Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 24, 2017 | Jun. 30, 2016 | |
Document and Entity Information | |||
Entity Registrant Name | ALLIANCE RESOURCE PARTNERS LP | ||
Entity Central Index Key | 1,086,600 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 670,497,506 | ||
Entity Common Units Outstanding | 74,597,036 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 39,782 | $ 33,431 |
Trade receivables | 152,032 | 122,875 |
Other receivables | 279 | 696 |
Due from affiliates | 271 | 190 |
Inventories, net | 61,051 | 121,081 |
Advance royalties, net | 1,207 | 6,820 |
Prepaid expenses and other assets | 22,050 | 29,812 |
Total current assets | 276,672 | 314,905 |
PROPERTY, PLANT AND EQUIPMENT: | ||
Property, plant and equipment, at cost | 2,920,988 | 3,044,260 |
Less accumulated depreciation, depletion and amortization | (1,335,145) | (1,243,985) |
Total property, plant and equipment, net | 1,585,843 | 1,800,275 |
OTHER ASSETS: | ||
Advance royalties, net | 29,372 | 21,295 |
Equity investments in affiliates | 138,817 | 64,509 |
Goodwill | 136,399 | 136,399 |
Other long-term assets | 25,939 | 23,903 |
Total other assets | 330,527 | 246,106 |
TOTAL ASSETS | 2,193,042 | 2,361,286 |
CURRENT LIABILITIES: | ||
Accounts payable | 64,055 | 83,597 |
Due to affiliates | 906 | 129 |
Accrued taxes other than income taxes | 18,273 | 15,621 |
Accrued payroll and related expenses | 41,576 | 37,031 |
Accrued interest | 316 | 306 |
Workers' compensation and pneumoconiosis benefits | 9,897 | 8,688 |
Current capital lease obligations | 27,196 | 19,764 |
Other current liabilities | 14,778 | 18,929 |
Current maturities, long-term debt, net | 149,874 | 239,016 |
Total current liabilities | 326,871 | 423,081 |
LONG-TERM LIABILITIES: | ||
Long-term debt, excluding current maturities, net | 399,446 | 578,490 |
Pneumoconiosis benefits | 62,822 | 60,077 |
Accrued pension benefit | 42,070 | 39,031 |
Workers' compensation | 40,400 | 47,486 |
Asset retirement obligations | 125,266 | 122,434 |
Long-term capital lease obligations | 85,540 | 80,150 |
Other liabilities | 17,203 | 21,174 |
Total long-term liabilities | 772,747 | 948,842 |
Total liabilities | 1,099,618 | 1,371,923 |
Alliance Resource Partners, L.P. ("ARLP") Partners' Capital: | ||
Limited Partners - Common Unitholders 74,375,025 and 74,188,784 units outstanding, respectively | 1,400,202 | 1,280,218 |
General Partners' deficit | (273,788) | (258,883) |
Accumulated other comprehensive loss | (38,540) | (34,557) |
Total ARLP Partners' Capital | 1,087,874 | 986,778 |
Noncontrolling interest | 5,550 | 2,585 |
Total Partners' Capital | 1,093,424 | 989,363 |
TOTAL LIABILITIES AND PARTNERS' CAPITAL | $ 2,193,042 | $ 2,361,286 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - shares | Dec. 31, 2016 | Dec. 31, 2015 |
CONSOLIDATED BALANCE SHEETS | ||
Limited Partners, Common Unitholders, units outstanding | 74,375,025 | 74,188,784 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
SALES AND OPERATING REVENUES: | |||
Coal sales | $ 1,861,788 | $ 2,158,006 | $ 2,208,611 |
Transportation revenues | 30,111 | 33,597 | 26,021 |
Other sales and operating revenues | 39,554 | 82,130 | 66,089 |
Total revenues | 1,931,453 | 2,273,733 | 2,300,721 |
EXPENSES: | |||
Operating expenses (excluding depreciation, depletion and amortization) | 1,138,848 | 1,377,053 | 1,383,360 |
Transportation expenses | 30,111 | 33,597 | 26,021 |
Outside coal purchases | 1,514 | 327 | 14 |
General and administrative | 72,529 | 67,484 | 72,552 |
Depreciation, depletion and amortization | 322,509 | 333,713 | 274,566 |
Asset impairment | 100,130 | ||
Total operating expenses | 1,565,511 | 1,912,304 | 1,756,513 |
INCOME FROM OPERATIONS | 365,942 | 361,429 | 544,208 |
Interest expense (net of interest capitalized of $358, $695 and $833, respectively) | (30,669) | (31,153) | (33,584) |
Interest income | 10 | 1,459 | 1,671 |
Equity in income (loss) of affiliates | 3,543 | (49,046) | (16,648) |
Acquisition gain, net | 22,548 | ||
Other income | 725 | 955 | 1,566 |
INCOME BEFORE INCOME TAXES | 339,551 | 306,192 | 497,213 |
INCOME TAX EXPENSE | 13 | 21 | |
NET INCOME | 339,538 | 306,171 | 497,213 |
LESS: NET LOSS (INCOME) ATTRIBUTABLE TO NONCONTROLLING INTEREST | (140) | 27 | 16 |
NET INCOME ATTRIBUTABLE TO ALLIANCE RESOURCE PARTNERS, L.P. ("NET INCOME OF ARLP") | 339,398 | 306,198 | 497,229 |
GENERAL PARTNERS' INTEREST IN NET INCOME OF ARLP | 80,911 | 146,338 | 138,274 |
LIMITED PARTNERS' INTEREST IN NET INCOME OF ARLP | $ 258,487 | $ 159,860 | $ 358,955 |
BASIC NET INCOME OF ARLP PER LIMITED PARTNER UNIT (in dollars per unit) | $ 3.39 | $ 2.11 | $ 4.77 |
DILUTED NET INCOME OF ARLP PER LIMITED PARTNER UNIT (in dollars per unit) | 3.39 | 2.11 | 4.77 |
DISTRIBUTIONS PAID PER LIMITED PARTNER UNIT (in dollars per unit) | $ 1.9875 | $ 2.6625 | $ 2.4725 |
WEIGHTED AVERAGE NUMBER OF UNITS OUTSTANDING - BASIC (in units) | 74,354,162 | 74,174,389 | 74,044,417 |
WEIGHTED AVERAGE NUMBER OF UNITS OUTSTANDING - DILUTED (in units) | 74,354,162 | 74,174,389 | 74,044,417 |
CONSOLIDATED STATEMENTS OF INC5
CONSOLIDATED STATEMENTS OF INCOME (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
CONSOLIDATED STATEMENTS OF INCOME | |||
Interest expense, interest capitalized | $ 358 | $ 695 | $ 833 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
NET INCOME | $ 339,538 | $ 306,171 | $ 497,213 | |
OTHER COMPREHENSIVE INCOME/(LOSS): | ||||
Total adjustments recognized | (3,983) | 1,290 | (26,128) | |
OTHER COMPREHENSIVE INCOME (LOSS) | (3,983) | 1,290 | (26,128) | |
COMPREHENSIVE INCOME | 335,555 | 307,461 | 471,085 | |
Less: Comprehensive (income) loss attributable to noncontrolling interest | (140) | 27 | 16 | |
COMPREHENSIVE INCOME ATTRIBUTABLE TO ARLP | 335,415 | 307,488 | 471,101 | |
Pension Plan | ||||
OTHER COMPREHENSIVE INCOME/(LOSS): | ||||
Prior service credit | (1,498) | |||
Net actuarial loss | (2,589) | (863) | (23,821) | |
Amortization of net actuarial (gain) loss (1) | [1] | 2,952 | 3,354 | 773 |
Total adjustments recognized | (1,135) | 2,491 | (23,048) | |
Pneumoconiosis benefits | ||||
OTHER COMPREHENSIVE INCOME/(LOSS): | ||||
Net actuarial loss | (205) | (750) | (2,029) | |
Amortization of net actuarial (gain) loss (1) | [1] | (2,643) | (451) | (1,051) |
Total adjustments recognized | $ (2,848) | $ (1,201) | $ (3,080) | |
[1] | Amortization of actuarial gain or loss is included in the computation of net periodic benefit cost (see Notes 13 and 17 for additional details). |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
NET INCOME | $ 339,538 | $ 306,171 | $ 497,213 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation, depletion and amortization | 322,509 | 333,713 | 274,566 |
Non-cash compensation expense | 13,885 | 12,631 | 11,250 |
Asset retirement obligations | 3,769 | 3,192 | 2,730 |
Coal inventory adjustment to market | 1,952 | 377 | |
Equity in loss of affiliates | (3,543) | 49,046 | 16,648 |
Net gain on sale of property, plant and equipment | (76) | (1) | (4,409) |
Asset impairment | 100,130 | ||
Acquisition gain, net | (22,548) | ||
Valuation allowance of deferred tax assets | (1,365) | 1,557 | 1,636 |
Other | 3,300 | 6,388 | (5,151) |
Changes in operating assets and liabilities: | |||
Trade receivables | (29,157) | 64,412 | (30,525) |
Other receivables | 417 | 422 | 16 |
Inventories | 58,948 | (31,628) | (39,103) |
Prepaid expenses and other assets | 17,023 | (3,403) | 856 |
Advance royalties | (2,464) | (6,915) | 4,956 |
Accounts payable | (15,140) | (41,534) | 8,742 |
Due to/from affiliates | 696 | (11,114) | (3,104) |
Accrued taxes other than income taxes | 2,652 | (4,287) | 365 |
Accrued payroll and related benefits | 4,545 | (24,527) | 10,551 |
Pneumoconiosis benefits | 447 | 2,808 | 3,743 |
Workers' compensation | (6,427) | (2,491) | (5,349) |
Other | (6,013) | (17,632) | (6,807) |
Total net adjustments | 364,006 | 410,171 | 241,988 |
Net cash provided by operating activities | 703,544 | 716,342 | 739,201 |
Property, plant and equipment: | |||
Capital expenditures | (91,056) | (212,797) | (307,387) |
Decrease in accounts payable and accrued liabilities | (4,402) | (3,021) | (2,270) |
Proceeds from sale of property, plant and equipment | 1,165 | 2,062 | 381 |
Proceeds from insurance settlement for property, plant and equipment | 4,512 | ||
Purchases of equity investments in affiliates | (76,797) | (64,540) | (111,376) |
Payments for acquisitions of businesses, net of cash acquired | (1,011) | (74,953) | |
Payments to affiliate for acquisition and development of coal reserves | (4,082) | ||
Payment for acquisition of customer contracts | (23,000) | (11,687) | |
Advances/loans to affiliate | (7,300) | ||
Other | 3,313 | 4,634 | (9,313) |
Net cash used in investing activities | (191,788) | (355,915) | (441,222) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Borrowings under securitization facility | 44,600 | 6,500 | 100,000 |
Payments under securitization facility | (27,700) | (23,400) | |
Payments on term loan | (156,250) | (108,502) | (18,750) |
Borrowings under revolving credit facilities | 140,000 | 543,000 | 341,800 |
Payments under revolving credit facilities | (270,000) | (308,000) | (451,800) |
Payment on long-term debt | (205,000) | (18,000) | |
Proceeds on capital lease transactions | 33,881 | 100,000 | |
Payments on capital lease obligations | (24,456) | (4,312) | (1,494) |
Payment of debt issuance costs | (101) | (263) | |
Contributions to consolidated company from affiliate noncontrolling interest | 3,014 | 2,147 | 481 |
Net settlement of employee withholding taxes on vesting of Long-Term Incentive Plan | (1,336) | (2,719) | (2,991) |
Cash contributions by General Partners | 1,047 | 1,595 | 1,611 |
Distributions paid to Partners | (247,915) | (346,799) | (317,626) |
Other | (189) | (6,107) | |
Net cash used in financing activities | (505,405) | (351,597) | (367,032) |
NET CHANGE IN CASH AND CASH EQUIVALENTS | 6,351 | 8,830 | (69,053) |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 33,431 | 24,601 | 93,654 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ 39,782 | $ 33,431 | $ 24,601 |
CONSOLIDATED STATEMENT OF PARTN
CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL - USD ($) $ in Thousands | Limited Partners' Capital | General Partners' Capital (Deficit) | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interest | Total |
Balance at Dec. 31, 2013 | $ 1,128,519 | $ (267,563) | $ (9,719) | $ 851,237 | |
Balance (in units) at Dec. 31, 2013 | 73,926,108 | ||||
Comprehensive income: | |||||
Net income (loss) | $ 358,955 | 138,274 | $ (16) | 497,213 | |
Actuarially determined long-term liability adjustments | (26,128) | (26,128) | |||
COMPREHENSIVE INCOME | 471,085 | ||||
Issuance of units to Long-Term Incentive Plan participants upon vesting | $ (2,991) | (2,991) | |||
Issuance of units to Long-Term Incentive Plan participants upon vesting (in units) | 134,526 | ||||
Common unit-based compensation | $ 11,250 | 11,250 | |||
Distributions on common unit-based compensation | (2,182) | (2,182) | |||
General Partners contributions (Note 13) | 1,611 | 1,611 | |||
Contributions to consolidated company from affiliate noncontrolling interest (Note 11) | 481 | 481 | |||
Distributions to Partners | (183,034) | (132,410) | (315,444) | ||
Balance at Dec. 31, 2014 | $ 1,310,517 | (260,088) | (35,847) | 465 | 1,015,047 |
Balance (in units) at Dec. 31, 2014 | 74,060,634 | ||||
Comprehensive income: | |||||
Net income (loss) | $ 159,860 | 146,338 | (27) | 306,171 | |
Actuarially determined long-term liability adjustments | 1,290 | 1,290 | |||
COMPREHENSIVE INCOME | 307,461 | ||||
Issuance of units to Long-Term Incentive Plan participants upon vesting | $ (2,719) | (2,719) | |||
Issuance of units to Long-Term Incentive Plan participants upon vesting (in units) | 128,150 | ||||
Common unit-based compensation | $ 12,631 | 12,631 | |||
Distributions on common unit-based compensation | (2,627) | (2,627) | |||
General Partners contributions (Note 13) | 1,595 | 1,595 | |||
Contributions to consolidated company from affiliate noncontrolling interest (Note 11) | 2,147 | 2,147 | |||
Distributions to Partners | (197,444) | (146,728) | (344,172) | ||
Balance at Dec. 31, 2015 | $ 1,280,218 | (258,883) | (34,557) | 2,585 | $ 989,363 |
Balance (in units) at Dec. 31, 2015 | 74,188,784 | 74,188,784 | |||
Comprehensive income: | |||||
Net income (loss) | $ 258,487 | 80,911 | 140 | $ 339,538 | |
Actuarially determined long-term liability adjustments | (3,983) | (3,983) | |||
COMPREHENSIVE INCOME | 335,555 | ||||
Issuance of units to Long-Term Incentive Plan participants upon vesting | $ (1,336) | (1,336) | |||
Issuance of units to Long-Term Incentive Plan participants upon vesting (in units) | 186,241 | ||||
Common unit-based compensation | $ 13,885 | 13,885 | |||
Distributions on common unit-based compensation | (3,355) | (3,355) | |||
General Partners contributions (Note 13) | 1,047 | 1,047 | |||
Contributions to consolidated company from affiliate noncontrolling interest (Note 11) | 3,014 | 3,014 | |||
Distributions to consolidated company from affiliate noncontrolling interest (Note 11) | (189) | (189) | |||
Distributions to Partners | (147,697) | (96,863) | (244,560) | ||
Balance at Dec. 31, 2016 | $ 1,400,202 | $ (273,788) | $ (38,540) | $ 5,550 | $ 1,093,424 |
Balance (in units) at Dec. 31, 2016 | 74,375,025 | 74,375,025 |
ORGANIZATION AND PRESENTATION
ORGANIZATION AND PRESENTATION | 12 Months Ended |
Dec. 31, 2016 | |
ORGANIZATION AND PRESENTATION | |
ORGANIZATION AND PRESENTATION | 1. ORGANIZATION AND PRESENTATION Significant Relationships Referenced in Notes to Consolidated Financial Statements · References to "we," "us," "our" or "ARLP Partnership" mean the business and operations of Alliance Resource Partners, L.P., the parent company, as well as its consolidated subsidiaries. · References to "ARLP" mean Alliance Resource Partners, L.P., individually as the parent company, and not on a consolidated basis. · References to "MGP" mean Alliance Resource Management GP, LLC, the managing general partner of Alliance Resource Partners, L.P. · 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 ("AHGP IPO") on May 15, 2006. AHGP owns directly and indirectly 100% of the members' interest of MGP, the incentive distribution rights ("IDR") in ARLP and 31,088,338 common units of ARLP. ARLP and its consolidated subsidiaries represent virtually all the net assets and operations of AHGP. The Delaware limited partnership, limited liability companies and corporation that comprise our subsidiaries are as follows: Intermediate Partnership; Alliance Coal; Alliance Design Group, LLC ("Alliance Design"); Alliance Land, LLC; Alliance Minerals, LLC ("Alliance Minerals"); Alliance Properties, LLC; Alliance Resource Properties; AROP Funding, LLC ("AROP Funding"); ARP Sebree, LLC ("ARP Sebree”); ARP Sebree South, LLC ("ARP Sebree South”); Alliance WOR Properties, LLC; Alliance Service, Inc. ("ASI"); Backbone Mountain, LLC; CR Services, LLC ("CR Services"); CR Machine Shop, LLC ("CR Machine Shop"); Excel Mining, LLC; Gibson County Coal, LLC ("Gibson County Coal"); Hamilton County Coal, LLC ("Hamilton"); Hopkins County Coal, LLC ("Hopkins County Coal"); Matrix Design Group, LLC ("Matrix Design"); Matrix Design International, LLC; Matrix Design Africa (PTY) LTD; MC Mining, LLC ("MC Mining"); Mettiki Coal, LLC ("Mettiki (MD)"); Mettiki Coal (WV), LLC ("Mettiki (WV)"); Mid-America Carbonates, LLC ("MAC"); Mt. Vernon Transfer Terminal, LLC ("Mt. Vernon"); Penn Ridge Coal, LLC ("Penn Ridge"); Pontiki Coal, LLC ("Pontiki"); River View Coal, LLC ("River View"); Rough Creek Mining, LLC; Sebree Mining, LLC ("Sebree"); Steamport, LLC; Tunnel Ridge, LLC ("Tunnel Ridge"); UC Coal, LLC ("UC Coal"); UC Mining, LLC ("UC Mining"); UC Processing, LLC ("UC Processing"); Warrior Coal, LLC ("Warrior"); Webster County Coal, LLC ("Webster County Coal"); White County Coal, LLC ("White County Coal"); WOR Land 6, LLC; White Oak Resources LLC (“White Oak”) and Wildcat Insurance, LLC ("Wildcat Insurance"). Presentation The consolidated financial statements include the accounts and operations of the ARLP Partnership and present our financial position as of December 31, 2016 and 2015, and results of our operations, comprehensive income, cash flows and changes in partners' capital for each of the three years in the period ended December 31, 2016. All of our intercompany transactions and accounts have been eliminated. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2016 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Estimates — The preparation of consolidated financial statements in conformity with generally accepted accounting principles of the United States ("GAAP") requires management to make estimates and assumptions that affect the reported amounts and disclosures in the consolidated financial statements. Actual results could differ from those estimates. Significant estimates and assumptions include: · Impairment assessments of investments, property, plant and equipment, and goodwill; · Asset retirement obligations; · Pension valuation variables; · Workers' compensation and pneumoconiosis valuation variables; · Acquisition related purchase price allocations; and · Life of mine assumptions. These significant estimates and assumptions are discussed throughout these notes to the consolidated financial statements. Consolidation — The consolidated financial statements present the consolidated financial position, results of operations and cash flows of ARLP, the Intermediate Partnership (a subsidiary of ARLP and a variable interest entity of which ARLP is the primary beneficiary), Alliance Coal (a subsidiary of the Intermediate Partnership and 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 IDR in ARLP are also reported with the general partner interest in ARLP. All intercompany transactions and accounts have been eliminated. See Note 10 – Variable Interest Entities for more information regarding ARLP's consolidation of the Intermediate Partnership and Alliance Coal. See Note 9 – Distributions of Available Cash for more information regarding MGP's IDR in ARLP. Fair Value Measurements — We apply fair value measurements to certain assets and liabilities. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. Fair value is based upon assumptions that market participants would use when pricing an asset or liability, including assumptions about risk and risks inherent in valuation techniques and inputs to valuations. Fair value measurements assume that the transaction occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability (the market for which the reporting entity would be able to maximize the amount received or minimize the amount paid). Valuation techniques used in our fair value measurements are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our own market assumptions. We use the following fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels: · Level 1 – Quoted prices for identical assets and liabilities in active markets that we have the ability to access at the measurement date. · Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model derived valuations whose inputs are observable or whose significant value drivers are observable. · Level 3 – Unobservable inputs for the asset or liability including situations where there is little, if any, market activity for the asset or liability. The fair value hierarchy gives the highest priority to quoted prices in active markets (Level 1) and the lowest priority to unobservable data (Level 3). In some cases, the inputs used to measure fair value might fall into different levels of the fair value hierarchy. The lowest level input that is significant to a fair value measurement determines the applicable level in the fair value hierarchy. Assessing the significance of a particular input to the fair value measurement requires judgment, considering factors specific to the asset or liability. Significant fair value measurements are used in our significant estimates and are discussed throughout these notes. See Note 8 – Fair Value Measurements for discussion of recurring fair value measurements not otherwise disclosed in these financial statements. Cash and Cash Equivalents — Cash and cash equivalents include cash on hand and on deposit, including highly liquid investments with maturities of three months or less. Cash Management — The cash flows from operating activities section of our consolidated statements of cash flows reflects an adjustment for $10.6 million representing book overdrafts at December 31, 2015. We did not have material book overdrafts at December 31, 2016 and 2014. Inventories — Coal inventories are stated at the lower of cost or net realizable value on a first-in, first-out basis. Supply inventories are stated at an average cost basis, less a reserve for obsolete and surplus items. Business Combinations — For acquisitions accounted for as a business combination, we record the assets acquired, including identified intangible assets and liabilities assumed at their fair value, which in many instances involves estimates based on third-party valuations, such as appraisals, or internal valuations based on discounted cash flow analyses or other valuation techniques. 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 2016. Property, Plant and Equipment — Expenditures which extend the useful lives of existing plant and equipment assets are capitalized. Interest costs associated with major asset additions are capitalized during the construction period. Maintenance and repairs that do not extend the useful life or increase productivity of the asset are charged to operating expense as incurred. Exploration expenditures are charged to operating expense as incurred, including costs related to drilling and study costs incurred to convert or upgrade mineral resources to reserves. Preparation plants and processing facilities are depreciated using the units-of-production method. Other plant and equipment assets are depreciated principally using the straight-line method over the estimated useful lives of the assets, ranging from 1 to 23 years, limited by the remaining estimated life of each mine. Depreciable lives for the mining equipment range from 1 to 23 years. Depreciable lives for buildings, office equipment and improvements range from 1 to 25 years. Gains or losses arising from retirements are included in operating expenses. Depletable lives for mineral rights, assuming current production expectations, range from 2 to 23 years. Depletion of mineral rights is provided on the basis of tonnage mined in relation to estimated recoverable tonnage, which equals estimated proven and probable reserves. Therefore, our mineral rights are depleted based on only proven and probable reserves derived in accordance with Industry Guide 7. At December 31, 2016 and 2015, land and mineral rights include $34.4 million and $30.7 million, respectively, representing the carrying value of coal reserves attributable to properties where we or a third party to which we lease reserves are not currently engaged in mining operations or leasing to third parties, and therefore, the coal reserves are not currently being depleted. We believe that the carrying value of these reserves will be recovered. Mine Development Costs — Mine development costs are capitalized until production, other than production incidental to the mine development process, commences and are amortized on a units of production method based on the estimated proven and probable reserves. Mine development costs represent costs incurred in establishing access to mineral reserves and include costs associated with sinking or driving shafts and underground drifts, permanent excavations, roads and tunnels. The end of the development phase and the beginning of the production phase takes place when construction of the mine for economic extraction is substantially complete. Coal extracted during the development phase is incidental to the mine's production capacity and is not considered to shift the mine into the production phase. Long-Lived Assets — We review the carrying value of long-lived assets and certain identifiable intangibles whenever events or changes in circumstances indicate that the carrying amount may not be recoverable based upon estimated undiscounted future cash flows. To the extent the carrying amount is not recoverable, the amount of impairment is measured by the difference between the carrying value and the fair value of the asset (See Note 4 – Long-Lived Asset Impairments). Intangibles — Intangibles subject to amortization include contracts with covenants not to compete, customer contracts acquired from other parties and mining permits. Intangibles other than customer contracts are amortized on a straight-line basis over their useful life. Intangibles for customer contracts are amortized on a per unit basis over the terms of the contracts. Amortization expense attributable to intangibles was $18.1 million, $15.1 million and $3.0 million for the years ending December 31, 2016, 2015 and 2014, respectively. Our intangibles are included in Prepaid expenses and other assets , Other long-term assets , Other current liabilities and Other liabilities on our consolidated balance sheets at December 31, 2016 and 2015. Our intangibles at December 31 are summarized as follows: December 31, 2016 December 31, 2015 Accumulated Intangibles, Accumulated Intangibles, Original Cost Amortization Net Original Cost Amortization Net (in thousands) Non-compete agreements $ $ $ $ $ $ Customer contracts and other, net Mining permits Total $ $ $ $ $ $ Amortization expense attributable to intangible assets is estimated as follows: Year Ended December 31, (in thousands) 2017 $ 2018 2019 2020 2021 Thereafter Investments —Investments and ownership interests are accounted for under the equity method of accounting if we have the ability to exercise significant influence, but not control, over the entity. Investments accounted for under the equity method are initially recorded at cost, and the difference between the basis of our investment and the underlying equity in the net assets of the joint venture at the investment date, if any, is amortized over the lives of the related assets that gave rise to the difference. In the event our ownership entitles us to a disproportionate sharing of income or loss, our equity in earnings or losses of affiliates is allocated based on the hypothetical liquidation at book value ("HLBV") method of accounting. Under the HLBV method, equity in earnings or losses of affiliates is allocated based on the difference between our claim on the net assets of the equity method investee at the end and beginning of the period with consideration of certain eliminating entries regarding differences of accounting for various related-party transactions, after taking into account contributions and distributions, if any. Our share of the net assets of the equity method investee is calculated as the amount we would receive if the equity method investee were to liquidate all of its assets at net book value and distribute the resulting cash to creditors, other investors and us according to the respective priorities. Our equity method investments during 2016 included AllDale Minerals, LP ("AllDale I") and AllDale Minerals II, LP ("AllDale II") (collectively "AllDale Minerals"). During 2015 and 2014, our equity method investments also included White Oak prior to our acquisition of its remaining equity interests on July 31, 2015. See Note 11 – Equity Investments for further discussion of these equity method investments. In addition, during 2014, our equity method investments also included MAC prior to our acquisition of the remaining interest on January 1, 2015. For discussion of both acquisitions, see Note 3 – Acquisitions. We review our investments and ownership interests accounted for under the equity method of accounting for impairment whenever events or changes in circumstances indicate a loss in the value of the investment may be other than temporary. Advance Royalties, net — Rights to coal mineral leases are often acquired and/or maintained through advance royalty payments. Where royalty payments represent prepayments recoupable against future production, they are recorded as an asset, with amounts expected to be recouped within one year classified as a current asset. As mining occurs on these leases, the royalty prepayments are charged to operating expenses. We assess the recoverability of royalty prepayments based on estimated future production. We have recorded a $6.2 million and $3.8 million allowance against these prepayments as of December 31, 2016 and 2015, respectively. Royalty prepayments estimated to be nonrecoverable are expensed. Our Advance royalties, net at December 31 are summarized as follows: 2016 2015 (in thousands) Advance royalties, affiliates (see Note 18 – Related-Party Transactions) $ $ Advance royalties, third-parties Total advance royalties, net $ $ Asset Retirement Obligations — The majority of our operations are governed by various state statutes and the Federal Surface Mining Control and Reclamation Act of 1977, which establish reclamation and mine closing standards. These regulations require, among other things, restoration of property in accordance with specified standards and an approved reclamation plan. We record a liability for the fair value of the estimated cost of future mine asset retirement and closing procedures, escalated for inflation then discounted, on a present value basis in the period incurred or acquired and a corresponding amount is capitalized by increasing the carrying amount of the related long-lived asset. Those costs relate to permanently sealing portals at underground mines and to reclaiming the final pits and support surface acreage for both our underground mines and past surface mines. Examples of these types of costs, common to both types of mining, include, but are not limited to, removing or covering refuse piles and settling ponds, water treatment obligations, and dismantling preparation plants, other facilities and roadway infrastructure. Accounting for asset retirement obligations also requires depreciation of the capitalized asset retirement cost and accretion of the asset retirement obligation over time. The depreciation is generally determined on a units-of-production basis and accretion is generally recognized over the life of the producing assets. As changes in estimates occur (such as mine plan revisions, changes in estimated costs or changes in timing of the performance of reclamation activities), the revisions to the obligation and asset are recognized at the appropriate credit-adjusted, risk-free interest rate. Federal and state laws require bonds to secure our obligations to reclaim lands used for mining and are typically renewable on a yearly basis. See Note 16 – Asset Retirement Obligations for more information. Pension Benefits — The funded status of our pension benefit plan is recognized separately in our consolidated balance sheets as either an asset or liability. The funded status is the difference between the fair value of plan assets and the plan's benefit obligation. Pension obligations and net periodic benefit costs are actuarially determined and impacted by various assumptions and estimates including expected return on assets, discount rates, mortality assumptions, employee turnover rates and retirement dates. We evaluate our assumptions periodically and make adjustments to these assumptions and the recorded liability as necessary (See Note 13 – Employee Benefit Plans). The discount rate is determined for our pension benefit plan based on an approach specific to our plan. The year-end discount rate is determined considering a yield curve comprised of high-quality corporate bonds and the timing of the expected benefit cash flows. The expected long-term rate of return on plan assets is determined based on broad equity and bond indices, the investment goals and objectives, the target investment allocation and on the average annual total return for each asset class. Unrecognized actuarial gains and losses and unrecognized prior service costs and credits are deferred and recorded in accumulated other comprehensive income ("AOCI") until amortized as a component of net periodic benefit cost. Unrecognized actuarial gains and losses in excess of 10% of the greater of the benefit obligation or the market-related value of plan assets are amortized over the participants' average remaining future years of service. Workers ' Compensation and Pneumoconiosis (Black Lung) Benefits — We are liable for workers' compensation benefits for traumatic injuries. Both black lung and traumatic claims are covered through our self-insured programs. In addition, 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. We provide income replacement and medical treatment for work-related traumatic injury claims as required by applicable state laws. Workers' compensation laws also compensate survivors of workers who suffer employment related deaths. Our liability for traumatic injury claims is the estimated present value of current workers' compensation benefits, based on our actuarial estimates. Our actuarial calculations are based on a blend of actuarial projection methods and numerous assumptions including claim development patterns, mortality, medical costs and interest rates. Our black lung benefits liability is calculated using the service cost method based on the actuarial present value of the estimated black lung obligation. Our actuarial calculations are based on numerous assumptions including disability incidence, medical costs, mortality, death benefits, dependents and discount rates. Actuarial gains or losses are amortized over the remaining service period of active miners. See Note 17 – Accrued Workers' Compensation and Pneumoconiosis Benefits for more information on Workers’ Compensation and Pneumoconiosis Benefits. Revenue Recognition — Revenues from coal sales are recognized when title passes to the customer as the coal is shipped. Some coal supply agreements provide for price adjustments based on variations in quality characteristics of the coal shipped. In certain cases, a customer's analysis of the coal quality is binding and the results of the analysis are received on a delayed basis. In these cases, we estimate the amount of the quality adjustment and adjust the estimate to actual when the information is provided by the customer. Historically, such adjustments have not been material. Non-coal sales revenues primarily consist of transloading fees, administrative service revenues from our affiliates, mine safety services and products, royalties and throughput fees earned from White Oak prior to July 31, 2015 as disclosed in Note 3 – Acquisitions, other coal contract fees and other handling and service fees. Transportation revenues are recognized in connection with us incurring the corresponding costs of transporting coal to customers through third-party carriers for which we are directly reimbursed through customer billings. As discussed below, we do not anticipate the new revenue recognition standard introduced by Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers ("ASU 2014-09") will result in a material change to our pattern of revenue recognition when it becomes effective. Common Unit-Based Compensation — We have the Long-Term Incentive Plan ("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 our managing general partner ("Compensation Committee"). Vesting of all grants outstanding are subject to the satisfaction of certain financial tests, which management currently believes is probable. Grants issued to LTIP participants are expected to cliff vest on January 1st of the third year following issuance of the grants. We expect to settle the non-vested LTIP grants by delivery of ARLP common units, except for the portion of the grants that will satisfy the minimum statutory tax withholding requirements. As provided under the distribution equivalent rights 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 and 2017 grants, at 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. We utilize the Supplemental Executive Retirement Plan ("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 MGP Amended and Restated Deferred Compensation Plan for Directors ("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. The fair value of restricted common unit grants under the LTIP, SERP and the Deferred Compensation Plan are determined on the grant date of the award and recognized as compensation expense on a pro rata basis for LTIP and SERP awards, as appropriate, over the requisite service period. Compensation expense is fully recognized on the grant date for quarterly distributions credited to SERP accounts and Deferred Compensation Plan awards. The corresponding liability is classified as equity and included in limited partners' capital in the consolidated financial statements (See Note 14 – Compensation Plans). Income Taxes —We are not a taxable entity for federal or state income tax purposes; the tax effect of our activities accrues to the unitholders. Although publicly traded partnerships as a general rule will be taxed as corporations, we qualify for an exemption because at least 90% of our income consists of qualifying income, as defined in Section 7704(c) of the Internal Revenue Code. Net income for financial statement purposes may differ significantly from taxable income reportable to unitholders as a result of differences between the tax basis and financial reporting basis of assets and liabilities and the taxable income allocation requirements under our partnership agreement. Individual unitholders have different investment bases depending upon the timing and price of acquisition of their partnership units. Furthermore, each unitholder's tax accounting, which is partially dependent upon the unitholder's tax position, differs from the accounting followed in our consolidated financial statements. Accordingly, the aggregate difference in the basis of our net assets for financial and tax reporting purposes cannot be readily determined because information regarding each unitholder's tax attributes in our partnership is not available to us. Our subsidiaries, ASI and Wildcat Insurance, are subject to federal and state income taxes. A valuation allowance is established if it is more likely than not that a deferred tax asset will not be realized. Our tax counsel has provided an opinion that ARLP, the Intermediate Partnership and Alliance Coal will each be treated as a partnership. However, as is customary, no ruling has been or will be requested from the Internal Revenue Service ("IRS") regarding our classification as a partnership for federal income tax purposes. Variable Interest Entity ("VIE") — VIEs are primarily entities that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders, as a group, lack one or more of the following characteristics: (a) direct or indirect ability to make decisions, (b) obligation to absorb expected losses or (c) right to receive expected residual returns. A VIE must be evaluated quantitatively and qualitatively to determine the primary beneficiary, which is the reporting entity that has (a) the power to direct activities of a VIE that most significantly impact the VIE's economic performance and (b) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. The primary beneficiary is required to consolidate the VIE for financial reporting purposes. To determine a VIE's primary beneficiary, we perform a qualitative assessment to determine which party, if any, has the power to direct activities of the VIE and the obligation to absorb losses and/or receive its benefits. This assessment involves identifying the activities that most significantly impact the VIE's economic performance and determine whether it, or another party, has the power to direct those activities. When evaluating whether we are the primary beneficiary of a VIE, we perform a qualitative analysis that considers the design of the VIE, the nature of our involvement and the variable interests held by other parties. See Note 10 – Variable Interest Entities for further information. New Accounting Standards Issued and Adopted – In May 2015, the Financial Accounting Standards Board ("FASB") issued ASU 2015-07 Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent) ("ASU 2015-07"). ASU 2015-07 removes the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. The standard is effective for financial statements issued for interim and annual reporting periods beginning after December 15, 2015, and requires retrospective presentation. The adoption of ASU 2015-07 impacted the presentation of our pension plan assets in the current year, but did not have a material impact on the presentation in the prior year (See Note 13 – Employee Benefit Plans). In April 2015, the FASB issued 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 did not have a material impact on our consolidated financial statements. In February 2015, the FASB issued ASU 2015-02, Consolidation ("ASU 2015-02") which was updated by ASU 2016-17, Interests Held through Related Parties That Are under Common Control issued on October 26, 2016. 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 a limited partnership’s variable interest status, the 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 did not 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. The adoption of ASU 2014-15 did not have a material impact on our 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, flexibility in the accounting for forfeitures 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 |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Dec. 31, 2016 | |
ACQUISITIONS | |
ACQUISITIONS | 3. ACQUISITIONS White Oak Resources On July 31, 2015 (the "Hamilton Acquisition Date") Hamilton acquired the remaining Series A and B Units, representing 60% of the voting interests of White Oak, from White Oak Finance Inc. and other parties (the "Sellers") for total fair value consideration of $310.3 million (the "Hamilton Acquisition"). The following table summarizes the total fair value of consideration transferred at the Hamilton Acquisition Date: (in thousands) Cash on hand $ Contingent consideration Settlement of pre-existing relationships Previously held equity-method investment Total consideration transferred $ Effective from the Hamilton Acquisition Date, the Partnership now owns 100% of the interests in White Oak and has assumed operating control of the White Oak Mine No. 1 (now known as the Hamilton mine), an underground longwall mining operation located in Hamilton County, Illinois. The Hamilton Acquisition was consistent with our general business strategy and a strategic complement to our coal mining operations. The contingent consideration is payable to the Sellers to the extent Hamilton's quarterly average coal sales price exceeds a specified amount on future sales. Amounts payable under the contingent consideration arrangement are subject to a defined maximum of $110.0 million reduced for any payments that we make under an overriding royalty agreement between White Oak and certain of the Sellers relating to undeveloped mineral interests controlled by White Oak. We estimated the fair value of the contingent consideration using a probability-weighted discounted cash flow model. The assumptions used in the model included a risk-adjusted discount rate, forward coal sales price curves, cost of debt, and probabilities of meeting certain threshold prices. The fair value measurement is based on significant inputs not observable in active markets and thus represents a Level 3 fair value measurement. Prior to the Hamilton Acquisition Date, we accounted for our 40% interest in White Oak as an equity-method investment (See Note 11 – Equity Investments). The acquisition date fair value of the previous equity interest was $121.2 million and is included in the measurement of the consideration transferred. We re-measured our equity investment immediately prior to the Hamilton Acquisition using a discounted cash flow model which resulted in a loss of $52.3 million ("Re-measurement Loss") which is recorded in the line item Acquisition gain, net in our consolidated statements of income. The assumptions used in the determination of the fair value include projected financial information, forward coal price curves, and a risk adjusted discount rate. The assumptions used in this fair value measurement are not observable in active markets and therefore represents a Level 3 fair value measurement. In connection with the Hamilton Acquisition, we settled our pre-existing relationships with White Oak which included existing account balances of $49.6 million. The settlement of pre-existing relationships also included, under business combination accounting, a $74.8 million net gain for above-market terms associated with pre-existing contractual agreements which were comprised of coal leases, a coal handling and preparation agreement, a coal supply agreement, export marketing and transportation agreements and certain debt agreements. The net gain of $74.8 million associated with the settlement of the net above-market terms is recorded in the line item Acquisition gain, net in our consolidated statements of income partially offset by the Re-measurement Loss of $52.3 million discussed above, which nets to $22.5 million. These settlements of account balances and settlements of net above-market terms are included in the measurement of consideration transferred for the Hamilton Acquisition. As part of the settlement of these agreements, we considered the rates at which a market participant would enter into these agreements and recognized gains for the above-market rates and losses for the below-market rates contained in the various agreements. We developed a discounted cash flow model to determine the fair value of each of these agreements at market rates and compared the valuations to similar models using the contractual rates of the agreements to determine our gains or losses. The assumptions used in these valuation models include processing rates, royalty rates, transportation rates, marketing rates, forward coal price curves, interest rates, projected financial information and risk-adjusted discount rates. These fair value measurements were based on the previously discussed assumptions which are not observable in active markets and therefore represent Level 3 fair value measurements. The following table summarizes the fair value allocation of assets acquired and liabilities assumed at the Hamilton Acquisition Date: (in thousands) Cash and cash equivalents $ Trade receivables Prepaid expenses Inventories Other current assets Property, plant and equipment Advance royalties Deposits Other assets Total identifiable assets acquired Accounts payable Accrued expenses Deferred revenue Current maturities, long-term debt Long-term debt, excluding current maturities Other long-term liabilities Asset retirement obligations Total liabilities assumed Net identifiable assets acquired $ Goodwill Net assets acquired $ The goodwill recognized is attributable to expected synergies and operational cost reductions by using our other owned facilities and reserves as well as utilizing our centralized marketing, operations and administrative functions. All of the goodwill has been allocated to our Hamilton reporting unit included in our Illinois Basin segment. We recognized intangible assets and liabilities associated with the above- and below-market customer contracts in addition to a mining permit as follows: Weighted-average Account in table (in thousands) amortization period above Customer contracts and intangibles Current above-market contracts $ Other current assets Non-current above-market contracts Other assets Current below-market contracts Accrued expenses Non-current below-market contracts Other long-term liabilities Total customer contract intangibles 3 years Mining permit 20 years Other assets Total intangibles acquired $ We determined the fair value of cash and cash equivalents, trade receivables, prepaid expenses, advanced royalties, deposits, accounts payable, accrued expenses, and deferred revenue approximated White Oak's carrying value given the highly liquid and short-term nature of these assets and liabilities. We determined the fair value of inventories, property, plant and equipment (inclusive of mineral interests), and mining permits using a market approach. The market approach included the development of an entity-wide value using discounted cash flows and allocating the entity-wide value back to the underlying assets based on observed market prices. We have recorded the fair value of the above- and below-market components of customer contracts acquired as assets and liabilities. We determined these fair values through comparison of the terms in the contracts against projected coal prices. We also evaluated the acquired asset retirement obligation to determine the cost to fulfill the obligation and apply an appropriate discount rate to determine the fair value. The assumptions used in these fair value measurements are not observable in active markets and thus represent Level 3 fair value measurements. We determined the fair value of the long-term debt acquired through comparison of similar debt instruments and interest rates in active markets, and thus the assumptions used for the long-term debt represent Level 2 fair value measurements. (See Note 2 – Summary of Significant Accounting Policies – Fair Value Measurements for more information regarding fair value hierarchy levels.) The amounts of revenue and earnings inclusive of the $22.5 million in net gains associated with the settlement of pre-existing relationships and the Re-Measurement Loss, both discussed above, included in the Partnership's consolidated statement of income from the Hamilton Acquisition Date to the period ending December 31, 2015 are as follows: (in thousands) Revenue $ Net income The following represents the pro forma condensed consolidated income statement as if Hamilton had been included in the consolidated results of the Partnership since January 1, 2014. These amounts have been calculated after applying the Partnership's accounting. Additionally, the Partnership's results have been adjusted to remove the effect of its equity investment in White Oak and the pre-existing relationships that it had in White Oak. Twelve Months Ended December 31, 2015 2014 (in thousands) Total revenues As reported $ $ Pro forma Net income As reported $ $ Pro forma Patriot Coal Corporation On December 31, 2014 (the "Initial Closing Date"), we entered into asset purchase agreements with Patriot Coal Corporation ("Patriot") regarding certain assets relating to two of Patriot's western Kentucky mining operations, including certain coal sales agreements, unassigned coal reserves and underground mining equipment and infrastructure. Both of the mining operations – the former Dodge Hill and Highland mining operations – were closed by Patriot in late 2014 prior to entering into these asset purchase agreements. Also on December 31, 2014, Patriot affiliates entered into agreements to sell other assets from Highland to a third party. Additional details of the transactions are discussed below. On the Initial Closing Date, our subsidiary, Alliance Coal acquired the rights to certain coal supply agreements from an affiliate of Patriot for approximately $21.0 million. Of the $21.0 million purchase price, $9.3 million was paid into escrow subject to obtaining certain assignment consents. In February 2015, $7.5 million of the escrowed amount was released to Patriot for a consent received and $1.8 million was returned to Alliance Coal as a result of a consent not received, reducing our purchase price to $19.2 million. The acquired agreements provide for delivery of a total of approximately 5.1 million tons of coal from 2015 through 2017. On February 3, 2015 (the "Acquisition Date"), Alliance Coal and Alliance Resource Properties acquired from Patriot an estimated 84.1 million tons of proven and probable medium/high-sulfur coal reserves in western Kentucky (substantially all of which was leased by Patriot), and substantially all of Dodge Hill's assets related to its former coal mining operation in western Kentucky, which principally included underground mining equipment and an estimated 43.2 million tons of non-reserve coal deposits (substantially all of which was leased by Dodge Hill). In addition, we assumed Dodge Hill's reclamation liabilities totaling $2.3 million. Also on the Acquisition Date, the Intermediate Partnership's subsidiaries, UC Mining and UC Processing, acquired certain underground mining equipment and spare parts inventory from Patriot's former Highland mining operation. The mining and reserve assets acquired from Patriot described above are located in Union and Henderson Counties, Kentucky. The mining equipment, spare parts and underground infrastructure that we acquired from Patriot has been and is continuing to be dispersed to our existing operations in the Illinois Basin region in accordance with their highest and best use. Our purchase price of $19.2 million and $20.5 million paid on the Initial Closing Date and the Acquisition Date, respectively, described above was financed using existing cash on hand. In addition, our purchase price was increased by $8.3 million, comprising $2.1 million cash paid prior to the Acquisition Date related to the transaction and an agreement to pay approximately $6.2 million additional consideration, which was satisfied as of December 31, 2015. As we have no intentions of operating the former Dodge Hill mining complex as a business and only acquired certain assets of Highland, we believe unaudited pro forma information of revenue and earnings is not meaningful as it relates to the acquisition of Patriot assets described above and furthermore not materially different than revenue and earnings as presented in our consolidated statements of income. The primary ongoing benefit derived from the transaction relates to the coal supply agreements acquired, which would have permitted the sale of 3.2 million tons at average pricing of $46.67 per ton sold during 2014 based on the contract price and sales volumes, if we had owned the contracts during that period. Revenues generated by these contracts since the Initial Closing Date were $130.5 million for the year ended December 31, 2015. In conjunction with our acquisitions on the Acquisition Date, WKY CoalPlay, LLC ("WKY CoalPlay"), a related party, acquired approximately 39.1 million tons of proven and probable medium/high-sulfur owned coal reserves located in Henderson and Union Counties, Kentucky from Central States Coal Reserves of Kentucky, LLC, a subsidiary of Patriot, for $25.0 million and in turn leased those reserves to us. See Note 18 – Related-Party Transactions for further information on our lease terms with WKY CoalPlay. The fair value of the acquired tangible and intangible assets and assumed liabilities are based on discounted cash flow projections and estimated replacement cost valuation techniques. We used an estimate of replacement cost based on comparable market prices to value the acquired equipment and utilized discounted cash flows to value intangible assets and reserves. Key assumptions used in the valuations included projections of future cash flows, estimated weighted-average cost of capital, and internal rates of return. Due to the unobservable nature of these inputs, these estimates are considered Level 3 fair value measurements. The following table summarizes the consideration transferred from us to Patriot and the fair value allocation of assets acquired and liabilities assumed as valued at the Acquisition Date: (in thousands) Consideration transferred $ Recognized amounts of net tangible and intangible assets acquired and liabilities assumed: Inventories Property, plant and equipment, including mineral rights and leased equipment Customer contracts, net Asset retirement obligation Other liabilities Net tangible and intangible assets acquired $ Intangible assets related to coal supply agreements, represented as "Customer contracts, net" in the table above, are reflected in the Prepaid expenses and other assets and Other long-term assets line items in our consolidated balance sheets. Amortization expense is recognized based on the weighted-average term of the contracts, ranging from 1 to 3 years, on a per unit basis. MAC In March 2006, White County Coal and Alexander J. House entered into a limited liability company agreement to form MAC. MAC was formed to engage in the development and operation of a rock dust mill and to manufacture and sell rock dust. White County Coal initially invested $1.0 million in exchange for a 50% equity interest in MAC. Our equity investment in MAC was $1.6 million at December 31, 2014. Effective on January 1, 2015, we purchased the remaining 50% equity interest in MAC from Mr. House for $5.5 million cash paid at closing. In conjunction with the acquisition, we assumed $0.2 million of liabilities and $7.3 million in assets, net of cash acquired, including $4.2 million of goodwill which is reflected in Other and Corporate in our segment presentation (Note 21 – Segment Information) and is included in Goodwill in our consolidated balance sheets. Peabody Energy Corporation In December 2014, Alliance Resource Properties acquired the rights to approximately 86.2 million tons of proven and probable medium/high-sulfur leased coal reserves in western Kentucky from Midwest Coal Reserves of Kentucky, LLC ("Midwest") and Cyprus Creek Land Company, both subsidiaries of Peabody Energy Corporation ("Peabody"), in exchange for an overriding royalty to be paid to Peabody based on a percentage of the sales price of coal mined from the reserves acquired. In addition, WKY CoalPlay acquired the rights to approximately 54.1 million tons of owned coal reserves in western Kentucky, through its purchase of a wholly owned subsidiary of Midwest for $29.6 million cash paid at closing. In conjunction with this acquisition, WKY CoalPlay's subsidiary leased 22.6 million tons of the acquired reserves to us and, as partial consideration for entering the lease, conveyed the remaining 31.5 million tons to us. The conveyed reserves have minimal value as a result of uncertainty regarding inclusion in a mine plan. See Note 18 – Related-Party Transactions for further information on our lease terms with WKY CoalPlay. This transaction allowed us to extend the expected life of our River View mine and provides potential greenfield mining opportunities. CONSOL Energy Inc. In November 2014, Alliance Resource Properties acquired the rights to approximately 124.2 million tons of proven and probable medium/high-sulfur coal reserves, most of which are leased reserves, and various surface properties in western Kentucky from CNX RCPC, LLC ("CNX RCPC") and Island Creek Coal Company ("Island Creek"), both subsidiaries of CONSOL Energy, Inc. ("CONSOL"). The purchase price of $11.6 million was financed using existing cash on hand and allocated to the owned and leased coal rights and surface properties acquired. We also assumed reclamation liabilities totaling $6.0 million. In conjunction with this acquisition, WKY CoalPlay acquired approximately 86.6 million tons of proven and probable medium/high-sulfur owned coal reserves in western Kentucky and southern Indiana through its purchase of two wholly owned subsidiaries of CNX RCPC and Island Creek for $57.2 million. In December 2014, WKY CoalPlay's subsidiaries leased 72.3 million tons of the acquired reserves to us and, as partial consideration for entering the leases, conveyed the remaining 14.3 million tons of its acquired reserves to us. The conveyed reserves have minimal value as a result of uncertainty regarding inclusion in a mine plan. See Note 18 – Related-Party Transactions for further information on our lease terms with WKY CoalPlay. The reserves described in this paragraph extended the expected lives of our River View and Dotiki mines and provide potential greenfield mining opportunities. See Note 2 – Summary of Significant Accounting Policies for more information on our accounting policy for business combinations and goodwill. |
LONG-LIVED ASSET IMPAIRMENTS
LONG-LIVED ASSET IMPAIRMENTS | 12 Months Ended |
Dec. 31, 2016 | |
LONG-LIVED ASSET IMPAIRMENTS | |
LONG-LIVED ASSET IMPAIRMENTS | 4. LONG-LIVED ASSET IMPAIRMENTS During the fourth quarter of 2015, we idled our Onton mine in response to market conditions and continued increases in coal inventories at our mines and customer locations. Our decision to idle this mine, as well as continued low coal prices and regulatory conditions, led to the conclusion that indicators of impairment were present and our carrying value for certain mines may not be fully recoverable. During our assessment of the recoverability of the carrying value of our operating segments, we determined that we would likely not recover the carrying value of the net assets at MC Mining within our Appalachia segment and Onton within our Illinois Basin segment. Accordingly, we estimated the fair values of the MC Mining and Onton net assets and then adjusted the carrying values to the fair values resulting in impairments of $19.5 million and $66.9 million, respectively. The fair value of the assets was determined using a market approach and represents a Level 3 fair value measurement under the fair value hierarchy. The fair value analysis was based on assumptions of marketability of coal properties in the current environment and the probability assessment of multiple sales scenarios based on observations of other recent mine sales. During the fourth quarter of 2015, we determined that certain undeveloped coal reserves and related property in western Pennsylvania were no longer a core part of our foreseeable development plans and thus surrendered the lease for the properties in order to avoid the high holding costs of those reserves. We recorded an impairment charge of $3.0 million to our Appalachia segment during the quarter ended December 31, 2015 to remove advanced royalties associated with the lease from our consolidated balance sheet. During the third quarter of 2015, we surrendered a lease agreement for certain undeveloped coal reserves and related property in western Kentucky. We determined that coal reserves held under this lease agreement were no longer a core part of our foreseeable development plans. As such, we surrendered the lease in order to avoid the high holding costs of those reserves. We recorded an impairment charge of $10.7 million to our Illinois Basin segment to remove certain assets associated with the lease, including mineral rights, advanced royalties and mining permits from our consolidated balance sheet. See Note 2 – Summary of Significant Accounting Policies for more information on our accounting policy for asset impairments. |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2016 | |
INVENTORIES | |
INVENTORIES | 5. INVENTORIES Inventories consist of the following at December 31 : 2016 2015 (in thousands) Coal $ $ Supplies (net of reserve for obsolescence of $4,940 and $3,841, respectively) Total inventories, net $ $ See Note 2 – Summary of Significant Accounting Policies for more information on our accounting policy for inventories. |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2016 | |
PROPERTY, PLANT AND EQUIPMENT | |
PROPERTY, PLANT AND EQUIPMENT | 6. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consist of the following at December 31: 2016 2015 (in thousands) Mining equipment and processing facilities $ $ Land and mineral rights Buildings, office equipment and improvements Construction and mine development in progress Mine development costs Property, plant and equipment, at cost Less accumulated depreciation, depletion and amortization Total property, plant and equipment, net $ $ At December 31, 2016, there were no capitalized development costs associated with mines in the development phase. All past capitalized development costs are associated with mines that shifted to the production phase and thus, these costs are being amortized. We believe that the carrying value of the past development costs will be recovered. At December 31, 2015, capitalized mine development costs representing the carrying value of development costs attributable to properties where we had not reached the production stage of mining operations totaled $5.9 million. Equipment leased by us under lease agreements which are determined to be capital leases are stated at an amount equal to the present value of the minimum lease payments during the lease term, less accumulated amortization. Equipment under capital leases totaling $144.5 million included in mining equipment and processing facilities is amortized on the straight-line method over the shorter of its useful life or the related lease term. The provision for amortization of leased properties is included in depreciation, depletion and amortization expense. Accumulated amortization related to our capital leases was $34.2 million, $7.1 million and $5.6 million as of December 31, 2016, 2015 and 2014, respectively, and amortization expense was $27.2 million, $5.7 million and $1.6 million for the years ended December 31, 2016, 2015 and 2014, respectively. For information regarding long-lived asset impairments please see Note 4 – Long-Lived Asset Impairments. See Note 2 – Summary of Significant Accounting Policies for more information on our accounting policy for property, plant and equipment. |
LONG-TERM DEBT
LONG-TERM DEBT | 12 Months Ended |
Dec. 31, 2016 | |
LONG-TERM DEBT | |
LONG-TERM DEBT | 7. LONG-TERM DEBT Long-term debt consists of the following at December 31: Unamortized Principal Debt Issuance Costs 2016 2015 2016 2015 (in thousands) Revolving Credit facility $ $ $ $ Series B senior notes Term loan Securitization facility — — Less current maturities Total long‑term debt $ $ $ $ Credit Facility. On January 27, 2017, our Intermediate Partnership entered into a Fourth Amended and Restated Credit Agreement (the "Credit Agreement") with various financial institutions for a revolving credit facility and term loan (the "Credit Facility"). The Credit Facility replaces the $250 million term loan ("Replaced Term Loan") and $700 million revolving credit facility ("Replaced Revolving Credit Facility") extended to the Intermediate Partnership on May 23, 2012 (the "Replaced Credit Agreement") by various banks and other lenders that would have expired on May 23, 2017. Certain lenders under the Replaced Credit Agreement, referred to as the non-extending lenders ("Non-Extending Lenders") are only participating in the Credit Facility through May 23, 2017, whereas the remaining lenders under the Replaced Credit Agreement are referred to as the extending lenders ("Extending Lenders"). The Credit Agreement provides for a $776.5 million revolving credit facility, reducing to $479.75 million on May 23, 2017, including a sublimit of $125 million for the issuance of letters of credit and a sublimit of $15.0 million for swingline borrowings (the "Revolving Credit Facility"), and for a term loan with a remaining principal balance of $50.0 million (the "Term Loan"). The outstanding revolver balance of $255.0 million and term loan balance of $50.0 million under the Replaced Credit Agreement were deemed to have been advanced under the Credit Facility on January 27, 2017. The Credit Agreement is guaranteed by all of the material direct and indirect subsidiaries of our Intermediate Partnership, and is secured by substantially all of the Intermediate Partnership’s assets. The $776.5 million Revolving Credit Facility through May 23, 2017 includes the commitments of the Non-Extending Lenders originally made under the Replaced Credit Agreement, as well as, the commitments of the new lenders and Extending Lenders. The new lenders and Extending Lenders under the new Revolving Credit Facility are providing $479.75 million of the $776.5 million total. The Revolving Credit Facility terminates on May 23, 2019, at which time all amounts outstanding are required to be repaid. The Revolving Credit Facility termination date will accelerate to (a) May 23, 2017 if, on or before May 13, 2017, the Intermediate Partnership has not satisfied the Cavalier Condition (as defined in the Credit Agreement) or (b) March 27, 2018 if, on or before March 27, 2018, the Intermediate Partnership has not satisfied the Senior Notes Condition (as defined in the Credit Agreement). The Cavalier Condition requires by May 13, 2017 that we utilize the Cavalier Credit Facility which is described below, to prepay $96.0 million under the Revolving Credit Facility. The Senior Notes Condition requires that we either (a) replace the Series B senior notes ("Series B Senior Notes," as described below) with junior financing that matures no earlier than January 2020, or (b) repay the Series B Senior Notes or escrow funds sufficient to repay them, in either case (a) or (b), at least 90 days prior to their expiration on June 26, 2018. The Term Loan will terminate on May 23, 2017 at which time the aggregate remaining outstanding principle balance of $50.0 million and unpaid interest will be paid in full. Borrowings under the Credit Facility bear interest, at the option of the Intermediate Partnership, at either (i) the Base Rate at the greater of three benchmarks, or (ii) a Eurodollar Rate, plus applicable margins for (i) and (ii) that fluctuates depending upon the ratio of Consolidated Debt to Consolidated Cash Flow (each as defined in the Credit Agreement). The Revolving Credit Facility bears a lower interest rate ("Lower Rate") for Non-Extending Lenders during their brief participation period which ends May 23, 2017 compared to rates associated with the new lenders and Extending Lenders which are in effect through May 23, 2019. The Lower Rate, which also applies to all lenders for the Term Loan, remains unchanged from prior interest rates under the Replaced Credit Agreement. Interest is payable quarterly. The Credit Agreement also provides for the payment of certain fees, including an unused portion fee and a fee with respect to the available amount under outstanding letters of credit. As with the Replaced Credit Agreement borrowings, we will utilize the Revolving Credit Facility, as appropriate, for working capital requirements, capital expenditures and investments in affiliates, scheduled debt payments and distribution payments. We incurred debt issuance costs of approximately $6.7 million, mostly in 2017, in connection with the Revolving Credit Facility which will be deferred and amortized as a component of interest expense over the duration of the Revolving Credit Facility. Borrowings under the Replaced Credit Agreement bore interest at a Base Rate or Eurodollar Rate, at our election, plus an applicable margin that fluctuated depending upon the ratio of Consolidated Debt to Consolidated Cash Flow (each as defined in the Replaced Credit Agreement). We elected a Eurodollar Rate, which, with applicable margin, was 2.42% on borrowings outstanding as of December 31, 2016. In June 2014, we began making quarterly principal payments on the Replaced Term Loan, leaving a balance of $50.0 million at December 31, 2016. We had borrowings of $255.0 million and $5.6 million of letters of credit outstanding under the Replaced Revolving Credit Facility at December 31, 2016. We incurred an annual commitment fee of 0.25% on the undrawn portion of the Replaced Revolving Credit Facility. Series B Senior Notes. On January 27, 2017, the Intermediate Partnership amended the 2008 Note Purchase Agreement dated June 26, 2008, for $145.0 million of Series B Senior Notes which bear interest at 6.72% and mature on June 26, 2018 with interest payable semi-annually. The amendment provides for certain modifications to the terms and provisions of the Note Purchase Agreement, including granting liens on substantially all of the Intermediate Partnership's assets to secure its obligations under the Note Purchase Agreement on an equal basis with the obligations under the Credit Agreement. The amendment also modifies certain covenants to align them with the same covenants in the Credit Agreement. The Series B Senior Notes are the subject of the Senior Notes Condition of the Credit Agreement discussed above. The Series B Senior Notes are guaranteed by all of the material direct and indirect subsidiaries of our Intermediate Partnership. The Credit Agreement and the Series B Senior Notes (collectively, "ARLP Debt Arrangements") contain various restrictions affecting our Intermediate Partnership and its subsidiaries including, among other things, incurrence of additional indebtedness and liens, sale of assets, investments, mergers and consolidations and transactions with affiliates, in each case subject to various exceptions, and the payment of cash distributions by our Intermediate Partnership if such payment would result in a fixed charge coverage ratio (as defined in the ARLP Debt Arrangements) of less than 1.25 to 1.0 for each rolling four-quarter period. See Note 10 – Variable Interest Entities for further discussion of restrictions on the cash available for distribution. 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 the Intermediate Partnership maintain (a) a debt to cash flow ratio of not more than 2.25 to 1.0 and (b) a 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 Replaced Credit Agreement and Series B Senior Notes requirements for (a) and (b) above were 3.0 to 1.0 as of December 31, 2016. ARLP’s actual debt to cash flow ratio and cash flow to interest expense ratio were 0.93 to 1.0 and 23.0 to 1.0, respectively, for the trailing twelve months ended December 31, 2016. We were in compliance with the covenants of the Replaced Credit Agreement and the Series B Senior Notes as of December 31, 2016. Accounts Receivable Securitization . On December 5, 2014, certain direct and indirect wholly owned subsidiaries of our Intermediate Partnership entered into a $100.0 million accounts receivable securitization facility ("Securitization Facility") providing additional liquidity and funding. Under the Securitization Facility, certain subsidiaries sell trade receivables on an ongoing basis to our Intermediate Partnership, which then sells the trade receivables to AROP Funding, a wholly owned bankruptcy-remote special purpose subsidiary of our Intermediate Partnership, which in turn borrows on a revolving basis up to $100.0 million secured by the trade receivables. After the sale, Alliance Coal, as servicer of the assets, collects the receivables on behalf of AROP Funding. The Securitization Facility bears interest based on a Eurodollar Rate. It was renewed in December 2016 and matures in December 2017. At December 31, 2016, we had $100.0 million outstanding under the Securitization Facility. Hamilton Revolving Credit Facility and Hamilton Equipment Financing Agreement . In connection with the Hamilton Acquisition (see Note 3 – Acquisitions), we assumed a $10.0 million revolving credit facility ("Hamilton Revolving Credit Facility"). In November 2014, White Oak entered into the Hamilton Revolving Credit Facility allowing for periodic borrowings up to $10.0 million, collateralized by White Oak's accounts receivable. Borrowings under the Hamilton Revolving Credit Facility carried interest at the prime rate plus 0.1%. On October 19, 2015, the outstanding balance of the Hamilton Revolving Credit Facility totaling $10.0 million was repaid and the facility terminated. Also in connection with the Hamilton Acquisition, we assumed an equipment financing agreement ("Hamilton Equipment Financing Agreement"). In 2012, White Oak acquired vendor financing totaling $100.0 million through the Hamilton Equipment Financing Agreement, which was secured by continuous mining, long-wall mining, and underground belt system equipment purchased from the vendor. The Hamilton Equipment Financing Agreement required repayment of principal and interest in equal monthly installments of $2.1 million from July 2014 until June 2019. On October 16, 2015, the outstanding balance of the Hamilton Equipment Financing Agreement totaling $80.6 million was repaid without penalty with funds drawn on the Replaced Revolving Credit Facility. Sale-leaseback Transactions . On October 29, 2015 and June 29, 2016, we entered into various sale-leaseback transactions whereby we sold certain mining equipment from various mines and received $100.0 million and $33.9 million, respectively, in proceeds and concurrently entered into lease agreements for the sold equipment. See Note 19 – Commitments and Contingencies for further information. Cavalier Credit Agreement . On October 6, 2015, Cavalier Minerals JV, LLC ("Cavalier Minerals") (see Note 10 – 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 6.0% 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. 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 December 31, 2016, Cavalier Minerals had not drawn on the Cavalier Credit Facility. Alliance Minerals has the right to require Cavalier Minerals to draw the full amount available under the Cavalier Credit Facility and distribute the proceeds to the members of Cavalier Minerals, including Alliance Minerals. The Cavalier Credit Facility is the subject of the Cavalier Condition of the Credit Agreement discussed above. Other. We also have agreements with two banks to provide additional letters of credit in an aggregate amount of $31.1 million to maintain surety bonds to secure certain asset retirement obligations and our obligations for workers' compensation benefits. At December 31, 2016, we had $13.0 million in letters of credit outstanding under agreements with these two banks. Aggregate maturities of long-term debt are payable as follows: Year Ended December 31, (in thousands) 2017 $ 2018 2019 2020 — 2021 — Thereafter — $ |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2016 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | 8. FAIR VALUE MEASUREMENTS The following table summarizes our fair value measurements within the hierarchy not included elsewhere in these notes: December 31, 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 $ — $ $ $ — $ $ See Note 2 – Summary of Significant Accounting Policies – Fair Value Measurements for more information regarding fair value hierarchy levels. The carrying amounts for cash equivalents, accounts receivable, accounts payable, accrued and other liabilities, 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 7 – 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 the contingent consideration arrangement is based on a probability-weighted discounted cash flow model. The assumptions in the model include a risk-adjusted discount rate, forward coal sale price curves, cost of debt and probabilities of meeting certain contractual threshold coal sales prices (See Note 3 – Acquisitions). The decrease in fair value was primarily a result of changes in the market risk adjustment and risk-adjusted discount rate and is recorded in Operating expenses (excluding depreciation, depletion and amortization) in our 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. |
DISTRIBUTIONS OF AVAILABLE CASH
DISTRIBUTIONS OF AVAILABLE CASH | 12 Months Ended |
Dec. 31, 2016 | |
DISTRIBUTIONS OF AVAILABLE CASH | |
DISTRIBUTIONS OF AVAILABLE CASH | 9. DISTRIBUTIONS OF AVAILABLE CASH We distribute 100% of our available cash within 45 days after the end of each quarter to unitholders of record and to our general partners. Available cash is generally defined in the partnership agreement as all cash and cash equivalents on hand at the end of each quarter less reserves established by our managing general partner in its reasonable discretion for future cash requirements. These reserves are retained to provide for the conduct of our business, the payment of debt principal and interest and to provide funds for future distributions. These reserves are also considered in our review of certain VIEs discussed in Note 10 – Variable Interest Entities. As quarterly distributions of available cash exceed the target distribution levels established in our partnership agreement, our managing general partner receives distributions based on specified increasing percentages of the available cash that exceeds the target distribution levels. The target distribution levels are based on the amounts of available cash from our operating surplus distributed for a given quarter that exceed the minimum quarterly distribution ("MQD") and common unit arrearages, if any. Our partnership agreement defines the MQD as $0.125 per unit ($0.50 per unit on an annual basis). Under the quarterly IDR provisions of our partnership agreement, our managing general partner is entitled to receive 15% of the amount we distribute in excess of $0.1375 per unit, 25% of the amount we distribute in excess of $0.15625 per unit, and 50% of the amount we distribute in excess of $0.1875 per unit. For the years ended December 31, 2016, 2015 and 2014, we allocated to our managing general partner incentive distributions of $75.1 million, $141.7 million and $129.8 million, respectively. The following table summarizes the quarterly per unit distribution paid during the respective quarter: Year 2016 2015 2014 First Quarter $ $ $ Second Quarter $ $ $ Third Quarter $ $ $ Fourth Quarter $ $ $ On January 27, 2017, we declared a quarterly distribution of $0.4375 per unit, totaling approximately $52.4 million (which includes our managing general partner's IDR distributions), on all our common units outstanding, which was paid on February 14, 2017, to all unitholders of record on February 7, 2017. |
VARIABLE INTEREST ENTITIES
VARIABLE INTEREST ENTITIES | 12 Months Ended |
Dec. 31, 2016 | |
VARIABLE INTEREST ENTITIES | |
VARIABLE INTEREST ENTITIES | 10. VARIABLE INTEREST ENTITIES Cavalier Minerals On November 10, 2014, our subsidiary, 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 7 – 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: Year Ended December 31, 2016 2015 2014 (in thousands) Alliance Minerals Beginning cumulative commitment fulfilled $ $ $ — Capital contributions - Cash Capital contributions - Net AllDale Minerals' distributions received by Cavalier Minerals (1) — Ending cumulative commitment fulfilled Remaining commitment (2) Total committed $ $ $ Bluegrass Minerals Beginning cumulative commitment fulfilled $ $ $ — Capital contributions - Cash Capital contributions - Net AllDale Minerals' distributions received by Cavalier Minerals (1) — Ending cumulative commitment fulfilled Remaining commitment (2) Total committed $ $ $ (1) Represents distributions received from AllDale Minerals net of distributions reinvested and payments to Bluegrass Minerals for administration expense. (2) The remaining commitments were fulfilled in 2017. 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 7 – Long-Term Debt). We expect to fund our remaining commitments utilizing existing cash balances, future cash flows from operations and cash provided from borrowings of debt or equity issuances. 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 all members have recovered their investment. The incentive distributions are 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: Year Ended December 31, 2016 2015 2014 (in thousands) Alliance Minerals $ $ — $ — Bluegrass Minerals — — Alliance Minerals' ownership interest in Cavalier Minerals at December 31, 2016 and 2015 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 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 consolidated balance sheets. In addition, earnings attributable to Bluegrass Minerals are recognized as noncontrolling interest in our 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. WKY CoalPlay was formed, in part, to purchase and lease coal reserves. WKY CoalPlay is managed by the ARH Officer discussed in Note 7 – 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. See Note 18 – Related-Party Transactions for further information on our lease terms with WKY CoalPlay. We have concluded that WKY CoalPlay is a VIE because of our ability to exercise options to acquire reserves under lease with WKY CoalPlay (Note 18 – Related-Party Transactions), 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. White Oak Prior to our acquisition of the remaining equity interests in White Oak as discussed in Note 3 – Acquisitions, White Oak was a variable interest entity of which we were not the primary beneficiary. We held a majority of the Series A Units that had certain distribution and liquidation preferences but only gave us a 40% voting interest in the primary activities of the company. We had protective rights and limited participating rights, such as minority representation on their board of directors, restrictions on indebtedness and other obligations, the ability to assume control of the board of directors in certain circumstances, such as an event of default, and the right to approve certain coal sales agreements. These protective and participating rights did not provide us the ability to unilaterally direct any of the primary activities of White Oak that most significantly impacted its economic performance and thus, we were not the primary beneficiary for consolidation purposes. Consequentially, we accounted for our Series A Units investment as an equity investment. See Note 11 – Equity Method Investments for further information. 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 ASI. The Intermediate Partnership is a limited 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 neither the MGP nor the Intermediate Partnership have both the power and the benefits related to Alliance Coal. We then considered which of the two was most closely aligned with Alliance Coal and thus would be designated the primary beneficiary of Alliance Coal for consolidation purposes. We determined that the Intermediate Partnership was most closely aligned with Alliance Coal and is the primary beneficiary. We based our determination of alignment 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 and 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. ARLP holds a 98.9899% limited partnership interest in the Intermediate Partnership and MGP holds the 1.0001% managing general 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 neither the MGP nor ARLP have both the power and the benefits related to Intermediate Partnership. We then considered which of the two was most closely aligned with the Intermediate Partnership and thus would be designated the primary beneficiary of the Intermediate Partnership for consolidation purposes. We determined that ARLP was most closely aligned with the Intermediate Partnership and is the primary beneficiary. We based our determination of alignment 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 and 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. 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 7 – 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, without the consent of the limited partners, to amend the Agreements. See Note 2 – Summary of Significant Accounting Policies for more information on our accounting policy for variable interest entities. |
EQUITY INVESTMENTS
EQUITY INVESTMENTS | 12 Months Ended |
Dec. 31, 2016 | |
EQUITY INVESTMENTS | |
EQUITY INVESTMENT | 11. EQUITY INVESTMENTS AllDale Minerals On November 10, 2014, Cavalier Minerals (see Note 10 – Variable Interest Entities) 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 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: Year Ended December 31, 2016 2015 2014 (in thousands) Beginning balance $ $ $ — Contributions Equity in income (loss) of affiliates Distributions received — Ending balance $ $ $ In accordance with AllDale Minerals' partnership agreements, limited partners, such as Cavalier Minerals, will initially receive all distributions of proceeds from certain producing basins based upon the greater of the limited partner's cumulative contributions plus 25.0% or an amount sufficient to cause the limited partner to receive an effective internal rate of return of 10.0%. Afterwards, 20.0% of all distributions will be allocated to AllDale Minerals Management, as an incentive distribution to the general partner, with the remaining 80.0% allocated to limited partners based upon ownership percentages. In addition, upon an event of liquidation, any proceeds will be distributed using the same methodology. In February 2017, Alliance Minerals committed to directly (rather than through Cavalier Minerals) invest $30.0 million in AllDale Minerals III, LP ("AllDale III") which was created for similar investment purposes as AllDale Minerals. White Oak On September 22, 2011, we entered into a series of transactions ("Initial Transactions") with White Oak to support development of a longwall mining operation, which we assumed control of in July 2015 through our acquisition of the remaining equity interests in White Oak (see Note 3 - Acquisitions). The Initial Transactions featured several components, including an equity investment in White Oak, the acquisition and lease-back of certain coal reserves and surface rights, a loan and a coal handling and preparation agreement, pursuant to which we constructed and operated Hamilton's preparation plant and other surface facilities. Prior to the Hamilton Acquisition, we recorded our previous equity in income or losses of affiliates from White Oak under the hypothetical-liquidation-at-book-value method of accounting due to the preferences to which we were entitled with respect to distributions. See Note 10 – Variable Interest Entities regarding our determination to account for White Oak as an equity investment prior to the Hamilton Acquisition. White Oak's results prior to the Hamilton Acquisition for the period from January 1, 2015 to July 31, 2015 and for the year ended December 31, 2014 are summarized as follows: January 1, 2015 December 31, to July 31, 2015 2014 (in thousands) Total revenues $ $ Gross loss Loss from operations Net loss See Note 2 – Summary of Significant Accounting Policies for more information on our accounting policy for equity investments. |
NET INCOME OF ARLP PER LIMITED
NET INCOME OF ARLP PER LIMITED PARTNER UNIT | 12 Months Ended |
Dec. 31, 2016 | |
NET INCOME OF ARLP PER LIMITED PARTNER UNIT | |
NET INCOME OF ARLP PER LIMITED PARTNER UNIT | 12. NET INCOME OF ARLP PER LIMITED PARTNER UNIT 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 (see Note 9 – Distributions). Under the quarterly IDR provisions of our partnership agreement, our managing general partner is entitled to receive 15% of the amount we distribute in excess of $0.1375 per unit, 25% of the amount we distribute in excess of $0.15625 per unit, and 50% of the amount we distribute in excess of $0.1875 per unit. Our partnership agreement contractually limits our distributions to available cash and therefore, undistributed earnings of the ARLP Partnership are not allocated to the IDR holder. In addition, our outstanding unvested awards under our LTIP and phantom units in the SERP and Deferred Compensation Plan contain 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 and net income used for calculating EPU and the weighted-average units used in computing EPU for the years ended December 31, 2016, 2015 and 2014, respectively: Year Ended December 31, 2016 2015 2014 (in thousands, except per unit data) Net income of ARLP $ $ $ Adjustments: Managing general partner's priority distributions General partners' 2% equity ownership General partners' special allocation of certain general and administrative expenses 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 (1) 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. For the year ended December 31, 2016, 2015 and 2014, the combined total of LTIP, SERP and Deferred Compensation Plan units of 922,386, 734,171 and 798,701, respectively, were considered anti-dilutive under the treasury stock method. During 2016, 2015 and 2014, an affiliated entity controlled by Mr. Craft made capital contributions of $1.0 million, $1.5 million and $1.5 million, respectively, to AHGP for the purpose of funding certain general and administrative expenses. Upon AHGP's receipt of each contribution, it contributed the same to its subsidiary MGP, our managing general partner, which in turn contributed the same to our subsidiary, Alliance Coal. As provided under our partnership agreement, we made special allocations to our managing general partner of certain general and administrative expenses equal to its contributions. Net income of ARLP allocated to the limited partners was not burdened by this expense. |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2016 | |
COMPONENTS OF PENSION PLAN NET PERIODIC BENEFIT COSTS | |
EMPLOYEE BENEFIT PLANS | 13. EMPLOYEE BENEFIT PLANS Defined Contribution Plans —Our eligible employees currently participate in a defined contribution profit sharing and savings plan ("PSSP") that we sponsor. The PSSP covers all regular full-time employees. PSSP participants may elect to make voluntary contributions to this plan up to a specified amount of their compensation. We make matching contributions based on a percent of an employee's eligible compensation and also make an additional non-matching contribution. Our contribution expense for the PSSP was approximately $18.2 million, $22.6 million and $21.8 million for the years ended December 31, 2016, 2015 and 2014, respectively. Defined Benefit Plan —Eligible employees at certain of our mining operations participate in a defined benefit plan (the "Pension Plan") that we sponsor. The Pension Plan is currently closed to new applicants and effective January 31, 2017, participants within the Pension Plan ("Participants") are no longer receiving benefit accruals for service. The amendment did not affect pension benefits accrued prior to January 31, 2017. All Participants can participate in enhanced benefits provisions under the PSSP. The benefit formula for the Pension Plan is a fixed-dollar unit based on years of service. The following sets forth changes in benefit obligations and plan assets for the years ended December 31, 2016 and 2015 and the funded status of the Pension Plan reconciled with the amounts reported in our consolidated financial statements at December 31, 2016 and 2015, respectively: 2016 2015 (dollars in thousands) Change in benefit obligations: Benefit obligations at beginning of year $ $ Service cost Interest cost Actuarial (gain) loss Benefits paid Plan amendments — Benefit obligations at end of year Change in plan assets: Fair value of plan assets at beginning of year Employer contribution Actual return on plan assets Benefits paid Fair value of plan assets at end of year Funded status at the end of year $ $ Amounts recognized in balance sheet: Non-current liability $ $ $ $ Amounts recognized in accumulated other comprehensive income consists of: Prior service credit $ $ — Net actuarial loss $ $ Weighted-average assumptions to determine benefit obligations as of December 31, Discount rate Expected rate of return on plan assets Weighted-average assumptions used to determine net periodic benefit cost for the year ended December 31, Discount rate Expected return on plan assets The actuarial loss component of the change in benefit obligation in 2016 was primarily attributable to a decrease in the discount rate compared to December 31, 2015 offset in part by improved life expectancies and updated retirement and withdrawal rate estimates. The actuarial gain component of the change in benefit obligation in 2015 was primarily attributable to an increase in the discount rate compared to December 31, 2014 and the adoption of newly issued mortality tables reflecting improved life expectancies offset in part by updated retirement and withdrawal rate estimates. The expected long-term rate of return used to determine our pension liability is based on a 1.5% active management premium in addition to an asset allocation assumption of: Expected long- Asset allocation term rate of As of December 31, 2016 assumption return Domestic equity securities Foreign equity securities Fixed income securities/cash The actual return on plan assets was 5.9% and (2.0)% for the years ended December 31, 2016 and 2015, respectively. 2016 2015 2014 (in thousands) Components of net periodic benefit cost: Service cost $ $ $ Interest cost Expected return on plan assets Amortization of net loss Net periodic benefit cost $ $ $ 2016 2015 (in thousands) Other changes in plan assets and benefit obligation recognized in accumulated other comprehensive income: Prior service credit $ $ — Net actuarial loss Reversal of amortization item: Net actuarial loss Total recognized in accumulated other comprehensive income (loss) Net periodic benefit cost Total recognized in net periodic benefit cost and accumulated other comprehensive loss $ $ Estimated future benefit payments as of December 31, 2016 are as follows: Year Ended December 31, (in thousands) 2017 $ 2018 2019 2020 2021 2022-2026 $ We expect to contribute $3.3 million to the Pension Plan in 2017. The estimated net actuarial loss for the Pension Plan that will be amortized from AOCI into net periodic benefit cost during the 2017 fiscal year is $3.1 million. The Compensation Committee has appointed an investment manager with full investment authority with respect to Pension Plan investments subject to investment guidelines and compliance with ERISA or other applicable laws. The investment manager employs a series of asset allocation strategy phases to glide the portfolio risk commensurate with both plan characteristics and market conditions. The objective of the allocation policy is to reach and maintain fully funded status. The total portfolio allocation will be adjusted as the funded ratio of the Pension Plan changes and market conditions warrant. The target allocation includes investments in equity and fixed income commingled investment funds. Total account performance is reviewed at least annually, using a dynamic benchmark approach to track investment performance. General asset allocation guidelines at December 31, 2016 are as follows: Percentage of Total Portfolio Minimum Target Maximum Equity securities Fixed income securities Real estate Equity securities include domestic equity securities, developed international securities, emerging markets equity securities and real estate investment trust. Fixed income securities include domestic and international investment grade fixed income securities, high yield securities and emerging markets fixed income securities. Fixed income futures may also be utilized within the fixed income securities asset allocation. The following information discloses the fair values of our Pension Plan assets, by asset category, for the periods indicated: December 31, 2016 December 31, 2015 Level 1 (a) Level 2 (a) Level 3 (a) Total Level 1 (a) Level 2 (a) Level 3 (a) Total (in thousands) Cash and cash equivalents $ $ — $ — $ $ $ — $ — $ Equity securities (b): U.S. large-cap growth — — — — — — U.S. large-cap value — — — — — — U.S. small/mid-cap blend — — — — — — International large-cap core — — — — — — Fixed income securities: U.S. Treasury securities (c) — — — — — — Corporate bonds (d) — — — — — — Preferred stock — — — — — — — — Taxable municipal bonds (d) — — — — — — International bonds (d) — — — — — — Equity mutual funds (e): U.S. mid-cap growth — — — — — — International — — — — — — Fixed income mutual funds (e): Corporate bond — — — — — — Mortgage backed-securities — — — — — — Short term investment grade bond — — — — — — Intermediate investment grade bond — — — — — — High yield bond — — — — — — International bond — — — — — — Stock market index options (f): Puts — — — — — — Calls — — — — — — Accrued income (g) — — — — — — $ $ — $ — $ $ $ — Commingled investment funds measured at net asset value (h): Equities - U.S. large-cap — Equities - U.S. small-cap — Equities - International developed markets — Equities - International emerging markets — Fixed income - Investment grade — Fixed income - High yield — Real estate — Other — Total $ $ (a) See Note 2 – Summary of Significant Accounting Policies – Fair Value Measurements for more information regarding the definitions of fair value hierarchy levels. (b) Equity securities include investments in publicly traded common stock and preferred stock. Publicly-traded common stocks are traded on a national securities exchange and investments in common and preferred stocks are valued using quoted market prices multiplied by the number of shares owned. (c) U.S. Treasury securities include agency and treasury debt. These investments are valued using dealer quotes in an active market. (d) Bonds are valued utilizing a market approach that includes various valuation techniques and sources such as value generation models, broker quotes in active and non-active markets, benchmark yields and securities, reported trades, issuer spreads, and/or other applicable reference data. The corporate bonds and notes category is primarily comprised of U.S. dollar denominated, investment grade securities. Less than 5 percent of the securities have a rating below investment grade. (e) Mutual funds are valued daily in actively traded markets by an independent custodian for the investment manager. For purposes of calculating the value, portfolio securities and other assets for which market quotes are readily available are valued at market value. Market value is generally determined on a basis of last reported sales prices, or if no sales are reported, based on quotes obtained from a quotation reporting system, established market makers, or pricing services. Investments initially valued in currencies other than the U.S. dollars are converted to the U.S. dollar using exchange rates obtained from pricing services. (f) Options are valued utilizing quotes in active markets. (g) Accrued income represents dividends declared, but not received, on equity securities owned at December 31, 2016 and 2015. (h) Investments measured at fair value using the net asset value per share (or its equivalent) have not been classified within the fair value hierarchy. The fair values of all commingled investment funds are determined based on the net asset values per unit of each of the funds. The net asset values per unit represent the aggregate value of the fund's assets at fair value less liabilities, divided by the number of units outstanding. See Note 2 – Summary of Significant Accounting Policies for more information on our accounting policy for pension benefits. |
COMPENSATION PLANS
COMPENSATION PLANS | 12 Months Ended |
Dec. 31, 2016 | |
COMPENSATION PLANS | |
COMPENSATION PLANS | 14. COMPENSATION PLANS 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. Vesting of all grants outstanding are subject to the satisfaction of certain financial tests, which management currently believes is probable. Grants issued to LTIP participants are expected to cliff vest on January 1st of the third year following issuance of the grants. We expect to settle the non-vested LTIP grants by delivery of ARLP common units, except for the portion of the grants that will satisfy the minimum statutory tax withholding requirements. As provided under the distribution equivalent rights 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 and 2017 grants, at 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. A summary of non-vested LTIP grants as of and for the years ended December 31, 2016, 2015 and 2014 is as follows: Number of units Weighted average grant date fair value per unit Intrinsic value (in thousands) Non-vested grants at January 1, 2014 $ $ Granted Vested (1) Forfeited Non-vested grants at December 31, 2014 Granted Vested (1) Forfeited Non-vested grants at December 31, 2015 Granted Vested (1) Forfeited Non‑vested grants at December 31, 2016 (1) During the years ended December 31, 2016, 2015 and 2014, we issued 176,319, 128,150 and 128,610, respectively, unrestricted common units to the LTIP participants. The remaining vested units were settled in cash to satisfy the individual statutory minimum tax obligations of the LTIP participants. For the years ended December 31, 2016, 2015 and 2014, our LTIP expense was $12.7 million, $11.2 million and $9.6 million, respectively. The total obligation associated with the LTIP as of December 31, 2016 and 2015 was $25.1 million and $21.4 million, respectively, and is included in the partners' capital Limited partners-common unitholders line item in our consolidated balance sheets. As of December 31, 2016, there was $11.7 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 1.8 years. On January 25, 2017, the Compensation Committee determined that the vesting requirements for the 2014 grants of 350,516 restricted units (which was net of 5,638 forfeitures) had been satisfied as of January 1, 2017. As a result of this vesting, on February 8, 2017, we issued 222,011 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 25, 2017, the Compensation Committee also authorized additional grants of 472,890 restricted units, of which 462,890 units were granted. After consideration of the January 1, 2017 vesting and subsequent issuance of 222,011 common units, approximately 2.5 million units remain available under the LTIP for issuance in the future, assuming all grants issued in 2017, 2016 and 2015 and currently outstanding are settled with common units, without reduction for tax withholding, and no future forfeitures occur. Supplemental Executive Retirement Plan 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. A summary of SERP and Deferred Compensation Plan activity as of and for the years ended December 31, 2016, 2015 and 2014 is as follows: Number of units Weighted average grant date fair value per unit Intrinsic value (in thousands) Phantom units outstanding as of January 1, 2014 $ $ Granted Issued Phantom units outstanding as of December 31, 2014 Granted Phantom units outstanding as of December 31, 2015 Granted Issued Phantom units outstanding as of December 31, 2016 Total SERP and Deferred Compensation Plan expense was approximately $1.2 million, $1.3 million and $1.2 million for the years ended December 31, 2016, 2015 and 2014, respectively. As of December 31, 2016 and 2015, the total obligation associated with the SERP and Deferred Compensation Plan was $14.7 million and $13.8 million, respectively, and is included in the partners' capital Limited partners-common unitholders line item in our consolidated balance sheets. See Note 2 – Summary of Significant Accounting Policies for more information on our accounting policy for unit-based compensation. |
SUPPLEMENTAL CASH FLOW INFORMAT
SUPPLEMENTAL CASH FLOW INFORMATION | 12 Months Ended |
Dec. 31, 2016 | |
SUPPLEMENTAL CASH FLOW INFORMATION | |
SUPPLEMENTAL CASH FLOW INFORMATION | 15. SUPPLEMENTAL CASH FLOW INFORMATION Year Ended December 31, 2016 2015 2014 (in thousands) Cash Paid For: Interest $ $ $ Income taxes $ $ $ — Non-Cash Activity: Accounts payable for purchase of property, plant and equipment $ $ $ Assets acquired by capital lease $ $ $ — Market value of common units vested in Long-Term Incentive Plan and Deferred Compensation Plan before minimum statutory tax withholding requirements $ $ $ Acquisition of businesses: Fair value of assets assumed, net of cash acquired $ $ $ — Contingent consideration — — Settlement of pre-existing relationships — — Previously held equity-method investment — — Cash paid, net of cash acquired — Fair value of liabilities assumed $ — $ $ — Disposition of property, plant and equipment: Net change in assets $ — $ — $ Book value of liabilities transferred — — Gain recognized $ — $ — $ |
ASSET RETIREMENT OBLIGATIONS
ASSET RETIREMENT OBLIGATIONS | 12 Months Ended |
Dec. 31, 2016 | |
ASSET RETIREMENT OBLIGATIONS | |
ASSET RETIREMENT OBLIGATIONS | 16. ASSET RETIREMENT OBLIGATIONS The majority of our operations are governed by various state statutes and the Federal Surface Mining Control and Reclamation Act of 1977, which establish reclamation and mine closing standards. These regulations require, among other things, restoration of property in accordance with specified standards and an approved reclamation plan. The following table presents the activity affecting the asset retirement and mine closing liability: Year Ended December 31, 2016 2015 (in thousands) Beginning balance $ $ Accretion expense Payments Assumption of existing liability — Allocation of liability associated with acquisitions, mine development and change in assumptions Ending balance $ $ For the year ended December 31, 2016, the allocation of liability associated with acquisition, mine development and change in assumptions was a net decrease of $1.4 million. This decrease was attributable to the net impact of overall general changes in inflation and discount rates, current estimates of the costs and scope of remaining reclamation work, reclamation work completed and fluctuations in projected mine life estimates, offset in part by increased expansion and disturbances of refuse sites primarily at the Warrior and Gibson County Coal mines. For the year ended December 31, 2015, the increase in the total liability was primarily attributable to the acquisition of additional property with certain existing reclamation liabilities (See Note 3 – Acquisitions). The allocation of liability associated with mine development and change in assumptions was a net decrease of $3.5 million. This decrease was primarily attributable to decreased estimates of reclamation requirements at property of our subsidiary, Rough Creek Mining, LLC, offset by increased refuse site reclamation acreage and material required at Pattiki, along with updated estimates at all other operations, offset in part by the net impact of overall general changes in inflation and discount rates, current estimates of the costs and scope of remaining reclamation work, reclamation work completed and fluctuations in other projected mine life estimates. The impact of discounting our estimated cash flows resulted in reducing the accrual for asset retirement obligations by $110.7 million and $104.8 million at December 31, 2016 and 2015, respectively. Estimated payments of asset retirement obligations as of December 31, 2016 are as follows: Year Ended December 31, (in thousands) 2017 $ 2018 2019 2020 2021 Thereafter Aggregate undiscounted asset retirement obligations Effect of discounting Total asset retirement obligations Less: current portion Asset retirement obligations $ Federal and state laws require bonds to secure our obligations to reclaim lands used for mining and are typically renewable on a yearly basis. As of December 31, 2016 and 2015, we had approximately $171.8 million and $153.5 million, respectively, in surety bonds outstanding to secure the performance of our reclamation obligations. See Note 2 – Summary of Significant Accounting Policies for more information on our accounting policy for asset retirement obligations. |
ACCRUED WORKERS' COMPENSATION A
ACCRUED WORKERS' COMPENSATION AND PNEUMOCONIOSIS BENEFITS | 12 Months Ended |
Dec. 31, 2016 | |
WORKERS' COMPENSATION AND PNEUMOCONIOSIS | |
ACCRUED WORKERS' COMPENSATION AND PNEUMOCONIOSIS BENEFITS | 17. ACCRUED WORKERS' COMPENSATION AND PNEUMOCONIOSIS BENEFITS We provide income replacement and medical treatment for work-related traumatic injury claims as required by applicable state laws. Workers' compensation laws also compensate survivors of workers who suffer employment related deaths. Certain of our mine operating entities are liable under state statutes and the Federal Coal Mine Health and Safety Act of 1969, as amended, to pay pneumoconiosis, or black lung, benefits to eligible employees and former employees and their dependents. In addition, we are liable for workers' compensation benefits for traumatic injuries. Both black lung and traumatic claims are covered through our self-insured programs. The following is a reconciliation of the changes in workers' compensation liability (including current and long-term liability balances) at December 31, 2016 and 2015: 2016 2015 (in thousands) Beginning balance $ $ Accruals Payments Interest accretion Valuation gain Ending balance $ $ The discount rate used to calculate the estimated present value of future obligations for workers' compensation was 3.52%, 3.63% and 3.41% at December 31, 2016, 2015 and 2014, respectively. The 2016 valuation gain was primarily attributable to favorable changes in claims development partially offset by the decrease in the discount rate used to calculate the estimated present value of future obligations. The valuation gain component of the change in benefit obligation in 2015 was primarily attributable to favorable changes in claim development and an increase in the discount rate used to calculate the estimated present value of future obligations. The following is a reconciliation of the changes in black lung benefit obligations at December 31, 2016 and 2015: 2016 2015 (in thousands) Benefit obligations at beginning of year $ $ Service cost Interest cost Actuarial loss Acquisition — Benefits and expenses paid Benefit obligations at end of year $ $ 2016 2015 2014 (in thousands) Amount recognized in accumulated other comprehensive income consists of: Net actuarial gain $ $ $ The actuarial loss component of the change in benefit obligations in 2016 was primarily attributable to the decrease in the discount rate used to calculate the estimated present value of the future obligations which was partially offset by favorable claims development changes. The actuarial loss component of the change in benefit obligations in 2015 was primarily attributable to unfavorable changes in anticipated claims development and filing assumptions and higher expected claim benefit costs partially offset by an increase in the discount rate used to calculate the estimated present value of future obligations. Summarized below is information about the amounts recognized in the accompanying consolidated balance sheets for black lung and workers' compensation benefits at December 31, 2016 and 2015: 2016 2015 (in thousands) Black lung claims $ $ Workers’ compensation claims Total obligations Less current portion Non-current obligations $ $ Both the black lung and workers' compensation obligations were unfunded at December 31, 2016 and 2015. The black lung and workers' compensation expense consists of the following components for the year ended December 31, 2016, 2015 and 2014: 2016 2015 2014 (in thousands) Black lung benefits: Service cost $ $ $ Interest cost Net amortization Total black lung Workers’ compensation expense Total expense $ $ $ The following is a reconciliation of the changes in the black lung benefit obligation recognized in AOCI for the years ended December 31, 2016, 2015 and 2014: 2016 2015 2014 (in thousands) Net actuarial loss $ $ $ Reversal of amortization item: Net actuarial gain Total recognized in accumulated other comprehensive loss $ $ $ The discount rate used to calculate the estimated present value of future obligations for black lung was 3.97%, 4.16% and 3.82% at December 31, 2016, 2015 and 2014, respectively. As of December 31, 2016 and 2015, we had $89.1 million and $90.0 million, respectively, in surety bonds and letters of credit outstanding to secure workers' compensation obligations. See Note 2 – Summary of Significant Accounting Policies for more information on our accounting policy for workers' compensation and black lung benefits. |
RELATED-PARTY TRANSACTIONS
RELATED-PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2016 | |
RELATED-PARTY TRANSACTIONS | |
RELATED-PARTY TRANSACTIONS | 18. RELATED-PARTY TRANSACTIONS The board of directors of our managing general partner ("Board of Directors") and its conflicts committee ("Conflicts Committee") review our related-party transactions that involve a potential conflict of interest between a general partner and ARLP or its subsidiaries or another partner to determine that such transactions are fair and reasonable to ARLP. As a result of these reviews, the Board of Directors and the Conflicts Committee approved each of the transactions described below that had such potential conflict of interest as fair and reasonable to ARLP. White Oak — On September 22, 2011, we entered into the Initial Transactions (See Note 11 – Equity Investments) with White Oak and related entities to support development of a longwall mining operation. The Initial Transactions and subsequent transactions with White Oak involved several components, including an equity investment containing certain distribution and liquidation preferences, the acquisition and lease-back of certain reserves and surface rights which generated royalties of $11.4 million and $0.2 million in 2015 and 2014, respectively, a coal handling and services agreement which generated throughput revenues of $28.2 million and $19.6 million in 2015 and 2014, respectively, a coal supply agreement, export marketing and transportation agreements and certain debt agreements. On July 31, 2015, we purchased the remaining equity interests in White Oak. See Note 3 – Acquisitions for a detailed discussion of this acquisition. In addition to the agreements discussed above, White Oak also had agreements with our subsidiaries for the purchase of various services and products, including for coal handling services provided by our Mt. Vernon transloading facility. For the years ended December 31, 2015 and 2014, we recorded revenues of $4.6 million and $3.9 million, respectively, for services and products provided by Mt. Vernon and Matrix Design to White Oak, which are included in Other sales and operating revenues on our consolidated statements of income. Affiliate Royalty Agreements The following table summarizes advanced royalties outstanding and related payments and recoupments under our affiliate royalty agreements: WKY CoalPlay SGP Towhead Webster Henderson WKY Land SGP Coal Coal Coal CoalPlay Henderson Henderson MC Tunnel & Union Webster Henderson & Union Mining Ridge Counties, KY County, KY County, KY Counties, KY Total 2001 2005 December 2014 December 2014 December 2014 February 2015 (in thousands) As of January 1, 2014 $ $ $ — $ — $ — $ — $ Payments — — — — — Recoupment — — — — As of December 31, 2014 — — — — — Payments — Recoupment — — — — As of December 31, 2015 — Payments — Recoupment — — — As of December 31, 2016 $ — $ — $ $ $ $ $ SGP Land — In 2001, SGP Land, as successor in interest to an unaffiliated third party, entered into an amended mineral lease with MC Mining. Under the terms of the lease, MC Mining was required to pay an annual minimum royalty of $0.3 million until $6.0 million of cumulative annual minimum and/or earned royalty payments had been paid. The cumulative annual minimum lease requirement of $6.0 million was met in 2015. MC Mining paid to SGP Land earned royalties of $0.6 million, $1.9 million and $0.9 million for the years ended December 31, 2016, 2015 and 2014, respectively. SGP — In January 2005, we acquired Tunnel Ridge from ARH. In connection with this acquisition, we assumed a coal lease with SGP. Under the terms of the lease, Tunnel Ridge has paid SGP and will continue to pay SGP an annual minimum royalty of $3.0 million until the earlier of January 1, 2033 or the exhaustion of the mineable and merchantable leased coal. In December 2016, Tunnel Ridge had recouped all past annual advances and made the first earned royalty payment to SGP which was nominal. As of December 31, 2016, Tunnel Ridge had $0.9 million accrued for earned royalties payable to SGP in January 2017. WKY CoalPlay — In February 2015, WKY CoalPlay entered into a coal lease agreement with Alliance Resource Properties regarding coal reserves located in Henderson and Union Counties, Kentucky. The lease has an initial term of 20 years and provides for earned royalty payments to WKY CoalPlay of 4.0% of the coal sales price and annual minimum royalty payments of $2.1 million. All annual minimum royalty payments are recoupable from future earned royalties. Alliance Resource Properties also was granted an option to acquire the leased reserves at any time during a three-year period beginning in February 2018 for a purchase price that would provide WKY CoalPlay a 7.0% internal rate of return on its investment in these reserves taking into account payments previously made under the lease (See Note 10 - Variable Interest Entities). In December 2014, WKY CoalPlay's subsidiaries, Towhead Coal Reserves, LLC (“Towhead Coal”), Webster Coal Reserves, LLC (“Webster Coal”), and Henderson Coal Reserves, LLC (“Henderson Coal”) entered into coal lease agreements with Alliance Resource Properties. The leases with Towhead Coal and Henderson Coal have initial terms of 20 years and provide for earned royalty payments of 4.0% of the coal sales price to both and annual minimum royalty payments of $3.6 million and $2.5 million, respectively. The lease with Webster Coal has an initial term of 7 years and provides for earned royalty payments of 4.0% of the coal sales price and annual minimum royalty payments of $2.6 million. All annual minimum royalty payments for each agreement are recoupable from future earned royalties related to their respective agreements. Each agreement grants Alliance Resource Properties an option to acquire the leased reserves at any time during a three-year period beginning in December 2017 for a purchase price that would provide WKY CoalPlay a 7.0% internal rate of return on its investment in the reserves taking into account payments previously made under the leases (See Note 10 – Variable Interest Entities). Cavalier Minerals – As discussed in Note 10 – Variable Interest Entities, Alliance Minerals has a limited partnership interest in Cavalier and we consolidate Cavalier Minerals which holds limited partner interests in the AllDale Minerals entities, which were created to purchase oil and gas mineral interests in various geographical locations within producing basins in the continental U.S. See Note - 11 Equity Investments for information on payments made and distributions received. Mineral Lending– See Note 7 - Long-Term Debt for discussion of the Cavalier Credit Agreement and Mineral Lending. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2016 | |
CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 19. Commitments — We lease buildings and equipment under operating lease agreements that provide for the payment of both minimum and contingent rentals. We also had a noncancelable lease with SGP in 2016 and have a noncancelable lease for equipment under a capital lease obligation. In 2015, we acquired equipment and other assets under operating and capital lease agreements as a result of the Hamilton and Patriot acquisitions (See Note 3 – Acquisitions). Future minimum lease payments are as follows: Other Operating Leases Capital Year Ending December 31, Lease Affiliate Others Total (in thousands) 2017 $ $ $ $ 2018 — 2019 — 2020 — 2021 — — — Thereafter — — — Total future minimum lease payments $ $ $ $ Less: amount representing interest Present value of future minimum lease payments Less: current portion Long-term capital lease obligation $ Rental expense (including rental expense incurred under operating lease agreements) was $17.0 million, $11.7 million and $4.7 million for the years ended December 31, 2016, 2015 and 2014, respectively. Contractual Commitments — In connection with planned capital projects, we have contractual commitments of approximately $27.3 million at December 31, 2016. As of December 31, 2016, we had no material commitments to purchase coal from external production sources in 2017. On November 10, 2014, Cavalier Minerals purchased equity interests in AllDale Minerals, an entity created to purchase oil and gas mineral interests in various geographic locations within producing basins in the continental U.S. Cavalier Minerals had an investment funding commitment to AllDale Minerals of $6.3 million at December 31, 2016, which it funded in January 2017. For more information on Cavalier Minerals and AllDale Minerals, see Note 10 – Variable Interest Entities and Note 11 – Equity Investments. In February 2017, Alliance Minerals committed to directly (rather than through Cavalier Minerals) invest $30.0 million over the next two years in AllDale III which was created for similar investment purposes as AllDale Minerals. On October 29, 2015, we entered into a sale-leaseback transaction whereby we sold certain mining equipment for $100.0 million and concurrently entered into a lease agreement for the sold equipment with a four-year term. Under the lease agreement, we will pay an initial monthly rent of $1.9 million. A balloon payment equal to 20% of the equipment cost is due at the end of the lease term. As a result of this transaction, we recognized a deferred gain of $5.0 million which is being amortized over the lease term. 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 $7.9 million which is being amortized over the life of the equipment. We have recognized these sales-leaseback transactions as capital leases and included future payments within future minimum lease payments presented above. General Litigation — Various lawsuits, claims and regulatory proceedings incidental to our business are pending against the ARLP Partnership. We record an accrual for a potential loss related to these matters when, in management's opinion, such loss is probable and reasonably estimable. Based on known facts and circumstances, we believe the ultimate outcome of these outstanding lawsuits, claims and regulatory proceedings will not have a material adverse effect on our financial condition, results of operations or liquidity. However, if the results of these matters were different from management's current opinion and in amounts greater than our accruals, then they could have a material adverse effect. Other —Effective October 1, 2016, we renewed our annual property and casualty insurance program. Our property insurance was procured from our wholly owned captive insurance company, Wildcat Insurance. Wildcat Insurance charged certain of our subsidiaries for the premiums on this program and in return purchased reinsurance for the program in the standard market. The maximum limit in the commercial property program is $100.0 million per occurrence, excluding a $1.5 million deductible for property damage, a 75, 90 or 120 day waiting period for underground business interruption depending on the mining complex and an additional $10.0 million overall aggregate deductible. We can make no assurances that we will not experience significant insurance claims in the future that could have a material adverse effect on our business, financial condition, results of operations and ability to purchase property insurance in the future. |
CONCENTRATION OF CREDIT RISK AN
CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS | 12 Months Ended |
Dec. 31, 2016 | |
CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS | |
CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS | 20. We have significant long-term coal supply agreements, some of which contain prospective price adjustment provisions designed to reflect changes in market conditions, labor and other production costs and, in the infrequent circumstance when the coal is sold other than free on board the mine, changes in transportation rates. Illinois Basin and Appalachia segments as well as Other and Corporate have revenues from all of the major customers. Total revenues from major customers, including transportation revenues, which are at least ten percent of total revenues, are as follows: Year Ended December 31, 2016 2015 2014 (in thousands) Customer A $ $ $ Customer B Customer C Trade accounts receivable from these customers totaled approximately $42.5 million and $48.4 million at December 31, 2016 and 2015, respectively. Our bad debt experience has historically been insignificant. Financial conditions of our customers could result in a material change to our bad debt expense in future periods. The coal supply agreements expire in 2018 for customer A, 2019 for customer B and 2018 for customer C. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2016 | |
SEGMENT INFORMATION | |
SEGMENT INFORMATION | 21. 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's Dotiki mining complex, b) Gibson County Coal's mining complex, which includes the Gibson North (currently idled) and Gibson South mines, c) Warrior's mining complex, d) River View's mining complex and e) the Hamilton mining complex. In April 2014, production began at the Gibson South mine. The Gibson North mine has been idled since the fourth quarter of 2015 in response to market conditions. The Illinois Basin reportable segment also includes White County Coal's Pattiki mining complex, Hopkins County Coal's mining complex, which includes the Elk Creek mine, the Pleasant View surface mineable reserves and the Fies underground project, Sebree's mining complex, which includes the Onton mine, Steamport and certain Sebree reserves, CR Services, CR Machine Shop, certain properties and equipment of Alliance Resource Properties, ARP Sebree, ARP Sebree South and UC Coal and its subsidiaries, UC Mining and UC Processing. The Pattiki mine ceased production in December 2016. The Elk Creek mine depleted its reserves in March 2016 and ceased production on April 1, 2016. The Sebree properties, the Pleasant View surface mineable reserves and the Fies underground project are held by us for future mine development. Our Onton mine has been idled since the fourth quarter of 2015 in response to market conditions. UC Coal equipment assets acquired in 2015 continue to be deployed as needed at various Illinois Basin operating mines. Illinois Basin reserves and other assets increased as a result of multiple acquisitions in 2014 and 2015 as discussed in Note 3 – Acquisitions. The Appalachia reportable segment is comprised of multiple operating segments, including the Mettiki mining complex, the Tunnel Ridge mining complex and the MC Mining mining complex. The Mettiki mining complex includes Mettiki Coal (WV)'s Mountain View mine and Mettiki Coal's preparation plant. During the fourth quarter of 2015, we surrendered the Penn Ridge lease as those reserves were no longer a core part of our foreseeable development plans. See Note 4 – Long-Lived Asset Impairment for further discussion of this surrender. Other and Corporate includes marketing and administrative activities, ASI and its subsidiaries included in the Matrix Group, ASI's ownership of aircraft, our Mt. Vernon dock activities, coal brokerage activity, MAC (Note 3 – Acquisitions), certain activities of Alliance Resource Properties, throughput receivables and prior workers' compensation and pneumoconiosis liabilities from Pontiki, which sold most of its assets in May 2014, Wildcat Insurance, Alliance Minerals, and its affiliate, Cavalier Minerals (Note 10 – Variable Interest Entities), which holds an equity investment in AllDale Minerals (Note 11 – Equity Investments), and AROP Funding (Note 7 – Long-Term Debt). Reportable segment results as of and for the years ended December 31, 2016, 2015 and 2014 are presented below. Illinois Other and Elimination Basin Appalachia Corporate (1) Consolidated (in thousands) Year Ended December 31, 2016 Revenues - Outside $ $ $ $ — $ Revenues - Intercompany — Total revenues (2) Segment Adjusted EBITDA Expense (3) Segment Adjusted EBITDA (4) Total assets (6) Capital expenditures — Year Ended December 31, 2015 Revenues - Outside $ $ $ $ — $ Revenues - Intercompany — Total revenues (2) Segment Adjusted EBITDA Expense (3) Segment Adjusted EBITDA (4)(5) Total assets (6) Capital expenditures (7) — Year Ended December 31, 2014 Revenues - Outside $ $ $ $ — $ Revenues - Intercompany — — — 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): Year Ended December 31, 2016 2015 2014 (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, asset impairment, acquisition gain, net and general and administrative expenses. Management therefore is able to focus solely on the evaluation of segment operating profitability as it relates to our revenues and operating expenses, which are primarily controlled by our segments. Consolidated Segment Adjusted EBITDA is reconciled to net income as follows: Year Ended December 31, 2016 2015 2014 (in thousands) Consolidated Segment Adjusted EBITDA $ $ $ General and administrative Depreciation, depletion and amortization Asset impairment — — Interest expense, net Acquisition gain, net — — Income tax expense — Net income $ $ $ (5) Includes equity in loss of affiliates for the years ended December 31, 2015 and 2014 of $48.5 million and $16.6 million, respectively, for the Illinois Basin segment. (6) Total assets at December 31, 2016, 2015 and 2014 include investments in affiliates of $138.8 million, $64.5 million and $12.9 million, respectively, within Other and Corporate. Total assets at December 31, 2014 include investments in affiliate of $211.7 million for the Illinois Basin segment. (7) Capital expenditures shown above exclude the Hamilton Acquisition on July 31, 2015, the Patriot acquisition on February 3, 2015, the MAC acquisition on January 1, 2015, purchase of coal supply agreements from Patriot on December 31, 2014 (Note 3 – Acquisitions) and the payment for acquisition of customer contracts in 2016 (see consolidated statements of cash flows). |
SELECTED QUARTERLY FINANCIAL DA
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | 12 Months Ended |
Dec. 31, 2016 | |
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | |
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | 22. A summary of our consolidated quarterly operating results in 2016 and 2015 is as follows: Quarter Ended March 31, June 30, September 30, December 31, 2016 2016 2016 2016 (in thousands, except unit and per unit data) Revenues $ $ $ $ Income from operations Income before income taxes Net income of ARLP Basic and diluted net income of ARLP per limited partner unit $ $ $ $ Weighted-average number of units outstanding – basic and diluted Quarter Ended March 31, June 30, September 30, December 31, 2015 2015 2015 (1) 2015 (1) (in thousands, except unit and per unit data) Revenues $ $ $ $ Income from operations Income before income taxes Net income of ARLP Basic and diluted net income of ARLP per limited partner unit $ $ $ $ Weighted-average number of units outstanding – basic and diluted (1) The comparability of our December 31, 2015 quarterly results to other quarters presented was affected by $89.4 million of asset impairments relating to our Onton mine, MC Mining mine and a surrendered lease (Note 4 – Long-Lived Asset Impairments), which was partially offset by a $22.5 million net gain relating to final business combination accounting for the Hamilton Acquisition (Note 3 – Acquisitions). An impairment charge of $10.7 million impacted the comparability of our September 30, 2015 quarterly results to other quarters presented. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2016 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 23. Other than those events described in Notes 7, 9, 10, 11, 13, 14 and 19, there were no subsequent events. |
SCHEDULE II VALUATION AND QUALI
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Dec. 31, 2016 | |
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS | |
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS | SCHEDULE II ALLIANCE RESOURCE PARTNERS, L.P. AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014 Balance At Additions Beginning Charged to Balance At of Year Income Deductions End of Year (in thousands) 2016 Allowance for doubtful accounts $ — $ — $ — $ — 2015 Allowance for doubtful accounts $ — $ — $ — $ — 2014 Allowance for doubtful accounts $ — $ — $ — $ — |
SUMMARY OF SIGNIFICANT ACCOUN33
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Estimates | Estimates — The preparation of consolidated financial statements in conformity with generally accepted accounting principles of the United States ("GAAP") requires management to make estimates and assumptions that affect the reported amounts and disclosures in the consolidated financial statements. Actual results could differ from those estimates. Significant estimates and assumptions include: · Impairment assessments of investments, property, plant and equipment, and goodwill; · Asset retirement obligations; · Pension valuation variables; · Workers' compensation and pneumoconiosis valuation variables; · Acquisition related purchase price allocations; and · Life of mine assumptions. These significant estimates and assumptions are discussed throughout these notes to the consolidated financial statements. |
Consolidation | Consolidation — The consolidated financial statements present the consolidated financial position, results of operations and cash flows of ARLP, the Intermediate Partnership (a subsidiary of ARLP and a variable interest entity of which ARLP is the primary beneficiary), Alliance Coal (a subsidiary of the Intermediate Partnership and 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 IDR in ARLP are also reported with the general partner interest in ARLP. All intercompany transactions and accounts have been eliminated. See Note 10 – Variable Interest Entities for more information regarding ARLP's consolidation of the Intermediate Partnership and Alliance Coal. See Note 9 – Distributions of Available Cash for more information regarding MGP's IDR in ARLP. |
Fair Value of Financial Instruments | Fair Value Measurements — We apply fair value measurements to certain assets and liabilities. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. Fair value is based upon assumptions that market participants would use when pricing an asset or liability, including assumptions about risk and risks inherent in valuation techniques and inputs to valuations. Fair value measurements assume that the transaction occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability (the market for which the reporting entity would be able to maximize the amount received or minimize the amount paid). Valuation techniques used in our fair value measurements are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our own market assumptions. We use the following fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels: · Level 1 – Quoted prices for identical assets and liabilities in active markets that we have the ability to access at the measurement date. · Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model derived valuations whose inputs are observable or whose significant value drivers are observable. · Level 3 – Unobservable inputs for the asset or liability including situations where there is little, if any, market activity for the asset or liability. The fair value hierarchy gives the highest priority to quoted prices in active markets (Level 1) and the lowest priority to unobservable data (Level 3). In some cases, the inputs used to measure fair value might fall into different levels of the fair value hierarchy. The lowest level input that is significant to a fair value measurement determines the applicable level in the fair value hierarchy. Assessing the significance of a particular input to the fair value measurement requires judgment, considering factors specific to the asset or liability. Significant fair value measurements are used in our significant estimates and are discussed throughout these notes. See Note 8 – Fair Value Measurements for discussion of recurring fair value measurements not otherwise disclosed in these financial statements. |
Cash and Cash Equivalents | Cash and Cash Equivalents — Cash and cash equivalents include cash on hand and on deposit, including highly liquid investments with maturities of three months or less. |
Cash Management | Cash Management — The cash flows from operating activities section of our consolidated statements of cash flows reflects an adjustment for $10.6 million representing book overdrafts at December 31, 2015. We did not have material book overdrafts at December 31, 2016 and 2014. |
Inventories | Inventories — Coal inventories are stated at the lower of cost or net realizable value on a first-in, first-out basis. Supply inventories are stated at an average cost basis, less a reserve for obsolete and surplus items. |
Business Combinations | Business Combinations — For acquisitions accounted for as a business combination, we record the assets acquired, including identified intangible assets and liabilities assumed at their fair value, which in many instances involves estimates based on third-party valuations, such as appraisals, or internal valuations based on discounted cash flow analyses or other valuation techniques. |
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 2016. |
Property, Plant and Equipment | Property, Plant and Equipment — Expenditures which extend the useful lives of existing plant and equipment assets are capitalized. Interest costs associated with major asset additions are capitalized during the construction period. Maintenance and repairs that do not extend the useful life or increase productivity of the asset are charged to operating expense as incurred. Exploration expenditures are charged to operating expense as incurred, including costs related to drilling and study costs incurred to convert or upgrade mineral resources to reserves. Preparation plants and processing facilities are depreciated using the units-of-production method. Other plant and equipment assets are depreciated principally using the straight-line method over the estimated useful lives of the assets, ranging from 1 to 23 years, limited by the remaining estimated life of each mine. Depreciable lives for the mining equipment range from 1 to 23 years. Depreciable lives for buildings, office equipment and improvements range from 1 to 25 years. Gains or losses arising from retirements are included in operating expenses. Depletable lives for mineral rights, assuming current production expectations, range from 2 to 23 years. Depletion of mineral rights is provided on the basis of tonnage mined in relation to estimated recoverable tonnage, which equals estimated proven and probable reserves. Therefore, our mineral rights are depleted based on only proven and probable reserves derived in accordance with Industry Guide 7. At December 31, 2016 and 2015, land and mineral rights include $34.4 million and $30.7 million, respectively, representing the carrying value of coal reserves attributable to properties where we or a third party to which we lease reserves are not currently engaged in mining operations or leasing to third parties, and therefore, the coal reserves are not currently being depleted. We believe that the carrying value of these reserves will be recovered. |
Mine Development Costs | Mine Development Costs — Mine development costs are capitalized until production, other than production incidental to the mine development process, commences and are amortized on a units of production method based on the estimated proven and probable reserves. Mine development costs represent costs incurred in establishing access to mineral reserves and include costs associated with sinking or driving shafts and underground drifts, permanent excavations, roads and tunnels. The end of the development phase and the beginning of the production phase takes place when construction of the mine for economic extraction is substantially complete. Coal extracted during the development phase is incidental to the mine's production capacity and is not considered to shift the mine into the production phase. |
Long-Lived Assets | Long-Lived Assets — We review the carrying value of long-lived assets and certain identifiable intangibles whenever events or changes in circumstances indicate that the carrying amount may not be recoverable based upon estimated undiscounted future cash flows. To the extent the carrying amount is not recoverable, the amount of impairment is measured by the difference between the carrying value and the fair value of the asset (See Note 4 – Long-Lived Asset Impairments). |
Intangibles | Intangibles — Intangibles subject to amortization include contracts with covenants not to compete, customer contracts acquired from other parties and mining permits. Intangibles other than customer contracts are amortized on a straight-line basis over their useful life. Intangibles for customer contracts are amortized on a per unit basis over the terms of the contracts. Amortization expense attributable to intangibles was $18.1 million, $15.1 million and $3.0 million for the years ending December 31, 2016, 2015 and 2014, respectively. Our intangibles are included in Prepaid expenses and other assets , Other long-term assets , Other current liabilities and Other liabilities on our consolidated balance sheets at December 31, 2016 and 2015. Our intangibles at December 31 are summarized as follows: December 31, 2016 December 31, 2015 Accumulated Intangibles, Accumulated Intangibles, Original Cost Amortization Net Original Cost Amortization Net (in thousands) Non-compete agreements $ $ $ $ $ $ Customer contracts and other, net Mining permits Total $ $ $ $ $ $ Amortization expense attributable to intangible assets is estimated as follows: Year Ended December 31, (in thousands) 2017 $ 2018 2019 2020 2021 Thereafter |
Investments | Investments —Investments and ownership interests are accounted for under the equity method of accounting if we have the ability to exercise significant influence, but not control, over the entity. Investments accounted for under the equity method are initially recorded at cost, and the difference between the basis of our investment and the underlying equity in the net assets of the joint venture at the investment date, if any, is amortized over the lives of the related assets that gave rise to the difference. In the event our ownership entitles us to a disproportionate sharing of income or loss, our equity in earnings or losses of affiliates is allocated based on the hypothetical liquidation at book value ("HLBV") method of accounting. Under the HLBV method, equity in earnings or losses of affiliates is allocated based on the difference between our claim on the net assets of the equity method investee at the end and beginning of the period with consideration of certain eliminating entries regarding differences of accounting for various related-party transactions, after taking into account contributions and distributions, if any. Our share of the net assets of the equity method investee is calculated as the amount we would receive if the equity method investee were to liquidate all of its assets at net book value and distribute the resulting cash to creditors, other investors and us according to the respective priorities. Our equity method investments during 2016 included AllDale Minerals, LP ("AllDale I") and AllDale Minerals II, LP ("AllDale II") (collectively "AllDale Minerals"). During 2015 and 2014, our equity method investments also included White Oak prior to our acquisition of its remaining equity interests on July 31, 2015. See Note 11 – Equity Investments for further discussion of these equity method investments. In addition, during 2014, our equity method investments also included MAC prior to our acquisition of the remaining interest on January 1, 2015. For discussion of both acquisitions, see Note 3 – Acquisitions. We review our investments and ownership interests accounted for under the equity method of accounting for impairment whenever events or changes in circumstances indicate a loss in the value of the investment may be other than temporary. |
Advance Royalties, net | Advance Royalties, net — Rights to coal mineral leases are often acquired and/or maintained through advance royalty payments. Where royalty payments represent prepayments recoupable against future production, they are recorded as an asset, with amounts expected to be recouped within one year classified as a current asset. As mining occurs on these leases, the royalty prepayments are charged to operating expenses. We assess the recoverability of royalty prepayments based on estimated future production. We have recorded a $6.2 million and $3.8 million allowance against these prepayments as of December 31, 2016 and 2015, respectively. Royalty prepayments estimated to be nonrecoverable are expensed. Our Advance royalties, net at December 31 are summarized as follows: 2016 2015 (in thousands) Advance royalties, affiliates (see Note 18 – Related-Party Transactions) $ $ Advance royalties, third-parties Total advance royalties, net $ $ |
Asset Retirement Obligations | Asset Retirement Obligations — The majority of our operations are governed by various state statutes and the Federal Surface Mining Control and Reclamation Act of 1977, which establish reclamation and mine closing standards. These regulations require, among other things, restoration of property in accordance with specified standards and an approved reclamation plan. We record a liability for the fair value of the estimated cost of future mine asset retirement and closing procedures, escalated for inflation then discounted, on a present value basis in the period incurred or acquired and a corresponding amount is capitalized by increasing the carrying amount of the related long-lived asset. Those costs relate to permanently sealing portals at underground mines and to reclaiming the final pits and support surface acreage for both our underground mines and past surface mines. Examples of these types of costs, common to both types of mining, include, but are not limited to, removing or covering refuse piles and settling ponds, water treatment obligations, and dismantling preparation plants, other facilities and roadway infrastructure. Accounting for asset retirement obligations also requires depreciation of the capitalized asset retirement cost and accretion of the asset retirement obligation over time. The depreciation is generally determined on a units-of-production basis and accretion is generally recognized over the life of the producing assets. As changes in estimates occur (such as mine plan revisions, changes in estimated costs or changes in timing of the performance of reclamation activities), the revisions to the obligation and asset are recognized at the appropriate credit-adjusted, risk-free interest rate. Federal and state laws require bonds to secure our obligations to reclaim lands used for mining and are typically renewable on a yearly basis. See Note 16 – Asset Retirement Obligations for more information. |
Pension Benefits | Pension Benefits — The funded status of our pension benefit plan is recognized separately in our consolidated balance sheets as either an asset or liability. The funded status is the difference between the fair value of plan assets and the plan's benefit obligation. Pension obligations and net periodic benefit costs are actuarially determined and impacted by various assumptions and estimates including expected return on assets, discount rates, mortality assumptions, employee turnover rates and retirement dates. We evaluate our assumptions periodically and make adjustments to these assumptions and the recorded liability as necessary (See Note 13 – Employee Benefit Plans). The discount rate is determined for our pension benefit plan based on an approach specific to our plan. The year-end discount rate is determined considering a yield curve comprised of high-quality corporate bonds and the timing of the expected benefit cash flows. The expected long-term rate of return on plan assets is determined based on broad equity and bond indices, the investment goals and objectives, the target investment allocation and on the average annual total return for each asset class. Unrecognized actuarial gains and losses and unrecognized prior service costs and credits are deferred and recorded in accumulated other comprehensive income ("AOCI") until amortized as a component of net periodic benefit cost. Unrecognized actuarial gains and losses in excess of 10% of the greater of the benefit obligation or the market-related value of plan assets are amortized over the participants' average remaining future years of service. |
Workers' Compensation and Pneumoconiosis (Black Lung) Benefits | Workers ' Compensation and Pneumoconiosis (Black Lung) Benefits — We are liable for workers' compensation benefits for traumatic injuries. Both black lung and traumatic claims are covered through our self-insured programs. In addition, 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. We provide income replacement and medical treatment for work-related traumatic injury claims as required by applicable state laws. Workers' compensation laws also compensate survivors of workers who suffer employment related deaths. Our liability for traumatic injury claims is the estimated present value of current workers' compensation benefits, based on our actuarial estimates. Our actuarial calculations are based on a blend of actuarial projection methods and numerous assumptions including claim development patterns, mortality, medical costs and interest rates. Our black lung benefits liability is calculated using the service cost method based on the actuarial present value of the estimated black lung obligation. Our actuarial calculations are based on numerous assumptions including disability incidence, medical costs, mortality, death benefits, dependents and discount rates. Actuarial gains or losses are amortized over the remaining service period of active miners. See Note 17 – Accrued Workers' Compensation and Pneumoconiosis Benefits for more information on Workers’ Compensation and Pneumoconiosis Benefits. |
Revenue Recognition | Revenue Recognition — Revenues from coal sales are recognized when title passes to the customer as the coal is shipped. Some coal supply agreements provide for price adjustments based on variations in quality characteristics of the coal shipped. In certain cases, a customer's analysis of the coal quality is binding and the results of the analysis are received on a delayed basis. In these cases, we estimate the amount of the quality adjustment and adjust the estimate to actual when the information is provided by the customer. Historically, such adjustments have not been material. Non-coal sales revenues primarily consist of transloading fees, administrative service revenues from our affiliates, mine safety services and products, royalties and throughput fees earned from White Oak prior to July 31, 2015 as disclosed in Note 3 – Acquisitions, other coal contract fees and other handling and service fees. Transportation revenues are recognized in connection with us incurring the corresponding costs of transporting coal to customers through third-party carriers for which we are directly reimbursed through customer billings. As discussed below, we do not anticipate the new revenue recognition standard introduced by Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers ("ASU 2014-09") will result in a material change to our pattern of revenue recognition when it becomes effective. |
Common Unit-Based Compensation | Common Unit-Based Compensation — We have the Long-Term Incentive Plan ("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 our managing general partner ("Compensation Committee"). Vesting of all grants outstanding are subject to the satisfaction of certain financial tests, which management currently believes is probable. Grants issued to LTIP participants are expected to cliff vest on January 1st of the third year following issuance of the grants. We expect to settle the non-vested LTIP grants by delivery of ARLP common units, except for the portion of the grants that will satisfy the minimum statutory tax withholding requirements. As provided under the distribution equivalent rights 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 and 2017 grants, at 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. We utilize the Supplemental Executive Retirement Plan ("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 MGP Amended and Restated Deferred Compensation Plan for Directors ("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. The fair value of restricted common unit grants under the LTIP, SERP and the Deferred Compensation Plan are determined on the grant date of the award and recognized as compensation expense on a pro rata basis for LTIP and SERP awards, as appropriate, over the requisite service period. Compensation expense is fully recognized on the grant date for quarterly distributions credited to SERP accounts and Deferred Compensation Plan awards. The corresponding liability is classified as equity and included in limited partners' capital in the consolidated financial statements (See Note 14 – Compensation Plans). |
Income Taxes | Income Taxes —We are not a taxable entity for federal or state income tax purposes; the tax effect of our activities accrues to the unitholders. Although publicly traded partnerships as a general rule will be taxed as corporations, we qualify for an exemption because at least 90% of our income consists of qualifying income, as defined in Section 7704(c) of the Internal Revenue Code. Net income for financial statement purposes may differ significantly from taxable income reportable to unitholders as a result of differences between the tax basis and financial reporting basis of assets and liabilities and the taxable income allocation requirements under our partnership agreement. Individual unitholders have different investment bases depending upon the timing and price of acquisition of their partnership units. Furthermore, each unitholder's tax accounting, which is partially dependent upon the unitholder's tax position, differs from the accounting followed in our consolidated financial statements. Accordingly, the aggregate difference in the basis of our net assets for financial and tax reporting purposes cannot be readily determined because information regarding each unitholder's tax attributes in our partnership is not available to us. Our subsidiaries, ASI and Wildcat Insurance, are subject to federal and state income taxes. A valuation allowance is established if it is more likely than not that a deferred tax asset will not be realized. Our tax counsel has provided an opinion that ARLP, the Intermediate Partnership and Alliance Coal will each be treated as a partnership. However, as is customary, no ruling has been or will be requested from the Internal Revenue Service ("IRS") regarding our classification as a partnership for federal income tax purposes. |
Variable Interest Entities ("VIE") | Variable Interest Entity ("VIE") — VIEs are primarily entities that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders, as a group, lack one or more of the following characteristics: (a) direct or indirect ability to make decisions, (b) obligation to absorb expected losses or (c) right to receive expected residual returns. A VIE must be evaluated quantitatively and qualitatively to determine the primary beneficiary, which is the reporting entity that has (a) the power to direct activities of a VIE that most significantly impact the VIE's economic performance and (b) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. The primary beneficiary is required to consolidate the VIE for financial reporting purposes. To determine a VIE's primary beneficiary, we perform a qualitative assessment to determine which party, if any, has the power to direct activities of the VIE and the obligation to absorb losses and/or receive its benefits. This assessment involves identifying the activities that most significantly impact the VIE's economic performance and determine whether it, or another party, has the power to direct those activities. When evaluating whether we are the primary beneficiary of a VIE, we perform a qualitative analysis that considers the design of the VIE, the nature of our involvement and the variable interests held by other parties. See Note 10 – Variable Interest Entities for further information. |
New Accounting Standards | New Accounting Standards Issued and Adopted – In May 2015, the Financial Accounting Standards Board ("FASB") issued ASU 2015-07 Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent) ("ASU 2015-07"). ASU 2015-07 removes the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. The standard is effective for financial statements issued for interim and annual reporting periods beginning after December 15, 2015, and requires retrospective presentation. The adoption of ASU 2015-07 impacted the presentation of our pension plan assets in the current year, but did not have a material impact on the presentation in the prior year (See Note 13 – Employee Benefit Plans). In April 2015, the FASB issued 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 did not have a material impact on our consolidated financial statements. In February 2015, the FASB issued ASU 2015-02, Consolidation ("ASU 2015-02") which was updated by ASU 2016-17, Interests Held through Related Parties That Are under Common Control issued on October 26, 2016. 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 a limited partnership’s variable interest status, the 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 did not 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. The adoption of ASU 2014-15 did not have a material impact on our 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, flexibility in the accounting for forfeitures 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 classify leases as either finance or operating (similar to current standard’s “capital” or operating” classification), 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 do not expect the adoption of ASU 2015-11 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 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 as follows: An entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 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 deferred 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. As part of our assessment process, we applied the five-step analysis outlined in the new standard to certain contracts representative of the majority of our coal sales contracts and determined that our pattern of recognition appears consistent between both the new and existing standards. We have also reviewed the expanded disclosure requirements under the new standard and have determined the additional information to be disclosed. In addition we are in the process of reviewing our business processes, systems and internal controls over financial reporting to support the new recognition and disclosure requirements under the new standard. The assessment team continues to report our implementation progress for the new standard to our management and audit committee of our managing general partner ("Audit Committee"). We continue to monitor closely, a) activities of the FASB and various non-authoritative groups with respect to implementation issues that might impact our determinations b) existing contracts for consistency with current implementation determinations derived from our assessment process and c) our revenue recognition policy, where applicable, for required modifications. We expect to complete this review in the first half of 2017. We do not expect that the adoption of the new standard will have a material impact on our financial statements, but will require expanded disclosures including presenting, by type and by segment, revenues for all periods presented and expected revenues by year for performance obligations that are unsatisfied or partially unsatisfied as of the date of presentation. The new standard allows for two methods of adoption: a full retrospective adoption method, which requires the recasting of prior periods presented as if the new standard were in effect with a cumulative effect adjustment to equity at the beginning of the earliest period presented and a modified retrospective method which allows a cumulative effect adjustment to equity as of the date of adoption. Because we do not anticipate a change in our pattern of revenue recognition, we anticipate that neither method will have a material impact on our consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN34
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Summary of intangible assets | December 31, 2016 December 31, 2015 Accumulated Intangibles, Accumulated Intangibles, Original Cost Amortization Net Original Cost Amortization Net (in thousands) Non-compete agreements $ $ $ $ $ $ Customer contracts and other, net Mining permits Total $ $ $ $ $ $ |
Schedule of estimated amortization expense attributable to intangible assets | Year Ended December 31, (in thousands) 2017 $ 2018 2019 2020 2021 Thereafter |
Summary of advance royalties | 2016 2015 (in thousands) Advance royalties, affiliates (see Note 18 – Related-Party Transactions) $ $ Advance royalties, third-parties Total advance royalties, net $ $ |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
White Oak | |
Acquisitions | |
Schedule of consideration transferred | (in thousands) Cash on hand $ Contingent consideration Settlement of pre-existing relationships Previously held equity-method investment Total consideration transferred $ |
Summary of fair value allocation of assets acquired and liabilities assumed | (in thousands) Cash and cash equivalents $ Trade receivables Prepaid expenses Inventories Other current assets Property, plant and equipment Advance royalties Deposits Other assets Total identifiable assets acquired Accounts payable Accrued expenses Deferred revenue Current maturities, long-term debt Long-term debt, excluding current maturities Other long-term liabilities Asset retirement obligations Total liabilities assumed Net identifiable assets acquired $ Goodwill Net assets acquired $ |
Schedule of recognized intangible assets and liabilities acquired | Weighted-average Account in table (in thousands) amortization period above Customer contracts and intangibles Current above-market contracts $ Other current assets Non-current above-market contracts Other assets Current below-market contracts Accrued expenses Non-current below-market contracts Other long-term liabilities Total customer contract intangibles 3 years Mining permit 20 years Other assets Total intangibles acquired $ |
Schedule of revenue and earnings since acquisition date and pro forma condensed consolidated income statement | The amounts of revenue and earnings inclusive of the $22.5 million in net gains associated with the settlement of pre-existing relationships and the Re-Measurement Loss, both discussed above, included in the Partnership's consolidated statement of income from the Hamilton Acquisition Date to the period ending December 31, 2015 are as follows: (in thousands) Revenue $ Net income The following represents the pro forma condensed consolidated income statement as if Hamilton had been included in the consolidated results of the Partnership since January 1, 2014. These amounts have been calculated after applying the Partnership's accounting. Additionally, the Partnership's results have been adjusted to remove the effect of its equity investment in White Oak and the pre-existing relationships that it had in White Oak. Twelve Months Ended December 31, 2015 2014 (in thousands) Total revenues As reported $ $ Pro forma Net income As reported $ $ Pro forma |
Patriot Coal Corporation | |
Acquisitions | |
Summary of consideration transferred and fair value allocation of assets acquired and liabilities assumed | (in thousands) Consideration transferred $ Recognized amounts of net tangible and intangible assets acquired and liabilities assumed: Inventories Property, plant and equipment, including mineral rights and leased equipment Customer contracts, net Asset retirement obligation Other liabilities Net tangible and intangible assets acquired $ |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
INVENTORIES | |
Schedule of inventories | 2016 2015 (in thousands) Coal $ $ Supplies (net of reserve for obsolescence of $4,940 and $3,841, respectively) Total inventories, net $ $ |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
PROPERTY, PLANT AND EQUIPMENT | |
Schedule of property, plant and equipment | 2016 2015 (in thousands) Mining equipment and processing facilities $ $ Land and mineral rights Buildings, office equipment and improvements Construction and mine development in progress Mine development costs Property, plant and equipment, at cost Less accumulated depreciation, depletion and amortization Total property, plant and equipment, net $ $ |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
LONG-TERM DEBT | |
Schedule of long-term debt | Unamortized Principal Debt Issuance Costs 2016 2015 2016 2015 (in thousands) Revolving Credit facility $ $ $ $ Series B senior notes Term loan Securitization facility — — Less current maturities Total long‑term debt $ $ $ $ |
Schedule of aggregate maturities of long-term debt | Year Ended December 31, (in thousands) 2017 $ 2018 2019 2020 — 2021 — Thereafter — $ |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
FAIR VALUE MEASUREMENTS | |
Summary of fair value measurements within the hierarchy | December 31, 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 $ — $ $ $ — $ $ |
DISTRIBUTIONS OF AVAILABLE CA40
DISTRIBUTIONS OF AVAILABLE CASH (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
DISTRIBUTIONS OF AVAILABLE CASH | |
Summary of quarterly per unit distribution paid | Year 2016 2015 2014 First Quarter $ $ $ Second Quarter $ $ $ Third Quarter $ $ $ Fourth Quarter $ $ $ |
VARIABLE INTEREST ENTITIES (Tab
VARIABLE INTEREST ENTITIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
VARIABLE INTEREST ENTITIES | |
Schedule of contributions and commitments | Year Ended December 31, 2016 2015 2014 (in thousands) Alliance Minerals Beginning cumulative commitment fulfilled $ $ $ — Capital contributions - Cash Capital contributions - Net AllDale Minerals' distributions received by Cavalier Minerals (1) — Ending cumulative commitment fulfilled Remaining commitment (2) Total committed $ $ $ Bluegrass Minerals Beginning cumulative commitment fulfilled $ $ $ — Capital contributions - Cash Capital contributions - Net AllDale Minerals' distributions received by Cavalier Minerals (1) — Ending cumulative commitment fulfilled Remaining commitment (2) Total committed $ $ $ (1) Represents distributions received from AllDale Minerals net of distributions reinvested and payments to Bluegrass Minerals for administration expense. (2) The remaining commitments were fulfilled in 2017. |
Schedule of distributions | Year Ended December 31, 2016 2015 2014 (in thousands) Alliance Minerals $ $ — $ — Bluegrass Minerals — — |
EQUITY INVESTMENTS (Tables)
EQUITY INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
AllDale Minerals | |
Schedule of changes in equity investment | Year Ended December 31, 2016 2015 2014 (in thousands) Beginning balance $ $ $ — Contributions Equity in income (loss) of affiliates Distributions received — Ending balance $ $ $ |
White Oak | |
Schedule of Equity Method Investments | January 1, 2015 December 31, to July 31, 2015 2014 (in thousands) Total revenues $ $ Gross loss Loss from operations Net loss |
NET INCOME OF ARLP PER LIMITE43
NET INCOME OF ARLP PER LIMITED PARTNER UNIT (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
NET INCOME OF ARLP PER LIMITED PARTNER UNIT | |
Reconciliation of net income and EPU calculations | Year Ended December 31, 2016 2015 2014 (in thousands, except per unit data) Net income of ARLP $ $ $ Adjustments: Managing general partner's priority distributions General partners' 2% equity ownership General partners' special allocation of certain general and administrative expenses 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 (1) 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. For the year ended December 31, 2016, 2015 and 2014, the combined total of LTIP, SERP and Deferred Compensation Plan units of 922,386, 734,171 and 798,701, respectively, were considered anti-dilutive under the treasury stock method. |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) - Pension Plan | 12 Months Ended |
Dec. 31, 2016 | |
Employee Benefit Plans | |
Summary of benefit plans for employees | 2016 2015 (dollars in thousands) Change in benefit obligations: Benefit obligations at beginning of year $ $ Service cost Interest cost Actuarial (gain) loss Benefits paid Plan amendments — Benefit obligations at end of year Change in plan assets: Fair value of plan assets at beginning of year Employer contribution Actual return on plan assets Benefits paid Fair value of plan assets at end of year Funded status at the end of year $ $ Amounts recognized in balance sheet: Non-current liability $ $ $ $ Amounts recognized in accumulated other comprehensive income consists of: Prior service credit $ $ — Net actuarial loss $ $ Weighted-average assumptions to determine benefit obligations as of December 31, Discount rate Expected rate of return on plan assets Weighted-average assumptions used to determine net periodic benefit cost for the year ended December 31, Discount rate Expected return on plan assets |
Schedule of long-term rate of return assumptions | Expected long- Asset allocation term rate of As of December 31, 2016 assumption return Domestic equity securities Foreign equity securities Fixed income securities/cash |
Components of net periodic benefit cost | 2016 2015 2014 (in thousands) Components of net periodic benefit cost: Service cost $ $ $ Interest cost Expected return on plan assets Amortization of net loss Net periodic benefit cost $ $ $ |
Schedule of other changes in plan assets and benefit obligation recognized in accumulated other comprehensive income | 2016 2015 (in thousands) Other changes in plan assets and benefit obligation recognized in accumulated other comprehensive income: Prior service credit $ $ — Net actuarial loss Reversal of amortization item: Net actuarial loss Total recognized in accumulated other comprehensive income (loss) Net periodic benefit cost Total recognized in net periodic benefit cost and accumulated other comprehensive loss $ $ |
Schedule of estimated future benefit payments | Year Ended December 31, (in thousands) 2017 $ 2018 2019 2020 2021 2022-2026 $ |
Schedule of asset allocation guidelines, actual asset allocations and fair value of Pension Plan assets | Total account performance is reviewed at least annually, using a dynamic benchmark approach to track investment performance. General asset allocation guidelines at December 31, 2016 are as follows: Percentage of Total Portfolio Minimum Target Maximum Equity securities Fixed income securities Real estate Equity securities include domestic equity securities, developed international securities, emerging markets equity securities and real estate investment trust. Fixed income securities include domestic and international investment grade fixed income securities, high yield securities and emerging markets fixed income securities. Fixed income futures may also be utilized within the fixed income securities asset allocation. The following information discloses the fair values of our Pension Plan assets, by asset category, for the periods indicated: December 31, 2016 December 31, 2015 Level 1 (a) Level 2 (a) Level 3 (a) Total Level 1 (a) Level 2 (a) Level 3 (a) Total (in thousands) Cash and cash equivalents $ $ — $ — $ $ $ — $ — $ Equity securities (b): U.S. large-cap growth — — — — — — U.S. large-cap value — — — — — — U.S. small/mid-cap blend — — — — — — International large-cap core — — — — — — Fixed income securities: U.S. Treasury securities (c) — — — — — — Corporate bonds (d) — — — — — — Preferred stock — — — — — — — — Taxable municipal bonds (d) — — — — — — International bonds (d) — — — — — — Equity mutual funds (e): U.S. mid-cap growth — — — — — — International — — — — — — Fixed income mutual funds (e): Corporate bond — — — — — — Mortgage backed-securities — — — — — — Short term investment grade bond — — — — — — Intermediate investment grade bond — — — — — — High yield bond — — — — — — International bond — — — — — — Stock market index options (f): Puts — — — — — — Calls — — — — — — Accrued income (g) — — — — — — $ $ — $ — $ $ $ — Commingled investment funds measured at net asset value (h): Equities - U.S. large-cap — Equities - U.S. small-cap — Equities - International developed markets — Equities - International emerging markets — Fixed income - Investment grade — Fixed income - High yield — Real estate — Other — Total $ $ (a) See Note 2 – Summary of Significant Accounting Policies – Fair Value Measurements for more information regarding the definitions of fair value hierarchy levels. (b) Equity securities include investments in publicly traded common stock and preferred stock. Publicly-traded common stocks are traded on a national securities exchange and investments in common and preferred stocks are valued using quoted market prices multiplied by the number of shares owned. (c) U.S. Treasury securities include agency and treasury debt. These investments are valued using dealer quotes in an active market. (d) Bonds are valued utilizing a market approach that includes various valuation techniques and sources such as value generation models, broker quotes in active and non-active markets, benchmark yields and securities, reported trades, issuer spreads, and/or other applicable reference data. The corporate bonds and notes category is primarily comprised of U.S. dollar denominated, investment grade securities. Less than 5 percent of the securities have a rating below investment grade. (e) Mutual funds are valued daily in actively traded markets by an independent custodian for the investment manager. For purposes of calculating the value, portfolio securities and other assets for which market quotes are readily available are valued at market value. Market value is generally determined on a basis of last reported sales prices, or if no sales are reported, based on quotes obtained from a quotation reporting system, established market makers, or pricing services. Investments initially valued in currencies other than the U.S. dollars are converted to the U.S. dollar using exchange rates obtained from pricing services. (f) Options are valued utilizing quotes in active markets. (g) Accrued income represents dividends declared, but not received, on equity securities owned at December 31, 2016 and 2015. (h) Investments measured at fair value using the net asset value per share (or its equivalent) have not been classified within the fair value hierarchy. The fair values of all commingled investment funds are determined based on the net asset values per unit of each of the funds. The net asset values per unit represent the aggregate value of the fund's assets at fair value less liabilities, divided by the number of units outstanding. |
COMPENSATION PLANS (Tables)
COMPENSATION PLANS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
ARLP LTIP | |
Compensation Plans | |
Summary of activity in share-based plans | Number of units Weighted average grant date fair value per unit Intrinsic value (in thousands) Non-vested grants at January 1, 2014 $ $ Granted Vested (1) Forfeited Non-vested grants at December 31, 2014 Granted Vested (1) Forfeited Non-vested grants at December 31, 2015 Granted Vested (1) Forfeited Non‑vested grants at December 31, 2016 (1) During the years ended December 31, 2016, 2015 and 2014, we issued 176,319, 128,150 and 128,610, respectively, unrestricted common units to the LTIP participants. The remaining vested units were settled in cash to satisfy the individual statutory minimum tax obligations of the LTIP participants. |
SERP and Deferred Compensation Plans | |
Compensation Plans | |
Summary of activity in share-based plans | Number of units Weighted average grant date fair value per unit Intrinsic value (in thousands) Phantom units outstanding as of January 1, 2014 $ $ Granted Issued Phantom units outstanding as of December 31, 2014 Granted Phantom units outstanding as of December 31, 2015 Granted Issued Phantom units outstanding as of December 31, 2016 |
SUPPLEMENTAL CASH FLOW INFORM46
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
SUPPLEMENTAL CASH FLOW INFORMATION | |
Schedule of supplemental cash flow information | Year Ended December 31, 2016 2015 2014 (in thousands) Cash Paid For: Interest $ $ $ Income taxes $ $ $ — Non-Cash Activity: Accounts payable for purchase of property, plant and equipment $ $ $ Assets acquired by capital lease $ $ $ — Market value of common units vested in Long-Term Incentive Plan and Deferred Compensation Plan before minimum statutory tax withholding requirements $ $ $ Acquisition of businesses: Fair value of assets assumed, net of cash acquired $ $ $ — Contingent consideration — — Settlement of pre-existing relationships — — Previously held equity-method investment — — Cash paid, net of cash acquired — Fair value of liabilities assumed $ — $ $ — Disposition of property, plant and equipment: Net change in assets $ — $ — $ Book value of liabilities transferred — — Gain recognized $ — $ — $ |
ASSET RETIREMENT OBLIGATIONS (T
ASSET RETIREMENT OBLIGATIONS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
ASSET RETIREMENT OBLIGATIONS | |
Schedule of activity affecting the asset retirement and mine closing liability | Year Ended December 31, 2016 2015 (in thousands) Beginning balance $ $ Accretion expense Payments Assumption of existing liability — Allocation of liability associated with acquisitions, mine development and change in assumptions Ending balance $ $ |
Schedule of estimated payments of asset retirement obligations | Year Ended December 31, (in thousands) 2017 $ 2018 2019 2020 2021 Thereafter Aggregate undiscounted asset retirement obligations Effect of discounting Total asset retirement obligations Less: current portion Asset retirement obligations $ |
ACCRUED WORKERS' COMPENSATION48
ACCRUED WORKERS' COMPENSATION AND PNEUMOCONIOSIS BENEFITS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accrued Workers Compensation And Pneumoconiosis Benefits | |
Reconciliation of changes in workers' compensation liability | 2016 2015 (in thousands) Beginning balance $ $ Accruals Payments Interest accretion Valuation gain Ending balance $ $ |
Summary of information about amounts recognized in the consolidated balance sheets | 2016 2015 (in thousands) Black lung claims $ $ Workers’ compensation claims Total obligations Less current portion Non-current obligations $ $ |
Components of black lung and workers' compensation expense | 2016 2015 2014 (in thousands) Black lung benefits: Service cost $ $ $ Interest cost Net amortization Total black lung Workers’ compensation expense Total expense $ $ $ |
Pneumoconiosis benefits | |
Accrued Workers Compensation And Pneumoconiosis Benefits | |
Reconciliation of changes in black lung benefit obligation | 2016 2015 (in thousands) Benefit obligations at beginning of year $ $ Service cost Interest cost Actuarial loss Acquisition — Benefits and expenses paid Benefit obligations at end of year $ $ 2016 2015 2014 (in thousands) Amount recognized in accumulated other comprehensive income consists of: Net actuarial gain $ $ $ |
Reconciliation of changes in the black lung benefit obligation recognized in AOCI | 2016 2015 2014 (in thousands) Net actuarial loss $ $ $ Reversal of amortization item: Net actuarial gain Total recognized in accumulated other comprehensive loss $ $ $ |
RELATED-PARTY TRANSACTIONS (Tab
RELATED-PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
RELATED-PARTY TRANSACTIONS | |
Summary of advanced royalties outstanding | WKY CoalPlay SGP Towhead Webster Henderson WKY Land SGP Coal Coal Coal CoalPlay Henderson Henderson MC Tunnel & Union Webster Henderson & Union Mining Ridge Counties, KY County, KY County, KY Counties, KY Total 2001 2005 December 2014 December 2014 December 2014 February 2015 (in thousands) As of January 1, 2014 $ $ $ — $ — $ — $ — $ Payments — — — — — Recoupment — — — — As of December 31, 2014 — — — — — Payments — Recoupment — — — — As of December 31, 2015 — Payments — Recoupment — — — As of December 31, 2016 $ — $ — $ $ $ $ $ |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
CONTINGENCIES | |
Schedule of future minimum lease payments, Capital Lease | Other Operating Leases Capital Year Ending December 31, Lease Affiliate Others Total (in thousands) 2017 $ $ $ $ 2018 — 2019 — 2020 — 2021 — — — Thereafter — — — Total future minimum lease payments $ $ $ $ Less: amount representing interest Present value of future minimum lease payments Less: current portion Long-term capital lease obligation $ |
Schedule of future minimum lease payments, Other Operating Leases | Other Operating Leases Capital Year Ending December 31, Lease Affiliate Others Total (in thousands) 2017 $ $ $ $ 2018 — 2019 — 2020 — 2021 — — — Thereafter — — — Total future minimum lease payments $ $ $ $ Less: amount representing interest Present value of future minimum lease payments Less: current portion Long-term capital lease obligation $ |
CONCENTRATION OF CREDIT RISK 51
CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS | |
Schedule of total revenues from major customers | Year Ended December 31, 2016 2015 2014 (in thousands) Customer A $ $ $ Customer B Customer C |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
SEGMENT INFORMATION | |
Reconciliation of consolidated Segment Adjusted EBITDA Expense to operating expenses (excluding depreciation, depletion and amortization) | Year Ended December 31, 2016 2015 2014 (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 | Year Ended December 31, 2016 2015 2014 (in thousands) Consolidated Segment Adjusted EBITDA $ $ $ General and administrative Depreciation, depletion and amortization Asset impairment — — Interest expense, net Acquisition gain, net — — Income tax expense — Net income $ $ $ |
SELECTED QUARTERLY FINANCIAL 53
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | |
Summary of consolidated quarterly operating results | Quarter Ended March 31, June 30, September 30, December 31, 2016 2016 2016 2016 (in thousands, except unit and per unit data) Revenues $ $ $ $ Income from operations Income before income taxes Net income of ARLP Basic and diluted net income of ARLP per limited partner unit $ $ $ $ Weighted-average number of units outstanding – basic and diluted Quarter Ended March 31, June 30, September 30, December 31, 2015 2015 2015 (1) 2015 (1) (in thousands, except unit and per unit data) Revenues $ $ $ $ Income from operations Income before income taxes Net income of ARLP Basic and diluted net income of ARLP per limited partner unit $ $ $ $ Weighted-average number of units outstanding – basic and diluted (1) The comparability of our December 31, 2015 quarterly results to other quarters presented was affected by $89.4 million of asset impairments relating to our Onton mine, MC Mining mine and a surrendered lease (Note 4 – Long-Lived Asset Impairments), which was partially offset by a $22.5 million net gain relating to final business combination accounting for the Hamilton Acquisition (Note 3 – Acquisitions). An impairment charge of $10.7 million impacted the comparability of our September 30, 2015 quarterly results to other quarters presented. |
ORGANIZATION AND PRESENTATION (
ORGANIZATION AND PRESENTATION (Details) - shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Ownership interests | |||
Ownership percentage by general partners | 2.00% | 2.00% | 2.00% |
AHGP | MGP | |||
Ownership interests | |||
Ownership percentage of managing general partner by parent | 100.00% | ||
AHGP | AHGP | |||
Ownership interests | |||
Units owned by parent | 31,088,338 | ||
ARLP | SGP | |||
Ownership interests | |||
Ownership percentage by general partners | 0.01% | ||
ARLP | MGP | |||
Ownership interests | |||
Ownership percentage by general partners | 0.99% | ||
Intermediate Partnership | SGP | |||
Ownership interests | |||
Ownership percentage by general partners | 0.01% | ||
Intermediate Partnership | MGP | |||
Ownership interests | |||
Ownership percentage by general partners | 1.0001% | ||
Alliance Coal | MGP | |||
Ownership interests | |||
Ownership percentage by general partners | 0.001% |
SUMMARY OF SIGNIFICANT ACCOUN55
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Consolidation (Details) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Ownership interests | |||
Ownership percentage by general partners | 2.00% | 2.00% | 2.00% |
Intermediate Partnership | SGP | |||
Ownership interests | |||
Ownership percentage by general partners | 0.01% |
SUMMARY OF SIGNIFICANT ACCOUN56
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Cash and Goodwill (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Cash Management | ||
Book overdrafts | $ 10.6 | |
Goodwill | ||
Impairments of goodwill | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN57
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Tangible Assets (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment | ||
Coal reserves not subject to depletion | $ 34.4 | $ 30.7 |
Plant and equipment assets, other than preparation plants and processing facilities | Minimum | ||
Property, Plant and Equipment | ||
Estimated useful life | 1 year | |
Plant and equipment assets, other than preparation plants and processing facilities | Maximum | ||
Property, Plant and Equipment | ||
Estimated useful life | 23 years | |
Mining Equipment | Minimum | ||
Property, Plant and Equipment | ||
Estimated useful life | 1 year | |
Mining Equipment | Maximum | ||
Property, Plant and Equipment | ||
Estimated useful life | 23 years | |
Buildings, Office Equipment And Improvements | Minimum | ||
Property, Plant and Equipment | ||
Estimated useful life | 1 year | |
Buildings, Office Equipment And Improvements | Maximum | ||
Property, Plant and Equipment | ||
Estimated useful life | 25 years | |
Land And Mineral Rights | Minimum | ||
Property, Plant and Equipment | ||
Estimated useful life | 2 years | |
Land And Mineral Rights | Maximum | ||
Property, Plant and Equipment | ||
Estimated useful life | 23 years |
SUMMARY OF SIGNIFICANT ACCOUN58
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Intangible Assets | |||
Amortization expense attributable to intangible assets | $ 18,100 | $ 15,100 | $ 3,000 |
Original Cost | 71,020 | 47,283 | |
Accumulated Amortization | (44,378) | (26,737) | |
Intangibles, Net | 26,642 | 20,546 | |
Estimated amortization expense attributable to intangible assets | |||
2,017 | 10,581 | ||
2,018 | 6,830 | ||
2,019 | 7,737 | ||
2,020 | 391 | ||
2,021 | 74 | ||
Thereafter | 1,029 | ||
Noncompete agreement | |||
Intangible Assets | |||
Original Cost | 14,542 | 14,729 | |
Accumulated Amortization | (10,974) | (9,750) | |
Intangibles, Net | 3,568 | 4,979 | |
Customer contracts, net | |||
Intangible Assets | |||
Original Cost | 54,978 | 31,054 | |
Accumulated Amortization | (33,300) | (16,959) | |
Intangibles, Net | 21,678 | 14,095 | |
Permits | |||
Intangible Assets | |||
Original Cost | 1,500 | 1,500 | |
Accumulated Amortization | (104) | (28) | |
Intangibles, Net | $ 1,396 | $ 1,472 |
SUMMARY OF SIGNIFICANT ACCOUN59
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Advance Royalties (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Advance Royalties | ||
Allowance against royalty prepayments | $ 6,200 | $ 3,800 |
Advance royalties, affiliates (see Note 18 - Related Party Transactions) | 19,820 | 16,190 |
Advance royalties, third-parties | 10,759 | 11,925 |
Total advance royalties, net | $ 30,579 | $ 28,115 |
SUMMARY OF SIGNIFICANT ACCOUN60
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Pension Benefits and Income Taxes (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes | |
Percentage of qualifying income for tax purposes | 90.00% |
Pension Plan | |
Employee Benefit Plans | |
Threshold for amortization of unrecognized actuarial gains and losses (as a percent) | 10.00% |
ACQUISITIONS - White Oak - Cons
ACQUISITIONS - White Oak - Consideration, Gains and Losses (Details) - USD ($) $ in Thousands | Jul. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2016 |
Acquisitions | ||||
Contingent consideration | $ 20,907 | |||
Settlement of pre-existing relationships | 124,379 | |||
Previously held equity-method investment | 122,764 | |||
Acquisition gain, net | $ 22,500 | $ 22,548 | ||
White Oak | ||||
Acquisitions | ||||
Remaining equity interest acquired (as a percent) | 60.00% | |||
Cash on hand | $ 50,000 | |||
Contingent consideration | 14,800 | |||
Settlement of pre-existing relationships | 124,379 | |||
Previously held equity-method investment | 121,155 | |||
Total consideration | $ 310,334 | |||
Business Combination, Step Acquisition, Equity Interest in Acquiree, including Subsequent Acquisition, Percentage, Total | 100.00% | |||
Maximum amount of contingent consideration payable | $ 110,000 | |||
Prior equity interest (as a percent) | 40.00% | |||
Re-measurement loss | $ 52,300 | |||
Settlement of existing account balances | 49,600 | |||
Net gain for above-market terms associated with pre-existing contractual agreements | 74,800 | |||
Acquisition gain, net | $ 22,500 |
ACQUISITIONS - White Oak - Asse
ACQUISITIONS - White Oak - Assets and Liabilities (Details) - USD ($) $ in Thousands | Jul. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 |
Recognized amounts of net tangible and intangible assets acquired and liabilities assumed: | |||
Goodwill | $ 136,399 | $ 136,399 | |
White Oak | |||
Recognized amounts of net tangible and intangible assets acquired and liabilities assumed: | |||
Cash and cash equivalents | $ 3,125 | ||
Trade receivables | 3,018 | ||
Prepaid expenses | 3,942 | ||
Inventories | 7,240 | ||
Other current assets | 9,456 | ||
Property, plant and equipment | 299,214 | ||
Advance royalties | 3,349 | ||
Deposits | 6,981 | ||
Other assets | 12,829 | ||
Total identifiable assets acquired | 349,154 | ||
Accounts payable | (31,181) | ||
Accrued expenses | (20,987) | ||
Deferred revenue | (517) | ||
Current maturities, long-term debt | (29,529) | ||
Long-term debt, excluding current maturities | (63,973) | ||
Other long-term liabilities | (12,175) | ||
Asset retirement obligations | (12,484) | ||
Total liabilities assumed | (170,846) | ||
Net identifiable assets acquired | 178,308 | ||
Goodwill | 132,026 | ||
Net tangible and intangible assets acquired | 310,334 | ||
White Oak | Total intangibles acquired | |||
Recognized amounts of net tangible and intangible assets acquired and liabilities assumed: | |||
Net identifiable assets acquired | 8,277 | ||
White Oak | Customer contracts, net | |||
Recognized amounts of net tangible and intangible assets acquired and liabilities assumed: | |||
Net identifiable assets acquired | $ 6,777 | ||
Weighted-average amortization period | 3 years | ||
White Oak | Customer contracts, net | Below-market contracts | |||
Recognized amounts of net tangible and intangible assets acquired and liabilities assumed: | |||
Accrued expenses | $ (4,702) | ||
Other long-term liabilities | (1,525) | ||
White Oak | Customer contracts, net | Above-market contracts | |||
Recognized amounts of net tangible and intangible assets acquired and liabilities assumed: | |||
Other current assets | 9,333 | ||
Other assets | 3,671 | ||
White Oak | Permits | |||
Recognized amounts of net tangible and intangible assets acquired and liabilities assumed: | |||
Other assets | $ 1,500 | ||
Weighted-average amortization period | 20 years |
ACQUISITIONS - White Oak - Pro
ACQUISITIONS - White Oak - Pro Forma (Details) - USD ($) $ in Thousands | Jul. 31, 2015 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Acquisitions, additional information | |||||||||||||
Acquisition gain, net | $ 22,500 | $ 22,548 | |||||||||||
Pro forma condensed consolidated income statement | |||||||||||||
Total revenues, As reported | $ 527,400 | $ 552,074 | $ 439,150 | $ 412,829 | $ 542,152 | $ 566,445 | $ 604,720 | $ 560,416 | $ 1,931,453 | 2,273,733 | $ 2,300,721 | ||
Net income, As reported | $ 339,538 | 306,171 | 497,213 | ||||||||||
White Oak | |||||||||||||
Acquisitions, additional information | |||||||||||||
Acquisition gain, net | $ 22,500 | ||||||||||||
Revenue of acquired business included in consolidated statements of income | $ 75,251 | ||||||||||||
Net income of acquired business included in consolidated statements of income | $ 20,687 | ||||||||||||
Pro forma condensed consolidated income statement | |||||||||||||
Total revenues, Pro forma | 2,337,380 | 2,346,858 | |||||||||||
Net income, Pro forma | $ 295,219 | $ 480,280 |
ACQUISITIONS - Patriot (Details
ACQUISITIONS - Patriot (Details) $ in Thousands, T in Millions | Feb. 03, 2015USD ($)T | Dec. 31, 2014USD ($)$ / TT | Feb. 28, 2015USD ($) | Feb. 02, 2015USD ($) | Dec. 31, 2015USD ($) |
Acquisitions | |||||
Liabilities assumed in acquisition | $ 20,907 | ||||
Coal Reserves in Henderson and Union Counties, Kentucky | WKY CoalPlay | Variable Interest Entity, Not Primary Beneficiary | Coal lease | |||||
Acquisitions | |||||
Coal reserves leased from related party (in tons) | T | 39.1 | ||||
WKY CoalPlay | Coal Reserves in Henderson and Union Counties, Kentucky | Central States, a subsidiary of Patriot | |||||
Acquisitions | |||||
Coal reserves, rights purchased (in tons) | T | 39.1 | ||||
Purchase price | $ 25,000 | ||||
Patriot Coal Corporation | |||||
Acquisitions | |||||
Consideration transferred | $ 47,874 | ||||
Coal reserves (in tons) | T | 84.1 | ||||
Non-reserve coal deposits (in tons) | T | 43.2 | ||||
Purchase price paid in cash | $ 20,500 | $ 19,200 | $ 2,100 | ||
Increase to purchase price from prior cash paid and agreement for contingent consideration | $ 8,300 | ||||
Liabilities assumed in acquisition | 6,200 | ||||
Patriot Coal Corporation | Customer contracts, net | |||||
Acquisitions | |||||
Initial purchase price for coal supply agreements | 21,000 | ||||
Amount paid into escrow | $ 9,300 | ||||
Escrow deposit released | $ 7,500 | ||||
Escrow deposit returned | 1,800 | ||||
Consideration transferred | $ 19,200 | ||||
Coal to be delivered under acquired supply agreements (in tons) | T | 5.1 | ||||
Pro forma coal sales under acquired supply agreements (in tons) | T | 3.2 | ||||
Pro forma average price for coal sales under acquired supply agreements (in dollars per ton) | $ / T | 46.67 | ||||
Revenues generated since the Initial Closing Date | $ 130,500 |
ACQUISITIONS - Patriot Assets a
ACQUISITIONS - Patriot Assets and Liabilities (Details) - Patriot Coal Corporation - USD ($) $ in Thousands | Feb. 03, 2015 | Dec. 31, 2014 | Feb. 28, 2015 |
Acquisitions | |||
Consideration transferred | $ 47,874 | ||
Recognized amounts of net tangible and intangible assets acquired and liabilities assumed: | |||
Inventories | 1,994 | ||
Property, plant and equipment, including mineral rights and leased facilities | 32,029 | ||
Customer contracts, net | 19,193 | ||
Asset retirement obligations | (2,255) | ||
Other liabilities | (3,087) | ||
Net tangible and intangible assets acquired | $ 47,874 | ||
Customer contracts, net | |||
Acquisitions | |||
Consideration transferred | $ 19,200 | ||
Customer contracts, net | Minimum | |||
Acquisitions, additional information | |||
Average term of the contracts | 1 year | ||
Customer contracts, net | Maximum | |||
Acquisitions, additional information | |||
Average term of the contracts | 3 years |
ACQUISITIONS - MAC (Details)
ACQUISITIONS - MAC (Details) - USD ($) $ in Thousands | Jan. 01, 2015 | Mar. 31, 2006 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Acquisitions | |||||
Goodwill | $ 136,399 | $ 136,399 | |||
White County Coal | MAC | |||||
Acquisitions | |||||
Purchase of equity investment | $ 1,000 | ||||
MAC | |||||
Acquisitions | |||||
Equity interest (as a percent) | 50.00% | ||||
Balance of equity investment | $ 1,600 | ||||
Remaining equity interest acquired (as a percent) | 50.00% | ||||
Purchase price paid in cash | $ 5,500 | ||||
Liabilities assumed | 200 | ||||
Assets acquired | 7,300 | ||||
Goodwill | $ 4,200 |
ACQUISITIONS - Peabody and CONS
ACQUISITIONS - Peabody and CONSOL (Details) T in Millions, $ in Millions | 1 Months Ended | |
Dec. 31, 2014USD ($)T | Nov. 30, 2014USD ($)subsidiaryT | |
Coal Reserves in Western Kentucky | WKY CoalPlay | Variable Interest Entity, Not Primary Beneficiary | ||
Property, Plant and Equipment | ||
Coal reserves conveyed by related party (in tons) | 31.5 | |
Coal Reserves in Western Kentucky | WKY CoalPlay | Variable Interest Entity, Not Primary Beneficiary | Coal lease | ||
Property, Plant and Equipment | ||
Coal reserves leased from related party (in tons) | 22.6 | |
Coal Reserves in Western Kentucky and Southern Indiana | WKY CoalPlay | Variable Interest Entity, Not Primary Beneficiary | ||
Property, Plant and Equipment | ||
Coal reserves conveyed by related party (in tons) | 14.3 | |
Coal Reserves in Western Kentucky and Southern Indiana | WKY CoalPlay | Variable Interest Entity, Not Primary Beneficiary | Coal lease | ||
Property, Plant and Equipment | ||
Coal reserves leased from related party (in tons) | 72.3 | |
Alliance Resource Properties | Coal Reserves in Western Kentucky | Midwest and Cyprus Creek Land Company | ||
Property, Plant and Equipment | ||
Coal reserves, rights purchased (in tons) | 86.2 | |
Alliance Resource Properties | Coal Reserves and Surface Properties in Western Kentucky | CNX RCPC and Island Creek | ||
Property, Plant and Equipment | ||
Coal reserves, rights purchased (in tons) | 124.2 | |
Purchase price (in dollars) | $ | $ 11.6 | |
Reclamation liabilities assumed (in dollars) | $ | $ 6 | |
WKY CoalPlay | Coal Reserves in Western Kentucky | Midwest | ||
Property, Plant and Equipment | ||
Coal reserves, rights purchased (in tons) | 54.1 | |
Purchase price (in dollars) | $ | $ 29.6 | |
WKY CoalPlay | Coal Reserves in Western Kentucky and Southern Indiana | CNX RCPC and Island Creek | ||
Property, Plant and Equipment | ||
Coal reserves, rights purchased (in tons) | 86.6 | |
Purchase price (in dollars) | $ | $ 57.2 | |
Number of subsidiaries purchased in coal reserves acquisition | subsidiary | 2 |
LONG-LIVED ASSET IMPAIRMENTS (D
LONG-LIVED ASSET IMPAIRMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2015 | Sep. 30, 2015 | Dec. 31, 2015 | |
Asset impairment charges | |||
Asset impairment charges | $ 89,400 | $ 10,700 | $ 100,130 |
Appalachia | MC Mining | |||
Asset impairment charges | |||
Asset impairment charges | 19,500 | ||
Appalachia | Capitalized payments associated with surrendered lease | |||
Asset impairment charges | |||
Asset impairment charges | 3,000 | ||
Illinois Basin | Onton | |||
Asset impairment charges | |||
Asset impairment charges | $ 66,900 | ||
Illinois Basin | Assets associated with surrendered lease agreement | |||
Asset impairment charges | |||
Asset impairment charges | $ 10,700 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
INVENTORIES | ||
Coal | $ 29,242 | $ 83,682 |
Supplies (net of reserve for obsolescence of $3,729 and $3,841, respectively) | 31,809 | 37,399 |
Total inventory | 61,051 | 121,081 |
Reserve for obsolescence | $ 4,940 | $ 3,841 |
PROPERTY, PLANT AND EQUIPMENT -
PROPERTY, PLANT AND EQUIPMENT - Summary (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
PROPERTY, PLANT AND EQUIPMENT | ||
Property, plant and equipment, at cost | $ 2,920,988 | $ 3,044,260 |
Less accumulated depreciation, depletion and amortization | (1,335,145) | (1,243,985) |
Total property, plant and equipment, net | 1,585,843 | 1,800,275 |
Mining Equipment | ||
PROPERTY, PLANT AND EQUIPMENT | ||
Property, plant and equipment, at cost | 1,854,001 | 1,923,310 |
Land And Mineral Rights | ||
PROPERTY, PLANT AND EQUIPMENT | ||
Property, plant and equipment, at cost | 439,236 | 418,668 |
Buildings, Office Equipment And Improvements | ||
PROPERTY, PLANT AND EQUIPMENT | ||
Property, plant and equipment, at cost | 304,696 | 291,106 |
Construction and mine development in progress | ||
PROPERTY, PLANT AND EQUIPMENT | ||
Property, plant and equipment, at cost | 26,025 | 94,482 |
Mine development costs | ||
PROPERTY, PLANT AND EQUIPMENT | ||
Property, plant and equipment, at cost | $ 297,030 | $ 316,694 |
PROPERTY, PLANT AND EQUIPMENT71
PROPERTY, PLANT AND EQUIPMENT - Amortization (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Mine development costs | |||
PROPERTY, PLANT AND EQUIPMENT | |||
Capitalized development costs of mines in development phase | $ 0 | $ 5.9 | |
Mining Equipment | |||
PROPERTY, PLANT AND EQUIPMENT | |||
Equipment under capital leases | 144.5 | ||
Accumulated amortization related to capital leases | 34.2 | 7.1 | $ 5.6 |
Amortization expense related to capital leases | $ 27.2 | $ 5.7 | $ 1.6 |
LONG-TERM DEBT - Components (De
LONG-TERM DEBT - Components (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Principal | ||
Long-term debt including current and non-current | $ 550,000 | $ 819,350 |
Less current maturities | (150,000) | (239,350) |
Total long-term debt | 400,000 | 580,000 |
Unamortized Debt Issuance Costs | ||
Unamortized debt issuance costs including current and non-current | (680) | (1,844) |
Less current maturities | 126 | 334 |
Total unamortized debt issuance costs | (554) | (1,510) |
Replaced Revolving Credit Facility | ||
Principal | ||
Long-term debt including current and non-current | 255,000 | 385,000 |
Unamortized Debt Issuance Costs | ||
Unamortized debt issuance costs including current and non-current | (453) | (1,234) |
Replaced Term Loan | ||
Principal | ||
Long-term debt including current and non-current | 50,000 | 206,250 |
Unamortized Debt Issuance Costs | ||
Unamortized debt issuance costs including current and non-current | (126) | (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 | (101) | (169) |
Securitization Facility | ||
Principal | ||
Long-term debt including current and non-current | $ 100,000 | $ 83,100 |
LONG-TERM DEBT - Credit Facilit
LONG-TERM DEBT - Credit Facility (Details) - USD ($) | Jan. 27, 2017 | Dec. 31, 2016 | Jan. 26, 2017 | Dec. 31, 2015 |
Long-Term Debt | ||||
Debt issuance costs | $ 680,000 | $ 1,844,000 | ||
Credit Agreement | ||||
Long-Term Debt | ||||
Senior Note Condition, Minimum period for notification | 90 days | |||
Replaced Credit Agreement | Eurodollar Rate | ||||
Long-Term Debt | ||||
Effective interest rate (as a percent) | 2.42% | |||
Revolving credit facility | Credit Agreement | ||||
Long-Term Debt | ||||
Balance transfer from previous facility | $ 255,000,000 | |||
Cavalier Condition, Prepayment amount | 96,000,000 | |||
Debt issuance costs | 6,700,000 | |||
Revolving credit facility | Credit Agreement | Debt Redemption Period, period one | ||||
Long-Term Debt | ||||
Maximum borrowing capacity | 776,500,000 | |||
Revolving credit facility | Credit Agreement | New Lenders and Extending Lenders | Debt Redemption Period, period two | ||||
Long-Term Debt | ||||
Maximum borrowing capacity | 479,750,000 | |||
Letters of credit subfacility | Credit Agreement | ||||
Long-Term Debt | ||||
Maximum borrowing capacity | 125,000,000 | |||
Swingline subfacility | Credit Agreement | ||||
Long-Term Debt | ||||
Maximum borrowing capacity | 15,000,000 | |||
Term loan | Credit Agreement | ||||
Long-Term Debt | ||||
Principal amount | 50,000,000 | |||
Line of credit facility outstanding amount | 50,000,000 | |||
Balance transfer from previous facility | $ 50,000,000 | |||
Replaced Revolving Credit Facility | ||||
Long-Term Debt | ||||
Debt issuance costs | $ 453,000 | 1,234,000 | ||
Replaced Revolving Credit Facility | Replaced Credit Agreement | ||||
Long-Term Debt | ||||
Maximum borrowing capacity | $ 700,000,000 | |||
Line of credit facility outstanding amount | 255,000,000 | |||
Letters of credit outstanding | $ 5,600,000 | |||
Annual commitment fee percentage, undrawn portion | 0.25% | |||
Replaced Term Loan | ||||
Long-Term Debt | ||||
Debt issuance costs | $ 126,000 | $ 441,000 | ||
Replaced Term Loan | Replaced Credit Agreement | ||||
Long-Term Debt | ||||
Principal amount | $ 250,000,000 | |||
Line of credit facility outstanding amount | $ 50,000,000 |
LONG-TERM DEBT - Series B Senio
LONG-TERM DEBT - Series B Senior Notes (Details) - ARLP Debt Arrangements | Jan. 27, 2017USD ($) | Dec. 31, 2016 | Dec. 31, 2016 |
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 | 0.93 | ||
Actual cash flow to interest expense ratio for trailing twelve months | 23 | ||
Credit Agreement | Maximum | |||
Long-Term Debt | |||
ARLP debt arrangements requirements, debt to cash flow ratio | 2.25 | ||
Credit Agreement | Minimum | |||
Long-Term Debt | |||
ARLP debt arrangements requirements, fixed charge coverage ratio | 1.25 | ||
ARLP debt arrangements requirements, cash flow to interest expense ratio | 3 | ||
Series B Senior Notes | |||
Long-Term Debt | |||
Aggregate principal amount | $ 145,000,000 | ||
Interest rate (as a percent) | 6.72% | ||
Series B Senior Notes | Maximum | |||
Long-Term Debt | |||
ARLP debt arrangements requirements, debt to cash flow ratio | 2.25 | 3 | |
Series B Senior Notes | Minimum | |||
Long-Term Debt | |||
ARLP debt arrangements requirements, fixed charge coverage ratio | 1.25 | ||
ARLP debt arrangements requirements, cash flow to interest expense ratio | 3 | 3 | |
Replaced Credit Agreement | Maximum | |||
Long-Term Debt | |||
ARLP debt arrangements requirements, debt to cash flow ratio | 3 | ||
Replaced Credit Agreement | Minimum | |||
Long-Term Debt | |||
ARLP debt arrangements requirements, cash flow to interest expense ratio | 3 |
LONG-TERM DEBT - Accounts Recei
LONG-TERM DEBT - Accounts Receivable Securitization and Hamilton (Details) - USD ($) | Oct. 19, 2015 | Oct. 16, 2015 | Jul. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2016 | Dec. 05, 2014 | Nov. 30, 2014 |
Long-Term Debt | ||||||||
Outstanding balance of debt repaid | $ 205,000,000 | $ 18,000,000 | ||||||
Securitization Facility | ||||||||
Long-Term Debt | ||||||||
Maximum borrowing capacity | $ 100,000,000 | |||||||
Line of credit facility outstanding amount | $ 100,000,000 | |||||||
Hamilton Revolving Credit Facility | ||||||||
Long-Term Debt | ||||||||
Maximum borrowing capacity | $ 10,000,000 | $ 10,000,000 | ||||||
Outstanding balance of debt repaid | $ 10,000,000 | |||||||
Hamilton Revolving Credit Facility | Prime rate | ||||||||
Long-Term Debt | ||||||||
Basis spread for variable interest rate (as a percent) | 0.10% | |||||||
Hamilton Equipment Financing Agreement | ||||||||
Long-Term Debt | ||||||||
Aggregate principal amount | $ 100,000,000 | |||||||
Frequency of required repayment installments | monthly | |||||||
Amount of equal installments | $ 2,100,000 | |||||||
Outstanding balance of debt repaid | $ 80,600,000 |
LONG-TERM DEBT - Sale-Leaseback
LONG-TERM DEBT - Sale-Leaseback (Details) - USD ($) $ in Thousands | Jun. 29, 2016 | Oct. 29, 2015 | Dec. 31, 2016 | Dec. 31, 2015 |
Sale-leaseback transaction | ||||
Proceeds from sale-leaseback transactions | $ 33,881 | $ 100,000 | ||
Sale-leaseback of mining equipment, October 2015 | ||||
Sale-leaseback transaction | ||||
Proceeds from sale-leaseback transactions | $ 100,000 | |||
Sale-leaseback of mining equipment, June 2016 | ||||
Sale-leaseback transaction | ||||
Proceeds from sale-leaseback transactions | $ 33,900 |
LONG-TERM DEBT - Cavalier and O
LONG-TERM DEBT - Cavalier and Other (Details) | Oct. 06, 2015USD ($) | Dec. 31, 2016USD ($)Counterparty |
Cavalier Credit Agreement | ||
Long-Term Debt | ||
Credit facility amount | $ 100,000,000 | |
Annual commitment fee percentage, undrawn portion | 0.00% | |
Threshold aggregate borrowings to trigger principal repayment | $ 90,000,000 | |
Period for initial amount of payments | 2 years | |
Cavalier Credit Agreement | Minimum | ||
Long-Term Debt | ||
Initial quarterly payments | $ 1,300,000 | |
Quarterly payments after initial period | $ 2,500,000 | |
Quarterly payments as a percentage of excess cash flow | 50.00% | |
Cavalier Credit Agreement | One-month LIBOR | ||
Long-Term Debt | ||
Basis spread for variable interest rate (as a percent) | 6.00% | |
Other | ||
Long-Term Debt | ||
Number of banks | Counterparty | 2 | |
Credit facility amount | $ 31,100,000 | |
Letters of credit outstanding | $ 13,000,000 |
LONG-TERM DEBT - Maturities (De
LONG-TERM DEBT - Maturities (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Aggregate maturities of long-term debt | |
2,017 | $ 150,000 |
2,018 | 145,000 |
2,019 | 255,000 |
Long-term debt including current and non-current | $ 550,000 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Level 2 | ||
FAIR VALUE MEASUREMENTS | ||
Long-term debt | $ 559,509 | $ 819,099 |
Total | 559,509 | 819,099 |
Level 3 | ||
FAIR VALUE MEASUREMENTS | ||
Total | 9,700 | 10,400 |
Recurring | Level 3 | ||
FAIR VALUE MEASUREMENTS | ||
Contingent consideration | $ 9,700 | $ 10,400 |
DISTRIBUTIONS OF AVAILABLE CA80
DISTRIBUTIONS OF AVAILABLE CASH - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Distribution Made to Member or Limited Partner | |||
Percentage of available cash distributed | 100.00% | ||
Period following quarter end for distribution of available cash | 45 days | ||
Minimum quarterly distribution (in dollars per unit) | $ 0.125 | ||
Minimum annual distribution (in dollars per unit) | $ 0.50 | ||
MGP | |||
Distribution Made to Member or Limited Partner | |||
Managing general partner incentive distributions (in dollars) | $ 75.1 | $ 141.7 | $ 129.8 |
MGP | Excess Of $0.1375 Per Unit | |||
Distribution Made to Member or Limited Partner | |||
General partner incentive distribution percentage | 15.00% | ||
Threshold distribution of net income per unit (in dollars per unit) | $ 0.1375 | ||
MGP | Excess Of $0.15625 Per Unit | |||
Distribution Made to Member or Limited Partner | |||
General partner incentive distribution percentage | 25.00% | ||
Threshold distribution of net income per unit (in dollars per unit) | $ 0.15625 | ||
MGP | Excess Of $0.1875 Per Unit | |||
Distribution Made to Member or Limited Partner | |||
General partner incentive distribution percentage | 50.00% | ||
Threshold distribution of net income per unit (in dollars per unit) | $ 0.1875 |
DISTRIBUTIONS OF AVAILABLE CA81
DISTRIBUTIONS OF AVAILABLE CASH - Quarterly Distributions (Details) - USD ($) $ / shares in Units, $ in Millions | Feb. 14, 2017 | Jan. 27, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 |
DISTRIBUTIONS OF AVAILABLE CASH | ||||||||||||||
Quarterly distribution paid (in dollars per unit) | $ 0.4375 | $ 0.43750 | $ 0.43750 | $ 0.43750 | $ 0.67500 | $ 0.67500 | $ 0.67500 | $ 0.66250 | $ 0.65000 | $ 0.63750 | $ 0.62500 | $ 0.61125 | $ 0.59875 | |
Distribution declared (in dollars per unit) | $ 0.4375 | |||||||||||||
Approximate distribution to be paid, including incentive distributions (in dollars) | $ 52.4 |
VARIABLE INTEREST ENTITIES - Ca
VARIABLE INTEREST ENTITIES - Cavalier Minerals (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Oct. 06, 2015 | Dec. 31, 2014 | 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 | $ 6,923 | $ 80,502 | $ 36,480 | ||
Funding Commitments | Bluegrass Minerals | Cavalier Minerals | |||||
Variable Interest Entities | |||||
Funding commitment | $ 288 | $ 3,354 | $ 1,520 | ||
Funding Commitments | Cavalier Minerals | All Dale I | |||||
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 - 83
VARIABLE INTEREST ENTITIES - Cavalier Minerals Commitments (Details) - Cavalier Minerals - Funding Commitments - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Alliance Minerals | |||
Variable Interest Entities | |||
Beginning cumulative commitment fulfilled | $ 63,498 | $ 11,520 | $ 0 |
Capital contributions - Cash | 72,334 | 51,552 | 11,520 |
Capital contributions - AllDale Minerals' distributions received by Cavalier Minerals | 1,245 | 426 | |
Ending cumulative commitment fulfilled | 137,077 | 63,498 | 11,520 |
Remaining commitment | 6,923 | 80,502 | 36,480 |
Total committed | 144,000 | 144,000 | 48,000 |
Bluegrass Minerals | |||
Variable Interest Entities | |||
Beginning cumulative commitment fulfilled | 2,646 | 480 | 0 |
Capital contributions - Cash | 3,014 | 2,148 | 480 |
Capital contributions - AllDale Minerals' distributions received by Cavalier Minerals | 52 | 18 | |
Ending cumulative commitment fulfilled | 5,712 | 2,646 | 480 |
Remaining commitment | 288 | 3,354 | 1,520 |
Total committed | $ 6,000 | $ 6,000 | $ 2,000 |
VARIABLE INTEREST ENTITIES - 84
VARIABLE INTEREST ENTITIES - Cavalier Minerals Distributions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Variable Interest Entities | |||
Distributions paid to Partners | $ 247,915 | $ 346,799 | $ 317,626 |
Cavalier Minerals | Alliance Minerals | |||
Variable Interest Entities | |||
Distributions paid to Partners | $ 4,546 | ||
Cavalier Minerals | Bluegrass Minerals | |||
Variable Interest Entities | |||
Incentive distribution for noncontrolling owners (as a percent) | 25.00% | ||
Distributions paid to Partners | $ 189 | ||
Cavalier Minerals | Variable Interest Entity, Primary Beneficiary | Alliance Minerals | |||
Variable Interest Entities | |||
Ownership interest in VIE (as a percent) | 96.00% | 96.00% |
VARIABLE INTEREST ENTITIES - Ot
VARIABLE INTEREST ENTITIES - Other VIE (Details) - company | Jul. 30, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Variable Interest Entities | ||||
Ownership percentage by general partners | 2.00% | 2.00% | 2.00% | |
Percentage of available cash distributed | 100.00% | |||
Variable Interest Entity, Not Primary Beneficiary | White Oak | ||||
Variable Interest Entities | ||||
Ownership interest in VIE (as a percent) | 40.00% | |||
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 | 2 | |||
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% | |||
MGP | Intermediate Partnership | ||||
Variable Interest Entities | ||||
Ownership percentage by general partners | 1.0001% |
EQUITY INVESTMENTS - AllDale (D
EQUITY INVESTMENTS - AllDale (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Feb. 28, 2017 | |
Changes in equity method investment | ||||
Beginning balance | $ 64,509 | |||
Equity in income (loss) of affiliates | 3,543 | $ (49,046) | $ (16,648) | |
Ending balance | 138,817 | 64,509 | ||
AllDale Minerals | ||||
Changes in equity method investment | ||||
Beginning balance | 64,509 | 11,257 | 0 | |
Contributions | 76,797 | 54,290 | 11,626 | |
Equity in income (loss) of affiliates | 3,543 | (594) | (369) | |
Distributions received | (6,032) | (444) | ||
Ending balance | $ 138,817 | $ 64,509 | $ 11,257 | |
Equity method investments, additional information | ||||
Percentage added to cumulative contributions for initial limited partner distributions | 25.00% | |||
Percentage of effective internal rate of return to limited partners for initial distributions | 10.00% | |||
Percentage of incentive distributions to general partner after initial distributions | 20.00% | |||
Percentage of distributions to limited partners after initial distributions | 80.00% | |||
Funding Commitments | All Dale Minerals III | Alliance Minerals | ||||
Equity method investments, additional information | ||||
Investment commitment | $ 30,000 |
EQUITY INVESTMENTS - White Oak
EQUITY INVESTMENTS - White Oak (Details) - White Oak - USD ($) $ in Thousands | 7 Months Ended | 12 Months Ended |
Jul. 31, 2015 | Dec. 31, 2014 | |
Equity method investments results | ||
Total revenues | $ 108,256 | $ 42,748 |
Gross loss | (2,919) | (1,134) |
Loss from operations | (38,148) | (21,018) |
Net loss | $ (69,075) | $ (46,324) |
NET INCOME OF ARLP PER LIMITE88
NET INCOME OF ARLP PER LIMITED PARTNER UNIT - Incentive Distributions (Details) - MGP | 12 Months Ended |
Dec. 31, 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 LIMITE89
NET INCOME OF ARLP PER LIMITED PARTNER UNIT - Reconciliation (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
NET INCOME OF ARLP PER LIMITED PARTNER UNIT | |||||||||||
Net income of ARLP | $ 119,595 | $ 89,780 | $ 82,713 | $ 47,310 | $ 21,475 | $ 83,379 | $ 94,864 | $ 106,480 | $ 339,398 | $ 306,198 | $ 497,229 |
Managing general partner priority distributions | (76,636) | (144,576) | (132,449) | ||||||||
General partners' 2% equity ownership | (5,275) | (3,262) | (7,325) | ||||||||
General partners' special allocation of certain general and administrative expenses | 1,000 | 1,500 | 1,500 | ||||||||
LIMITED PARTNERS' INTEREST IN NET INCOME OF ARLP | 258,487 | 159,860 | 358,955 | ||||||||
Distributions to participating securities | (3,391) | (3,493) | (2,956) | ||||||||
Undistributed earnings attributable to participating securities | (3,281) | (2,669) | |||||||||
Net income of ARLP available to limited partners | $ 251,815 | $ 156,367 | $ 353,330 | ||||||||
Weighted average limited partner units outstanding - basic (in units) | 74,375,025 | 74,375,025 | 74,375,025 | 74,291,114 | 74,188,784 | 74,188,784 | 74,188,784 | 74,130,405 | 74,354,162 | 74,174,389 | 74,044,417 |
Weighted average limited partner units outstanding - diluted (in units) | 74,375,025 | 74,375,025 | 74,375,025 | 74,291,114 | 74,188,784 | 74,188,784 | 74,188,784 | 74,130,405 | 74,354,162 | 74,174,389 | 74,044,417 |
Basic net income of ARLP per limited partner unit (in dollars per unit) | $ 1.30 | $ 0.91 | $ 0.82 | $ 0.36 | $ (0.19) | $ 0.61 | $ 0.76 | $ 0.92 | $ 3.39 | $ 2.11 | $ 4.77 |
Diluted net income of ARLP per limited partner unit (in dollars per unit) | $ 1.30 | $ 0.91 | $ 0.82 | $ 0.36 | $ (0.19) | $ 0.61 | $ 0.76 | $ 0.92 | $ 3.39 | $ 2.11 | $ 4.77 |
Anti-dilutive under the treasury stock method (in units) | 922,386 | 734,171 | 798,701 | ||||||||
Ownership percentage by general partners | 2.00% | 2.00% | 2.00% |
NET INCOME OF ARLP PER LIMITE90
NET INCOME OF ARLP PER LIMITED PARTNER UNIT - Contribution by Affiliate (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Affiliated entity controlled by Mr. Craft | |||
Related Party Transaction | |||
Contributions from affiliates for general and administrative expenses | $ 1 | $ 1.5 | $ 1.5 |
EMPLOYEE BENEFIT PLANS - Define
EMPLOYEE BENEFIT PLANS - Defined Contribution (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
PSSP | |||
Defined Contribution Plans | |||
Contribution expense | $ 18.2 | $ 22.6 | $ 21.8 |
EMPLOYEE BENEFIT PLANS - Benefi
EMPLOYEE BENEFIT PLANS - Benefit Obligations, Plan Assets and Reported Amounts (Details) - Pension Plan - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Change in benefit obligations: | |||
Benefit obligations at beginning of year | $ 107,476 | $ 109,626 | |
Service cost | 2,205 | 2,473 | $ 2,174 |
Interest cost | 4,493 | 4,296 | 4,074 |
Actuarial (gain) loss | 901 | (6,420) | |
Benefits paid | (3,091) | (2,499) | |
Plan amendments | 1,498 | ||
Benefit obligations at end of year | 113,482 | 107,476 | 109,626 |
Change in plan assets: | |||
Fair value of plan assets at beginning of year | 68,445 | 69,521 | |
Employer contribution payments | 2,608 | 3,116 | |
Actual return on plan assets | 3,450 | (1,693) | |
Benefits paid | (3,091) | (2,499) | |
Fair value of plan assets at end of year | 71,412 | 68,445 | $ 69,521 |
Funded status at the end of year | (42,070) | (39,031) | |
Amounts recognized in balance sheet: | |||
Non-current liability | (42,070) | (39,031) | |
Total amounts recognized in balance sheet | (42,070) | (39,031) | |
Amounts recognized in accumulated other comprehensive income consist of: | |||
Prior service credit | (1,498) | ||
Net actuarial loss | (38,424) | (38,787) | |
Amounts recognized in accumulated other comprehensive income | $ (39,922) | $ (38,787) | |
Weighted-average assumptions to determine benefit obligations | |||
Discount rate | 4.06% | 4.27% | |
Expected rate of return on plan assets | 7.00% | 7.50% | |
Weighted-average assumptions used to determine net periodic benefit cost | |||
Discount rate | 4.27% | 3.92% | |
Expected return on plan assets | 7.50% | 8.00% |
EMPLOYEE BENEFIT PLANS - Assump
EMPLOYEE BENEFIT PLANS - Assumptions (Details) - Pension Plan | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Asset allocation assumptions | ||
Active management premium percentage | 1.50% | |
Asset allocation assumption | 100.00% | |
Expected rate of return on plan assets | 7.00% | 7.50% |
Actual return on plan assets (as a percent) | 5.90% | (2.00%) |
Domestic equity securities | ||
Asset allocation assumptions | ||
Asset allocation assumption | 70.00% | |
Expected rate of return on plan assets | 6.40% | |
Foreign equity securities | ||
Asset allocation assumptions | ||
Asset allocation assumption | 10.00% | |
Expected rate of return on plan assets | 6.80% | |
Fixed income securities/cash | ||
Asset allocation assumptions | ||
Asset allocation assumption | 20.00% | |
Expected rate of return on plan assets | 3.00% |
EMPLOYEE BENEFIT PLANS - Period
EMPLOYEE BENEFIT PLANS - Periodic Benefit Cost and Other Changes (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Other changes in plan assets and benefit obligations recognized in accumulated other comprehensive income: | ||||
Total adjustments recognized | $ (3,983) | $ 1,290 | $ (26,128) | |
Pension Plan | ||||
Components of net periodic benefit cost: | ||||
Service cost | 2,205 | 2,473 | 2,174 | |
Interest cost | 4,493 | 4,296 | 4,074 | |
Expected return on plan assets | (5,138) | (5,590) | (5,475) | |
Amortization of net loss | 2,952 | 3,354 | 773 | |
Net periodic benefit cost | 4,512 | 4,533 | 1,546 | |
Other changes in plan assets and benefit obligations recognized in accumulated other comprehensive income: | ||||
Prior service credit | (1,498) | |||
Net actuarial loss | (2,589) | (863) | (23,821) | |
Reversal of amortization item: net actuarial loss | [1] | 2,952 | 3,354 | 773 |
Total adjustments recognized | (1,135) | 2,491 | (23,048) | |
Net periodic benefit cost | (4,512) | (4,533) | $ (1,546) | |
Total recognized in net periodic benefit cost and accumulated other comprehensive loss | $ (5,647) | $ (2,042) | ||
[1] | Amortization of actuarial gain or loss is included in the computation of net periodic benefit cost (see Notes 13 and 17 for additional details). |
EMPLOYEE BENEFIT PLANS - Estima
EMPLOYEE BENEFIT PLANS - Estimated Benefit Payments (Details) - Pension Plan $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Estimated future benefit payments | |
2,017 | $ 3,332 |
2,018 | 3,733 |
2,019 | 4,112 |
2,020 | 4,531 |
2,021 | 4,889 |
2022-2026 | 28,766 |
Estimated future benefit payments | 49,363 |
Expected contribution for pension plan in next year | 3,300 |
Estimated net actuarial loss for pension plan amortized from AOCI into net periodic benefit cost in next year | $ (3,100) |
EMPLOYEE BENEFIT PLANS - Asset
EMPLOYEE BENEFIT PLANS - Asset Allocations (Details) - Pension Plan | 12 Months Ended |
Dec. 31, 2016 | |
Equity securities | |
Employee Benefit Plans | |
Target allocation, minimum | 45.00% |
Target allocation | 62.00% |
Target allocation, maximum | 80.00% |
Fixed income securities | |
Employee Benefit Plans | |
Target allocation, minimum | 10.00% |
Target allocation | 33.00% |
Target allocation, maximum | 55.00% |
Real estate | |
Employee Benefit Plans | |
Target allocation, minimum | 0.00% |
Target allocation | 5.00% |
Target allocation, maximum | 10.00% |
EMPLOYEE BENEFIT PLANS - Fair V
EMPLOYEE BENEFIT PLANS - Fair Value of Plan Assets (Details) - Pension Plan - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | $ 71,412 | $ 68,445 | $ 69,521 |
Level 1 | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | 48,684 | ||
Level 2 | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | 19,761 | ||
Cash And Cash Equivalents | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | 1,137 | 883 | |
Cash And Cash Equivalents | Level 1 | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | $ 1,137 | 883 | |
Equity securities: U.S. large-cap growth | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | 17,977 | ||
Equity securities: U.S. large-cap growth | Level 1 | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | 17,977 | ||
Equity securities: U.S. large-cap value | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | 17,635 | ||
Equity securities: U.S. large-cap value | Level 1 | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | 17,635 | ||
Equity securities: U.S. small/mid-cap blend | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | 7,609 | ||
Equity securities: U.S. small/mid-cap blend | Level 1 | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | 7,609 | ||
Equity securities: International large-cap core | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | 3,257 | ||
Equity securities: International large-cap core | Level 1 | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | 3,257 | ||
U.S. Treasury securities | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | 1,234 | ||
U.S. Treasury securities | Level 1 | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | 1,234 | ||
Corporate bond | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | $ 1,938 | ||
Corporate bond | Maximum | |||
Employee Benefit Plans | |||
Percentage of securities below investment grade | 5.00% | 5.00% | |
Corporate bond | Level 2 | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | $ 1,938 | ||
Taxable municipal bonds | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | 182 | ||
Taxable municipal bonds | Level 2 | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | 182 | ||
Fixed income securities: International bonds | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | 319 | ||
Fixed income securities: International bonds | Level 2 | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | 319 | ||
Equity mutual funds: U.S. mid-cap growth | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | 4,948 | ||
Equity mutual funds: U.S. mid-cap growth | Level 2 | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | 4,948 | ||
Equity mutual funds: International | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | 3,322 | ||
Equity mutual funds: International | Level 2 | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | 3,322 | ||
Fixed income mutual funds: Corporate bond | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | 4,668 | ||
Fixed income mutual funds: Corporate bond | Level 2 | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | 4,668 | ||
Mortgage backed-securities | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | 1,277 | ||
Mortgage backed-securities | Level 2 | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | 1,277 | ||
Fixed income mutual funds: Short term investment grade bond | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | 1,322 | ||
Fixed income mutual funds: Short term investment grade bond | Level 2 | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | 1,322 | ||
Fixed income mutual funds: Intermediate investment grade bond | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | 801 | ||
Fixed income mutual funds: Intermediate investment grade bond | Level 2 | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | 801 | ||
Fixed income mutual funds: High yield bond | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | 693 | ||
Fixed income mutual funds: High yield bond | Level 2 | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | 693 | ||
Fixed income mutual funds: International bond | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | 226 | ||
Fixed income mutual funds: International bond | Level 2 | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | 226 | ||
Puts | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | 143 | ||
Puts | Level 1 | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | 143 | ||
Calls | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | (54) | ||
Calls | Level 1 | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | (54) | ||
Accrued income | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | 65 | ||
Accrued income | Level 2 | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | $ 65 | ||
Equities - U.S. large-cap | Investments measured at net asset value | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | $ 21,082 | ||
Equities - U.S. small-cap | Investments measured at net asset value | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | 6,531 | ||
Equities - International developed markets | Investments measured at net asset value | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | 11,074 | ||
Equities - International emerging markets | Investments measured at net asset value | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | 4,614 | ||
Fixed income - Investment grade | Investments measured at net asset value | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | 16,823 | ||
Fixed income - High yield | Investments measured at net asset value | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | 4,543 | ||
Real estate | Investments measured at net asset value | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | 4,259 | ||
Other | Investments measured at net asset value | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | $ 1,349 |
COMPENSATION PLANS - LTIP Grant
COMPENSATION PLANS - LTIP Grants Activity (Details) - ARLP LTIP - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Summary of non-vested grants (in units) | ||||
Balance at the beginning of the period (in units) | 939,793 | 843,340 | 695,532 | |
Granted (in units) | 960,992 | 303,165 | 356,154 | |
Vested (in units) | (284,272) | (202,778) | (202,742) | |
Forfeited (in units) | (11,765) | (3,934) | (5,604) | |
Balance at the end of the period (in units) | 1,604,748 | 939,793 | 843,340 | |
Weighted average grant date fair value per unit | ||||
Balance at the beginning of the period (in dollars per unit) | $ 36.80 | $ 37.16 | $ 34.23 | |
Granted (in dollars per unit) | 12.38 | 37.18 | 40.72 | |
Vested (in dollars per unit) | 31.51 | 38.85 | 33.42 | |
Forfeited (in dollars per unit) | 26.39 | 36.49 | 35.88 | |
Balance at the end of the period (in dollars per unit) | $ 23.19 | $ 36.80 | $ 37.16 | |
Intrinisic value (in dollars) | ||||
Intrinsic value of outstanding grants (in dollars) | $ 36,027 | $ 12,678 | $ 36,306 | $ 26,778 |
Other information | ||||
Common units issued upon vesting | 176,319 | 128,150 | 128,610 |
COMPENSATION PLANS - LTIP Other
COMPENSATION PLANS - LTIP Other Information (Details) - ARLP LTIP - USD ($) $ in Millions | Feb. 08, 2017 | Jan. 25, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Other information | |||||
Common units issued upon vesting | 176,319 | 128,150 | 128,610 | ||
Unit-based compensation expense | $ 12.7 | $ 11.2 | $ 9.6 | ||
Total unit-based obligation recorded | 25.1 | $ 21.4 | |||
Unrecognized compensation expense (in dollars) | $ 11.7 | ||||
Weighted-average period for recognition of expense | 1 year 9 months 18 days | ||||
Units for which vesting requirements were deemed satisfied | 284,272 | 202,778 | 202,742 | ||
Forfeited (in units) | 11,765 | 3,934 | 5,604 | ||
Granted (in units) | 960,992 | 303,165 | 356,154 | ||
Units available for grant | 2,500,000 | ||||
2014 Grants | |||||
Other information | |||||
Common units issued upon vesting | 222,011 | ||||
Units for which vesting requirements were deemed satisfied | 350,516 | ||||
Forfeited (in units) | 5,638 | ||||
2017 Grants | |||||
Other information | |||||
Additional grants authorized (in units) | 472,890 | ||||
Granted (in units) | 462,890 |
COMPENSATION PLANS - SERP and D
COMPENSATION PLANS - SERP and Directors Deferred Compensation Plans (Details) - SERP and Deferred Compensation Plans - Phantom Share Units (PSUs) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Summary of non-vested grants (in units) | ||||
Balance at the beginning of the period (in units) | 429,141 | 368,981 | 347,320 | |
Granted (in units) | 74,799 | 60,160 | 27,577 | |
Issued (in units) | (9,922) | (5,916) | ||
Balance at the end of the period (in units) | 494,018 | 429,141 | 368,981 | |
Weighted average grant date fair value per unit | ||||
Balance at the beginning of the period (in dollars per unit) | $ 32.25 | $ 34.02 | $ 33.20 | |
Granted (in dollars per unit) | 16.31 | 21.38 | 44.56 | |
Issued (in dollars per unit) | 33.76 | 35.29 | ||
Balance at the end of the period (in dollars per unit) | $ 29.77 | $ 32.25 | $ 34.02 | |
Intrinisic value (in dollars) | ||||
Intrinsic value of outstanding grants (in dollars) | $ 11,091 | $ 5,789 | $ 15,885 | $ 13,372 |
COMPENSATION PLANS - SERP an101
COMPENSATION PLANS - SERP and Directors Deferred Compensation Plans Other Information (Details) - SERP and Deferred Compensation Plans - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Other information | |||
Unit-based compensation expense | $ 1.2 | $ 1.3 | $ 1.2 |
Total unit-based obligation recorded | $ 14.7 | $ 13.8 |
SUPPLEMENTAL CASH FLOW INFOR102
SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash Paid For: | |||
Interest | $ 29,274 | $ 30,438 | $ 34,005 |
Income taxes | 10 | 21 | |
Non-Cash Activity: | |||
Accounts payable for purchase of property, plant and equipment | 8,232 | 12,634 | 15,654 |
Assets acquired by capital lease | 37,089 | 99,543 | |
Market value of common units vested in Long-Term Incentive Plan and Deferred Compensation Plan before minimum statutory tax withholding requirements | 3,642 | 7,389 | 8,417 |
Acquisition of businesses: | |||
Fair value of assets assumed, net of cash acquired | 1,011 | 519,384 | |
Contingent consideration | (20,907) | ||
Settlement of pre-existing relationships | (124,379) | ||
Previously held equity-method investment | (122,764) | ||
Cash paid, net of cash acquired | (1,011) | (74,953) | |
Fair value of liabilities assumed | 176,381 | ||
Disposition of property, plant and equipment: | |||
Gain recognized | $ (76) | $ (1) | (4,409) |
Other and Corporate | Pontiki mining complex | |||
Disposition of property, plant and equipment: | |||
Net change in assets | 846 | ||
Book value of liabilities transferred | (5,246) | ||
Gain recognized | $ (4,400) |
ASSET RETIREMENT OBLIGATIONS -
ASSET RETIREMENT OBLIGATIONS - Activity (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Asset retirement and mine closing liability | |||
Balance at the beginning of the period | $ 123,685 | $ 93,140 | |
Accretion expense | 3,769 | 3,192 | $ 2,730 |
Payments | (379) | (519) | |
Assumption of existing liability | 31,372 | ||
Allocation of liability associated with acquisitions, mine development and change in assumptions | 1,374 | 3,500 | |
Balance at the end of the period | $ 125,701 | $ 123,685 | $ 93,140 |
ASSET RETIREMENT OBLIGATIONS104
ASSET RETIREMENT OBLIGATIONS - Estimated Payments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Estimated payments of asset retirement obligations: | |||
2,017 | $ 435 | ||
2,018 | 385 | ||
2,019 | 158 | ||
2,020 | 147 | ||
2,021 | 80 | ||
Thereafter | 235,237 | ||
Aggregate undiscounted asset retirement obligations | 236,442 | ||
Effect of discounting | (110,741) | $ (104,800) | |
Total asset retirement obligations | 125,701 | 123,685 | $ 93,140 |
Less: current portion | (435) | ||
Asset retirement obligations | 125,266 | 122,434 | |
Surety bonds outstanding to performance of reclamation obligations | $ 171,800 | $ 153,500 |
ACCRUED WORKERS' COMPENSATIO105
ACCRUED WORKERS' COMPENSATION AND PNEUMOCONIOSIS BENEFITS - Workers' Compensation Liability (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Reconciliation of changes in the workers' compensation liability | |||
Beginning balance | $ 54,558 | $ 57,557 | |
Accruals | 10,450 | 13,220 | |
Payments | (10,415) | (8,906) | |
Interest accretion | 1,967 | 1,954 | |
Valuation gain | (8,429) | (9,267) | |
Ending balance | $ 48,131 | $ 54,558 | $ 57,557 |
Estimated present value of future obligations and other informaton | |||
Workers' compensation discount rate | 3.52% | 3.63% | 3.41% |
ACCRUED WORKERS' COMPENSATIO106
ACCRUED WORKERS' COMPENSATION AND PNEUMOCONIOSIS BENEFITS - Benefit Obligations (Details) - Pneumoconiosis benefits - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Reconciliation of the changes in black lung benefit obligations | |||
Benefit obligations at beginning of year | $ 61,693 | $ 56,386 | |
Service cost | 2,578 | 3,081 | $ 3,424 |
Interest cost | 2,506 | 2,094 | 2,262 |
Actuarial loss | 205 | 750 | |
Acquisition | 790 | ||
Benefits and expenses paid | (1,994) | (1,408) | |
Benefit obligations at end of year | 64,988 | 61,693 | 56,386 |
Amounts recognized in accumulated other comprehensive income consist of: | |||
Net actuarial gain | $ (1,382) | $ (4,230) | $ (5,431) |
ACCRUED WORKERS' COMPENSATIO107
ACCRUED WORKERS' COMPENSATION AND PNEUMOCONIOSIS BENEFITS - Recognized in Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
WORKERS' COMPENSATION AND PNEUMOCONIOSIS | |||
Black lung claims | $ 64,988 | $ 61,693 | |
Workers' compensation claims | 48,131 | 54,558 | $ 57,557 |
Total obligations | 113,119 | 116,251 | |
Less current portion | (9,897) | (8,688) | |
Non-current obligations | $ 103,222 | $ 107,563 |
ACCRUED WORKERS' COMPENSATIO108
ACCRUED WORKERS' COMPENSATION AND PNEUMOCONIOSIS BENEFITS - Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Accrued Workers Compensation And Pneumoconiosis Benefits | |||
Workers' compensation expense (benefit) | $ 9,063 | $ 9,759 | $ 7,776 |
Total expense | 11,504 | 14,483 | 12,411 |
Pneumoconiosis benefits | |||
Accrued Workers Compensation And Pneumoconiosis Benefits | |||
Service cost | 2,578 | 3,081 | 3,424 |
Interest cost | 2,506 | 2,094 | 2,262 |
Net amortization | (2,643) | (451) | (1,051) |
Net periodic benefit cost | $ 2,441 | $ 4,724 | $ 4,635 |
ACCRUED WORKERS' COMPENSATIO109
ACCRUED WORKERS' COMPENSATION AND PNEUMOCONIOSIS BENEFITS - Recognized in AOCI (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Accrued Workers Compensation And Pneumoconiosis Benefits | ||||
Total adjustments recognized | $ (3,983) | $ 1,290 | $ (26,128) | |
Estimated present value of future obligations and other informaton | ||||
Letters of credit to secure workers compensation obligation | 89,100 | 90,000 | ||
Pneumoconiosis benefits | ||||
Accrued Workers Compensation And Pneumoconiosis Benefits | ||||
Net actuarial loss | (205) | (750) | (2,029) | |
Reversal of amortization item: net actuarial loss | [1] | (2,643) | (451) | (1,051) |
Total adjustments recognized | $ (2,848) | $ (1,201) | $ (3,080) | |
Estimated present value of future obligations and other informaton | ||||
Pneumoconiosis discount rate | 3.97% | 4.16% | 3.82% | |
[1] | Amortization of actuarial gain or loss is included in the computation of net periodic benefit cost (see Notes 13 and 17 for additional details). |
RELATED-PARTY TRANSACTIONS - Wh
RELATED-PARTY TRANSACTIONS - White Oak, SGP Land and SGP (Details) - Equity Method Investee - White Oak - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Acquisition and lease-back of reserves and surface rights | ||
Related Party Transaction | ||
Royalties generated | $ 11.4 | $ 0.2 |
Coal handling and services agreement | ||
Related Party Transaction | ||
Revenue from services and products | 28.2 | 19.6 |
Subsidiary agreements for purchase of services and products | ||
Related Party Transaction | ||
Revenue from services and products | $ 4.6 | $ 3.9 |
RELATED-PARTY TRANSACTIONS - Af
RELATED-PARTY TRANSACTIONS - Affliliate Royalty Agreements (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Related Party Transaction | |||
As of the beginning of period | $ 28,115 | ||
As of the end of period | 30,579 | $ 28,115 | |
Mineral and Coal Leases | |||
Related Party Transaction | |||
As of the beginning of period | 16,190 | 10,706 | $ 17,759 |
Payments | 13,819 | 13,819 | 3,000 |
Recoupment | (10,189) | (8,335) | (10,053) |
As of the end of period | 19,820 | 16,190 | 10,706 |
SGP Land, LLC | MC Mining LLC | Mineral lease | |||
Related Party Transaction | |||
As of the beginning of period | 0 | 0 | 766 |
Recoupment | (766) | ||
As of the end of period | 0 | 0 | 0 |
SGP | Tunnel Ridge | Coal lease | |||
Related Party Transaction | |||
As of the beginning of period | 5,413 | 10,706 | 16,993 |
Payments | 3,000 | 3,000 | 3,000 |
Recoupment | (8,413) | (8,293) | (9,287) |
As of the end of period | 0 | 5,413 | 10,706 |
WKY CoalPlay | December 2014 coal lease - Henderson and Union Counties, Kentucky | |||
Related Party Transaction | |||
As of the beginning of period | 3,598 | 0 | 0 |
Payments | 3,598 | 3,598 | |
Recoupment | (1) | ||
As of the end of period | 7,195 | 3,598 | 0 |
WKY CoalPlay | December 2014 coal lease - Webster County, Kentucky | |||
Related Party Transaction | |||
As of the beginning of period | 2,526 | 0 | 0 |
Payments | 2,568 | 2,568 | |
Recoupment | (1,775) | (42) | |
As of the end of period | 3,319 | 2,526 | 0 |
WKY CoalPlay | December 2014 coal lease - Henderson County, Kentucky | |||
Related Party Transaction | |||
As of the beginning of period | 2,522 | 0 | 0 |
Payments | 2,522 | 2,522 | |
As of the end of period | 5,044 | 2,522 | 0 |
WKY CoalPlay | February 2015 coal lease - Henderson and Union Counties, Kentucky | |||
Related Party Transaction | |||
As of the beginning of period | 2,131 | 0 | 0 |
Payments | 2,131 | 2,131 | |
As of the end of period | $ 4,262 | $ 2,131 | $ 0 |
RELATED-PARTY TRANSACTIONS -112
RELATED-PARTY TRANSACTIONS - Affliliate Royalty Agreements - SGP Land and SGP (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
SGP Land, LLC | MC Mining LLC | |||
Related Party Transaction | |||
Payments for earned royalties | $ 0.6 | $ 1.9 | $ 0.9 |
SGP Land, LLC | MC Mining LLC | Mineral lease | |||
Related Party Transaction | |||
Annual Minimum Royalties | 0.3 | ||
Cumulative annual minimum and/or earned royalty payments | 6 | ||
SGP | Tunnel Ridge | Coal lease | |||
Related Party Transaction | |||
Annual Minimum Royalties | 3 | ||
Accrued earned royalties payable | $ 0.9 |
RELATED-PARTY TRANSACTIONS - WK
RELATED-PARTY TRANSACTIONS - WKY CoalPlay (Details) - Variable Interest Entity, Not Primary Beneficiary - WKY CoalPlay - Alliance Resource Properties - USD ($) $ in Millions | 1 Months Ended | |
Feb. 28, 2015 | Dec. 31, 2014 | |
February 2015 coal lease - Henderson and Union Counties, Kentucky | ||
Related Party Transaction | ||
Initial term of lease | 20 years | |
Percentage of earned royalty on coal sale price | 4.00% | |
Annual minimum royalties | $ 2.1 | |
Period for option to acquire the leased reserves | 3 years | |
Percentage of internal rate of return on purchase price, if leased reserves acquired | 7.00% | |
Towhead Coal | December 2014 coal lease - Henderson and Union Counties, Kentucky | ||
Related Party Transaction | ||
Initial term of lease | 20 years | |
Percentage of earned royalty on coal sale price | 4.00% | |
Annual minimum royalties | $ 3.6 | |
Period for option to acquire the leased reserves | 3 years | |
Percentage of internal rate of return on purchase price, if leased reserves acquired | 7.00% | |
Henderson Coal | December 2014 coal lease - Henderson County, Kentucky | ||
Related Party Transaction | ||
Initial term of lease | 20 years | |
Percentage of earned royalty on coal sale price | 4.00% | |
Annual minimum royalties | $ 2.5 | |
Period for option to acquire the leased reserves | 3 years | |
Percentage of internal rate of return on purchase price, if leased reserves acquired | 7.00% | |
Webster Coal | December 2014 coal lease - Webster County, Kentucky | ||
Related Party Transaction | ||
Initial term of lease | 7 years | |
Percentage of earned royalty on coal sale price | 4.00% | |
Annual minimum royalties | $ 2.6 | |
Period for option to acquire the leased reserves | 3 years | |
Percentage of internal rate of return on purchase price, if leased reserves acquired | 7.00% |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Capital Leases (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Future minimum lease payments, Capital Lease | ||
2,017 | $ 32,374 | |
2,018 | 32,323 | |
2,019 | 48,910 | |
2,020 | 8,823 | |
2,021 | 923 | |
Thereafter | 886 | |
Total future minimum lease payments | 124,239 | |
Less: amount representing interest | (11,503) | |
Present value of future minimum lease payments | 112,736 | |
Less: current portion | (27,196) | $ (19,764) |
Long-term capital lease obligation | $ 85,540 | $ 80,150 |
COMMITMENTS AND CONTINGENCIE115
COMMITMENTS AND CONTINGENCIES - Operating Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Future minimum lease payments, Other Operating Leases | |||
2,017 | $ 11,811 | ||
2,018 | 9,609 | ||
2,019 | 5,608 | ||
2,020 | 1,239 | ||
Total future minimum lease payments | 28,267 | ||
Rental expense | 17,000 | $ 11,700 | $ 4,700 |
Other Operating Leases, Affiliate | |||
Future minimum lease payments, Other Operating Leases | |||
2,017 | 240 | ||
Total future minimum lease payments | 240 | ||
Other Operating Leases, Others | |||
Future minimum lease payments, Other Operating Leases | |||
2,017 | 11,571 | ||
2,018 | 9,609 | ||
2,019 | 5,608 | ||
2,020 | 1,239 | ||
Total future minimum lease payments | $ 28,027 |
COMMITMENTS AND CONTINGENCIE116
COMMITMENTS AND CONTINGENCIES - Purchase Commitments (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Commitments related to planned capital projects | |
Contractual Commitments | |
Contractual amount | $ 27.3 |
COMMITMENTS AND CONTINGENCIE117
COMMITMENTS AND CONTINGENCIES - Funding and Sale-Leaseback (Details) - USD ($) $ in Thousands | Jun. 29, 2016 | Oct. 29, 2015 | Feb. 28, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Contractual Commitments | |||||
Proceeds from sale-leaseback transactions | $ 33,881 | $ 100,000 | |||
Sale-leaseback of mining equipment, October 2015 | |||||
Contractual Commitments | |||||
Proceeds from sale-leaseback transactions | $ 100,000 | ||||
Term of lease | 4 years | ||||
Monthly rent under lease agreement | $ 1,900 | ||||
Balloon payment due at end of lease term (as a percent) | 20.00% | ||||
Deferred gain (loss) | $ 5,000 | ||||
Sale-leaseback transactions | |||||
Contractual Commitments | |||||
Proceeds from sale-leaseback transactions | $ 33,900 | ||||
Monthly rent under lease agreement | $ 700 | ||||
Balloon payment due at end of lease term (as a percent) | 20.00% | ||||
Deferred gain (loss) | $ (7,900) | ||||
Sale-leaseback transactions | Minimum | |||||
Contractual Commitments | |||||
Term of lease | 3 years | ||||
Sale-leaseback transactions | Maximum | |||||
Contractual Commitments | |||||
Term of lease | 4 years | ||||
AllDale Minerals | Cavalier Minerals | |||||
Contractual Commitments | |||||
Remaining funding commitment | $ 6,300 | ||||
All Dale Minerals III | Alliance Minerals | Funding Commitments | |||||
Contractual Commitments | |||||
Investment commitment | $ 30,000 | ||||
Expected period of funding | 2 years |
COMMITMENTS AND CONTINGENCIE118
COMMITMENTS AND CONTINGENCIES - Insurance (Details) - Property and casualty insurance | Oct. 01, 2016USD ($) |
Commitments And Contingencies | |
Aggregate maximum insurance limit | $ 100,000,000 |
Insurance deductible | $ 1,500,000 |
Waiting period one | 75 days |
Waiting period two | 90 days |
Waiting period three | 120 days |
Overall aggregate deductible | $ 10,000,000 |
CONCENTRATION OF CREDIT RISK119
CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Major Customers | |||||||||||
Total revenues | $ 527,400 | $ 552,074 | $ 439,150 | $ 412,829 | $ 542,152 | $ 566,445 | $ 604,720 | $ 560,416 | $ 1,931,453 | $ 2,273,733 | $ 2,300,721 |
Trade receivables | 152,032 | 122,875 | 152,032 | 122,875 | |||||||
Revenues | Customer Concentration Risk | Customer A | |||||||||||
Major Customers | |||||||||||
Total revenues | 253,465 | 343,483 | 301,191 | ||||||||
Revenues | Customer Concentration Risk | Customer B | |||||||||||
Major Customers | |||||||||||
Total revenues | 241,255 | 305,048 | 276,094 | ||||||||
Revenues | Customer Concentration Risk | Customer C | |||||||||||
Major Customers | |||||||||||
Total revenues | 265,642 | 312,150 | $ 317,745 | ||||||||
Trade accounts receivable | Customer Concentration Risk | Customers A, B, and C | |||||||||||
Major Customers | |||||||||||
Trade receivables | $ 42,500 | $ 48,400 | $ 42,500 | $ 48,400 |
SEGMENT INFORMATION - Segment R
SEGMENT INFORMATION - Segment Results (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2016USD ($)segment | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Segment Information | |||||||||||
Number of reportable segments | segment | 2 | ||||||||||
Reportable segment results | |||||||||||
Total revenues | $ 527,400 | $ 552,074 | $ 439,150 | $ 412,829 | $ 542,152 | $ 566,445 | $ 604,720 | $ 560,416 | $ 1,931,453 | $ 2,273,733 | $ 2,300,721 |
Segment Adjusted EBITDA Expense | 1,139,637 | 1,376,425 | 1,381,808 | ||||||||
Segment Adjusted EBITDA | 765,248 | 814,665 | 876,244 | ||||||||
Total assets | 2,193,042 | 2,361,286 | 2,193,042 | 2,361,286 | 2,285,059 | ||||||
Capital expenditures | 91,056 | 212,797 | 311,469 | ||||||||
Additional information | |||||||||||
Equity in income (loss) of affiliates | 3,543 | (49,046) | (16,648) | ||||||||
Investments in affiliate | 138,817 | 64,509 | 138,817 | 64,509 | |||||||
Payments to affiliate for acquisition and development of coal reserves | 4,082 | ||||||||||
Illinois Basin | |||||||||||
Reportable segment results | |||||||||||
Total revenues | 1,275,543 | 1,527,596 | 1,647,694 | ||||||||
Appalachia | |||||||||||
Reportable segment results | |||||||||||
Total revenues | 541,108 | 584,962 | 630,452 | ||||||||
Other and Corporate | |||||||||||
Reportable segment results | |||||||||||
Total revenues | 114,802 | 161,175 | 22,575 | ||||||||
Operating segments | Illinois Basin | |||||||||||
Reportable segment results | |||||||||||
Total revenues | 1,337,160 | 1,636,217 | 1,647,694 | ||||||||
Segment Adjusted EBITDA Expense | 775,851 | 949,271 | 1,000,028 | ||||||||
Segment Adjusted EBITDA | 538,077 | 617,148 | 616,727 | ||||||||
Total assets | 1,460,924 | 1,694,044 | 1,460,924 | 1,694,044 | 1,581,279 | ||||||
Capital expenditures | 52,505 | 145,352 | 243,167 | ||||||||
Additional information | |||||||||||
Equity in income (loss) of affiliates | 48,500 | 16,600 | |||||||||
Investments in affiliate | 211,700 | ||||||||||
Operating segments | Appalachia | |||||||||||
Reportable segment results | |||||||||||
Total revenues | 544,914 | 596,299 | 630,452 | ||||||||
Segment Adjusted EBITDA Expense | 346,505 | 400,681 | 364,689 | ||||||||
Segment Adjusted EBITDA | 191,694 | 183,908 | 254,037 | ||||||||
Total assets | 480,745 | 517,972 | 480,745 | 517,972 | 604,352 | ||||||
Capital expenditures | 36,213 | 61,279 | 56,840 | ||||||||
Operating segments | Other and Corporate | |||||||||||
Reportable segment results | |||||||||||
Total revenues | 132,554 | 181,044 | 34,090 | ||||||||
Segment Adjusted EBITDA Expense | 89,594 | 153,720 | 25,487 | ||||||||
Segment Adjusted EBITDA | 46,339 | 26,189 | 8,599 | ||||||||
Total assets | 404,153 | 263,817 | 404,153 | 263,817 | 258,424 | ||||||
Capital expenditures | 2,338 | 6,166 | 11,462 | ||||||||
Additional information | |||||||||||
Investments in affiliate | 138,800 | 64,500 | 138,800 | 64,500 | 12,900 | ||||||
Elimination | |||||||||||
Reportable segment results | |||||||||||
Total revenues | (83,175) | (139,827) | (11,515) | ||||||||
Segment Adjusted EBITDA Expense | (72,313) | (127,247) | (8,396) | ||||||||
Segment Adjusted EBITDA | (10,862) | (12,580) | (3,119) | ||||||||
Total assets | $ (152,780) | $ (114,547) | (152,780) | (114,547) | (158,996) | ||||||
Elimination | Illinois Basin | |||||||||||
Reportable segment results | |||||||||||
Total revenues | 61,617 | 108,621 | |||||||||
Elimination | Appalachia | |||||||||||
Reportable segment results | |||||||||||
Total revenues | 3,806 | 11,337 | |||||||||
Elimination | Other and Corporate | |||||||||||
Reportable segment results | |||||||||||
Total revenues | $ 17,752 | $ 19,869 | $ 11,515 |
SEGMENT INFORMATION - EBITDA Ex
SEGMENT INFORMATION - EBITDA Expense Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Reconciliation of consolidated Segment Adjusted EBITDA Expense to operating expenses (excluding depreciation, depletion and amortization) | |||
Segment Adjusted EBITDA Expense | $ 1,139,637 | $ 1,376,425 | $ 1,381,808 |
Outside coal purchases | (1,514) | (327) | (14) |
Other income | 725 | 955 | 1,566 |
Operating expenses (excluding depreciation, depletion and amortization) | $ 1,138,848 | $ 1,377,053 | $ 1,383,360 |
SEGMENT INFORMATION - EBITDA Re
SEGMENT INFORMATION - EBITDA Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2015 | Sep. 30, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Reconciliation of consolidated Segment Adjusted EBITDA to net income | |||||
Consolidated Segment Adjusted EBITDA | $ 765,248 | $ 814,665 | $ 876,244 | ||
General and administrative | (72,529) | (67,484) | (72,552) | ||
Depreciation, depletion and amortization | (322,509) | (333,713) | (274,566) | ||
Asset impairment charge | $ (89,400) | $ (10,700) | (100,130) | ||
Interest expense, net | (30,659) | (29,694) | (31,913) | ||
Acquisition gain, net | $ 22,500 | 22,548 | |||
Income tax expense (benefit) | (13) | (21) | |||
NET INCOME | $ 339,538 | $ 306,171 | $ 497,213 |
SELECTED QUARTERLY FINANCIAL123
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | |||||||||||
Revenues | $ 527,400 | $ 552,074 | $ 439,150 | $ 412,829 | $ 542,152 | $ 566,445 | $ 604,720 | $ 560,416 | $ 1,931,453 | $ 2,273,733 | $ 2,300,721 |
Income from operations | 124,303 | 96,431 | 90,361 | 54,847 | 6,212 | 107,217 | 124,530 | 123,470 | 365,942 | 361,429 | 544,208 |
Income before income taxes | 119,704 | 89,831 | 82,717 | 47,299 | 21,479 | 83,384 | 94,864 | 106,465 | 339,551 | 306,192 | 497,213 |
Net income of ARLP | $ 119,595 | $ 89,780 | $ 82,713 | $ 47,310 | $ 21,475 | $ 83,379 | $ 94,864 | $ 106,480 | $ 339,398 | $ 306,198 | $ 497,229 |
Basic net income of ARLP per limited partner unit (in dollars per unit) | $ 1.30 | $ 0.91 | $ 0.82 | $ 0.36 | $ (0.19) | $ 0.61 | $ 0.76 | $ 0.92 | $ 3.39 | $ 2.11 | $ 4.77 |
Diluted net income of ARLP per limited partner unit (in dollars per unit) | $ 1.30 | $ 0.91 | $ 0.82 | $ 0.36 | $ (0.19) | $ 0.61 | $ 0.76 | $ 0.92 | $ 3.39 | $ 2.11 | $ 4.77 |
Weighted average limited partner units outstanding - basic (in units) | 74,375,025 | 74,375,025 | 74,375,025 | 74,291,114 | 74,188,784 | 74,188,784 | 74,188,784 | 74,130,405 | 74,354,162 | 74,174,389 | 74,044,417 |
Weighted average limited partner units outstanding - diluted (in units) | 74,375,025 | 74,375,025 | 74,375,025 | 74,291,114 | 74,188,784 | 74,188,784 | 74,188,784 | 74,130,405 | 74,354,162 | 74,174,389 | 74,044,417 |
Asset impairment charges | $ 89,400 | $ 10,700 | $ 100,130 | ||||||||
Net gain relating to final business combination accounting | $ 22,500 | $ 22,548 |
SCHEDULE II VALUATION AND QU124
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS (Details) - Allowance for doubtful accounts - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Valuation And Qualifying Accounts | |||
Balance At Beginning of Year | $ 0 | $ 0 | $ 0 |
Additions Charged to Income | 0 | 0 | 0 |
Deductions | 0 | 0 | 0 |
Balance At End of Year | $ 0 | $ 0 | $ 0 |