,902 | |||||||||||||
Segment Adjusted EBITDA (4)(5) | 657,404 | 105,123 | -25,229 | 12,278 | - | 749,576 | |||||||||||||
Total assets (6) | 1,077,231 | 594,466 | 317,361 | 133,915 | -1,075 | 2,121,898 | |||||||||||||
Capital expenditures (7) | 232,676 | 72,926 | 40,185 | 8,636 | - | 354,423 | |||||||||||||
Reportable segment results as of and for the year ended December 31, 2012 were as follows: | |||||||||||||||||||
Total revenues (2) | $ | 1,499,976 | $ | 444,993 | $ | - | $ | 105,860 | $ | -16,528 | $ | 2,034,301 | |||||||
Segment Adjusted EBITDA Expense (3) | 894,769 | 361,560 | -1,347 | 100,329 | -16,528 | 1,338,783 | |||||||||||||
Segment Adjusted EBITDA (4) (5) | 593,054 | 73,553 | -13,987 | 6,214 | - | 658,834 | |||||||||||||
Total assets (6) | 1,042,719 | 603,088 | 226,714 | 84,550 | -1,099 | 1,955,972 | |||||||||||||
Capital expenditures (7) | 219,029 | 137,336 | 85,671 | 17,196 | - | 459,232 | |||||||||||||
-1 | The elimination column represents the elimination of intercompany transactions and is primarily comprised of sales from the Matrix Group to our mining operations, coal sales and purchases between mining operations within different segments (2013 only), sales of receivables to AROP Funding and insurance premiums paid to Wildcat Insurance (2014 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 (2013 only). Also included in the Other and Corporate column are Wildcat Insurance revenues, which are eliminated upon consolidation. | ||||||||||||||||||
-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): | |||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||
Segment Adjusted EBITDA Expense | $ | 1,381,808 | $ | 1,398,902 | $ | 1,338,783 | |||||||||||||
Outside coal purchases | -14 | -2,030 | -38,607 | ||||||||||||||||
Other income | 1,566 | 1,891 | 3,115 | ||||||||||||||||
Operating expenses (excluding depreciation, depletion and amortization) | $ | 1,383,360 | $ | 1,398,763 | $ | 1,303,291 | |||||||||||||
-4 | Segment Adjusted EBITDA is defined as net income (prior to the allocation of noncontrolling interest) before net interest expense, income taxes, depreciation, depletion and amortization, asset impairment charge 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 below (in thousands): | ||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||
Consolidated Segment Adjusted EBITDA | $ | 876,244 | $ | 749,576 | $ | 658,834 | |||||||||||||
General and administrative | -72,552 | -63,697 | -58,737 | ||||||||||||||||
Depreciation, depletion and amortization | -274,566 | -264,911 | -218,122 | ||||||||||||||||
Asset impairment charge | - | - | -19,031 | ||||||||||||||||
Interest expense, net | -31,913 | -26,082 | -28,455 | ||||||||||||||||
Income tax (expense) benefit | - | -1,396 | 1,082 | ||||||||||||||||
Net income | $ | 497,213 | $ | 393,490 | $ | 335,571 | |||||||||||||
-5 | Includes equity in income (loss) of affiliates for the years ended December 31, 2014, 2013 and 2012 of $(16.6) million, $(25.3) million and $(15.3) million, respectively, for the White Oak segment and $(3) thousand, $0.9 million and $0.7 million, respectively, for the Other and Corporate segment. | ||||||||||||||||||
-6 | Total assets at December 31, 2014, 2013 and 2012 include investments in affiliate of $211.7 million, $128.7 million and $86.8 million, respectively, for the White Oak segment and $12.9 million, $1.7 million and $1.7 million, respectively, for the Other and Corporate segment. | ||||||||||||||||||
-7 | Capital expenditures shown above include funding to White Oak of $4.1 million, $25.3 million and $34.6 million, for the years ended December 31, 2014, 2013 and 2012, respectively, for the acquisition and development of coal reserves from White Oak (Note 12), which is described as “Payments to affiliate for acquisition and development of coal reserves” in our consolidated statements of cash flow. Capital expenditures shown above exclude the Green River acquisition in April 2012 (Note 3) and purchase of coal supply agreements from Patriot in December 2014 (Note 3). | ||||||||||||||||||
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): | |||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||
Segment Adjusted EBITDA Expense | $ | 1,381,808 | $ | 1,398,902 | $ | 1,338,783 | |||||||||||||
Outside coal purchases | -14 | -2,030 | -38,607 | ||||||||||||||||
Other income | 1,566 | 1,891 | 3,115 | ||||||||||||||||
Operating expenses (excluding depreciation, depletion and amortization) | $ | 1,383,360 | $ | 1,398,763 | $ | 1,303,291 | |||||||||||||
Reconciliation of consolidated Segment Adjusted EBITDA to net income | Consolidated Segment Adjusted EBITDA is reconciled to net income below (in thousands): | ||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||
Consolidated Segment Adjusted EBITDA | $ | 876,244 | $ | 749,576 | $ | 658,834 | |||||||||||||
General and administrative | -72,552 | -63,697 | -58,737 | ||||||||||||||||
Depreciation, depletion and amortization | -274,566 | -264,911 | -218,122 | ||||||||||||||||
Asset impairment charge | - | - | -19,031 | ||||||||||||||||
Interest expense, net | -31,913 | -26,082 | -28,455 | ||||||||||||||||
Income tax (expense) benefit | - | -1,396 | 1,082 | ||||||||||||||||
Net income | $ | 497,213 | $ | 393,490 | $ | 335,571 | |||||||||||||
SELECTED_QUARTERLY_FINANCIAL_D1
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables) | 12 Months Ended | ||||||||||||||
Dec. 31, 2014 | |||||||||||||||
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | |||||||||||||||
Schedule of Consolidated Quarterly Operating Results | |||||||||||||||
A summary of our consolidated quarterly operating results in 2014 and 2013 is as follows (in thousands, except unit and per unit data): | |||||||||||||||
Quarter Ended | |||||||||||||||
March 31, | June 30, | September 30, | December 31, | ||||||||||||
2014 | 2014 (1) | 2014 | 2014 (1) | ||||||||||||
Revenues | $ | 542,038 | $ | 598,562 | $ | 569,328 | $ | 590,793 | |||||||
Income from operations | 129,513 | 153,034 | 127,513 | 134,148 | |||||||||||
Income before income taxes | 115,904 | 137,653 | 119,978 | 123,678 | |||||||||||
Net income of ARLP | 115,904 | 137,653 | 119,978 | 123,694 | |||||||||||
Basic and diluted net income of ARLP per limited partner unit | $ | 1.10 | $ | 1.37 | $ | 1.13 | $ | 1.18 | |||||||
Weighted-average number of units outstanding – basic and diluted | 73,994,866 | 74,060,634 | 74,060,634 | 74,060,634 | |||||||||||
Quarter Ended | |||||||||||||||
March 31, | June 30, | September 30, | December 31, | ||||||||||||
2013 | 2013 | 2013 | 2013 (1) | ||||||||||||
Revenues | $ | 548,055 | $ | 553,571 | $ | 537,229 | $ | 566,706 | |||||||
Income from operations | 112,316 | 115,569 | 98,002 | 117,631 | |||||||||||
Income before income taxes | 102,239 | 104,183 | 86,468 | 101,996 | |||||||||||
Net income of ARLP | 102,937 | 104,074 | 87,186 | 99,293 | |||||||||||
Basic and diluted net income of ARLP per limited partner unit | $ | 0.98 | $ | 0.98 | $ | 0.75 | $ | 0.93 | |||||||
Weighted-average number of units outstanding – basic and diluted | 73,838,004 | 73,926,108 | 73,926,108 | 73,926,108 | |||||||||||
-1 | The comparability of our December 31, 2013 quarterly results to other quarters presented was affected by a $12.9 million decrease in our workers’ compensation liability, excluding discount rate changes, due to the completion of our annual actuarial study, which reflected favorable development in our disability emergence patterns and claims estimates (Note 18). The comparability of our June 30, 2014 quarterly results to other quarters presented was affected by $7.0 million insurance settlement related to adverse geological events at the Onton mine in the third quarter of 2013 and a gain of $4.4 million recognized on the sale of Pontiki’s assets. | ||||||||||||||
ORGANIZATION_AND_PRESENTATION_
ORGANIZATION AND PRESENTATION (Details) | 0 Months Ended | 12 Months Ended | ||
Jun. 16, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Ownership interests | ||||
Ownership percentage by general partners | 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 | |||
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% |
SUMMARY_OF_SIGNIFICANT_ACCOUNT3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Fair Value of Financial Instruments | |||
Fair value of long-term debt, including current maturities (Level 2) | $833,400,000 | $884,800,000 | |
Cash and Cash Equivalents | |||
Restricted cash and cash equivalents | 400,000 | 0 | |
Cash Management | |||
Book overdrafts | 1,700,000 | 0 | 10,300,000 |
Property, Plant and Equipment | |||
Coal reserves not subject to depletion | 53,200,000 | 45,500,000 | |
Mine development costs | |||
Capitalized mine development costs | 7,000,000 | 33,100,000 | |
Long-lived assets | |||
Asset impairment charge | $0 | $0 | $19,031,000 |
Plant and equipment assets, other than preparation plants and processing facilities | Minimum | |||
Property, Plant and Equipment | |||
Estimated useful life | 1 year | ||
Plant and equipment assets, other than preparation plants and processing facilities | Maximum | |||
Property, Plant and Equipment | |||
Estimated useful life | 16 years | ||
Mining equipment | Minimum | |||
Property, Plant and Equipment | |||
Estimated useful life | 1 year | ||
Mining equipment | Maximum | |||
Property, Plant and Equipment | |||
Estimated useful life | 16 years | ||
Buildings, office equipment and improvements | Minimum | |||
Property, Plant and Equipment | |||
Estimated useful life | 2 years | ||
Buildings, office equipment and improvements | Maximum | |||
Property, Plant and Equipment | |||
Estimated useful life | 16 years | ||
Land and mineral rights | Minimum | |||
Property, Plant and Equipment | |||
Estimated useful life | 1 year | ||
Land and mineral rights | Maximum | |||
Property, Plant and Equipment | |||
Estimated useful life | 16 years |
SUMMARY_OF_SIGNIFICANT_ACCOUNT4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Intangible Assets | |||
Amortization expense attributable to intangible assets | $3,000,000 | $3,000,000 | $2,600,000 |
Original Cost | 36,854,000 | 25,250,000 | |
Accumulated Amortization | -12,326,000 | -9,419,000 | |
Intangibles, Net | 24,528,000 | 15,831,000 | |
Estimated amortization expense related to intangible assets in 2015 | 9,600,000 | ||
Estimated amortization expense related to intangible assets in 2016 | 6,100,000 | ||
Estimated amortization expense related to intangible assets in 2017 | 3,200,000 | ||
Estimated amortization expense related to intangible assets in 2018 | 1,000,000 | ||
Estimated amortization expense related to intangible assets in 2019 | 1,000,000 | ||
Noncompete agreement | |||
Intangible Assets | |||
Original Cost | 15,152,000 | 15,236,000 | |
Accumulated Amortization | -8,545,000 | -7,002,000 | |
Intangibles, Net | 6,607,000 | 8,234,000 | |
Customer contracts | |||
Intangible Assets | |||
Amortization expense attributable to intangible assets | 0 | 0 | 0 |
Original Cost | 17,859,000 | 6,171,000 | |
Accumulated Amortization | -3,599,000 | -2,301,000 | |
Intangibles, Net | 14,260,000 | 3,870,000 | |
Mining permits | |||
Intangible Assets | |||
Original Cost | 3,843,000 | 3,843,000 | |
Accumulated Amortization | -182,000 | -116,000 | |
Intangibles, Net | $3,661,000 | $3,727,000 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 3) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Advance Royalties | ||
Advance royalties, affiliates (Note 19) | $10,706 | $17,840 |
Advance royalties, third-parties | 14,605 | 12,427 |
Total advance royalties | 25,311 | 30,267 |
Income Taxes | ||
Percentage of qualifying income for tax purposes | 90.00% | |
Revenue Recognition | ||
Allowance for doubtful accounts for trade receivables | $0 | $0 |
ACQUISITION_OF_BUSINESS_Detail
ACQUISITION OF BUSINESS (Details) (USD $) | 12 Months Ended | 1 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2014 | Jun. 30, 2013 | Nov. 30, 2014 | |
T | T | T | ||
Asset Acquisition | ||||
Reclamation liabilities assumed (in dollars) | $6,042,000 | |||
Acquisition of coal reserves from CNX RCPC LLC and Island Creek Coal Company | WKY CoalPlay | ||||
Asset Acquisition | ||||
Coal reserves conveyed by related party (in tons) | 14,300,000 | |||
Acquisition of coal reserves from CNX RCPC LLC and Island Creek Coal Company | WKY CoalPlay | Coal lease | ||||
Asset Acquisition | ||||
Coal reserves leased from related party (in tons) | 72,300,000 | |||
Acquisition of coal reserves from Midwest Coal Reserves Kentucky LLC and Cyprus Creek Land Company | ||||
Asset Acquisition | ||||
Coal reserves, rights purchased (in tons) | 86,200,000 | |||
Acquisition of coal reserves from Midwest Coal Reserves Kentucky LLC and Cyprus Creek Land Company | WKY CoalPlay | ||||
Asset Acquisition | ||||
Coal reserves conveyed by related party (in tons) | 31,500,000 | |||
Acquisition of coal reserves from Midwest Coal Reserves Kentucky LLC and Cyprus Creek Land Company | WKY CoalPlay | Coal lease | ||||
Asset Acquisition | ||||
Coal reserves leased from related party (in tons) | 22,600,000 | |||
Alliance Resource Properties | Acquisition of coal reserves from Laurel Run Mining Company | ||||
Asset Acquisition | ||||
Coal reserves, rights purchased (in tons) | 11,600,000 | |||
Additional coal resources (in tons) | 5,900,000 | |||
Purchase price (in dollars) | 25,200,000 | |||
Alliance Resource Properties | Acquisition of coal reserves from CNX RCPC LLC and Island Creek Coal Company | ||||
Asset Acquisition | ||||
Coal reserves, rights purchased (in tons) | 124,200,000 | |||
Purchase price (in dollars) | 11,600,000 | |||
Reclamation liabilities assumed (in dollars) | 6,000,000 | |||
WKY CoalPlay | Acquisition of coal reserves from CNX RCPC LLC and Island Creek Coal Company | ||||
Asset Acquisition | ||||
Coal reserves, rights purchased (in tons) | 86,600,000 | |||
Purchase price (in dollars) | 57,200,000 | |||
Number of subsidiaries purchased in coal reserves acquisition | 2 | |||
WKY CoalPlay | Acquisition of coal reserves from Midwest Coal Reserves Kentucky LLC and Cyprus Creek Land Company | ||||
Asset Acquisition | ||||
Coal reserves, rights purchased (in tons) | 54,100,000 | |||
Purchase price (in dollars) | 29,600,000 |
ACQUISITION_OF_BUSINESS_Detail1
ACQUISITION OF BUSINESS (Details 2) (USD $) | 1 Months Ended | 12 Months Ended | 1 Months Ended | 0 Months Ended | 2 Months Ended | 0 Months Ended | ||
Feb. 03, 2015 | Dec. 31, 2014 | Dec. 31, 2012 | Feb. 28, 2015 | Feb. 03, 2015 | Feb. 28, 2015 | Dec. 31, 2014 | Apr. 02, 2012 | |
T | T | T | T | T | ||||
Acquisition Of Business | ||||||||
Consideration paid | $100,000,000 | |||||||
Reclamation liabilities assumed (in dollars) | 6,042,000 | |||||||
Non-reserve coal deposits reclassified to reserves (in tons) | 85,000,000 | |||||||
Total increase in coal reserves (in tons) | 537,200,000 | |||||||
WKY CoalPlay | Acquisition of coal reserves from a subsidiary of patriot | Coal lease | ||||||||
Acquisition Of Business | ||||||||
Coal reserves leased from related party (in tons) | 39,100,000 | |||||||
WKY CoalPlay | Acquisition of coal reserves from a subsidiary of patriot | ||||||||
Acquisition Of Business | ||||||||
Coal reserves, rights purchased (in tons) | 39,100,000 | 39,100,000 | ||||||
Purchase price (in dollars) | 25,000,000 | 25,000,000 | ||||||
Patriot Coal Corporation | ||||||||
Acquisition Of Business | ||||||||
Coal reserves (in tons) | 84,100,000 | 84,100,000 | ||||||
Non-reserve coal deposits (in tons) | 43,200,000 | 43,200,000 | ||||||
Consideration paid | 20,500,000 | 39,688,000 | ||||||
Reclamation liabilities assumed (in dollars) | 2,500,000 | |||||||
Recognized amounts of net tangible and intangible assets acquired and liabilities assumed: | ||||||||
Inventories | 3,255,000 | 3,255,000 | ||||||
Property, plant and equipment, including mineral rights and leased facilities | 19,740,000 | 19,740,000 | ||||||
Intangible assets | 19,193,000 | 19,193,000 | ||||||
Asset retirement obligation | -2,500,000 | -2,500,000 | ||||||
Net tangible and intangible assets acquired | 39,688,000 | |||||||
Patriot Coal Corporation | Customer contracts | ||||||||
Acquisition Of Business | ||||||||
Initial consideration paid | 21,000,000 | |||||||
Consideration paid | 19,200,000 | |||||||
Amount paid into escrow | 9,300,000 | |||||||
Escrow deposit released | 7,500,000 | |||||||
Escrow deposit returned | 1,800,000 | |||||||
Coal to be delivered under acquired supply agreements (in tons) | 5,100,000 | |||||||
Pro forma coal sales under acquired supply agreements (in tons) | 3,200,000 | |||||||
Pro forma average price for coal sales under acquired supply agreements (in dollars per ton) | 46.67 | |||||||
Green River Collieries, LLC | ||||||||
Acquisition Of Business | ||||||||
Coal reserves (in tons) | 40,000,000 | |||||||
Consideration paid | 100,000,000 | |||||||
Recognized amounts of net tangible and intangible assets acquired and liabilities assumed: | ||||||||
Inventories | 547,000 | |||||||
Advance royalties | 888,000 | |||||||
Property, plant and equipment, including mineral rights and leased facilities | 117,110,000 | |||||||
Capital lease obligation | -17,384,000 | |||||||
Asset retirement obligation | -6,032,000 | |||||||
Pneumoconiosis benefits | -2,127,000 | |||||||
Net tangible and intangible assets acquired | 100,000,000 | |||||||
Green River Collieries, LLC | Noncompete agreement | ||||||||
Recognized amounts of net tangible and intangible assets acquired and liabilities assumed: | ||||||||
Intangible assets | 1,200,000 | |||||||
Green River Collieries, LLC | Customer contracts | ||||||||
Recognized amounts of net tangible and intangible assets acquired and liabilities assumed: | ||||||||
Intangible assets | 4,955,000 | |||||||
Green River Collieries, LLC | Mining permits | ||||||||
Recognized amounts of net tangible and intangible assets acquired and liabilities assumed: | ||||||||
Intangible assets | $843,000 |
ASSET_IMPAIRMENT_CHARGE_Detail
ASSET IMPAIRMENT CHARGE (Details) (USD $) | 12 Months Ended | 0 Months Ended | 3 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 27, 2013 | Sep. 30, 2012 | |
Asset impairment charges | |||||
Asset impairment charge | $0 | $0 | $19,031,000 | ||
Pontiki mining complex | |||||
Asset impairment charges | |||||
Asset impairment charge | 0 | 19,000,000 | |||
Property plant and equipment, fair value | $16,100,000 |
INVENTORIES_Details
INVENTORIES (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
INVENTORIES | ||
Coal | $50,130 | $12,791 |
Supplies (net of reserve for obsolescence of $2,935 and $3,150, respectively) | 33,025 | 31,423 |
Total inventory | 83,155 | 44,214 |
Reserve for obsolescence | $2,935 | $3,150 |
PROPERTY_PLANT_AND_EQUIPMENT_D
PROPERTY, PLANT AND EQUIPMENT (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
PROPERTY, PLANT AND EQUIPMENT | |||
Property, plant and equipment, at cost | $2,815,620,000 | $2,645,872,000 | |
Less accumulated depreciation, depletion and amortization | -1,150,414,000 | -1,031,493,000 | |
Total property, plant and equipment, net | 1,665,206,000 | 1,614,379,000 | |
Equipment under capital leases | 20,900,000 | ||
Accumulated amortization related to capital leases | 5,600,000 | 5,800,000 | |
Amortization expense related to capital leases | 1,600,000 | 2,000,000 | 1,900,000 |
Mining equipment and processing facilities | |||
PROPERTY, PLANT AND EQUIPMENT | |||
Property, plant and equipment, at cost | 1,757,772,000 | 1,583,329,000 | |
Land and mineral rights | |||
PROPERTY, PLANT AND EQUIPMENT | |||
Property, plant and equipment, at cost | 376,937,000 | 369,347,000 | |
Buildings, office equipment and improvements | |||
PROPERTY, PLANT AND EQUIPMENT | |||
Property, plant and equipment, at cost | 278,283,000 | 226,672,000 | |
Construction and mine development in progress | |||
PROPERTY, PLANT AND EQUIPMENT | |||
Property, plant and equipment, at cost | 82,530,000 | 194,221,000 | |
Mine development costs | |||
PROPERTY, PLANT AND EQUIPMENT | |||
Property, plant and equipment, at cost | $320,098,000 | $272,303,000 |
LONGTERM_DEBT_Details
LONG-TERM DEBT (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Long-Term Debt | ||
Long-term debt including current and non-current | $821,250 | $868,000 |
Less current maturities | -230,000 | -36,750 |
Total long-term debt | 591,250 | 831,250 |
Revolving credit facility | ||
Long-Term Debt | ||
Long-term debt including current and non-current | 140,000 | 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 | 231,250 | 250,000 |
Securitization facility | ||
Long-Term Debt | ||
Long-term debt including current and non-current | $100,000 |
LONGTERM_DEBT_Details_2
LONG-TERM DEBT (Details 2) (USD $) | 12 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2012 | 23-May-12 | Jun. 26, 2008 |
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 | 1.01 | |||
Actual cash flow to interest expense ratio for trailing twelve months | 24 | |||
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 | |||
Credit Agreement | ||||
Long-Term Debt | ||||
Effective interest rate (as a percent) | 1.57% | |||
Debt issuance costs | $4.30 | |||
Revolving credit facility | ||||
Long-Term Debt | ||||
Revolving credit facility | 700 | |||
Letters of credit outstanding | 5.4 | |||
Line of credit facility, available for borrowing | 554.6 | |||
Annual commitment fee percentage, undrawn portion | 0.20% | |||
Frequency of commitment fee on undrawn portion | annual | |||
Term Loan | ||||
Long-Term Debt | ||||
Aggregate principal amount | 250 | |||
Term Loan | June 2014 through March 2016 | ||||
Long-Term Debt | ||||
Quarterly principal payments (as a percent) | 2.50% | |||
Term Loan | June 2016 through December 2016 | ||||
Long-Term Debt | ||||
Quarterly principal payments (as a percent) | 20.00% | |||
Series A Senior Notes | ||||
Long-Term Debt | ||||
Aggregate principal amount | 205 | |||
Interest rate (as a percent) | 6.28% | 6.28% | ||
Series B Senior Notes | ||||
Long-Term Debt | ||||
Aggregate principal amount | 145 | |||
Interest rate (as a percent) | 6.72% | 6.72% | ||
Terminated term loan | ||||
Long-Term Debt | ||||
Write off of deferred debt issuance cost | 1.1 | |||
Amount repaid on loan | 300 | |||
Securitization facility | ||||
Long-Term Debt | ||||
Revolving credit facility | 100 | |||
Extended term | 364 days | |||
Initial term | 364 days | |||
Line of credit facility outstanding amount | 100 | |||
Other | ||||
Long-Term Debt | ||||
Revolving credit facility | 31.1 | |||
Number of banks | 2 | |||
Letters of credit outstanding | 30.7 |
LONGTERM_DEBT_Details_3
LONG-TERM DEBT (Details 3) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Aggregate maturities of long-term debt | ||
2015 | $230,000 | |
2016 | 256,250 | |
2017 | 190,000 | |
2018 | 145,000 | |
Long-term debt including current and non-current | $821,250 | $868,000 |
FAIR_VALUE_MEASUREMENTS_Detail
FAIR VALUE MEASUREMENTS (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
FAIR VALUE MEASUREMENTS | ||
Fair value of long-term debt, including current maturities (Level 2) | $833.40 | $884.80 |
DISTRIBUTIONS_OF_AVAILABLE_CAS2
DISTRIBUTIONS OF AVAILABLE CASH (Details) (USD $) | 0 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||||||
In Millions, except Per Share data, unless otherwise specified | Jan. 28, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Distribution Made to Member or Limited Partner | ||||||||||||||||
Percentage of available cash distributed | 100.00% | |||||||||||||||
Period following quarter end for distribution of available cash | 45 days | |||||||||||||||
Minimum quarterly distribution (in dollars per unit) | $0.13 | |||||||||||||||
Minimum annual distribution (in dollars per unit) | $0.50 | |||||||||||||||
Quarterly distribution paid (in dollars per unit) | $0.64 | $0.63 | $0.61 | $0.60 | $0.59 | $0.58 | $0.56 | $0.55 | $0.54 | $0.53 | $0.51 | $0.50 | ||||
Distributions declared (in dollars per unit) | $0.65 | |||||||||||||||
Approximate distribution to be paid | $83.60 | |||||||||||||||
MGP | ||||||||||||||||
Distribution Made to Member or Limited Partner | ||||||||||||||||
Managing general partner incentive distributions | $129.80 | $115.60 | $102.10 | |||||||||||||
Excess Of $0.1375 Per Unit | ||||||||||||||||
Distribution Made to Member or Limited Partner | ||||||||||||||||
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 | ||||||||||||||||
Distribution Made to Member or Limited Partner | ||||||||||||||||
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 | ||||||||||||||||
Distribution Made to Member or Limited Partner | ||||||||||||||||
General partner incentive distribution percentage | 50.00% | |||||||||||||||
Threshold distribution of net income per unit (in dollars per unit) | $0.19 |
INCOME_TAXES_Details
INCOME TAXES (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Current: | ||
Federal | $7 | ($37) |
State | 16 | -183 |
Total current income tax expense (benefit) | 23 | -220 |
Deferred: | ||
Federal | 1,022 | -753 |
State | 351 | -109 |
Total deferred income tax expense (benefit) | 1,373 | -862 |
Income tax expense (benefit) | $1,396 | ($1,082) |
INCOME_TAXES_Details_2
INCOME TAXES (Details 2) (USD $) | Dec. 31, 2014 |
In Millions, unless otherwise specified | |
Income taxes | |
Deferred tax assets due to net operating losses and research and development credits | $6.50 |
Deferred tax liabilities | 1.3 |
Federal | |
Income taxes | |
Valuation allowance | 4 |
State | |
Income taxes | |
Valuation allowance | $1.20 |
INCOME_TAXES_Details_3
INCOME TAXES (Details 3) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
INCOME TAXES | |||
Income taxes at statutory rate | $174,024 | $138,210 | $117,057 |
Less: Income taxes at statutory rate on Partnership income not subject to income taxes | -174,912 | -139,771 | -117,767 |
Increase/(decrease) resulting from: | |||
State taxes, net of federal income tax | -112 | -192 | -83 |
Change in valuation allowance of deferred tax assets | 1,636 | 3,483 | |
Other | -636 | -334 | -289 |
Income tax expense (benefit) | $1,396 | ($1,082) |
NONCONTROLLING_INTEREST_Detail
NONCONTROLLING INTEREST (Details) (USD $) | 2 Months Ended | 12 Months Ended | 0 Months Ended | 2 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2014 | Nov. 10, 2014 | Dec. 31, 2014 |
Cavalier Minerals | ||||
Cavalier Agreement | ||||
Expected funding | $48 | $48 | $48 | |
Expected funding by noncontrolling owners | 2 | 2 | 2 | |
Amount of funding provided | 11.5 | 11.5 | ||
Remaining equity investment commitment | 36.5 | |||
Amount of funding from noncontrolling owners | 0.5 | |||
Additional funding committed by noncontrolling owners | 1.5 | 1.5 | 1.5 | |
Ownership interest in VIE (as a percent) | 96.00% | |||
Incentive distribution for noncontrolling owners (as a percent) | 25.00% | |||
Cavalier Minerals | Minimum | ||||
Cavalier Agreement | ||||
Expected period of funding | 2 years | |||
Cavalier Minerals | Maximum | ||||
Cavalier Agreement | ||||
Expected period of funding | 4 years | |||
Cavalier Minerals | AllDale Minerals | ||||
Cavalier Agreement | ||||
Expected funding | 49 | 49 | 49 | |
Amount of funding provided | 7.4 | 4.2 | ||
Remaining equity investment commitment | $37.40 | |||
Cavalier Minerals | AllDale Minerals | Minimum | ||||
Cavalier Agreement | ||||
Expected period of funding | 2 years | |||
Cavalier Minerals | AllDale Minerals | Maximum | ||||
Cavalier Agreement | ||||
Expected period of funding | 4 years |
EQUITY_INVESTMENTS_Details
EQUITY INVESTMENTS (Details) (USD $) | 12 Months Ended | 0 Months Ended | 1 Months Ended | 27 Months Ended | 39 Months Ended | 1 Months Ended | 15 Months Ended | 0 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 22, 2011 | Feb. 27, 2015 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2012 | Jun. 18, 2012 | |
person | person | ||||||||||
Equity Investments | |||||||||||
Payments to affiliate for acquisition and development of coal reserves | $4,082,000 | $25,272,000 | $34,601,000 | ||||||||
White Oak | |||||||||||
Equity Investments | |||||||||||
Amount funded by partnership | 69,500,000 | 320,500,000 | 390,000,000 | ||||||||
Purchase of equity investment | 99,800,000 | 35,700,000 | 6,000,000 | 129,300,000 | |||||||
Equity method investment, net | 264,800,000 | 264,800,000 | 264,800,000 | 264,800,000 | |||||||
Additional equity investments by another owner | 39,800,000 | 45,900,000 | |||||||||
Number of ARLP representatives on White Oak board of directors | 2 | 2 | 2 | 2 | |||||||
Total number of White Oak directors | 5 | 5 | 5 | 5 | |||||||
Percentage of distributions Series A Units are entitled to receive until minimum return is realized | 100.00% | ||||||||||
Voting interest (as a percent) | 39.00% | 21.60% | 21.60% | 39.00% | 39.00% | 39.00% | |||||
Number of primary activities that impact economic performance | 4 | ||||||||||
Distributions received from investee | 0 | ||||||||||
Allocated losses | 16,600,000 | 25,300,000 | |||||||||
Decrease in allocated losses from purchases of Series A Units by another owner | 11,600,000 | ||||||||||
White Oak | Minimum | |||||||||||
Equity Investments | |||||||||||
Total expected funding by partnership | 395,500,000 | 395,500,000 | 395,500,000 | 395,500,000 | |||||||
Remaining equity investment commitment | 114,300,000 | ||||||||||
Equity investment commitment | 150,000,000 | ||||||||||
White Oak | Maximum | |||||||||||
Equity Investments | |||||||||||
Total expected funding by partnership | 415,500,000 | 415,500,000 | 415,500,000 | 415,500,000 | |||||||
Equity investment commitment | 275,000,000 | ||||||||||
Additional equity investment commitment | 125,000,000 | ||||||||||
Potential ownership interest (as a percent) | 40.00% | 40.00% | 40.00% | 40.00% | |||||||
White Oak | Reserve Acquisition | |||||||||||
Equity Investments | |||||||||||
Coal reserves, rights purchased (in tons) | 14,600,000 | 90,100,000 | 204,900,000 | 309,600,000 | |||||||
Payment for acquisition of coal reserves and other assets | 4,100,000 | 25,300,000 | 33,800,000 | ||||||||
Payment for development of acquired coal reserves | 51,600,000 | ||||||||||
Commitment for additional coal reserve acquisitions | 25,200,000 | 25,200,000 | 25,200,000 | 25,200,000 | |||||||
Payments to affiliate for acquisition and development of coal reserves | 114,800,000 | ||||||||||
Proceeds from Royalties Received | 2,100,000 | ||||||||||
White Oak | Reserve Acquisition | Forecast | |||||||||||
Equity Investments | |||||||||||
Minimum monthly royalties receivable | 2,100,000 | ||||||||||
White Oak | Reserve Acquisition, rights purchased on Transaction Date | |||||||||||
Equity Investments | |||||||||||
Coal reserves developed for future mining (in tons) | 105,200,000 | 105,200,000 | 105,200,000 | 105,200,000 | |||||||
White Oak | Reserve Acquisition, rights purchased during fiscal year 2013 and 2014 | |||||||||||
Equity Investments | |||||||||||
Coal reserves developed for future mining (in tons) | 53,400,000 | 53,400,000 | 53,400,000 | 53,400,000 | |||||||
White Oak | Services Agreement | |||||||||||
Equity Investments | |||||||||||
Throughput fee up to minimum throughput quantity (in dollars per ton) | 5 | ||||||||||
Throughput fee beyond minimum throughput quantity (in dollars per ton) | 2.4 | ||||||||||
Minimum throughput quantity of feedstock coal, per month | 666,667 | ||||||||||
Throughput fees earned | 19,600,000 | 2,100,000 | |||||||||
Additional commitment for construction loan | 10,500,000 | ||||||||||
Term of construction loan | 20 years | ||||||||||
Construction loan utilized | 10,500,000 | 10,500,000 | 10,500,000 | 10,500,000 | |||||||
White Oak | Equipment Financing Commitment | |||||||||||
Equity Investments | |||||||||||
Equipment financing commitment | 100,000,000 | ||||||||||
Term of equipment financing commitment loan | 5 years | ||||||||||
Repayment of prior advances on equipment financing commitment loan | 2,200,000 | ||||||||||
Cancellation fee | $2,000,000 |
EQUITY_INVESTMENTS_Details_2
EQUITY INVESTMENTS (Details 2) (USD $) | 12 Months Ended | 2 Months Ended | 12 Months Ended | 0 Months Ended | 2 Months Ended | 0 Months Ended | 1 Months Ended |
Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2014 | Nov. 10, 2014 | Dec. 31, 2014 | Jan. 01, 2015 | Mar. 31, 2006 | |
Equity Investments | |||||||
Cash paid at closing | $100,000,000 | ||||||
Cavalier Minerals | |||||||
Equity Investments | |||||||
Amount of funding provided | 11,500,000 | 11,500,000 | |||||
Remaining equity investment commitment | 36,500,000 | ||||||
Cavalier Minerals | Minimum | |||||||
Equity Investments | |||||||
Expected period of funding | 2 years | ||||||
Cavalier Minerals | Maximum | |||||||
Equity Investments | |||||||
Expected period of funding | 4 years | ||||||
AllDale Minerals | |||||||
Equity Investments | |||||||
Number of members owning general partner of investee | 4 | ||||||
Number of members owning investee's general partner that are unrelated parties | 3 | ||||||
Allocated losses | 400,000 | ||||||
Percentage added to cumulative contributions for initial limited partner distributions | 25.00% | ||||||
Percentage of effective internal rate of return to limited partners for initial distributions | 10.00% | ||||||
Percentage of incentive distributions to general partner after initial distributions | 20.00% | ||||||
Percentage of distributions to limited partners after initial distributions | 80.00% | ||||||
AllDale Minerals | Cavalier Minerals | |||||||
Equity Investments | |||||||
Amount of funding provided | 7,400,000 | 4,200,000 | |||||
Remaining equity investment commitment | 37,400,000 | ||||||
Ownership interest in equity method investee (as a percent) | 71.70% | 71.70% | 71.70% | ||||
AllDale Minerals | Cavalier Minerals | Minimum | |||||||
Equity Investments | |||||||
Expected period of funding | 2 years | ||||||
AllDale Minerals | Cavalier Minerals | Maximum | |||||||
Equity Investments | |||||||
Expected period of funding | 4 years | ||||||
MAC | |||||||
Equity Investments | |||||||
Equity method investment, net | 1,600,000 | 1,600,000 | 1,600,000 | ||||
Remaining equity interest acquired (as a percent) | 50.00% | ||||||
Cash paid at closing | 5,500,000 | ||||||
MAC | White County Coal | |||||||
Equity Investments | |||||||
Ownership interest in equity method investee (as a percent) | 50.00% | ||||||
Purchase of equity investment | $1,000,000 |
EQUITY_INVESTMENTS_Details_3
EQUITY INVESTMENTS (Details 3) (White Oak, USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
White Oak | |||
Schedule of Equity Method Investments [Line Items] | |||
Total revenues | $42,748 | ||
Gross loss | -1,134 | -5,404 | -7 |
Loss from operations | -21,018 | -24,103 | -16,037 |
Net loss | -46,324 | -30,263 | -16,884 |
Current assets | 37,105 | 11,228 | |
Noncurrent assets | 639,953 | 533,696 | |
Current liabilities | 71,489 | 50,668 | |
Noncurrent liabilities | $372,507 | $354,597 |
NET_INCOME_PER_LIMITED_PARTNER
NET INCOME PER LIMITED PARTNER UNIT (Details) (USD $) | 12 Months Ended |
Dec. 31, 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_PARTNER1
NET INCOME PER LIMITED PARTNER UNIT (Details 2) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||||
NET INCOME OF ARLP PER LIMITED PARTNER UNIT | ||||||||||||||||
Net income of ARLP | $123,694 | $119,978 | $137,653 | $115,904 | $99,293 | $87,186 | $104,074 | $102,937 | $497,229 | $393,490 | $335,571 | |||||
Managing general partner's priority distributions | -132,449 | -117,995 | -104,168 | |||||||||||||
General partners' 2% equity ownership | -7,325 | -5,554 | -4,669 | |||||||||||||
General partners' special allocation of certain general and administrative expenses | 1,500 | 2,200 | 2,000 | |||||||||||||
LIMITED PARTNERS' INTEREST IN NET INCOME OF ARLP | 358,955 | 272,141 | 228,734 | |||||||||||||
Distributions to participating securities | -2,956 | -2,362 | -2,095 | |||||||||||||
Undistributed earnings attributable to participating securities | -2,669 | -1,350 | -922 | |||||||||||||
Net income of ARLP available to limited partners | $353,330 | $268,429 | $225,717 | |||||||||||||
Weighted average limited partner units outstanding - Basic and Diluted (in units) | 74,060,634 | [1] | 74,060,634 | 74,060,634 | 73,994,866 | 73,926,108 | [1] | 73,926,108 | 73,926,108 | 73,838,004 | 74,044,417 | [2] | 73,904,384 | [2] | 73,726,044 | [2] |
Basic and Diluted Net income of ARLP per limited partner unit (in dollars per unit) | $1.18 | [1] | $1.13 | $1.37 | $1.10 | $0.93 | [1] | $0.75 | $0.98 | $0.98 | $4.77 | [2] | $3.63 | [2] | $3.06 | [2] |
Anti-dilutive under the treasury stock method (in units) | 798,701 | 682,732 | 689,912 | |||||||||||||
Ownership percentage by general partners | 2.00% | 2.00% | 2.00% | |||||||||||||
[1] | The comparability of our December 31, 2013 quarterly results to other quarters presented was affected by a $12.9 million decrease in our workers' compensation liability, excluding discount rate changes, due to the completion of our annual actuarial study, which reflected favorable development in our disability emergence patterns and claims estimates (Note 18). The comparability of our June 30, 2014 quarterly results to other quarters presented was affected by $7.0 million insurance settlement related to adverse geological events at the Onton mine in the third quarter of 2013 and a gain of $4.4 million recognized on the sale of Pontiki's assets. | |||||||||||||||
[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 year ended December 31, 2014, 2013 and 2012, the combined total of LTIP, SERP and Deferred Compensation Plan units of 798,701, 682,732 and 689,912, respectively, were considered anti-dilutive. |
EMPLOYEE_BENEFIT_PLANS_Details
EMPLOYEE BENEFIT PLANS (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Defined Contribution Plans | |||
Contribution expense | $21,800,000 | $20,400,000 | $18,900,000 |
Pension Plan | |||
Change in benefit obligations: | |||
Benefit obligations at beginning of year | 85,662,000 | 86,468,000 | |
Service cost | 2,174,000 | 2,783,000 | 2,682,000 |
Interest cost | 4,074,000 | 3,640,000 | 3,246,000 |
Actuarial loss (gain) | 19,841,000 | -5,479,000 | |
Benefits paid | -2,125,000 | -1,750,000 | |
Benefit obligations at end of year | 109,626,000 | 85,662,000 | 86,468,000 |
Change in plan assets: | |||
Fair value of plan assets at beginning of year | 67,480,000 | 55,390,000 | |
Employer contribution | 2,671,000 | 2,400,000 | |
Actual return on plan assets | 1,495,000 | 11,440,000 | |
Benefits paid | -2,125,000 | -1,750,000 | |
Fair value of plan assets at end of year | 69,521,000 | 67,480,000 | 55,390,000 |
Funded status at the end of year | -40,105,000 | -18,182,000 | |
Amounts recognized in balance sheet: | |||
Non-current liability | -40,105,000 | -18,182,000 | |
Total amounts recognized in balance sheet | -40,105,000 | -18,182,000 | |
Amounts recognized in accumulated other comprehensive income consist of: | |||
Net actuarial loss | ($41,278,000) | ($18,230,000) |
EMPLOYEE_BENEFIT_PLANS_Details1
EMPLOYEE BENEFIT PLANS (Details 2) (Pension Plan) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Pension Plan | ||
Weighted-average assumptions to determine benefit obligations | ||
Discount rate (as a percent) | 3.92% | 4.89% |
Expected rate of return on plan assets (as a percent) | 8.00% | 8.00% |
Weighted-average assumptions used to determine net periodic benefit cost | ||
Discount rate (as a percent) | 4.89% | 3.99% |
Expected return on plan assets (as a percent) | 8.00% | 8.00% |
EMPLOYEE_BENEFIT_PLANS_Details2
EMPLOYEE BENEFIT PLANS (Details 3) (Pension Plan) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Employee Benefit Plans | ||
Expected rate of return on plan assets (as a percent) | 8.00% | 8.00% |
Period of average annual total return used as basis for expected long-term rate of return | 20 years | |
Actual return on plan assets (as a percent) | 5.40% | 22.70% |
Domestic equity securities | ||
Employee Benefit Plans | ||
Assumed asset allocations (as a percent) | 70.00% | |
Expected rate of return on plan assets (as a percent) | 9.90% | |
Foreign equity securities | ||
Employee Benefit Plans | ||
Assumed asset allocations (as a percent) | 10.00% | |
Expected rate of return on plan assets (as a percent) | 5.60% | |
Fixed income securities | ||
Employee Benefit Plans | ||
Assumed asset allocations (as a percent) | 20.00% | |
Expected rate of return on plan assets (as a percent) | 5.70% |
EMPLOYEE_BENEFIT_PLANS_Details3
EMPLOYEE BENEFIT PLANS (Details 4) (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Other changes in plan assets and benefit obligations recognized in accumulated other comprehensive income: | ||||||
Actuarially determined long-term liability adjustments | ($26,128) | $32,545 | ($1,804) | |||
Pension Plan | ||||||
Components of net periodic benefit cost: | ||||||
Service cost | 2,174 | 2,783 | 2,682 | |||
Interest cost | 4,074 | 3,640 | 3,246 | |||
Expected return on plan assets | -5,475 | -4,446 | -3,882 | |||
Amortization of net loss | 773 | 2,653 | 1,788 | |||
Net periodic benefit cost | 1,546 | 4,630 | 3,834 | |||
Other changes in plan assets and benefit obligations recognized in accumulated other comprehensive income: | ||||||
Net actuarial (loss) gain | -23,821 | 12,472 | -6,524 | |||
Reversal of amortization item: net actuarial loss | 773 | [1] | 2,653 | [1] | 1,788 | [1] |
Actuarially determined long-term liability adjustments | -23,048 | 15,125 | -4,736 | |||
Net periodic benefit cost | -1,546 | -4,630 | -3,834 | |||
Total recognized in net periodic benefit cost and accumulated other comprehensive (loss) income | ($24,594) | $10,495 | ||||
[1] | Amortization of actuarial gain or loss is included in the computation of net periodic benefit cost (see Notes 14 and 18 for additional details). |
EMPLOYEE_BENEFIT_PLANS_Details4
EMPLOYEE BENEFIT PLANS (Details 5) (Pension Plan, USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Pension Plan | |
Employee Benefit Plans | |
2015 | $2,456,000 |
2016 | 2,828,000 |
2017 | 3,222,000 |
2018 | 3,679,000 |
2019 | 4,118,000 |
2020-2024 | 27,416,000 |
Estimated future benefit payments | 43,719,000 |
Expected contribution for pension plan in 2015 | 3,100,000 |
Estimated net actuarial loss for pension plan amortized from AOCI into net periodic benefit cost in 2015 | $3,400,000 |
EMPLOYEE_BENEFIT_PLANS_Details5
EMPLOYEE BENEFIT PLANS (Details 6) (Pension Plan) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Employee Benefit Plans | ||
Asset allocations (as a percent) | 100.00% | 100.00% |
Domestic equity securities | ||
Employee Benefit Plans | ||
Target allocation, minimum (as a percent) | 50.00% | |
Target allocation (as a percent) | 70.00% | |
Target allocation, maximum (as a percent) | 90.00% | |
Asset allocations (as a percent) | 71.00% | 71.00% |
Foreign equity securities | ||
Employee Benefit Plans | ||
Target allocation, minimum (as a percent) | 0.00% | |
Target allocation (as a percent) | 10.00% | |
Target allocation, maximum (as a percent) | 20.00% | |
Asset allocations (as a percent) | 8.00% | 13.00% |
Fixed income securities/cash | ||
Employee Benefit Plans | ||
Target allocation, minimum (as a percent) | 5.00% | |
Target allocation (as a percent) | 20.00% | |
Target allocation, maximum (as a percent) | 40.00% | |
Asset allocations (as a percent) | 21.00% | 16.00% |
Any one stock | ||
Employee Benefit Plans | ||
Target allocation, maximum (as a percent) | 10.00% | |
Any one industry | ||
Employee Benefit Plans | ||
Target allocation, maximum (as a percent) | 30.00% | |
Noninvestment grade debt | ||
Employee Benefit Plans | ||
Target allocation, maximum (as a percent) | 10.00% |
EMPLOYEE_BENEFIT_PLANS_Details6
EMPLOYEE BENEFIT PLANS (Details 7) (Pension Plan, USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||
In Thousands, unless otherwise specified | |||||
Employee Benefit Plans | |||||
Defined benefit plan, fair value of plan assets | $69,521 | $67,480 | $55,390 | ||
Quoted Prices In Active Markets For Identical Assets (Level 1) | |||||
Employee Benefit Plans | |||||
Defined benefit plan, fair value of plan assets | 52,330 | 45,670 | |||
Significant Observable Inputs (Level 2) | |||||
Employee Benefit Plans | |||||
Defined benefit plan, fair value of plan assets | 17,191 | 21,810 | |||
Cash And cash equivalents | Quoted Prices In Active Markets For Identical Assets (Level 1) | |||||
Employee Benefit Plans | |||||
Defined benefit plan, fair value of plan assets | 917 | 1,625 | |||
Equity securities | U.S. large-cap growth | Quoted Prices In Active Markets For Identical Assets (Level 1) | |||||
Employee Benefit Plans | |||||
Defined benefit plan, fair value of plan assets | 19,147 | [1] | 9,406 | [1] | |
Equity securities | U.S. large-cap value | Quoted Prices In Active Markets For Identical Assets (Level 1) | |||||
Employee Benefit Plans | |||||
Defined benefit plan, fair value of plan assets | 19,196 | [1] | 17,731 | [1] | |
Equity securities | U.S. small/mid-cap blend | Quoted Prices In Active Markets For Identical Assets (Level 1) | |||||
Employee Benefit Plans | |||||
Defined benefit plan, fair value of plan assets | 8,681 | [1] | 10,512 | [1] | |
Equity securities | International large-cap core | Quoted Prices In Active Markets For Identical Assets (Level 1) | |||||
Employee Benefit Plans | |||||
Defined benefit plan, fair value of plan assets | 2,934 | [1] | 4,970 | [1] | |
Fixed income securities | Maximum | |||||
Employee Benefit Plans | |||||
Percentage of securities below investment grade | 5.00% | ||||
Fixed income securities | U.S. Treasury securities | Quoted Prices In Active Markets For Identical Assets (Level 1) | |||||
Employee Benefit Plans | |||||
Defined benefit plan, fair value of plan assets | 1,455 | [2] | 1,426 | [2] | |
Fixed income securities | Corporate bond | Significant Observable Inputs (Level 2) | |||||
Employee Benefit Plans | |||||
Defined benefit plan, fair value of plan assets | 1,802 | [3] | 1,623 | [3] | |
Fixed income securities | Preferred stock | Significant Observable Inputs (Level 2) | |||||
Employee Benefit Plans | |||||
Defined benefit plan, fair value of plan assets | 61 | 107 | |||
Fixed income securities | Taxable municipal bonds | Significant Observable Inputs (Level 2) | |||||
Employee Benefit Plans | |||||
Defined benefit plan, fair value of plan assets | 193 | [3] | 162 | [3] | |
Fixed income securities | International bonds | Significant Observable Inputs (Level 2) | |||||
Employee Benefit Plans | |||||
Defined benefit plan, fair value of plan assets | 227 | [3] | 569 | [3] | |
Equity mutual funds | U.S. large-cap growth | Significant Observable Inputs (Level 2) | |||||
Employee Benefit Plans | |||||
Defined benefit plan, fair value of plan assets | 1,446 | [4] | |||
Equity mutual funds | U.S. large-cap value | Significant Observable Inputs (Level 2) | |||||
Employee Benefit Plans | |||||
Defined benefit plan, fair value of plan assets | 1,398 | [4] | |||
Equity mutual funds | U.S. mid-cap growth | Significant Observable Inputs (Level 2) | |||||
Employee Benefit Plans | |||||
Defined benefit plan, fair value of plan assets | 2,537 | [4] | 4,752 | [4] | |
Equity mutual funds | U.S. small-cap growth | Significant Observable Inputs (Level 2) | |||||
Employee Benefit Plans | |||||
Defined benefit plan, fair value of plan assets | 1,389 | [4] | |||
Equity mutual funds | U.S. small-cap value | Significant Observable Inputs (Level 2) | |||||
Employee Benefit Plans | |||||
Defined benefit plan, fair value of plan assets | 1,331 | [4] | |||
Equity mutual funds | International | Significant Observable Inputs (Level 2) | |||||
Employee Benefit Plans | |||||
Defined benefit plan, fair value of plan assets | 2,856 | [4] | |||
Equity mutual funds | International small/mid-cap blend | Significant Observable Inputs (Level 2) | |||||
Employee Benefit Plans | |||||
Defined benefit plan, fair value of plan assets | 1,916 | [4] | |||
Equity mutual funds | Emerging Markets | Significant Observable Inputs (Level 2) | |||||
Employee Benefit Plans | |||||
Defined benefit plan, fair value of plan assets | 1,805 | [4] | |||
Fixed income mutual funds | Corporate bond | Significant Observable Inputs (Level 2) | |||||
Employee Benefit Plans | |||||
Defined benefit plan, fair value of plan assets | 4,729 | [4] | 2,617 | [4] | |
Fixed income mutual funds | International bonds | Significant Observable Inputs (Level 2) | |||||
Employee Benefit Plans | |||||
Defined benefit plan, fair value of plan assets | 296 | [4] | 207 | [4] | |
Fixed income mutual funds | Mortgage backed-securities | Significant Observable Inputs (Level 2) | |||||
Employee Benefit Plans | |||||
Defined benefit plan, fair value of plan assets | 1,226 | [4] | 1,075 | [4] | |
Fixed income mutual funds | Short term investment grade bond | Significant Observable Inputs (Level 2) | |||||
Employee Benefit Plans | |||||
Defined benefit plan, fair value of plan assets | 1,417 | [4] | 1,009 | [4] | |
Fixed income mutual funds | Intermediate investment grade bond | Significant Observable Inputs (Level 2) | |||||
Employee Benefit Plans | |||||
Defined benefit plan, fair value of plan assets | 1,013 | [4] | |||
Fixed income mutual funds | High yield bond | Significant Observable Inputs (Level 2) | |||||
Employee Benefit Plans | |||||
Defined benefit plan, fair value of plan assets | 689 | [4] | 684 | [4] | |
Stock market index options | Puts | Significant Observable Inputs (Level 2) | |||||
Employee Benefit Plans | |||||
Defined benefit plan, fair value of plan assets | 111 | [5] | 46 | [5] | |
Stock market index options | Calls | Significant Observable Inputs (Level 2) | |||||
Employee Benefit Plans | |||||
Defined benefit plan, fair value of plan assets | -40 | [5] | -407 | [5] | |
Accrued income | Significant Observable Inputs (Level 2) | |||||
Employee Benefit Plans | |||||
Defined benefit plan, fair value of plan assets | $74 | [6] | $81 | [6] | |
[1] | Equity securities include investments in publicly traded common stock and preferred stock. Publicly-traded common stocks are traded on a national securities exchange and investments in common and preferred stocks are valued using quoted market prices multiplied by the number of shares owned. | ||||
[2] | U.S. Treasury securities include agency and treasury debt. These investments are valued using dealer quotes in an active market. | ||||
[3] | Bonds are valued utilizing a market approach that includes various valuation techniques and sources such as value generation models, broker quotes in active and non-active markets, benchmark yields and securities, reported trades, issuer spreads, and/or other applicable reference data. The corporate bonds and notes category is primarily comprised of U.S. dollar denominated, investment grade securities. Less than 5 percent of the securities have a rating below investment grade. | ||||
[4] | Mutual funds are valued daily in actively traded markets by an independent custodian for the investment manager. For purposes of calculating the value, portfolio securities and other assets for which market quotes are readily available are valued at market value. Market value is generally determined on a basis of last reported sales prices, or if no sales are reported, based on quotes obtained from a quotation reporting system, established market makers, or pricing services. Investments initially valued in currencies other than the U.S. dollars are converted to the U.S. dollar using exchange rates obtained from pricing services. | ||||
[5] | Options are valued utilizing a market approach that includes various valuation techniques and sources such as value generation models, broker quotes in active and non-active markets, reported trades, issuer spreads, and/or other applicable reference data. | ||||
[6] | Accrued income represents dividends declared, but not received, on equity securities owned at December 31, 2014. |
COMPENSATION_PLANS_Details
COMPENSATION PLANS (Details) (ARLP LTIP, USD $) | 0 Months Ended | 12 Months Ended | 0 Months Ended | 36 Months Ended | 0 Months Ended | 36 Months Ended | ||||
In Millions, except Share data, unless otherwise specified | Feb. 14, 2015 | Feb. 14, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jan. 26, 2015 | Jan. 02, 2014 | Dec. 31, 2013 | Jan. 02, 2015 | Dec. 31, 2014 |
Compensation Plans | ||||||||||
Common units issued upon vesting | 128,150 | 128,610 | ||||||||
Units available for grant | 4,000,000 | 4,000,000 | ||||||||
Share based compensation expense | $9.60 | $7.40 | $6.40 | |||||||
Total unit based obligation recorded | $17.90 | $14.70 | 14.7 | 17.9 | ||||||
Phantom Share Units (PSUs) | ||||||||||
Compensation Plans | ||||||||||
Units for which vesting requirements were deemed satisfied | 202,742 | |||||||||
Forfeitures (in units) | 5,604 | |||||||||
Additional grants authorized (in units) | 314,019 | |||||||||
Units granted | 356,154 | 293,450 | 302,555 | |||||||
Fair value as intrinsic value at date of grant (in dollars per unit) | $40.72 | $31.51 | $38.86 | |||||||
Phantom Share Units (PSUs) | 2011 Grants | ||||||||||
Compensation Plans | ||||||||||
Units for which vesting requirements were deemed satisfied | 202,742 | |||||||||
Forfeitures (in units) | 14,090 | |||||||||
Phantom Share Units (PSUs) | 2012 Grants | ||||||||||
Compensation Plans | ||||||||||
Units for which vesting requirements were deemed satisfied | 202,778 | |||||||||
Forfeitures (in units) | 11,450 | |||||||||
Phantom Share Units (PSUs) | 2014 and 2013 Grants | ||||||||||
Compensation Plans | ||||||||||
Forfeitures (in units) | 20,492 |
COMPENSATION_PLANS_Details_2
COMPENSATION PLANS (Details 2) (ARLP LTIP, USD $) | 0 Months Ended | 12 Months Ended | |
In Millions, except Share data, unless otherwise specified | Jan. 26, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Summary of non-vested LTIP grants | |||
Unrecognized compensation expense | $12.50 | ||
Weighted-average period for recognition of expense | 1 year 6 months | ||
Phantom Share Units (PSUs) | |||
Summary of non-vested LTIP grants | |||
Balance at the beginning of the period (in units) | 695,532 | ||
Granted (in units) | 302,555 | 356,154 | 293,450 |
Vested (in units) | -202,742 | ||
Forfeited (in units) | -5,604 | ||
Balance at the end of the period (in units) | 843,340 | 695,532 | |
Intrinsic value of outstanding grants | $36.30 |
COMPENSATION_PLANS_Details_3
COMPENSATION PLANS (Details 3) (SERP and Deferred Compensation Plans, USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Compensation Plans | |||
Share based compensation expense | $1.20 | $1.20 | $0.80 |
Total unit based obligation recorded | 12.6 | 11.5 | |
Phantom Share Units (PSUs) | |||
Compensation Plans | |||
Units granted | 27,577 | 33,738 | |
Fair value (in dollars per unit) | $44.56 | $35.48 | |
Units outstanding | 368,981 | ||
Intrinsic value of outstanding grants | $15.90 |
SUPPLEMENTAL_CASH_FLOW_INFORMA2
SUPPLEMENTAL CASH FLOW INFORMATION (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cash Paid For: | |||
Interest | $34,005 | $35,362 | $35,833 |
Non-Cash Activity: | |||
Accounts payable for purchase of property, plant and equipment | 15,654 | 17,924 | 20,972 |
Market value of common units vested in Long-Term Incentive Plan and Deferred Compensation Plan before minimum statutory tax withholding requirements | 8,417 | 8,583 | 11,070 |
Acquisition of business: | |||
Fair value of assets assumed | 126,639 | ||
Cash paid | -100,000 | ||
Fair value of liabilities assumed | 26,639 | ||
Disposition of property, plant and equipment: | |||
Gain recognized | -4,409 | 3,475 | 147 |
Asset acquisition | |||
Liabilities assumed in asset acquisition | 6,042 | ||
Pontiki mining complex | |||
Disposition of property, plant and equipment: | |||
Net change in assets | 846 | ||
Book value of liabilities transferred | -5,246 | ||
Gain recognized | ($4,400) |
ASSET_RETIREMENT_OBLIGATIONS_D
ASSET RETIREMENT OBLIGATIONS (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
ASSET RETIREMENT OBLIGATIONS | |||
Surety bonds outstanding to performance of reclamation obligations | $142,300,000 | $88,700,000 | |
Estimated payments of asset retirement obligations: | |||
2015 | 2,055,000 | ||
2016 | 2,127,000 | ||
2017 | 1,914,000 | ||
2018 | 1,964,000 | ||
2019 | 698,000 | ||
Thereafter | 173,135,000 | ||
Aggregate undiscounted asset retirement obligations | 181,893,000 | ||
Effect of discounting | -88,753,000 | 76,500,000 | |
Total asset retirement obligations | 93,140,000 | 82,898,000 | 84,836,000 |
Less: current portion | -2,055,000 | ||
Asset retirement obligations | $91,085,000 | $80,807,000 |
ASSET_RETIREMENT_OBLIGATIONS_D1
ASSET RETIREMENT OBLIGATIONS (Details 2) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Asset retirement and mine closing liability | ||
Balance at the beginning of the period | $82,898 | $84,836 |
Accretion expense | 2,730 | 3,004 |
Payments | -1,134 | -2,242 |
Assumption of existing liability | 6,042 | |
Disposition | -5,246 | |
Allocation of liability associated with acquisitions, mine development and change in assumptions | 7,850 | -2,700 |
Balance at the end of the period | $93,140 | $82,898 |
ACCRUED_WORKERS_COMPENSATION_A2
ACCRUED WORKERS' COMPENSATION AND PNEUMOCONIOSIS BENEFITS (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Accrued Workers Compensation And Pneumoconiosis Benefits | |||
Workers' compensation discount rate (as a percent) | 3.41% | 4.11% | 3.22% |
Letters of credit to secure workers compensation obligation | $79.30 | $86.30 | |
Pneumoconiosis benefits | |||
Accrued Workers Compensation And Pneumoconiosis Benefits | |||
Pneumoconiosis discount rate (as a percent) | 3.82% | 4.69% | 3.78% |
ACCRUED_WORKERS_COMPENSATION_A3
ACCRUED WORKERS' COMPENSATION AND PNEUMOCONIOSIS BENEFITS (Details 2) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Accrued Workers Compensation And Pneumoconiosis Benefits | |||
Workers' compensation expense (benefit) | $7,776 | ($110) | $17,572 |
Total expense | 12,411 | 6,623 | 24,478 |
Pneumoconiosis benefits | |||
Accrued Workers Compensation And Pneumoconiosis Benefits | |||
Service cost | 3,424 | 3,810 | 3,758 |
Interest cost | 2,262 | 2,253 | 2,372 |
Net amortization | -1,051 | 670 | 776 |
Net periodic benefit cost | $4,635 | $6,733 | $6,906 |
ACCRUED_WORKERS_COMPENSATION_A4
ACCRUED WORKERS' COMPENSATION AND PNEUMOCONIOSIS BENEFITS (Details 3) (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Accrued Workers Compensation And Pneumoconiosis Benefits | ||||||
Total recognized in accumulated other comprehensive (loss) income | ($26,128) | $32,545 | ($1,804) | |||
Pneumoconiosis benefits | ||||||
Accrued Workers Compensation And Pneumoconiosis Benefits | ||||||
Net actuarial (loss) gain | -2,029 | 16,750 | 2,156 | |||
Reversal of amortization item: net actuarial loss | -1,051 | [1] | 670 | [1] | 776 | [1] |
Total recognized in accumulated other comprehensive (loss) income | ($3,080) | $17,420 | $2,932 | |||
[1] | Amortization of actuarial gain or loss is included in the computation of net periodic benefit cost (see Notes 14 and 18 for additional details). |
ACCRUED_WORKERS_COMPENSATION_A5
ACCRUED WORKERS' COMPENSATION AND PNEUMOCONIOSIS BENEFITS (Details 4) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Reconciliation of the changes in workers' compensation liability | ||
Beginning balance | $62,909 | $77,046 |
Accruals increase | 14,978 | 18,544 |
Payments | -10,563 | -10,639 |
Interest accretion | 2,585 | 2,481 |
Valuation gain | -12,352 | -24,523 |
Ending balance | $57,557 | $62,909 |
ACCRUED_WORKERS_COMPENSATION_A6
ACCRUED WORKERS' COMPENSATION AND PNEUMOCONIOSIS BENEFITS (Details 5) (Pneumoconiosis benefits, USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Pneumoconiosis benefits | |||
Reconciliation of the changes in black lung benefit obligations | |||
Benefit obligations at beginning of year | $49,560 | $60,991 | |
Service cost | 3,424 | 3,810 | 3,758 |
Interest cost | 2,262 | 2,253 | 2,372 |
Actuarial loss (gain) | 2,029 | -16,750 | |
Benefits and expenses paid | -889 | -744 | |
Benefit obligations at end of year | 56,386 | 49,560 | 60,991 |
Amounts recognized in accumulated other comprehensive income consist of: | |||
Net actuarial (gain) loss | ($5,431) | ($8,511) | $8,908 |
ACCRUED_WORKERS_COMPENSATION_A7
ACCRUED WORKERS' COMPENSATION AND PNEUMOCONIOSIS BENEFITS (Details 6) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
ACCRUED WORKERS' COMPENSATION AND PNEUMOCONIOSIS BENEFITS | |||
Black lung claims | $56,386 | $49,560 | |
Workers' compensation claims | 57,557 | 62,909 | 77,046 |
Total obligations | 113,943 | 112,469 | |
Less current portion | -8,868 | -9,065 | |
Non-current obligations | $105,075 | $103,404 |
RELATEDPARTY_TRANSACTIONS_Deta
RELATED-PARTY TRANSACTIONS (Details) (USD $) | 12 Months Ended | 1 Months Ended | 0 Months Ended | 39 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | 2 Months Ended | 1 Months Ended | ||||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Sep. 22, 2011 | Dec. 31, 2014 | Dec. 31, 2014 | Feb. 03, 2015 | Feb. 28, 2015 | Nov. 10, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jan. 31, 2015 | Mar. 01, 2012 | |
T | T | T | item | ||||||||||||
Related Party Transaction | |||||||||||||||
Contributions from affiliates for general and administrative expenses | $1,500,000 | $2,200,000 | $2,000,000 | ||||||||||||
Advance royalties | 25,311,000 | 30,267,000 | 25,311,000 | 25,311,000 | 25,311,000 | 25,311,000 | 30,267,000 | ||||||||
Lease expense | 4,700,000 | 5,100,000 | 5,100,000 | ||||||||||||
Lease payments | 1,494,000 | 1,190,000 | 943,000 | ||||||||||||
2015 | 14,118,000 | 14,118,000 | 14,118,000 | 14,118,000 | 14,118,000 | ||||||||||
2016 | 13,857,000 | 13,857,000 | 13,857,000 | 13,857,000 | 13,857,000 | ||||||||||
2017 | 13,818,000 | 13,818,000 | 13,818,000 | 13,818,000 | 13,818,000 | ||||||||||
2018 | 13,818,000 | 13,818,000 | 13,818,000 | 13,818,000 | 13,818,000 | ||||||||||
2019 | 13,818,000 | 13,818,000 | 13,818,000 | 13,818,000 | 13,818,000 | ||||||||||
Acquisition of coal reserves from Midwest Coal Reserves Kentucky LLC and Cyprus Creek Land Company | |||||||||||||||
Related Party Transaction | |||||||||||||||
Coal reserves, rights purchased (in tons) | 86,200,000 | ||||||||||||||
White Oak | |||||||||||||||
Related Party Transaction | |||||||||||||||
Revenue from services and products | 3,900,000 | 2,400,000 | 1,000,000 | ||||||||||||
Amount of funding provided | 69,500,000 | 320,500,000 | 390,000,000 | ||||||||||||
Ownership interest in equity method investee (as a percent) | 39.00% | 21.60% | 39.00% | 39.00% | 39.00% | 39.00% | 21.60% | ||||||||
White Oak | Minimum | |||||||||||||||
Related Party Transaction | |||||||||||||||
Remaining equity investment commitment | 114,300,000 | ||||||||||||||
AllDale Minerals | |||||||||||||||
Related Party Transaction | |||||||||||||||
Number of members owning general partner of investee | 4 | ||||||||||||||
Number of members owning investee's general partner that are unrelated parties | 3 | ||||||||||||||
WKY CoalPlay | Acquisition of coal reserves from CNX RCPC LLC and Island Creek Coal Company | |||||||||||||||
Related Party Transaction | |||||||||||||||
Coal reserves, rights purchased (in tons) | 86,600,000 | ||||||||||||||
Number of subsidiaries purchased in coal reserves acquisition | 2 | ||||||||||||||
Purchase price (in dollars) | 57,200,000 | ||||||||||||||
WKY CoalPlay | Acquisition of coal reserves from Midwest Coal Reserves Kentucky LLC and Cyprus Creek Land Company | |||||||||||||||
Related Party Transaction | |||||||||||||||
Coal reserves, rights purchased (in tons) | 54,100,000 | ||||||||||||||
Purchase price (in dollars) | 29,600,000 | ||||||||||||||
WKY CoalPlay | Acquisition of coal reserves from a subsidiary of patriot | |||||||||||||||
Related Party Transaction | |||||||||||||||
Coal reserves, rights purchased (in tons) | 39,100,000 | 39,100,000 | |||||||||||||
Purchase price (in dollars) | 25,000,000 | 25,000,000 | |||||||||||||
Cavalier Minerals | AllDale Minerals | |||||||||||||||
Related Party Transaction | |||||||||||||||
Amount of funding provided | 7,400,000 | 4,200,000 | |||||||||||||
Remaining equity investment commitment | 37,400,000 | ||||||||||||||
Ownership interest in equity method investee (as a percent) | 71.70% | 71.70% | 71.70% | 71.70% | 71.70% | ||||||||||
Cavalier Minerals | AllDale Minerals | Minimum | |||||||||||||||
Related Party Transaction | |||||||||||||||
Expected period of funding | 2 years | ||||||||||||||
Cavalier Minerals | AllDale Minerals | Maximum | |||||||||||||||
Related Party Transaction | |||||||||||||||
Expected period of funding | 4 years | ||||||||||||||
AHGP | Administrative services agreement | |||||||||||||||
Related Party Transaction | |||||||||||||||
Revenue from services and products | 400,000 | 400,000 | 400,000 | ||||||||||||
ARH II | Administrative services agreement | |||||||||||||||
Related Party Transaction | |||||||||||||||
Revenue from services and products | 100,000 | 100,000 | 100,000 | ||||||||||||
MGP | Partnership agreement | |||||||||||||||
Related Party Transaction | |||||||||||||||
Costs billed by managing general partner and its affiliates | 800,000 | 800,000 | 1,200,000 | ||||||||||||
Affiliated entity controlled by Mr. Craft | |||||||||||||||
Related Party Transaction | |||||||||||||||
Contributions from affiliates for general and administrative expenses | 1,500,000 | 2,200,000 | 2,000,000 | ||||||||||||
SGP Land, LLC | |||||||||||||||
Related Party Transaction | |||||||||||||||
Amount paid for use of aircraft | 300,000 | ||||||||||||||
SGP Land, LLC | Airplanes | |||||||||||||||
Related Party Transaction | |||||||||||||||
Number of airplanes acquired in merger | 2 | ||||||||||||||
Number of airplanes acquired, previously subject to time sharing agreement | 1 | ||||||||||||||
Cost of airplanes acquired | 8,000,000 | ||||||||||||||
SGP Land, LLC | MC Mining LLC | |||||||||||||||
Related Party Transaction | |||||||||||||||
Annual minimum royalties | 300,000 | ||||||||||||||
Cumulative annual minimum and/or earned royalty payments | 6,000,000 | ||||||||||||||
Payments for royalties | 900,000 | 300,000 | 300,000 | ||||||||||||
JC Land | |||||||||||||||
Related Party Transaction | |||||||||||||||
Amount received for use of aircraft | 100,000 | 100,000 | 100,000 | ||||||||||||
Amount paid for use of aircraft | 200,000 | 300,000 | 100,000 | ||||||||||||
Amount received for reimbursement of pilot compensation expense | 200,000 | 100,000 | |||||||||||||
SGP | Tunnel Ridge | Coal lease | |||||||||||||||
Related Party Transaction | |||||||||||||||
Annual minimum royalties | 3,000,000 | ||||||||||||||
Payments for royalties | 3,000,000 | 3,000,000 | 3,000,000 | ||||||||||||
Advance royalties | 10,700,000 | 10,700,000 | 10,700,000 | 10,700,000 | 10,700,000 | ||||||||||
SGP | Tunnel Ridge | Surface land and tangible assets lease | |||||||||||||||
Related Party Transaction | |||||||||||||||
Annual lease payment | 200,000 | ||||||||||||||
Lease agreement term | 4 years | ||||||||||||||
Lease expense | 200,000 | 200,000 | 200,000 | ||||||||||||
SGP | Gibson County Coal | |||||||||||||||
Related Party Transaction | |||||||||||||||
Monthly lease payment | 50,000 | ||||||||||||||
Lease payments | 600,000 | 600,000 | 600,000 | ||||||||||||
WKY CoalPlay | Acquisition of coal reserves from CNX RCPC LLC and Island Creek Coal Company | |||||||||||||||
Related Party Transaction | |||||||||||||||
Coal reserves conveyed by related party (in tons) | 14,300,000 | ||||||||||||||
WKY CoalPlay | Acquisition of coal reserves from Midwest Coal Reserves Kentucky LLC and Cyprus Creek Land Company | |||||||||||||||
Related Party Transaction | |||||||||||||||
Coal reserves conveyed by related party (in tons) | 31,500,000 | ||||||||||||||
WKY CoalPlay | Coal lease | Acquisition of coal reserves from CNX RCPC LLC and Island Creek Coal Company | |||||||||||||||
Related Party Transaction | |||||||||||||||
Annual minimum royalties | 6,200,000 | ||||||||||||||
Payments for royalties | 6,200,000 | ||||||||||||||
Coal reserves leased from related party (in tons) | 72,300,000 | ||||||||||||||
Percentage of earned royalty on coal sale price | 4.00% | 4.00% | 4.00% | 4.00% | 4.00% | ||||||||||
Term to acquire the leased reserves | 3 years | ||||||||||||||
Percentage of internal rate of return on purchase price, if leased reserves acquired | 7.00% | ||||||||||||||
WKY CoalPlay | Coal lease | Acquisition of coal reserves from CNX RCPC LLC and Island Creek Coal Company | Minimum | |||||||||||||||
Related Party Transaction | |||||||||||||||
Lease agreement term | 7 years | ||||||||||||||
WKY CoalPlay | Coal lease | Acquisition of coal reserves from CNX RCPC LLC and Island Creek Coal Company | Maximum | |||||||||||||||
Related Party Transaction | |||||||||||||||
Lease agreement term | 20 years | ||||||||||||||
WKY CoalPlay | Coal lease | Acquisition of coal reserves from Midwest Coal Reserves Kentucky LLC and Cyprus Creek Land Company | |||||||||||||||
Related Party Transaction | |||||||||||||||
Annual minimum royalties | 2,500,000 | ||||||||||||||
Payments for royalties | 2,500,000 | ||||||||||||||
Coal reserves leased from related party (in tons) | 22,600,000 | ||||||||||||||
Lease agreement term | 20 years | ||||||||||||||
Percentage of earned royalty on coal sale price | 4.00% | 4.00% | 4.00% | 4.00% | 4.00% | ||||||||||
Term to acquire the leased reserves | 3 years | ||||||||||||||
Percentage of internal rate of return on purchase price, if leased reserves acquired | 7.00% | ||||||||||||||
WKY CoalPlay | Coal lease | Acquisition of coal reserves from a subsidiary of patriot | |||||||||||||||
Related Party Transaction | |||||||||||||||
Annual minimum royalties | 2,100,000 | ||||||||||||||
Payments for royalties | $2,100,000 | ||||||||||||||
Coal reserves leased from related party (in tons) | 39,100,000 | ||||||||||||||
Lease agreement term | 20 years | ||||||||||||||
Percentage of earned royalty on coal sale price | 4.00% | ||||||||||||||
Term to acquire the leased reserves | 3 years | ||||||||||||||
Percentage of internal rate of return on purchase price, if leased reserves acquired | 7.00% |
COMMITMENTS_AND_CONTINGENCIES_1
COMMITMENTS AND CONTINGENCIES (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Future minimum lease payments, Capital Lease | |||
2015 | $2,054,000 | ||
2016 | 2,065,000 | ||
2017 | 1,850,000 | ||
2018 | 1,818,000 | ||
2019 | 1,930,000 | ||
Thereafter | 11,934,000 | ||
Total future minimum lease payments | 21,651,000 | ||
Less: amount representing interest | -4,722,000 | ||
Present value of future minimum lease payments | 16,929,000 | ||
Less: current portion | -1,305,000 | -1,288,000 | |
Long-term capital lease obligation | 15,624,000 | 17,135,000 | |
Future minimum lease payments, Other Operating Leases | |||
2015 | 1,656,000 | ||
2016 | 1,416,000 | ||
2017 | 1,009,000 | ||
2018 | 650,000 | ||
Total future minimum lease payments | 4,731,000 | ||
Rental expense | 4,700,000 | 5,100,000 | 5,100,000 |
Other Operating Leases, Affiliate | |||
Future minimum lease payments, Other Operating Leases | |||
2015 | 240,000 | ||
Total future minimum lease payments | 240,000 | ||
Other Operating Leases, Others | |||
Future minimum lease payments, Other Operating Leases | |||
2015 | 1,416,000 | ||
2016 | 1,416,000 | ||
2017 | 1,009,000 | ||
2018 | 650,000 | ||
Total future minimum lease payments | $4,491,000 |
COMMITMENTS_AND_CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details 2) (USD $) | 12 Months Ended | 0 Months Ended | 12 Months Ended | 39 Months Ended | 2 Months Ended | 0 Months Ended | 2 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Sep. 22, 2011 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Nov. 10, 2014 | Dec. 31, 2014 |
COMMITMENTS AND CONTINGENCIES | ||||||||
Contractual commitments amount | $50.80 | |||||||
Commitments to purchase coal | 0 | 0 | 0 | 0 | 0 | |||
White Oak | ||||||||
Equity Investments | ||||||||
Amount of funding provided | 69.5 | 320.5 | 390 | |||||
Additional equity investments by another owner | 39.8 | 45.9 | ||||||
White Oak | Maximum | ||||||||
Equity Investments | ||||||||
Expected funding | 415.5 | 415.5 | 415.5 | 415.5 | 415.5 | |||
White Oak | Minimum | ||||||||
Equity Investments | ||||||||
Expected funding | 395.5 | 395.5 | 395.5 | 395.5 | 395.5 | |||
Remaining equity investment commitment | 114.3 | |||||||
Cavalier Minerals | ||||||||
Equity Investments | ||||||||
Amount of funding provided | 11.5 | 11.5 | ||||||
Expected funding | 48 | 48 | 48 | 48 | 48 | |||
Remaining equity investment commitment | 36.5 | |||||||
Cavalier Minerals | Maximum | ||||||||
Equity Investments | ||||||||
Expected period of funding | 4 years | |||||||
Cavalier Minerals | Minimum | ||||||||
Equity Investments | ||||||||
Expected period of funding | 2 years | |||||||
AllDale Minerals | Cavalier Minerals | ||||||||
Equity Investments | ||||||||
Amount of funding provided | 7.4 | 4.2 | ||||||
Expected funding | 49 | 49 | 49 | 49 | 49 | |||
Remaining equity investment commitment | $37.40 | |||||||
AllDale Minerals | Cavalier Minerals | Maximum | ||||||||
Equity Investments | ||||||||
Expected period of funding | 4 years | |||||||
AllDale Minerals | Cavalier Minerals | Minimum | ||||||||
Equity Investments | ||||||||
Expected period of funding | 2 years |
COMMITMENTS_AND_CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Details 3) (Property and casualty insurance, USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2014 |
Commitments And Contingencies | |
Aggregate maximum insurance limit | $100 |
Insurance deductible | 1.5 |
Overall aggregate deductible | $10 |
Minimum | |
Commitments And Contingencies | |
Waiting period | 90 days |
Maximum | |
Commitments And Contingencies | |
Waiting period | 120 days |
CONCENTRATION_OF_CREDIT_RISK_A2
CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||||
Major Customers | ||||||||||||||||
Total revenues | $590,793 | [1] | $569,328 | $598,562 | $542,038 | $566,706 | [1] | $537,229 | $553,571 | $548,055 | $2,300,721 | [2] | $2,205,561 | [2] | $2,034,301 | [2] |
Trade receivables | 184,187 | 153,662 | 184,187 | 153,662 | ||||||||||||
Customers A and B | ||||||||||||||||
Major Customers | ||||||||||||||||
Trade receivables | 43,500 | 45,800 | 43,500 | 45,800 | ||||||||||||
Illinois Basin | Customer A | ||||||||||||||||
Major Customers | ||||||||||||||||
Total revenues | 301,191 | 319,932 | 336,560 | |||||||||||||
Illinois Basin | Customer B | ||||||||||||||||
Major Customers | ||||||||||||||||
Total revenues | $276,094 | $263,582 | $243,339 | |||||||||||||
[1] | The comparability of our December 31, 2013 quarterly results to other quarters presented was affected by a $12.9 million decrease in our workers' compensation liability, excluding discount rate changes, due to the completion of our annual actuarial study, which reflected favorable development in our disability emergence patterns and claims estimates (Note 18). The comparability of our June 30, 2014 quarterly results to other quarters presented was affected by $7.0 million insurance settlement related to adverse geological events at the Onton mine in the third quarter of 2013 and a gain of $4.4 million recognized on the sale of Pontiki's assets. | |||||||||||||||
[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 (2013 only). Also included in the Other and Corporate column are Wildcat Insurance revenues, which are eliminated upon consolidation. |
SEGMENT_INFORMATION_Details
SEGMENT INFORMATION (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||||
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 | $590,793 | [1] | $569,328 | $598,562 | $542,038 | $566,706 | [1] | $537,229 | $553,571 | $548,055 | $2,300,721 | [2] | $2,205,561 | [2] | $2,034,301 | [2] |
Segment Adjusted EBITDA Expense | 1,381,808 | [3] | 1,398,902 | [3] | 1,338,783 | [3] | ||||||||||
Segment Adjusted EBITDA | 876,244 | [4],[5] | 749,576 | [4],[5] | 658,834 | [4],[5] | ||||||||||
Total assets | 2,285,059 | [6] | 2,121,898 | [6] | 2,285,059 | [6] | 2,121,898 | [6] | 1,955,972 | [6] | ||||||
Capital expenditures | 311,469 | [7] | 354,423 | [7] | 459,232 | [7] | ||||||||||
Additional information | ||||||||||||||||
Equity in income (loss) of affiliates, net | -16,648 | -24,441 | -14,650 | |||||||||||||
Investments in affiliate | 224,611 | 130,410 | 224,611 | 130,410 | ||||||||||||
Payments to affiliate for acquisition and development of coal reserves | 4,082 | 25,272 | 34,601 | |||||||||||||
White Oak | ||||||||||||||||
Segment Information | ||||||||||||||||
Number of operating segments within the reportable segment | 2 | |||||||||||||||
Operating segments | Illinois Basin | ||||||||||||||||
Reportable segment results | ||||||||||||||||
Total revenues | 1,626,450 | [2] | 1,629,089 | [2] | 1,499,976 | [2] | ||||||||||
Segment Adjusted EBITDA Expense | 992,045 | [3] | 951,686 | [3] | 894,769 | [3] | ||||||||||
Segment Adjusted EBITDA | 620,111 | [4],[5] | 657,404 | [4],[5] | 593,054 | [4],[5] | ||||||||||
Total assets | 1,174,141 | [6] | 1,077,231 | [6] | 1,174,141 | [6] | 1,077,231 | [6] | 1,042,719 | [6] | ||||||
Capital expenditures | 237,953 | [7] | 232,676 | [7] | 219,029 | [7] | ||||||||||
Operating segments | Appalachia | ||||||||||||||||
Reportable segment results | ||||||||||||||||
Total revenues | 630,452 | [2] | 493,689 | [2] | 444,993 | [2] | ||||||||||
Segment Adjusted EBITDA Expense | 364,689 | [3] | 375,923 | [3] | 361,560 | [3] | ||||||||||
Segment Adjusted EBITDA | 254,037 | [4],[5] | 105,123 | [4],[5] | 73,553 | [4],[5] | ||||||||||
Total assets | 604,352 | [6] | 594,466 | [6] | 604,352 | [6] | 594,466 | [6] | 603,088 | [6] | ||||||
Capital expenditures | 56,840 | [7] | 72,926 | [7] | 137,336 | [7] | ||||||||||
Operating segments | White Oak | ||||||||||||||||
Reportable segment results | ||||||||||||||||
Total revenues | 21,244 | [2] | 2,194 | [2] | ||||||||||||
Segment Adjusted EBITDA Expense | 7,983 | [3] | 2,112 | [3] | -1,347 | [3] | ||||||||||
Segment Adjusted EBITDA | -3,384 | [4],[5] | -25,229 | [4],[5] | -13,987 | [4],[5] | ||||||||||
Total assets | 407,138 | [6] | 317,361 | [6] | 407,138 | [6] | 317,361 | [6] | 226,714 | [6] | ||||||
Capital expenditures | 5,214 | [7] | 40,185 | [7] | 85,671 | [7] | ||||||||||
Additional information | ||||||||||||||||
Equity in income (loss) of affiliates, net | -16,600 | -25,300 | -15,300 | |||||||||||||
Investments in affiliate | 211,700 | 128,700 | 211,700 | 128,700 | 86,800 | |||||||||||
Payments to affiliate for acquisition and development of coal reserves | 4,100 | 25,300 | 34,600 | |||||||||||||
Operating segments | Other And Corporate | ||||||||||||||||
Reportable segment results | ||||||||||||||||
Total revenues | 34,090 | [2] | 98,272 | [2] | 105,860 | [2] | ||||||||||
Segment Adjusted EBITDA Expense | 25,487 | [3] | 86,864 | [3] | 100,329 | [3] | ||||||||||
Segment Adjusted EBITDA | 8,599 | [4],[5] | 12,278 | [4],[5] | 6,214 | [4],[5] | ||||||||||
Total assets | 258,424 | [6] | 133,915 | [6] | 258,424 | [6] | 133,915 | [6] | 84,550 | [6] | ||||||
Capital expenditures | 11,462 | [7] | 8,636 | [7] | 17,196 | [7] | ||||||||||
Additional information | ||||||||||||||||
Equity in income (loss) of affiliates, net | -3 | 900 | 700 | |||||||||||||
Investments in affiliate | 12,900 | 1,700 | 12,900 | 1,700 | 1,700 | |||||||||||
Elimination | ||||||||||||||||
Reportable segment results | ||||||||||||||||
Total revenues | -11,515 | [2],[8] | -17,683 | [2],[8] | -16,528 | [2],[8] | ||||||||||
Segment Adjusted EBITDA Expense | -8,396 | [3],[8] | -17,683 | [3],[8] | -16,528 | [3],[8] | ||||||||||
Segment Adjusted EBITDA | -3,119 | [4],[5],[8] | ||||||||||||||
Total assets | ($158,996) | [6],[8] | ($1,075) | [6],[8] | ($158,996) | [6],[8] | ($1,075) | [6],[8] | ($1,099) | [6],[8] | ||||||
[1] | The comparability of our December 31, 2013 quarterly results to other quarters presented was affected by a $12.9 million decrease in our workers' compensation liability, excluding discount rate changes, due to the completion of our annual actuarial study, which reflected favorable development in our disability emergence patterns and claims estimates (Note 18). The comparability of our June 30, 2014 quarterly results to other quarters presented was affected by $7.0 million insurance settlement related to adverse geological events at the Onton mine in the third quarter of 2013 and a gain of $4.4 million recognized on the sale of Pontiki's assets. | |||||||||||||||
[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 (2013 only). Also included in the Other and Corporate column are Wildcat Insurance revenues, which are eliminated upon consolidation. | |||||||||||||||
[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. | |||||||||||||||
[4] | Segment Adjusted EBITDA is defined as net income (prior to the allocation of noncontrolling interest) before net interest expense, income taxes, depreciation, depletion and amortization, asset impairment charge 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. | |||||||||||||||
[5] | Includes equity in income (loss) of affiliates for the years ended December 31, 2014, 2013 and 2012 of $(16.6) million, $(25.3) million and $(15.3) million, respectively, for the White Oak segment and $(3) thousand, $0.9 million and $0.7 million, respectively, for the Other and Corporate segment. | |||||||||||||||
[6] | Total assets at December 31, 2014, 2013 and 2012 include investments in affiliate of $211.7 million, $128.7 million and $86.8 million, respectively, for the White Oak segment and $12.9 million, $1.7 million and $1.7 million, respectively, for the Other and Corporate segment. | |||||||||||||||
[7] | Capital expenditures shown above include funding to White Oak of $4.1 million, $25.3 million and $34.6 million, for the years ended December 31, 2014, 2013 and 2012, respectively, for the acquisition and development of coal reserves from White Oak (Note 12), which is described as "Payments to affiliate for acquisition and development of coal reserves" in our consolidated statements of cash flow. Capital expenditures shown above exclude the Green River acquisition in April 2012 (Note 3) and purchase of coal supply agreements from Patriot in December 2014 (Note 3). | |||||||||||||||
[8] | The elimination column represents the elimination of intercompany transactions and is primarily comprised of sales from the Matrix Group to our mining operations, coal sales and purchases between mining operations within different segments (2013 only), sales of receivables to AROP Funding and insurance premiums paid to Wildcat Insurance (2014 only). |
SEGMENT_INFORMATION_Details_2
SEGMENT INFORMATION (Details 2) (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Reconciliation of consolidated Segment Adjusted EBITDA Expense to operating expenses (excluding depreciation, depletion and amortization) | ||||||
Segment Adjusted EBITDA Expense | $1,381,808 | [1] | $1,398,902 | [1] | $1,338,783 | [1] |
Outside coal purchases | -14 | -2,030 | -38,607 | |||
Other income | 1,566 | 1,891 | 3,115 | |||
Operating expenses (excluding depreciation, depletion and amortization) | $1,383,360 | $1,398,763 | $1,303,291 | |||
[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 $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Reconciliation of consolidated Segment Adjusted EBITDA to net income | ||||||
Consolidated Segment Adjusted EBITDA | $876,244 | [1],[2] | $749,576 | [1],[2] | $658,834 | [1],[2] |
General and administrative | -72,552 | -63,697 | -58,737 | |||
Depreciation, depletion and amortization | -274,566 | -264,911 | -218,122 | |||
Asset impairment charge | 0 | 0 | -19,031 | |||
Interest expense, net | -31,913 | -26,082 | -28,455 | |||
Income tax (expense) benefit | -1,396 | 1,082 | ||||
NET INCOME | $497,213 | $393,490 | $335,571 | |||
[1] | Segment Adjusted EBITDA is defined as net income (prior to the allocation of noncontrolling interest) before net interest expense, income taxes, depreciation, depletion and amortization, asset impairment charge 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. | |||||
[2] | Includes equity in income (loss) of affiliates for the years ended December 31, 2014, 2013 and 2012 of $(16.6) million, $(25.3) million and $(15.3) million, respectively, for the White Oak segment and $(3) thousand, $0.9 million and $0.7 million, respectively, for the Other and Corporate segment. |
SELECTED_QUARTERLY_FINANCIAL_D2
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||||
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | ||||||||||||||||
Revenues | $590,793 | [1] | $569,328 | $598,562 | $542,038 | $566,706 | [1] | $537,229 | $553,571 | $548,055 | $2,300,721 | [2] | $2,205,561 | [2] | $2,034,301 | [2] |
Income from operations | 134,148 | [1] | 127,513 | 153,034 | 129,513 | 117,631 | [1] | 98,002 | 115,569 | 112,316 | 544,208 | 443,518 | 374,479 | |||
Income before income taxes | 123,678 | 119,978 | 137,653 | 115,904 | 101,996 | 86,468 | 104,183 | 102,239 | 497,213 | 394,886 | 334,489 | |||||
Net income of ARLP | $123,694 | $119,978 | $137,653 | $115,904 | $99,293 | $87,186 | $104,074 | $102,937 | $497,229 | $393,490 | $335,571 | |||||
Basic and Diluted Net income of ARLP per limited partner unit (in dollars per unit) | $1.18 | [1] | $1.13 | $1.37 | $1.10 | $0.93 | [1] | $0.75 | $0.98 | $0.98 | $4.77 | [3] | $3.63 | [3] | $3.06 | [3] |
Weighted average limited partner units outstanding - basic and diluted (in units) | 74,060,634 | [1] | 74,060,634 | 74,060,634 | 73,994,866 | 73,926,108 | [1] | 73,926,108 | 73,926,108 | 73,838,004 | 74,044,417 | [3] | 73,904,384 | [3] | 73,726,044 | [3] |
[1] | The comparability of our December 31, 2013 quarterly results to other quarters presented was affected by a $12.9 million decrease in our workers' compensation liability, excluding discount rate changes, due to the completion of our annual actuarial study, which reflected favorable development in our disability emergence patterns and claims estimates (Note 18). The comparability of our June 30, 2014 quarterly results to other quarters presented was affected by $7.0 million insurance settlement related to adverse geological events at the Onton mine in the third quarter of 2013 and a gain of $4.4 million recognized on the sale of Pontiki's assets. | |||||||||||||||
[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 (2013 only). Also included in the Other and Corporate column are Wildcat Insurance revenues, which are eliminated upon consolidation. | |||||||||||||||
[3] | 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 year ended December 31, 2014, 2013 and 2012, the combined total of LTIP, SERP and Deferred Compensation Plan units of 798,701, 682,732 and 689,912, respectively, were considered anti-dilutive. |
SELECTED_QUARTERLY_FINANCIAL_D3
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Details 2) (USD $) | 12 Months Ended | 3 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 30, 2014 |
Workers compensation | ||||
Workers compensation liability | $57,557 | $62,909 | $77,046 | |
Insurance settlement | 4,512 | |||
Gain recognized | 4,409 | -3,475 | -147 | |
Adjustments due to annual actuarial study | ||||
Workers compensation | ||||
Workers compensation liability | -12,900 | |||
Adjustments due to adverse geological events | ||||
Workers compensation | ||||
Insurance settlement | 7,000 | |||
Gain recognized | $4,400 |
SCHEDULE_II_VALUATION_AND_QUAL1
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS (Details) (Allowance for doubtful accounts, USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Allowance for doubtful accounts | |||
Valuation And Qualifying Accounts | |||
Balance At Beginning of Year | $0 | $0 | $0 |
Additions Charged to Income | 0 | 0 | 0 |
Deductions | 0 | 0 | 0 |
Balance At End of Year | $0 | $0 | $0 |