Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Nov. 08, 2016 | |
Document and Entity Information | ||
Entity Registrant Name | ALLIANCE RESOURCE PARTNERS LP | |
Entity Central Index Key | 1,086,600 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Units Outstanding | 74,375,025 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 21,372 | $ 33,431 |
Trade receivables | 146,209 | 122,875 |
Other receivables | 492 | 696 |
Due from affiliates | 198 | 190 |
Inventories, net | 89,904 | 121,081 |
Advance royalties, net | 2,016 | 6,820 |
Prepaid expenses and other assets | 18,106 | 29,812 |
Total current assets | 278,297 | 314,905 |
PROPERTY, PLANT AND EQUIPMENT: | ||
Property, plant and equipment, at cost | 2,994,420 | 3,044,260 |
Less accumulated depreciation, depletion and amortization | (1,352,117) | (1,243,985) |
Total property, plant and equipment, net | 1,642,303 | 1,800,275 |
OTHER ASSETS: | ||
Advance royalties, net | 30,872 | 21,295 |
Equity investments in affiliates | 128,051 | 64,509 |
Goodwill | 136,399 | 136,399 |
Other long-term assets | 28,353 | 23,903 |
Total other assets | 323,675 | 246,106 |
TOTAL ASSETS | 2,244,275 | 2,361,286 |
CURRENT LIABILITIES: | ||
Accounts payable | 63,465 | 83,597 |
Due to affiliates | 44 | 129 |
Accrued taxes other than income taxes | 22,007 | 15,621 |
Accrued payroll and related expenses | 43,396 | 37,031 |
Accrued interest | 2,607 | 306 |
Workers' compensation and pneumoconiosis benefits | 8,701 | 8,688 |
Current capital lease obligations | 27,035 | 19,764 |
Other current liabilities | 15,420 | 18,929 |
Current maturities, long-term debt, net | 509,155 | 238,086 |
Total current liabilities | 691,830 | 422,151 |
LONG-TERM LIABILITIES: | ||
Long-term debt, excluding current maturities, net | 144,949 | 579,420 |
Pneumoconiosis benefits | 62,529 | 60,077 |
Accrued pension benefit | 38,239 | 39,031 |
Workers' compensation | 50,051 | 47,486 |
Asset retirement obligations | 124,925 | 122,434 |
Long-term capital lease obligations | 92,376 | 80,150 |
Other liabilities | 13,647 | 21,174 |
Total long-term liabilities | 526,716 | 949,772 |
Total liabilities | 1,218,546 | 1,371,923 |
COMMITMENTS AND CONTINGENCIES | ||
Alliance Resource Partners, L.P. ("ARLP") Partners' Capital: | ||
Limited Partners - Common Unitholders 74,375,025 and 74,188,784 units outstanding, respectively | 1,329,934 | 1,280,218 |
General Partners' deficit | (275,153) | (258,883) |
Accumulated other comprehensive loss | (34,174) | (34,557) |
Total ARLP Partners' Capital | 1,020,607 | 986,778 |
Noncontrolling interest | 5,122 | 2,585 |
Total Partners' Capital | 1,025,729 | 989,363 |
TOTAL LIABILITIES AND PARTNERS' CAPITAL | $ 2,244,275 | $ 2,361,286 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - shares | Sep. 30, 2016 | Dec. 31, 2015 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Limited Partners, Common Unitholders, units outstanding | 74,375,025 | 74,188,784 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
SALES AND OPERATING REVENUES: | ||||
Coal sales | $ 533,817 | $ 547,466 | $ 1,357,578 | $ 1,632,493 |
Transportation revenues | 7,692 | 9,395 | 19,732 | 24,323 |
Other sales and operating revenues | 10,565 | 9,584 | 26,743 | 74,765 |
Total revenues | 552,074 | 566,445 | 1,404,053 | 1,731,581 |
EXPENSES: | ||||
Operating expenses (excluding depreciation, depletion and amortization) | 347,711 | 336,527 | 847,513 | 1,045,954 |
Transportation expenses | 7,692 | 9,395 | 19,732 | 24,323 |
Outside coal purchases | 1,514 | 2 | 1,514 | 326 |
General and administrative | 18,114 | 17,948 | 53,015 | 52,336 |
Depreciation, depletion and amortization | 80,612 | 84,661 | 240,640 | 242,730 |
Asset impairment | 10,695 | 10,695 | ||
Total operating expenses | 455,643 | 459,228 | 1,162,414 | 1,376,364 |
INCOME FROM OPERATIONS | 96,431 | 107,217 | 241,639 | 355,217 |
Interest expense (net of interest capitalized for the three and nine months ended September 30, 2016 and 2015 of $47, $152, $320 and $518, respectively) | (8,001) | (7,352) | (23,386) | (23,626) |
Interest income | 3 | 285 | 8 | 1,421 |
Equity in income (loss) of affiliates, net | 1,105 | (17,221) | 1,041 | (49,049) |
Other income | 293 | 455 | 545 | 750 |
INCOME BEFORE INCOME TAXES | 89,831 | 83,384 | 219,847 | 284,713 |
INCOME TAX EXPENSE | 7 | 12 | 4 | 17 |
NET INCOME | 89,824 | 83,372 | 219,843 | 284,696 |
LESS: NET LOSS (INCOME) ATTRIBUTABLE TO NONCONTROLLING INTEREST | (44) | 7 | (40) | 27 |
NET INCOME ATTRIBUTABLE TO ALLIANCE RESOURCE PARTNERS, L.P. ("NET INCOME OF ARLP") | 89,780 | 83,379 | 219,803 | 284,723 |
GENERAL PARTNERS' INTEREST IN NET INCOME OF ARLP | 20,571 | 37,311 | 60,723 | 111,735 |
LIMITED PARTNERS' INTEREST IN NET INCOME OF ARLP | $ 69,209 | $ 46,068 | $ 159,080 | $ 172,988 |
BASIC NET INCOME OF ARLP PER LIMITED PARTNER UNIT (Note 9) (in dollars per unit) | $ 0.91 | $ 0.61 | $ 2.08 | $ 2.29 |
DILUTED NET INCOME OF ARLP PER LIMITED PARTNER UNIT (Note 9) (in dollars per unit) | 0.91 | 0.61 | 2.08 | 2.29 |
DISTRIBUTIONS PAID PER LIMITED PARTNER UNIT (in dollars per unit) | $ 0.4375 | $ 0.6750 | $ 1.5500 | $ 1.9875 |
WEIGHTED AVERAGE NUMBER OF UNITS OUTSTANDING - BASIC (in units) | 74,375,025 | 74,188,784 | 74,347,157 | 74,169,538 |
WEIGHTED AVERAGE NUMBER OF UNITS OUTSTANDING - DILUTED (in units) | 74,375,025 | 74,188,784 | 74,347,157 | 74,169,538 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||
Interest expense, interest capitalized | $ 47 | $ 152 | $ 320 | $ 518 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | ||
NET INCOME | $ 89,824 | $ 83,372 | $ 219,843 | $ 284,696 | |
OTHER COMPREHENSIVE INCOME/(LOSS): | |||||
OTHER COMPREHENSIVE INCOME | 127 | 726 | 383 | 2,178 | |
COMPREHENSIVE INCOME | 89,951 | 84,098 | 220,226 | 286,874 | |
Less: Comprehensive (income) loss attributable to noncontrolling interest | (44) | 7 | (40) | 27 | |
COMPREHENSIVE INCOME ATTRIBUTABLE TO ARLP | 89,907 | 84,105 | 220,186 | 286,901 | |
Pension Plan | |||||
OTHER COMPREHENSIVE INCOME/(LOSS): | |||||
Amortization of net actuarial (gain) loss (1) | [1] | 787 | 839 | 2,365 | 2,516 |
Total adjustments recognized | [1] | 787 | 839 | 2,365 | 2,516 |
Pneumoconiosis benefits | |||||
OTHER COMPREHENSIVE INCOME/(LOSS): | |||||
Amortization of net actuarial (gain) loss (1) | [1] | (660) | (113) | (1,982) | (338) |
Total adjustments recognized | [1] | $ (660) | $ (113) | $ (1,982) | $ (338) |
[1] | Amortization of net actuarial gain or loss is included in the computation of net periodic benefit cost (see Notes 10 and 12 for additional details). |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES | $ 494,528 | $ 528,895 |
Property, plant and equipment: | ||
Capital expenditures | (70,267) | (159,182) |
Decrease in accounts payable and accrued liabilities | (7,965) | (3,093) |
Proceeds from sale of property, plant and equipment | 756 | 1,519 |
Purchases of equity investments in affiliates | (65,367) | (47,624) |
Payments for acquisitions of businesses, net of cash acquired | (1,011) | (74,953) |
Advances/loans to affiliate | (7,300) | |
Payment for acquisition of customer contracts | (23,000) | |
Other | 2,167 | 1,807 |
Net cash used in investing activities | (164,687) | (288,826) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Borrowings under securitization facility | 44,600 | 6,500 |
Payments under securitization facility | (27,700) | (6,500) |
Payments on term loan | (106,250) | (20,319) |
Borrowings under revolving credit facilities | 140,000 | 463,000 |
Payments under revolving credit facilities | (215,000) | (200,000) |
Payment on long-term debt | (205,000) | |
Proceeds on capital lease transactions | 33,881 | |
Payments on capital lease obligations | (17,769) | (994) |
Contributions to consolidated company from affiliate noncontrolling interest | 2,557 | 1,483 |
Net settlement of employee withholding taxes on vesting of Long-Term Incentive Plan | (1,336) | (2,719) |
Cash contributions by General Partners | 47 | 95 |
Distributions paid to Partners | (194,870) | (258,697) |
Other | (60) | (5,583) |
Net cash used in financing activities | (341,900) | (228,734) |
NET CHANGE IN CASH AND CASH EQUIVALENTS | (12,059) | 11,335 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 33,431 | 24,601 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 21,372 | 35,936 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ||
Cash paid for interest | 20,194 | 20,164 |
Cash paid for income taxes | 7 | 14 |
NON-CASH INVESTING AND FINANCING ACTIVITY: | ||
Accounts payable for purchase of property, plant and equipment | 4,669 | 12,561 |
Assets acquired by capital lease | 37,089 | |
Market value of common units issued under Long-Term Incentive and Directors Deferred Compensation Plans before minimum statutory tax withholding requirements | 3,642 | 7,389 |
Acquisition of businesses: | ||
Fair value of assets assumed | 1,011 | 497,790 |
Contingent consideration | (20,407) | |
Settlement of pre-existing relationships | (119,663) | |
Previously held equity-method investment | (104,931) | |
Cash paid, net of cash acquired | $ (1,011) | (74,953) |
Fair value of liabilities assumed | $ 177,836 |
ORGANIZATION AND PRESENTATION
ORGANIZATION AND PRESENTATION | 9 Months Ended |
Sep. 30, 2016 | |
ORGANIZATION AND PRESENTATION | |
ORGANIZATION AND PRESENTATION | 1. Significant Relationships Referenced in Notes to Condensed Consolidated Financial Statements · References to "we," "us," "our" or "ARLP Partnership" mean the business and operations of Alliance Resource Partners, L.P., the parent company, as well as its consolidated subsidiaries. · References to "ARLP" mean Alliance Resource Partners, L.P., individually as the parent company, and not on a consolidated basis. · References to "MGP" mean Alliance Resource Management GP, LLC, the managing general partner of Alliance Resource Partners, L.P. · 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. · References to "Alliance Resource Properties" mean Alliance Resource Properties, LLC, the land-holding company for the mining operations of Alliance Resource Operating Partners, L.P. · References to "Alliance Coal" mean Alliance Coal, LLC, the holding company for the mining operations of Alliance Resource Operating Partners, L.P., also referred to as our primary 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 MGP, a Delaware limited liability company, which holds a 0.99% and a 1.0001% managing general partner interest in ARLP and the Intermediate Partnership, respectively, and a 0.001% managing member interest in Alliance Coal. AHGP is a Delaware limited partnership that was formed to become the owner and controlling member of MGP. AHGP completed its initial public offering on May 15, 2006. AHGP owns directly and indirectly 100% of the members' interest of MGP, the incentive distribution rights ("IDR") in ARLP and 31,088,338 common units of ARLP. ARLP and its consolidated subsidiaries represent virtually all the net assets and operations of AHGP. Basis of Presentation The accompanying condensed consolidated financial statements include the accounts and operations of the ARLP Partnership and present the consolidated financial position as of September 30, 2016 and December 31, 2015, the results of operations and comprehensive income for the three and nine months ended September 30, 2016 and 2015 and the cash flows for the nine months ended September 30, 2016 and 2015 of ARLP, the Intermediate Partnership (a subsidiary of ARLP and a variable interest entity of which ARLP is the primary beneficiary), Alliance Coal (a variable interest entity of which the Intermediate Partnership is the primary beneficiary) and other directly and indirectly wholly- and majority-owned subsidiaries of the Intermediate Partnership and Alliance Coal. The Intermediate Partnership, Alliance Coal and their wholly- and majority-owned subsidiaries represent virtually all the net assets of the ARLP Partnership. MGP's interests in both Alliance Coal and the Intermediate Partnership and SGP's 0.01% interest in the Intermediate Partnership are reported as part of the overall two percent general partner interest in the ARLP Partnership. MGP's incentive distribution rights in ARLP are also reported with the general partner interest in ARLP. All intercompany transactions and accounts have been eliminated. See Note 7 – Variable Interest Entities for more information regarding ARLP's consolidation of the Intermediate Partnership and Alliance Coal. See Note 9 – Net Income of ARLP Per Limited Partner Unit for more information regarding MGP's incentive distribution rights in ARLP. These condensed consolidated financial statements and notes are unaudited. However, in the opinion of management, these financial statements reflect all normal recurring adjustments necessary for a fair presentation of the results for the periods presented. Results for interim periods are not necessarily indicative of results to be expected for the full year ending December 31, 2016. These condensed consolidated financial statements and notes are prepared pursuant to the rules and regulations of the Securities and Exchange Commission for interim reporting and do not include all of the information normally included with financial statements prepared in accordance with generally accepted accounting principles ("GAAP") of the United States. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2015. Use of Estimates The preparation of the ARLP Partnership's condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in our condensed consolidated financial statements. Actual results could differ from those estimates. Goodwill Goodwill represents the excess of cost over the fair value of net assets of acquired businesses. Goodwill is not amortized, but instead is evaluated for impairment periodically. We evaluate goodwill for impairment annually on November 30th, or more often if events or circumstances indicate that goodwill might be impaired. The reporting unit or units used to evaluate and measure goodwill for impairment are determined primarily from the manner in which the business is managed or operated. A reporting unit is an operating segment or a component that is one level below an operating segment. There were no impairments of goodwill during the nine months ended September 30, 2016. In future periods it is reasonably possible that a variety of circumstances could result in an impairment of our goodwill. |
NEW ACCOUNTING STANDARDS
NEW ACCOUNTING STANDARDS | 9 Months Ended |
Sep. 30, 2016 | |
NEW ACCOUNTING STANDARDS | |
NEW ACCOUNTING STANDARDS | 2. New Accounting Standard Issued and Adopted In April 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2015-03, Interest – Imputation of Interest ("ASU 2015-03"). ASU 2015-03 changes the classification and presentation of debt issuance costs by requiring debt issuance costs to be reported as a direct deduction from the face amount of the debt liability rather than an asset. Amortization of the costs is reported as interest expense. The amendment does not affect the current guidance on the recognition and measurement of debt issuance costs. ASU 2015-03 was effective for fiscal years, and interim periods within those years, beginning after December 15, 2015 and is applied retrospectively to each period presented. The adoption of ASU 2015-03 resulted in immaterial changes to our condensed consolidated financial statements. In February 2015, the FASB issued ASU 2015-02, Consolidation ("ASU 2015-02"). ASU 2015-02 changes the requirements and analysis required when determining the reporting entity's need to consolidate an entity, including modifying the evaluation of limited partnership variable interest status, presumption that a general partner should consolidate a limited partnership and the consolidation criterion applied by a reporting entity involved with variable interest entities. ASU 2015-02 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015 and may be applied retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. The adoption of ASU 2015-02 in January 2016 did not have a material impact on our condensed consolidated financial statements. New Accounting Standards Issued and Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments–Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). ASU 2016-13 changes the impairment model for most financial assets and certain other instruments to require the use of a new forward-looking "expected loss" model that generally will result in earlier recognition of allowances for losses. The new standard will require disclosure of significantly more information related to these items. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted for the fiscal year beginning after December 15, 2018, including interim periods. We are currently evaluating the effect of adopting ASU 2016-13. In March 2016, the FASB issued ASU 2016-09, Compensation–Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"). ASU 2016-09 simplifies the accounting for several aspects of share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods, with early adoption permitted. We do not expect the adoption of ASU 2016-09 to have a material impact on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) ("ASU 2016-02"). ASU 2016-02 increases transparency and comparability among organizations by requiring lessees to record right-to-use assets and corresponding lease liabilities on the balance sheet and disclosing key information about lease arrangements. The new guidance will continue to classify leases as either finance or operating, with classification affecting the pattern of income recognition in the statement of income. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. We are currently evaluating the effect of adopting ASU 2016-02. In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory ("ASU 2015-11"). ASU 2015-11 simplifies the subsequent measurement of inventory. It replaces the current lower of cost or market test with the lower of cost or net realizable value test. Net realizable value is defined as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The new standard will be applied prospectively and is effective for annual reporting periods beginning after December 15, 2016 and interim periods within those annual periods, with early adoption permitted. We are currently evaluating the effect of adopting ASU 2015-11, but do not expect it to have a material impact on our consolidated financial statements. 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 expect the adoption of ASU 2014-15 to 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. The standard will be applied retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. ASU 2014-09 was originally effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers: Deferral of the Effective Date ("ASU 2015-14"), which defers the effective date by one year while providing the option to early adopt the standard on the original effective date. We have developed an assessment team to determine the effect of adopting ASU 2014-09. We are still determining whether there will be any material impact on our revenue recognition; however, we believe there will be changes with respect to disclosures on revenue from contracts and such changes will be reflected in our consolidated financial statements. Our assessment team will continue working through the new guidance to finalize an evaluation later this year. |
CONTINGENCIES
CONTINGENCIES | 9 Months Ended |
Sep. 30, 2016 | |
CONTINGENCIES | |
CONTINGENCIES | 3. Various lawsuits, claims and regulatory proceedings incidental to our business are pending against the ARLP Partnership. We record accruals for potential losses related to these matters when, in management's opinion, such losses are 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. |
INVENTORIES
INVENTORIES | 9 Months Ended |
Sep. 30, 2016 | |
INVENTORIES | |
INVENTORIES | 4. Inventories consist of the following: September 30, December 31, 2016 2015 (in thousands) Coal $ $ Supplies (net of reserve for obsolescence of $4,005 and $3,841, respectively) Total inventory $ $ During the nine months ended September 30, 2016, we recorded adjustments of $16.1 million to reduce the carrying value of our coal inventories to market price as a result of lower coal sale prices and higher cost per ton primarily due to lower production at the Hamilton County Coal, LLC ("Hamilton") mining complex as a result of challenging market conditions. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2016 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | 5. The following table summarizes our fair value measurements within the hierarchy: September 30, 2016 December 31, 2015 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 (in thousands) Measured on a recurring basis: Contingent consideration — — — — Additional disclosures: Long-term debt — — — — Total $ — $ $ $ — $ $ The carrying amounts for cash equivalents, accounts receivable, accounts payable, due from affiliates and due to affiliates approximate fair value due to the short maturity of those instruments. The estimated fair value of our long-term debt, including current maturities, is based on interest rates that we believe are currently available to us in active markets for issuance of debt with similar terms and remaining maturities (See Note 6 – Long-Term Debt). The fair value of debt, which is based upon these interest rates, is classified as a Level 2 measurement under the fair value hierarchy. The estimated fair value of our contingent consideration arrangement is based on a probability-weighted discounted cash flow model. The assumptions used in the model include a risk-adjusted discount rate, forward coal sales price curves, cost of debt and probabilities of meeting certain threshold prices. The decrease in fair value was primarily a result of changes in the risk-adjusted discount rate and is recorded in Operating expenses (excluding depreciation, depletion and amortization) in our condensed consolidated income statement. The fair value measurement is based on significant inputs not observable in active markets and thus represents a Level 3 fair value measurement under the fair value hierarchy. |
LONG-TERM DEBT
LONG-TERM DEBT | 9 Months Ended |
Sep. 30, 2016 | |
LONG-TERM DEBT | |
LONG-TERM DEBT | 6. Long-term debt consists of the following: Unamortized Principal Debt Issuance Costs September 30, December 31, September 30, December 31, 2016 2015 2016 2015 (in thousands) Revolving Credit facility $ $ $ $ Series B senior notes Term loan Securitization facility — — Less current maturities Total long-term debt $ $ $ $ Our Intermediate Partnership has a $700.0 million revolving credit facility ("Revolving Credit Facility"), $145.0 million in Series B senior notes ("Series B Senior Notes") and a $100.0 million term loan ("Term Loan" and collectively, with the Revolving Credit Facility and the Series B Senior Notes, the "ARLP Debt Arrangements"), which are guaranteed by all of the material direct and indirect subsidiaries of our Intermediate Partnership. On October 16, 2015, the Revolving Credit Facility was amended to increase the baskets for permitted other unsecured debt and capital lease obligations and for annual sale-leaseback arrangements. Our Intermediate Partnership also has a $100.0 million accounts receivable securitization facility ("Securitization Facility"). At September 30, 2016, current maturities include the Securitization Facility, the Revolving Credit Facility and the Term Loan. Management is currently finalizing plans to extend the Revolving Credit Facility, the cost, availability and terms of which could be impacted by weakness in the energy sector in general and coal in particular. 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 1.12 to 1.0 and 22.0 to 1.0, respectively, for the trailing twelve months ended September 30, 2016. We were in compliance with the covenants of the ARLP Debt Arrangements as of September 30, 2016. See Note 7 – Variable Interest Entities for further discussion of restrictions on the cash available for distribution and its impact on our consolidations. At September 30, 2016, we had borrowings of $310.0 million and $5.7 million of letters of credit outstanding with $384.3 million available for borrowing under the Revolving Credit Facility. We utilize the Revolving Credit Facility, as appropriate, for working capital requirements, capital expenditures and investments in affiliates. We incur an annual commitment fee of 0.25% on the undrawn portion of the Revolving Credit Facility. On December 5, 2014, certain direct and indirect wholly-owned subsidiaries of our Intermediate Partnership entered into the 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, LLC ("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. It was renewed in December 2015 and matures in December 2016. On February 24, 2016 the facility was amended to include additional subsidiaries as sellers of trade receivables, thereby increasing availability under the facility. At September 30, 2016, we had $100.0 million outstanding under the Securitization Facility. On October 6, 2015, Cavalier Minerals JV, LLC ("Cavalier Minerals") (See Note 7 – Variable Interest Entities) entered into a credit agreement (the "Cavalier Credit Agreement") with Mineral Lending, LLC ("Mineral Lending") for a $100.0 million line of credit (the "Cavalier Credit Facility"). Mineral Lending is an entity owned by a) Alliance Resource Holdings II, Inc. ("ARH II," the parent of ARH), b) an entity owned by an officer of ARH who is also a director of ARH II ("ARH Officer") and c) foundations established by the President and Chief Executive Officer of MGP and Kathleen S. Craft. There is no commitment fee under the facility. Borrowings under the Cavalier Credit Facility bear interest at a one month LIBOR rate plus 6% with interest payable quarterly. Repayment of the principal balance will begin following the first fiscal quarter after the earlier of the date on which the aggregate amount borrowed exceeds $90.0 million or December 31, 2017, in quarterly payments of an amount equal to the greater of $1.3 million initially, escalated to $2.5 million after two years, or fifty percent of Cavalier Minerals' excess cash flow. The Cavalier Credit Facility matures September 30, 2024, at which time all amounts then outstanding are required to be repaid. To secure payment of the facility, Cavalier Minerals pledged all of its partnership interests, owned or later acquired, in AllDale Minerals, L.P. ("AllDale I") and AllDale Minerals II, L.P. ("AllDale II") (collectively "AllDale Minerals"). Cavalier Minerals may prepay the Cavalier Credit Facility at any time in whole or in part subject to terms and conditions described in the Cavalier Credit Agreement. As of September 30, 2016, Cavalier Minerals had not drawn on the Cavalier Credit Facility. On June 29, 2016, we entered into various sale-leaseback transactions for certain mining equipment and received $33.9 million in proceeds. The lease agreements have terms ranging from three to four years with initial monthly rentals totaling $0.7 million. Balloon payments equal to 20% of the equipment cost under lease are due at the end of each lease term. As a result of this transaction, we recognized a deferred loss of $7.6 million which is being amortized over the life of the equipment. We have recognized the lease agreements as capital leases. |
VARIABLE INTEREST ENTITIES
VARIABLE INTEREST ENTITIES | 9 Months Ended |
Sep. 30, 2016 | |
VARIABLE INTEREST ENTITIES | |
VARIABLE INTEREST ENTITIES | 7. Cavalier Minerals On November 10, 2014, our subsidiary, Alliance Minerals, LLC ("Alliance Minerals"), and Bluegrass Minerals Management, LLC ("Bluegrass Minerals") entered into a limited liability company agreement (the "Cavalier Agreement") to create Cavalier Minerals, which was formed to indirectly acquire oil and gas mineral interests, initially through its 71.7% noncontrolling ownership interest in AllDale I and subsequently through its 72.8% noncontrolling ownership interest in AllDale II. Bluegrass Minerals is owned and controlled by the ARH Officer discussed in Note 6 – Long-Term Debt and is Cavalier Minerals' managing member. Alliance Minerals and Bluegrass Minerals initially committed funding of $48.0 million and $2.0 million, respectively, to Cavalier Minerals, and Cavalier Minerals committed funding of $49.0 million to AllDale I. On October 6, 2015, Alliance Minerals and Bluegrass Minerals committed to fund an additional $96.0 million and $4.0 million, respectively, to Cavalier Minerals, and Cavalier Minerals committed to fund $100.0 million to AllDale II. Contributions made from Alliance Minerals and Bluegrass Minerals to Cavalier Minerals and remaining commitments for each period presented are as follows: Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 (in thousands) Alliance Minerals Beginning cumulative commitment fulfilled $ $ $ $ Capital contributions - Cash Capital contributions - AllDale Minerals' distributions received by Cavalier Minerals — — Ending cumulative commitment fulfilled Remaining commitment Total committed $ $ $ $ Bluegrass Minerals Beginning cumulative commitment fulfilled $ $ $ $ Capital contributions - Cash Capital contributions - AllDale Minerals' distributions received by Cavalier Minerals — — Ending cumulative commitment fulfilled Remaining commitment Total committed $ $ $ $ At Alliance Minerals' election, Cavalier Minerals will meet its remaining funding commitment to AllDale Minerals through contributions from Alliance Minerals and Bluegrass Minerals or from borrowings under the Cavalier Credit Facility (see Note 6 – Long-Term Debt). We expect to fund our remaining 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, or by requiring Cavalier Minerals to draw on the Cavalier Credit Facility. In accordance with the Cavalier Agreement, Bluegrass Minerals is entitled to receive an incentive distribution from Cavalier Minerals equal to 25% 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"), the managing member of AllDale Minerals. Distributions paid to Alliance Minerals and Bluegrass Minerals from Cavalier Minerals for each period presented are as follows: Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 (in thousands) Alliance Minerals $ $ — $ $ — Bluegrass Minerals — — Alliance Minerals' ownership interest in Cavalier Minerals at September 30, 2016 was 96%. The remainder of the equity ownership is held by Bluegrass Minerals. We have consolidated Cavalier Minerals' financial results as we concluded that Cavalier Minerals is a variable interest entity ("VIE") and we are the primary beneficiary because neither Bluegrass Minerals nor Alliance Minerals individually has both the power and the benefits related to Cavalier Minerals and we are most closely aligned with Cavalier Minerals through our substantial equity ownership. Bluegrass Minerals equity ownership of Cavalier Minerals is accounted for as noncontrolling ownership interest in our condensed consolidated balance sheets. In addition, earnings attributable to Bluegrass Minerals are recognized as noncontrolling interest in our condensed consolidated statements of income. WKY CoalPlay On November 17, 2014, SGP Land, LLC ("SGP Land"), a wholly-owned subsidiary of SGP, and two limited liability companies ("Craft Companies") owned by irrevocable trusts established by the President and Chief Executive Officer of MGP entered into a limited liability company agreement to form WKY CoalPlay, LLC ("WKY CoalPlay"). WKY CoalPlay was formed, in part, to purchase and lease coal reserves. WKY CoalPlay is managed by the ARH Officer discussed in Note 6 – Long-Term Debt, who is also an employee of SGP Land and trustee of the irrevocable trusts owning the Craft Companies. In December 2014 and February 2015, we entered into various coal reserve leases with WKY CoalPlay. During the nine months ended September 30, 2016, we paid $10.8 million of advanced royalties to WKY CoalPlay. As of September 30, 2016, we had $20.4 million of advanced royalties outstanding under the leases, which is reflected in the Advance royalties, net line items in our condensed consolidated balance sheets. We have concluded that WKY CoalPlay is a VIE because of our ability to exercise options to acquire reserves under lease with WKY CoalPlay, which 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. Alliance Coal and the Intermediate Partnership Alliance Coal is a limited liability company designed to operate as the operating subsidiary of the Intermediate Partnership and holds the interests in the mining operations and Alliance Service, Inc. ("ASI"). The Intermediate Partnership is a limited liability partnership that holds the non-managing member interest in Alliance Coal and the sole member interests in Alliance Resource Properties, Alliance Minerals and other entities. Together Alliance Coal and the Intermediate Partnership and their subsidiaries represent virtually all the net assets of ARLP. Both the Intermediate Partnership and Alliance Coal were designed to operate as the operating subsidiaries of ARLP and to distribute available cash to ARLP so that ARLP can distribute available cash to its partners. We considered MGP's and ARLP's ownership in the Intermediate Partnership and MGP's and the Intermediate Partnership's ownership in Alliance Coal separately for the purposes of determining whether the Intermediate Partnership and Alliance Coal are VIEs. The Intermediate Partnership holds a 99.999% non-managing interest and MGP holds the 0.001% managing member interest in Alliance Coal. To determine whether Alliance Coal is a VIE, we considered that since Alliance Coal is structured as the equivalent of a limited partnership with the non-managing member 1) not having the ability to remove its managing member and 2) not participating significantly in the operational decisions, Alliance Coal represents a VIE. We determined that the Intermediate Partnership should consolidate Alliance Coal because it has a controlling financial interest in Alliance Coal. We made this determination based on 1) the purpose and design of Alliance Coal which is to a) be the operating subsidiary of the Intermediate Partnership and b) distribute all of its available cash to the Intermediate Partnership such that the Intermediate Partnership can pay its partners and debt obligations, 2) AHGP's common control over both the Intermediate Partnership and MGP, as discussed in Note 1 – Organization and Presentation, to achieve the aforementioned purpose and design, 3) the Intermediate Partnership's debt funding for Alliance Coal for capital expenditures, operations and other purposes as needed and related risks and collateral requirements in the debt arrangements and 4) making available the most meaningful information to investors. ARLP holds a 98.9899% limited partnership interest in the Intermediate Partnership and MGP holds the 1.0001% managing partner interest in the Intermediate Partnership. To determine whether the Intermediate Partnership is a VIE, we considered that since the Intermediate Partnership is structured as a limited partnership with the limited partner 1) not having the ability to remove its general partner and 2) not participating significantly in the operational decisions, the Intermediate Partnership represents a VIE. We determined that ARLP should consolidate the Intermediate Partnership because it has a controlling financial interest in the Intermediate Partnership. We made this determination based on 1) the purpose and design of the Intermediate Partnership which is to a) be the operating subsidiary to ARLP and b) distribute all of its available cash to ARLP to pay its partners, 2) AHGP's common control over ARLP, MGP and the Intermediate Partnership, as discussed in Note 1 – Organization and Presentation, to achieve the aforementioned purpose and design, and 3) making available the most meaningful information to investors. The effect of the partnership agreements of ARLP and the Intermediate Partnership and the operating agreement of Alliance Coal (collectively the "Agreements") is that on a quarterly basis 100% of available cash from our operations must be distributed by ARLP to its partners (apart from nominal distributions from the Intermediate Partnership and Alliance Coal to MGP and SGP). Available cash is determined as defined in the Agreements and represents all cash with the exception of cash reserves (i) for the proper conduct of the business including reserves for future capital expenditures and for anticipated credit needs of the Partnership Group, (ii) to comply with debt obligations or (iii) to provide funds for certain subsequent distributions. Cash reserves may not be established for the purpose of funding subsequent distributions if the effect would be to prevent ARLP from making the minimum quarterly distributions plus any cumulative distribution arrearage. MGP, as the managing member of Alliance Coal and the managing general partner of the Intermediate Partnership, is responsible for distributing this cash to ARLP so it can meet its distribution requirements. As discussed in Note 6 – Long-Term Debt, the Intermediate Partnership's debt covenants place additional restrictions on distributions to ARLP by limiting cash available for distribution from the Intermediate Partnership based on various debt covenants pertaining to the most recent preceding quarter. MGP does not have the ability to amend the Agreements. |
EQUITY INVESTMENT
EQUITY INVESTMENT | 9 Months Ended |
Sep. 30, 2016 | |
EQUITY INVESTMENT | |
EQUITY INVESTMENT | 8. AllDale Minerals On November 10, 2014, Cavalier Minerals (see Note 7 – Variable Interest Entities) made an initial contribution of $7.4 million in return for a limited partner interest in AllDale Minerals, which was created to purchase oil and gas mineral interests in various geographic locations within producing basins in the continental U.S. We continually review all rights provided to Cavalier Minerals and us by various agreements and continue to conclude all such rights do not provide Cavalier Minerals or us the ability to unilaterally direct any of the activities of AllDale Minerals that most significantly impact its economic performance. As such, we account for Cavalier Minerals' ownership interest in the income or loss of AllDale Minerals as an equity investment and it is so reflected in our condensed consolidated financial statements. We record equity income or loss based on AllDale Minerals' distribution structure. The changes in our equity investment in AllDale Minerals for each of the periods presented were as follows: Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 (in thousands) Beginning balance $ $ $ $ Contributions Equity in income (loss) of affiliates, net Distributions received — — Ending balance $ $ $ $ |
NET INCOME OF ARLP PER LIMITED
NET INCOME OF ARLP PER LIMITED PARTNER UNIT | 9 Months Ended |
Sep. 30, 2016 | |
NET INCOME OF ARLP PER LIMITED PARTNER UNIT | |
NET INCOME OF ARLP PER LIMITED PARTNER UNIT | 9. We utilize the two-class method in calculating basic and diluted 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. Under the quarterly IDR provisions of our partnership agreement, our managing general partner is entitled to receive 15% of the amount we distribute in excess of $0.1375 per unit, 25% of the amount we distribute in excess of $0.15625 per unit, and 50% of the amount we distribute in excess of $0.1875 per unit. Our partnership agreement contractually limits our distributions to available cash; therefore, undistributed earnings of the ARLP Partnership are not allocated to the IDR holder. In addition, outstanding awards under our Long-Term Incentive Plan ("LTIP") and phantom units in notional accounts under our Supplemental Executive Retirement Plan ("SERP") and the MGP Amended and Restated Deferred Compensation Plan for Directors ("Deferred Compensation Plan") include rights to nonforfeitable distributions or distribution equivalents and are therefore considered participating securities. As such, we allocate undistributed and distributed earnings to these outstanding awards in our calculation of EPU. The following is a reconciliation of net income of ARLP used for calculating basic earnings per unit and the weighted-average units used in computing EPU for the three and nine months ended September 30, 2016 and 2015: Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 (in thousands, except per unit data) Net income of ARLP $ $ $ $ Adjustments: Managing general partner's priority distributions General partners' 2% equity ownership Limited partners' interest in net income of ARLP Less: Distributions to participating securities Undistributed earnings attributable to participating securities — Net income of ARLP available to limited partners $ $ $ $ Weighted-average limited partner units outstanding – basic and diluted Basic and diluted net income of ARLP per limited partner unit (1) $ $ $ $ (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. The combined total of LTIP, SERP and Deferred Compensation Plan units of 1,227 and 735 for the three and nine months ended September 30, 2016, respectively, and 627 and 735 for the three and nine months ended September 30, 2015, respectively, were considered anti-dilutive under the treasury stock method. |
WORKERS' COMPENSATION AND PNEUM
WORKERS' COMPENSATION AND PNEUMOCONIOSIS | 9 Months Ended |
Sep. 30, 2016 | |
WORKERS' COMPENSATION AND PNEUMOCONIOSIS | |
WORKERS' COMPENSATION AND PNEUMOCONIOSIS | 10. The changes in the workers' compensation liability, including current and long-term liability balances, for each of the periods presented were as follows: Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 (in thousands) Beginning balance $ $ $ $ Accruals increase Payments Interest accretion Valuation loss (gain) (1) — — Ending balance $ $ $ $ (1) Our liability for the estimated present value of current workers′ compensation benefits is based on our actuarial estimates. Our actuarial calculations are based on a blend of actuarial projection methods and numerous assumptions including claim development patterns, mortality, medical costs and interest rates. We conducted a mid-year review of our actuarial assumptions in the second quarter of 2016 which resulted in a valuation loss in 2016 primarily attributable to a decrease in the discount rate used to calculate the estimated present value of future obligations from 3.63% at December 31, 2015 to 2.89% at June 30, 2016, partially offset by favorable changes in claims development. Our mid-year actuarial review in the second quarter of 2015 resulted in a valuation gain primarily attributable to favorable changes in claims development and an increase in the discount rate from 3.41% at December 31, 2014 to 3.71% at June 30, 2015. Absent evidence of significant changes in underlying activity or assumptions, the actuarial study is performed at June 30 and December 31 each year. Accordingly, the discount rate used in our assumptions at June 30, 2016 and 2015 continue in use for our third quarter liability estimates for both years. Certain of our mine operating entities are liable under state statutes and the Federal Coal Mine Health and Safety Act of 1969, as amended, to pay pneumoconiosis, or black lung, benefits to eligible employees and former employees and their dependents. Components of the net periodic benefit cost for each of the periods presented are as follows: Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 (in thousands) Service cost $ $ $ $ Interest cost Amortization of net actuarial gain (1) Net periodic benefit cost $ $ $ $ (1) Amortization of net actuarial gain is included in the Operating expenses (excluding depreciation, depletion and amortization) line item within our condensed consolidated statements of income. |
COMPENSATION PLANS
COMPENSATION PLANS | 9 Months Ended |
Sep. 30, 2016 | |
COMPENSATION PLANS | |
COMPENSATION PLANS | 11. Long-Term Incentive Plan We have the LTIP for certain employees and officers of MGP and its affiliates who perform services for us. The LTIP awards are grants of non-vested "phantom" or notional units, also referred to as "restricted units", which upon satisfaction of time and performance-based vesting requirements, entitle the LTIP participant to receive ARLP common units. Annual grant levels and vesting provisions for designated participants are recommended by the President and Chief Executive Officer of MGP, subject to review and approval of the compensation committee of the MGP board of directors (the "Compensation Committee"). On January 22, 2016, the Compensation Committee determined that the vesting requirements for the 2013 grants of 284,272 restricted units (which was net of 9,178 forfeitures) had been satisfied as of January 1, 2016. As a result of this vesting, on February 11, 2016, we issued 176,319 unrestricted common units to the LTIP participants. The remaining units were settled in cash to satisfy the individual statutory minimum tax obligations of the LTIP participants. On January 22, 2016, the Compensation Committee authorized additional grants of 969,028 restricted units, of which 960,992 units were granted during the nine months ended September 30, 2016 and will vest on January 1, 2019, subject to satisfaction of certain financial tests. The fair value of these 2016 grants is equal to the intrinsic value at the date of grant, which was $12.38 per unit. LTIP expense was $3.1 million and $2.8 million for the three months ended September 30, 2016 and 2015, respectively, and $9.0 million and $8.3 million for the nine months ended September 30, 2016 and 2015, respectively. After consideration of the January 1, 2016 vesting and subsequent issuance of 176,319 common units, approximately 2.8 million units remain available under the LTIP for issuance in the future, assuming all grants issued in 2014, 2015 and 2016 currently outstanding are settled with common units, without reduction for tax withholding, and no future forfeitures occur. As of September 30, 2016, there was $14.6 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 1.6 years. As of September 30, 2016, the intrinsic value of the non-vested LTIP grants was $35.7 million. As of September 30, 2016, the total obligation associated with the LTIP was $21.5 million and is included in the partners' capital Limited partners-common unitholders line item in our condensed consolidated balance sheets. As provided under the distribution equivalent rights provisions of the LTIP and the terms of the LTIP awards, all non-vested grants include contingent rights to receive quarterly distributions in cash or, in the case of the 2016 grants, in the discretion of the Compensation Committee, cash or in lieu of cash, phantom units credited to a bookkeeping account with value, equal to the cash distributions we make to unitholders during the vesting period. SERP and Directors Deferred Compensation Plan We utilize the SERP to provide deferred compensation benefits for certain officers and key employees. All allocations made to participants under the SERP are made in the form of "phantom" ARLP units and SERP distributions will be settled in the form of ARLP common units. The SERP is administered by the Compensation Committee. Our directors participate in the Deferred Compensation Plan. Pursuant to the Deferred Compensation Plan, for amounts deferred either automatically or at the election of the director, a notional account is established and credited with notional common units of ARLP, described in the Deferred Compensation Plan as "phantom" units. Distributions from the Deferred Compensation Plan will be settled in the form of ARLP common units. For both the SERP and Deferred Compensation Plan, when quarterly cash distributions are made with respect to ARLP common units, an amount equal to such quarterly distribution is credited to each participant's notional account as additional phantom units. All grants of phantom units under the SERP and Deferred Compensation Plan vest immediately. For the nine months ended September 30, 2016 and 2015, SERP and Deferred Compensation Plan participant notional account balances were credited with a total of 56,473 and 24,741 phantom units, respectively, and the fair value of these phantom units was $14.00 per unit and $30.23 per unit, respectively, on a weighted-average basis. Total SERP and Deferred Compensation Plan expense was $0.3 million and $0.4 million for the three months ended September 30, 2016 and 2015, respectively, and $0.9 million and $1.0 million for the nine months ended September 30, 2016 and 2015, respectively. As of September 30, 2016, there were 475,692 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 $10.6 million. As of September 30, 2016, the total obligation associated with the SERP and Deferred Compensation Plan was $14.3 million and is included in the partners' capital Limited partners-common unitholders line item in our condensed consolidated balance sheets. |
COMPONENTS OF PENSION PLAN NET
COMPONENTS OF PENSION PLAN NET PERIODIC BENEFIT COSTS | 9 Months Ended |
Sep. 30, 2016 | |
COMPONENTS OF PENSION PLAN NET PERIODIC BENEFIT COSTS | |
COMPONENTS OF PENSION PLAN NET PERIODIC BENEFIT COSTS | 12. Eligible employees at certain of our mining operations participate in a defined benefit plan (the "Pension Plan") that we sponsor. The benefit formula for the Pension Plan is a fixed dollar unit based on years of service. Components of the net periodic benefit cost for each of the periods presented are as follows: Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 (in thousands) Service cost $ $ $ $ Interest cost Expected return on plan assets Amortization of net loss (1) Net periodic benefit cost $ $ $ $ (1) Amortization of net actuarial loss is included in the Operating expenses (excluding depreciation, depletion and amortization) line item within our condensed consolidated statements of income. During the nine months ended September 30, 2016, we made contribution payments of $0.6 million to the Pension Plan for the 2015 plan year and $1.3 million to the Pension Plan for the 2016 plan year. On October 17, 2016, we made a contribution payment of $0.7 million for the 2016 plan year. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Sep. 30, 2016 | |
SEGMENT INFORMATION | |
SEGMENT INFORMATION | 13. 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 two reportable segments: Illinois Basin and Appalachia, and we have an "all other" category referred to as Other and Corporate. Our 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 Illinois Basin reportable segment is comprised of multiple operating segments, including current operating mining complexes a) Webster County Coal, LLC's Dotiki mining complex, b) Gibson County Coal, LLC's mining complex, which includes the Gibson North (currently idled) and Gibson South mines, c) White County Coal, LLC's Pattiki mining complex ("Pattiki"), d) Warrior Coal, LLC's mining complex, e) River View Coal, LLC's mining complex and f) the Hamilton mining complex. The Pattiki mining complex is currently expected to cease production by the end of 2016. The Illinois Basin reportable segment also includes Hopkins County Coal, LLC's mining complex, which includes the Elk Creek mine and the Fies property, Sebree Mining, LLC's mining complex ("Sebree"), which includes the Onton mine, Steamport, LLC and certain Sebree reserves, CR Services, LLC, CR Machine Shop, LLC, certain properties and equipment of Alliance Resource Properties, ARP Sebree, LLC, ARP Sebree South, LLC and UC Coal, LLC and its subsidiaries, UC Mining, LLC and UC Processing, LLC (collectively "UC Coal"). The Sebree and Fies properties are held by us for future mine development. UC Coal equipment assets acquired in 2015 are being deployed as needed at various Illinois Basin operating mines. The Elk Creek mine depleted its reserves in March 2016 and ceased production on April 1, 2016. Our Onton and Gibson North mines have been idled since the fourth quarter of 2015 in response to market conditions. The Appalachia reportable segment is comprised of multiple operating segments, including the Mettiki mining complex, the Tunnel Ridge, LLC mining complex and the MC Mining, LLC mining complex. The Mettiki mining complex includes Mettiki Coal (WV), LLC's Mountain View mine and Mettiki Coal, LLC's preparation plant. During the fourth quarter of 2015, we surrendered the Penn Ridge leases as they were no longer a core part of our foreseeable development plans. Other and Corporate includes marketing and administrative expenses, ASI and its subsidiary, Matrix Design Group, LLC and its subsidiaries Matrix Design International, LLC and Matrix Design Africa (PTY) LTD ("Matrix Design"), Alliance Design Group, LLC ("Alliance Design") (collectively, the Matrix Design entities and Alliance Design are referred to as the "Matrix Group"), ASI's ownership of aircraft, the Mt. Vernon Transfer Terminal, LLC ("Mt. Vernon") dock activities, coal brokerage activity, Mid-America Carbonates, LLC ("MAC"), certain activities of Alliance Resource Properties, Pontiki Coal, LLC's throughput receivables and prior workers' compensation and pneumoconiosis liabilities, Wildcat Insurance, LLC ("Wildcat Insurance"), Alliance Minerals, and its affiliate, Cavalier Minerals (Note 7 – Variable Interest Entities), which holds an equity investment in AllDale Minerals (Note 8 – Equity Investment), and AROP Funding (Note 6 - Long-Term Debt). Reportable segment results as of and for the three and nine months ended September 30, 2016 and 2015 are presented below. Illinois Other and Elimination Basin Appalachia Corporate (1) Consolidated (in thousands) Three months ended September 30, 2016 Total revenues (2) $ $ $ $ $ Segment Adjusted EBITDA Expense (3) Segment Adjusted EBITDA (4) Capital expenditures — Three months ended September 30, 2015 Total revenues (2) $ $ $ $ $ Segment Adjusted EBITDA Expense (3) Segment Adjusted EBITDA (4)(5) Capital expenditures — Nine months ended September 30, 2016 Total revenues (2) $ $ $ $ $ Segment Adjusted EBITDA Expense (3) Segment Adjusted EBITDA (4) Total assets (6) Capital expenditures — Nine months ended September 30, 2015 Total revenues (2) $ $ $ $ $ Segment Adjusted EBITDA Expense (3) Segment Adjusted EBITDA (4)(5) Total assets (6) Capital expenditures (7) — (1) The elimination column represents the elimination of intercompany transactions and is primarily comprised of sales from the Matrix Group and MAC to our mining operations, coal sales and purchases between operations within different segments, sales of receivables to AROP Funding and insurance premiums paid to Wildcat Insurance. (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, MAC revenues, Wildcat Insurance revenues and brokerage coal sales. (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) : Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 (in thousands) Segment Adjusted EBITDA Expense $ $ $ $ Outside coal purchases Other income Operating expenses (excluding depreciation, depletion and amortization) $ $ $ $ (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, general and administrative expenses and asset impairment. Management therefore is able to focus solely on the evaluation of segment operating profitability as it relates to our revenues and operating expenses, which are primarily controlled by our segments. Consolidated Segment Adjusted EBITDA is reconciled to net income as follows: Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 (in thousands) Consolidated Segment Adjusted EBITDA $ $ $ $ General and administrative Depreciation, depletion and amortization Asset impairment — — Interest expense, net Income tax expense Net income $ $ $ $ (5) Includes equity in loss of affiliates for the three and nine months ended September 30, 2015 of $17.1 million and $48.5 million, respectively, in the Illinois Basin segment. (6) Total assets for Other and Corporate include investments in affiliates of $128.1 million and $48.0 million at September 30, 2016 and 2015, respectively. Capital expenditures shown above exclude the Hamilton acquisition on July 31, 2015, the Patriot acquisition on February 3, 2015 and the MAC acquisition on January 1, 2015 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2016 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 14. On October 28, 2016, we declared a quarterly distribution for the quarter ended September 30, 2016, of $0.4375 per unit, on all common units outstanding, totaling approximately $52.4 million, including our managing general partner's incentive distributions, payable on November 14, 2016 to all unitholders of record as of November 7, 2016. |
ORGANIZATION AND PRESENTATION (
ORGANIZATION AND PRESENTATION (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
ORGANIZATION AND PRESENTATION | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements include the accounts and operations of the ARLP Partnership and present the consolidated financial position as of September 30, 2016 and December 31, 2015, the results of operations and comprehensive income for the three and nine months ended September 30, 2016 and 2015 and the cash flows for the nine months ended September 30, 2016 and 2015 of ARLP, the Intermediate Partnership (a subsidiary of ARLP and a variable interest entity of which ARLP is the primary beneficiary), Alliance Coal (a variable interest entity of which the Intermediate Partnership is the primary beneficiary) and other directly and indirectly wholly- and majority-owned subsidiaries of the Intermediate Partnership and Alliance Coal. The Intermediate Partnership, Alliance Coal and their wholly- and majority-owned subsidiaries represent virtually all the net assets of the ARLP Partnership. MGP's interests in both Alliance Coal and the Intermediate Partnership and SGP's 0.01% interest in the Intermediate Partnership are reported as part of the overall two percent general partner interest in the ARLP Partnership. MGP's incentive distribution rights in ARLP are also reported with the general partner interest in ARLP. All intercompany transactions and accounts have been eliminated. See Note 7 – Variable Interest Entities for more information regarding ARLP's consolidation of the Intermediate Partnership and Alliance Coal. See Note 9 – Net Income of ARLP Per Limited Partner Unit for more information regarding MGP's incentive distribution rights in ARLP. These condensed consolidated financial statements and notes are unaudited. However, in the opinion of management, these financial statements reflect all normal recurring adjustments necessary for a fair presentation of the results for the periods presented. Results for interim periods are not necessarily indicative of results to be expected for the full year ending December 31, 2016. These condensed consolidated financial statements and notes are prepared pursuant to the rules and regulations of the Securities and Exchange Commission for interim reporting and do not include all of the information normally included with financial statements prepared in accordance with generally accepted accounting principles ("GAAP") of the United States. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2015. |
Use of Estimates | Use of Estimates The preparation of the ARLP Partnership's condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in our condensed consolidated financial statements. Actual results could differ from those estimates. |
Goodwill | Goodwill Goodwill represents the excess of cost over the fair value of net assets of acquired businesses. Goodwill is not amortized, but instead is evaluated for impairment periodically. We evaluate goodwill for impairment annually on November 30th, or more often if events or circumstances indicate that goodwill might be impaired. The reporting unit or units used to evaluate and measure goodwill for impairment are determined primarily from the manner in which the business is managed or operated. A reporting unit is an operating segment or a component that is one level below an operating segment. There were no impairments of goodwill during the nine months ended September 30, 2016. In future periods it is reasonably possible that a variety of circumstances could result in an impairment of our goodwill. |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
INVENTORIES | |
Schedule of inventories | September 30, December 31, 2016 2015 (in thousands) Coal $ $ Supplies (net of reserve for obsolescence of $4,005 and $3,841, respectively) Total inventory $ $ |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
FAIR VALUE MEASUREMENTS | |
Summary of fair value measurements within the hierarchy | September 30, 2016 December 31, 2015 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 (in thousands) Measured on a recurring basis: Contingent consideration — — — — Additional disclosures: Long-term debt — — — — Total $ — $ $ $ — $ $ |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
LONG-TERM DEBT | |
Schedule of long-term debt | Unamortized Principal Debt Issuance Costs September 30, December 31, September 30, December 31, 2016 2015 2016 2015 (in thousands) Revolving Credit facility $ $ $ $ Series B senior notes Term loan Securitization facility — — Less current maturities Total long-term debt $ $ $ $ |
VARIABLE INTEREST ENTITIES (Tab
VARIABLE INTEREST ENTITIES (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
VARIABLE INTEREST ENTITIES | |
Schedule of contributions and commitments | Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 (in thousands) Alliance Minerals Beginning cumulative commitment fulfilled $ $ $ $ Capital contributions - Cash Capital contributions - AllDale Minerals' distributions received by Cavalier Minerals — — Ending cumulative commitment fulfilled Remaining commitment Total committed $ $ $ $ Bluegrass Minerals Beginning cumulative commitment fulfilled $ $ $ $ Capital contributions - Cash Capital contributions - AllDale Minerals' distributions received by Cavalier Minerals — — Ending cumulative commitment fulfilled Remaining commitment Total committed $ $ $ $ |
Schedule of distributions | Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 (in thousands) Alliance Minerals $ $ — $ $ — Bluegrass Minerals — — |
EQUITY INVESTMENT (Tables)
EQUITY INVESTMENT (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
EQUITY INVESTMENT | |
Schedule of changes in equity investment | Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 (in thousands) Beginning balance $ $ $ $ Contributions Equity in income (loss) of affiliates, net Distributions received — — Ending balance $ $ $ $ |
NET INCOME OF ARLP PER LIMITE28
NET INCOME OF ARLP PER LIMITED PARTNER UNIT (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
NET INCOME OF ARLP PER LIMITED PARTNER UNIT | |
Reconciliation of net income and EPU calculations | Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 (in thousands, except per unit data) Net income of ARLP $ $ $ $ Adjustments: Managing general partner's priority distributions General partners' 2% equity ownership Limited partners' interest in net income of ARLP Less: Distributions to participating securities Undistributed earnings attributable to participating securities — Net income of ARLP available to limited partners $ $ $ $ Weighted-average limited partner units outstanding – basic and diluted Basic and diluted net income of ARLP per limited partner unit (1) $ $ $ $ (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. The combined total of LTIP, SERP and Deferred Compensation Plan units of 1,227 and 735 for the three and nine months ended September 30, 2016, respectively, and 627 and 735 for the three and nine months ended September 30, 2015, respectively, were considered anti-dilutive under the treasury stock method. |
WORKERS' COMPENSATION AND PNE29
WORKERS' COMPENSATION AND PNEUMOCONIOSIS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Accrued Workers Compensation And Pneumoconiosis Benefits | |
Reconciliation of changes in workers' compensation liability | Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 (in thousands) Beginning balance $ $ $ $ Accruals increase Payments Interest accretion Valuation loss (gain) (1) — — Ending balance $ $ $ $ (1) Our liability for the estimated present value of current workers′ compensation benefits is based on our actuarial estimates. Our actuarial calculations are based on a blend of actuarial projection methods and numerous assumptions including claim development patterns, mortality, medical costs and interest rates. We conducted a mid-year review of our actuarial assumptions in the second quarter of 2016 which resulted in a valuation loss in 2016 primarily attributable to a decrease in the discount rate used to calculate the estimated present value of future obligations from 3.63% at December 31, 2015 to 2.89% at June 30, 2016, partially offset by favorable changes in claims development. Our mid-year actuarial review in the second quarter of 2015 resulted in a valuation gain primarily attributable to favorable changes in claims development and an increase in the discount rate from 3.41% at December 31, 2014 to 3.71% at June 30, 2015. Absent evidence of significant changes in underlying activity or assumptions, the actuarial study is performed at June 30 and December 31 each year. Accordingly, the discount rate used in our assumptions at June 30, 2016 and 2015 continue in use for our third quarter liability estimates for both years. |
Pneumoconiosis benefits | |
Accrued Workers Compensation And Pneumoconiosis Benefits | |
Components of net periodic benefit cost | Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 (in thousands) Service cost $ $ $ $ Interest cost Amortization of net actuarial gain (1) Net periodic benefit cost $ $ $ $ (1) Amortization of net actuarial gain is included in the Operating expenses (excluding depreciation, depletion and amortization) line item within our condensed consolidated statements of income. |
COMPONENTS OF PENSION PLAN NE30
COMPONENTS OF PENSION PLAN NET PERIODIC BENEFIT COSTS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Pension Plan | |
Employee Benefit Plans | |
Components of net periodic benefit cost | Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 (in thousands) Service cost $ $ $ $ Interest cost Expected return on plan assets Amortization of net loss (1) Net periodic benefit cost $ $ $ $ (1) Amortization of net actuarial loss is included in the Operating expenses (excluding depreciation, depletion and amortization) line item within our condensed consolidated statements of income. |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
SEGMENT INFORMATION | |
Schedule of reportable segment results | Reportable segment results as of and for the three and nine months ended September 30, 2016 and 2015 are presented below. Illinois Other and Elimination Basin Appalachia Corporate (1) Consolidated (in thousands) Three months ended September 30, 2016 Total revenues (2) $ $ $ $ $ Segment Adjusted EBITDA Expense (3) Segment Adjusted EBITDA (4) Capital expenditures — Three months ended September 30, 2015 Total revenues (2) $ $ $ $ $ Segment Adjusted EBITDA Expense (3) Segment Adjusted EBITDA (4)(5) Capital expenditures — Nine months ended September 30, 2016 Total revenues (2) $ $ $ $ $ Segment Adjusted EBITDA Expense (3) Segment Adjusted EBITDA (4) Total assets (6) Capital expenditures — Nine months ended September 30, 2015 Total revenues (2) $ $ $ $ $ Segment Adjusted EBITDA Expense (3) Segment Adjusted EBITDA (4)(5) Total assets (6) Capital expenditures (7) — (1) The elimination column represents the elimination of intercompany transactions and is primarily comprised of sales from the Matrix Group and MAC to our mining operations, coal sales and purchases between operations within different segments, sales of receivables to AROP Funding and insurance premiums paid to Wildcat Insurance. (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, MAC revenues, Wildcat Insurance revenues and brokerage coal sales. (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) : Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 (in thousands) Segment Adjusted EBITDA Expense $ $ $ $ Outside coal purchases Other income Operating expenses (excluding depreciation, depletion and amortization) $ $ $ $ (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, general and administrative expenses and asset impairment. Management therefore is able to focus solely on the evaluation of segment operating profitability as it relates to our revenues and operating expenses, which are primarily controlled by our segments. Consolidated Segment Adjusted EBITDA is reconciled to net income as follows: Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 (in thousands) Consolidated Segment Adjusted EBITDA $ $ $ $ General and administrative Depreciation, depletion and amortization Asset impairment — — Interest expense, net Income tax expense Net income $ $ $ $ (5) Includes equity in loss of affiliates for the three and nine months ended September 30, 2015 of $17.1 million and $48.5 million, respectively, in the Illinois Basin segment. (6) Total assets for Other and Corporate include investments in affiliates of $128.1 million and $48.0 million at September 30, 2016 and 2015, respectively. (7) Capital expenditures shown above exclude the Hamilton acquisition on July 31, 2015, the Patriot acquisition on February 3, 2015 and the MAC acquisition on January 1, 2015. |
Reconciliation of consolidated Segment Adjusted EBITDA Expense to operating expenses (excluding depreciation, depletion and amortization) | Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 (in thousands) Segment Adjusted EBITDA Expense $ $ $ $ Outside coal purchases Other income Operating expenses (excluding depreciation, depletion and amortization) $ $ $ $ |
Reconciliation of consolidated Segment Adjusted EBITDA to net income | Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 (in thousands) Consolidated Segment Adjusted EBITDA $ $ $ $ General and administrative Depreciation, depletion and amortization Asset impairment — — Interest expense, net Income tax expense Net income $ $ $ $ |
ORGANIZATION AND PRESENTATION32
ORGANIZATION AND PRESENTATION (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2016USD ($)shares | |
Ownership interests | |
Ownership percentage by general partners | 2.00% |
Impairments of goodwill (in dollars) | $ | $ 0 |
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 | shares | 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 | 1.0001% |
Alliance Coal | MGP | |
Ownership interests | |
Ownership percentage by general partners | 0.001% |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
INVENTORIES | ||
Coal | $ 56,366 | $ 83,682 |
Supplies (net of reserve for obsolescence of $3,729 and $3,841, respectively) | 33,538 | 37,399 |
Total inventory | 89,904 | 121,081 |
Reserve for obsolescence | 4,005 | $ 3,841 |
Adjustment to reduce carrying value of coal inventories to market | $ 16,100 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - Estimated fair value - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Level 2 | ||
FAIR VALUE MEASUREMENTS | ||
Long-term debt | $ 667,425 | $ 819,099 |
Total | 667,425 | 819,099 |
Level 3 | ||
FAIR VALUE MEASUREMENTS | ||
Total | 7,000 | 10,400 |
Recurring | Level 3 | ||
FAIR VALUE MEASUREMENTS | ||
Contingent consideration | $ 7,000 | $ 10,400 |
LONG-TERM DEBT - Components (De
LONG-TERM DEBT - Components (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Principal | ||
Long-term debt including current and non-current | $ 655,000 | $ 819,350 |
Less current maturities | (510,000) | (239,350) |
Total long-term debt | 145,000 | 580,000 |
Unamortized Debt Issuance Costs | ||
Unamortized debt issuance costs including current and non-current | (896) | (1,844) |
Less current maturities | 845 | 1,264 |
Total unamortized debt issuance costs | (51) | (580) |
Revolving Credit Facility | ||
Principal | ||
Long-term debt including current and non-current | 310,000 | 385,000 |
Unamortized Debt Issuance Costs | ||
Unamortized debt issuance costs including current and non-current | (573) | (1,234) |
Term Loan | ||
Principal | ||
Long-term debt including current and non-current | 100,000 | 206,250 |
Unamortized Debt Issuance Costs | ||
Unamortized debt issuance costs including current and non-current | (205) | (441) |
Series B Senior Notes | ||
Principal | ||
Long-term debt including current and non-current | 145,000 | 145,000 |
Unamortized Debt Issuance Costs | ||
Unamortized debt issuance costs including current and non-current | (118) | (169) |
Securitization Facility | ||
Principal | ||
Long-term debt including current and non-current | $ 100,000 | $ 83,100 |
LONG-TERM DEBT - ARLP Debt Arra
LONG-TERM DEBT - ARLP Debt Arrangements and Securitization Facility (Details) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2016USD ($) | Sep. 30, 2016USD ($) | Dec. 31, 2015USD ($) | |
Long-Term Debt | |||
Borrowings | $ 655,000 | $ 655,000 | $ 819,350 |
ARLP Debt Arrangements | |||
Long-Term Debt | |||
ARLP debt arrangements requirements, period over which the ratios are required to be maintained | 12 months | ||
Actual debt to cash flow ratio for trailing twelve months | 1.12 | ||
Actual cash flow to interest expense ratio for trailing twelve months | 22 | ||
ARLP Debt Arrangements | Maximum | |||
Long-Term Debt | |||
ARLP debt arrangements requirements, debt to cash flow ratio | 3 | ||
ARLP Debt Arrangements | Minimum | |||
Long-Term Debt | |||
ARLP debt arrangements requirements, cash flow to interest expense ratio | 3 | ||
Revolving Credit Facility | |||
Long-Term Debt | |||
Revolving credit facility | $ 700,000 | $ 700,000 | |
Borrowings | 310,000 | 310,000 | 385,000 |
Letters of credit outstanding | 5,700 | 5,700 | |
Line of credit facility, available for borrowing | $ 384,300 | 384,300 | |
Frequency of commitment fee on undrawn portion | annual | ||
Annual commitment fee percentage, undrawn portion | 0.25% | ||
Term Loan | |||
Long-Term Debt | |||
Borrowings | $ 100,000 | 100,000 | 206,250 |
Series B Senior Notes | |||
Long-Term Debt | |||
Borrowings | 145,000 | 145,000 | 145,000 |
Securitization Facility | |||
Long-Term Debt | |||
Revolving credit facility | 100,000 | 100,000 | |
Borrowings | $ 100,000 | $ 100,000 | $ 83,100 |
LONG-TERM DEBT - Cavalier (Deta
LONG-TERM DEBT - Cavalier (Details) - Cavalier Credit Agreement $ in Millions | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Long-Term Debt | |
Credit facility amount | $ 100 |
Annual commitment fee percentage, undrawn portion | 0.00% |
Threshold aggregate borrowings to trigger principal repayment | $ 90 |
Period for initial amount of payments | 2 years |
Minimum | |
Long-Term Debt | |
Initial quarterly payments | $ 1.3 |
Quarterly payments after initial period | $ 2.5 |
Quarterly payments as a percentage of excess cash flow | 50.00% |
LIBOR | |
Long-Term Debt | |
Basis spread for variable interest rate (as a percent) | 6.00% |
LONG-TERM DEBT - Sale-Leaseback
LONG-TERM DEBT - Sale-Leaseback (Details) - USD ($) $ in Thousands | Jun. 29, 2016 | Sep. 30, 2016 |
Sale-leaseback transaction | ||
Proceeds from sale of mining equipment leased back | $ 33,881 | |
Sale-leaseback of mining equipment, June 2016 | ||
Sale-leaseback transaction | ||
Proceeds from sale of mining equipment leased back | $ 33,900 | |
Monthly rent under lease agreement | $ 700 | |
Balloon payment due at end of lease term (as a percent) | 20.00% | |
Deferred loss | $ 7,600 | |
Sale-leaseback of mining equipment, June 2016 | Minimum | ||
Sale-leaseback transaction | ||
Term of lease | 3 years | |
Sale-leaseback of mining equipment, June 2016 | Maximum | ||
Sale-leaseback transaction | ||
Term of lease | 4 years |
VARIABLE INTEREST ENTITIES - Ca
VARIABLE INTEREST ENTITIES - Cavalier Minerals (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Oct. 06, 2015 | Sep. 30, 2015 | Nov. 10, 2014 |
Cavalier Minerals | All Dale I | ||||
Variable Interest Entities | ||||
Noncontrolling ownership interest (as a percent) | 71.70% | |||
Cavalier Minerals | All Dale II | ||||
Variable Interest Entities | ||||
Noncontrolling ownership interest (as a percent) | 72.80% | |||
Funding Commitments | Alliance Minerals | Cavalier Minerals | ||||
Variable Interest Entities | ||||
Funding commitment | $ 17,834 | $ 878 | ||
Funding Commitments | Bluegrass Minerals | Cavalier Minerals | ||||
Variable Interest Entities | ||||
Funding commitment | $ 743 | $ 37 | ||
Funding Commitments | Cavalier Minerals | Cavalier Minerals | ||||
Variable Interest Entities | ||||
Funding commitment | $ 49,000 | |||
Funding Commitments | Cavalier Minerals | All Dale II | ||||
Variable Interest Entities | ||||
Funding commitment | $ 100,000 | |||
Initial Funding Commitment | Bluegrass Minerals | Cavalier Minerals | ||||
Variable Interest Entities | ||||
Funding commitment | 2,000 | |||
Additional Funding Commitment | Bluegrass Minerals | Cavalier Minerals | ||||
Variable Interest Entities | ||||
Funding commitment | 4,000 | |||
Variable Interest Entity, Primary Beneficiary | Initial Funding Commitment | Alliance Minerals | Cavalier Minerals | ||||
Variable Interest Entities | ||||
Funding commitment | $ 48,000 | |||
Variable Interest Entity, Primary Beneficiary | Additional Funding Commitment | Alliance Minerals | Cavalier Minerals | ||||
Variable Interest Entities | ||||
Funding commitment | $ 96,000 |
VARIABLE INTEREST ENTITIES - 40
VARIABLE INTEREST ENTITIES - Cavalier Minerals Commitments (Details) - Cavalier Minerals - Funding Commitments - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Alliance Minerals | ||||
Variable Interest Entities | ||||
Beginning cumulative commitment fulfilled | $ 95,597 | $ 30,675 | $ 63,498 | $ 11,520 |
Capital contributions - Cash | 30,184 | 16,447 | 61,360 | 35,602 |
Capital contributions - AllDale Minerals' distributions received by Cavalier Minerals | 385 | 1,308 | ||
Ending cumulative commitment fulfilled | 126,166 | 47,122 | 126,166 | 47,122 |
Remaining commitment | 17,834 | 878 | 17,834 | 878 |
Total committed | 144,000 | 48,000 | 144,000 | 48,000 |
Bluegrass Minerals | ||||
Variable Interest Entities | ||||
Beginning cumulative commitment fulfilled | 3,983 | 1,627 | 2,646 | 480 |
Capital contributions - Cash | 1,258 | 336 | 2,557 | 1,483 |
Capital contributions - AllDale Minerals' distributions received by Cavalier Minerals | 16 | 54 | ||
Ending cumulative commitment fulfilled | 5,257 | 1,963 | 5,257 | 1,963 |
Remaining commitment | 743 | 37 | 743 | 37 |
Total committed | $ 6,000 | $ 2,000 | $ 6,000 | $ 2,000 |
VARIABLE INTEREST ENTITIES - 41
VARIABLE INTEREST ENTITIES - Cavalier Minerals Distributions (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Variable Interest Entities | ||||
Distributions paid to Partners | $ 194,870 | $ 258,697 | ||
Cavalier Minerals | Alliance Minerals | ||||
Variable Interest Entities | ||||
Distributions paid to Partners | $ 1,444 | $ 0 | $ 1,444 | 0 |
Cavalier Minerals | Bluegrass Minerals | ||||
Variable Interest Entities | ||||
Incentive distribution for noncontrolling owners (as a percent) | 25.00% | |||
Distributions paid to Partners | $ 60 | $ 0 | $ 60 | $ 0 |
Cavalier Minerals | Variable Interest Entity, Primary Beneficiary | Alliance Minerals | ||||
Variable Interest Entities | ||||
Ownership interest in VIE (as a percent) | 96.00% |
VARIABLE INTEREST ENTITIES - Ot
VARIABLE INTEREST ENTITIES - Other VIEs (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2016USD ($)company | |
Variable Interest Entities | |
Ownership percentage by general partners | 2.00% |
Percentage of available cash distributed | 100.00% |
Variable Interest Entity, Primary Beneficiary | Alliance Coal | Intermediate Partnership | |
Variable Interest Entities | |
Ownership interest in VIE (as a percent) | 99.999% |
Variable Interest Entity, Primary Beneficiary | Intermediate Partnership | ARLP | |
Variable Interest Entities | |
Ownership interest in VIE (as a percent) | 98.9899% |
WKY CoalPlay | Variable Interest Entity, Not Primary Beneficiary | |
Variable Interest Entities | |
Number of limited liability companies related to MGP, that formed the related party together with SGP Land | company | 2 |
WKY CoalPlay | Variable Interest Entity, Not Primary Beneficiary | Coal lease | |
Variable Interest Entities | |
Payments for royalties | $ 10.8 |
Advance royalties | $ 20.4 |
MGP | Intermediate Partnership | |
Variable Interest Entities | |
Ownership percentage by general partners | 1.0001% |
MGP | Alliance Coal | |
Variable Interest Entities | |
Ownership percentage by general partners | 0.001% |
MGP | ARLP | |
Variable Interest Entities | |
Ownership percentage by general partners | 0.99% |
EQUITY INVESTMENT (Details)
EQUITY INVESTMENT (Details) - USD ($) $ in Thousands | Nov. 10, 2014 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 |
Changes in equity method investment | |||||
Beginning balance | $ 64,509 | ||||
Equity in income (loss) of affiliates, net | $ 1,105 | $ (17,221) | 1,041 | $ (49,049) | |
Ending balance | 128,051 | 128,051 | |||
AllDale Minerals | |||||
Equity Investments | |||||
Contribution to equity investee | 32,181 | 16,866 | 65,367 | 37,374 | |
Changes in equity method investment | |||||
Beginning balance | 96,670 | 31,314 | 64,509 | 11,257 | |
Contributions | 32,181 | 16,866 | 65,367 | 37,374 | |
Equity in income (loss) of affiliates, net | 1,105 | (146) | 1,041 | (597) | |
Distributions received | (1,905) | (2,866) | |||
Ending balance | $ 128,051 | $ 48,034 | $ 128,051 | $ 48,034 | |
AllDale Minerals | Cavalier Minerals | |||||
Equity Investments | |||||
Contribution to equity investee | $ 7,400 | ||||
Changes in equity method investment | |||||
Contributions | $ 7,400 |
NET INCOME OF ARLP PER LIMITE44
NET INCOME OF ARLP PER LIMITED PARTNER UNIT - Incentive Distributions (Details) - MGP | 9 Months Ended |
Sep. 30, 2016$ / shares | |
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) | $ 0.1375 |
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) | $ 0.15625 |
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) | $ 0.1875 |
NET INCOME OF ARLP PER LIMITE45
NET INCOME OF ARLP PER LIMITED PARTNER UNIT - Reconciliation (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
NET INCOME OF ARLP PER LIMITED PARTNER UNIT | ||||
Net income of ARLP | $ 89,780 | $ 83,379 | $ 219,803 | $ 284,723 |
Managing general partner priority distributions | (19,159) | (36,371) | (57,477) | (108,205) |
General partners' 2% equity ownership | (1,412) | (940) | (3,246) | (3,530) |
LIMITED PARTNERS' INTEREST IN NET INCOME OF ARLP | 69,209 | 46,068 | 159,080 | 172,988 |
Distributions to participating securities | (887) | (880) | (2,640) | (2,602) |
Undistributed earnings attributable to participating securities | (974) | (1,524) | (367) | |
Net income of ARLP available to limited partners | $ 67,348 | $ 45,188 | $ 154,916 | $ 170,019 |
Weighted average limited partner units outstanding - basic (in units) | 74,375,025 | 74,188,784 | 74,347,157 | 74,169,538 |
Weighted average limited partner units outstanding - diluted (in units) | 74,375,025 | 74,188,784 | 74,347,157 | 74,169,538 |
Basic net income of ARLP per limited partner unit (in dollars per unit) | $ 0.91 | $ 0.61 | $ 2.08 | $ 2.29 |
Diluted net income of ARLP per limited partner unit (in dollars per unit) | $ 0.91 | $ 0.61 | $ 2.08 | $ 2.29 |
Anti-dilutive under the treasury stock method (in units) | 1,227,000 | 627,000 | 735,000 | 735,000 |
Ownership percentage by general partners | 2.00% |
WORKERS' COMPENSATION AND PNE46
WORKERS' COMPENSATION AND PNEUMOCONIOSIS - Workers' Compensation Liability (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Reconciliation of changes in the workers' compensation liability | |||||||||
Beginning balance | $ 56,403 | $ 55,671 | $ 54,558 | $ 57,557 | |||||
Accruals increase | 2,480 | 2,959 | 7,904 | 9,126 | |||||
Payments | (2,238) | (2,250) | (8,226) | (6,864) | |||||
Interest accretion | 492 | 489 | 1,476 | 1,466 | |||||
Valuation loss (gain) | [1] | 1,425 | (4,416) | ||||||
Ending balance | $ 56,403 | $ 54,558 | $ 55,671 | $ 57,557 | $ 57,137 | $ 56,869 | $ 57,137 | $ 56,869 | |
Workers' compensation discount rate | 2.89% | 3.63% | 3.71% | 3.41% | |||||
[1] | Our liability for the estimated present value of current workers′ compensation benefits is based on our actuarial estimates. Our actuarial calculations are based on a blend of actuarial projection methods and numerous assumptions including claim development patterns, mortality, medical costs and interest rates. We conducted a mid-year review of our actuarial assumptions in the second quarter of 2016 which resulted in a valuation loss in 2016 primarily attributable to a decrease in the discount rate used to calculate the estimated present value of future obligations from 3.63% at December 31, 2015 to 2.89% at June 30, 2016, partially offset by favorable changes in claims development. Our mid-year actuarial review in the second quarter of 2015 resulted in a valuation gain primarily attributable to favorable changes in claims development and an increase in the discount rate from 3.41% at December 31, 2014 to 3.71% at June 30, 2015 |
WORKERS' COMPENSATION AND PNE47
WORKERS' COMPENSATION AND PNEUMOCONIOSIS - Periodic Benefit Cost (Details) - Pneumoconiosis benefits - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | ||
Accrued Workers Compensation And Pneumoconiosis Benefits | |||||
Service cost | $ 644 | $ 773 | $ 1,936 | $ 2,237 | |
Interest cost | 627 | 524 | 1,880 | 1,571 | |
Amortization of net actuarial gain | [1] | (660) | (113) | (1,982) | (338) |
Net periodic benefit cost | $ 611 | $ 1,184 | $ 1,834 | $ 3,470 | |
[1] | Amortization of net actuarial loss is included in the Operating expenses (excluding depreciation, depletion and amortization) line item within our condensed consolidated statements of income. |
COMPENSATION PLANS - Long-Term
COMPENSATION PLANS - Long-Term Incentive Plan (Details) - ARLP LTIP - USD ($) $ / shares in Units, $ in Millions | Feb. 11, 2016 | Feb. 02, 2016 | Jan. 01, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Jan. 22, 2016 |
Compensation Plans | |||||||||
Common units issued upon vesting | 176,319 | 176,319 | |||||||
Common unit-based compensation expense | $ 3.1 | $ 2.8 | $ 9 | $ 8.3 | |||||
Units available for grant | 2,800,000 | 2,800,000 | |||||||
Unrecognized compensation expense (in dollars) | $ 14.6 | $ 14.6 | |||||||
Weighted-average period for recognition of expense | 1 year 7 months 6 days | ||||||||
Total unit-based obligation recorded | 21.5 | $ 21.5 | |||||||
Phantom Share Units (PSUs) | |||||||||
Compensation Plans | |||||||||
Additional grants authorized (in units) | 969,028 | ||||||||
Units granted | 960,992 | ||||||||
Fair value as intrinsic value at date of grant (in dollars per unit) | $ 12.38 | ||||||||
Intrinsic value of outstanding grants (in dollars) | $ 35.7 | $ 35.7 | |||||||
Phantom Share Units (PSUs) | 2013 Grants | |||||||||
Compensation Plans | |||||||||
Units for which vesting requirements were deemed satisfied | 284,272 | ||||||||
Forfeitures (in units) | 9,178 |
COMPENSATION PLANS - SERP and D
COMPENSATION PLANS - SERP and Deferred Compensation Plan (Details) - SERP and Deferred Compensation Plans - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Compensation Plans | ||||
Common unit-based compensation expense | $ 0.3 | $ 0.4 | $ 0.9 | $ 1 |
Total unit-based obligation recorded | $ 14.3 | $ 14.3 | ||
Phantom Share Units (PSUs) | ||||
Compensation Plans | ||||
Units granted | 56,473 | 24,741 | ||
Fair value (in dollars per unit) | $ 14 | $ 30.23 | ||
Units outstanding | 475,692 | 475,692 | ||
Intrinsic value of outstanding grants (in dollars) | $ 10.6 | $ 10.6 |
COMPONENTS OF PENSION PLAN NE50
COMPONENTS OF PENSION PLAN NET PERIODIC BENEFIT COSTS (Details) - USD ($) $ in Thousands | Oct. 17, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Pension Plan | ||||||
Components of net periodic benefit cost: | ||||||
Service cost | $ 524 | $ 618 | $ 1,720 | $ 1,855 | ||
Interest cost | 1,118 | 1,074 | 3,381 | 3,222 | ||
Expected return on plan assets | (1,363) | (1,398) | (3,937) | (4,193) | ||
Amortization of net loss | [1] | 787 | 839 | 2,365 | 2,516 | |
Net periodic benefit cost | $ 1,066 | $ 1,133 | 3,529 | $ 3,400 | ||
2015 plan year | ||||||
Components of net periodic benefit cost: | ||||||
Employer contribution payments | 600 | |||||
2016 plan year | ||||||
Components of net periodic benefit cost: | ||||||
Employer contribution payments | $ 700 | $ 1,300 | ||||
[1] | Amortization of net actuarial loss is included in the Operating expenses (excluding depreciation, depletion and amortization) line item within our condensed consolidated statements of income. |
SEGMENT INFORMATION - Segment R
SEGMENT INFORMATION - Segment Results (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)segment | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($) | |
Segment Information | |||||
Number of reportable segments | segment | 2 | ||||
Reportable segment results | |||||
Total revenues | $ 552,074 | $ 566,445 | $ 1,404,053 | $ 1,731,581 | |
Segment Adjusted EBITDA Expense | 348,932 | 336,074 | 848,482 | 1,045,530 | |
Segment Adjusted EBITDA | 196,555 | 203,755 | 536,880 | 612,679 | |
Total assets | 2,244,275 | 2,505,393 | 2,244,275 | 2,505,393 | $ 2,361,286 |
Capital expenditures | 21,665 | 51,424 | 70,267 | 159,182 | |
Additional information | |||||
Equity in income (loss) of affiliates, net | 1,105 | (17,221) | 1,041 | (49,049) | |
Investments in affiliate | 128,051 | 128,051 | $ 64,509 | ||
Operating segments | Illinois Basin | |||||
Reportable segment results | |||||
Total revenues | 378,488 | 420,517 | 962,244 | 1,237,819 | |
Segment Adjusted EBITDA Expense | 246,946 | 249,615 | 572,200 | 728,048 | |
Segment Adjusted EBITDA | 126,004 | 147,522 | 376,056 | 445,819 | |
Total assets | 1,541,513 | 1,799,170 | 1,541,513 | 1,799,170 | |
Capital expenditures | 10,893 | 37,350 | 41,264 | 105,536 | |
Additional information | |||||
Equity in income (loss) of affiliates, net | (17,100) | (48,500) | |||
Operating segments | Appalachia | |||||
Reportable segment results | |||||
Total revenues | 154,852 | 136,741 | 411,212 | 460,154 | |
Segment Adjusted EBITDA Expense | 95,601 | 80,421 | 262,043 | 296,980 | |
Segment Adjusted EBITDA | 57,097 | 53,380 | 143,589 | 154,760 | |
Total assets | 480,920 | 565,213 | 480,920 | 565,213 | |
Capital expenditures | 10,306 | 11,616 | 27,317 | 49,055 | |
Operating segments | Other and Corporate | |||||
Reportable segment results | |||||
Total revenues | 41,827 | 40,264 | 88,574 | 147,079 | |
Segment Adjusted EBITDA Expense | 26,664 | 33,701 | 63,575 | 124,321 | |
Segment Adjusted EBITDA | 16,268 | 6,266 | 25,876 | 21,752 | |
Total assets | 370,280 | 278,068 | 370,280 | 278,068 | |
Capital expenditures | 466 | 2,458 | 1,686 | 4,591 | |
Additional information | |||||
Investments in affiliate | 128,100 | 48,000 | 128,100 | 48,000 | |
Elimination | |||||
Reportable segment results | |||||
Total revenues | (23,093) | (31,077) | (57,977) | (113,471) | |
Segment Adjusted EBITDA Expense | (20,279) | (27,663) | (49,336) | (103,819) | |
Segment Adjusted EBITDA | (2,814) | (3,413) | (8,641) | (9,652) | |
Total assets | $ (148,438) | $ (137,058) | $ (148,438) | $ (137,058) |
SEGMENT INFORMATION - EBITDA Ex
SEGMENT INFORMATION - EBITDA Expense Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Reconciliation of consolidated Segment Adjusted EBITDA Expense to operating expenses (excluding depreciation, depletion and amortization) | ||||
Segment Adjusted EBITDA Expense | $ 348,932 | $ 336,074 | $ 848,482 | $ 1,045,530 |
Outside coal purchases | (1,514) | (2) | (1,514) | (326) |
Other income | 293 | 455 | 545 | 750 |
Operating expenses (excluding depreciation, depletion and amortization) | $ 347,711 | $ 336,527 | $ 847,513 | $ 1,045,954 |
SEGMENT INFORMATION - EBITDA Re
SEGMENT INFORMATION - EBITDA Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Reconciliation of consolidated Segment Adjusted EBITDA to net income | ||||
Consolidated Segment Adjusted EBITDA | $ 196,555 | $ 203,755 | $ 536,880 | $ 612,679 |
General and administrative | (18,114) | (17,948) | (53,015) | (52,336) |
Depreciation, depletion and amortization | (80,612) | (84,661) | (240,640) | (242,730) |
Asset impairment charge | (10,695) | (10,695) | ||
Interest expense, net | (7,998) | (7,067) | (23,378) | (22,205) |
Income tax expense (benefit) | (7) | (12) | (4) | (17) |
NET INCOME | $ 89,824 | $ 83,372 | $ 219,843 | $ 284,696 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent event $ / shares in Units, $ in Millions | Oct. 28, 2016USD ($)$ / shares |
Subsequent Event | |
Distribution declared (in dollars per unit) | $ / shares | $ 0.4375 |
Approximate distribution to be paid, including incentive distributions (in dollars) | $ | $ 52.4 |