Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Aug. 04, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | ALLIANCE RESOURCE PARTNERS LP | |
Entity Central Index Key | 1,086,600 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Units Outstanding | 130,704,217 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 39,457 | $ 39,782 |
Trade receivables | 118,801 | 152,032 |
Other receivables | 241 | 279 |
Due from affiliates | 419 | 271 |
Inventories, net | 115,017 | 61,051 |
Advance royalties, net | 1,207 | 1,207 |
Prepaid expenses and other assets | 15,465 | 22,050 |
Total current assets | 290,607 | 276,672 |
PROPERTY, PLANT AND EQUIPMENT: | ||
Property, plant and equipment, at cost | 2,926,175 | 2,920,988 |
Less accumulated depreciation, depletion and amortization | (1,400,169) | (1,335,145) |
Total property, plant and equipment, net | 1,526,006 | 1,585,843 |
OTHER ASSETS: | ||
Advance royalties, net | 40,737 | 29,372 |
Equity investments in affiliates | 149,592 | 138,817 |
Goodwill | 136,399 | 136,399 |
Other long-term assets | 34,077 | 25,939 |
Total other assets | 360,805 | 330,527 |
TOTAL ASSETS | 2,177,418 | 2,193,042 |
CURRENT LIABILITIES: | ||
Accounts payable | 68,770 | 64,055 |
Due to affiliates | 728 | 906 |
Accrued taxes other than income taxes | 20,132 | 18,273 |
Accrued payroll and related expenses | 37,405 | 41,576 |
Accrued interest | 5,583 | 316 |
Workers' compensation and pneumoconiosis benefits | 9,731 | 9,897 |
Current capital lease obligations | 27,855 | 27,196 |
Other current liabilities | 15,543 | 14,778 |
Current maturities, long-term debt, net | 75,700 | 149,874 |
Total current liabilities | 261,447 | 326,871 |
LONG-TERM LIABILITIES: | ||
Long-term debt, excluding current maturities, net | 385,886 | 399,446 |
Pneumoconiosis benefits | 63,662 | 62,822 |
Accrued pension benefit | 40,607 | 42,070 |
Workers' compensation | 52,416 | 40,400 |
Asset retirement obligations | 124,970 | 125,266 |
Long-term capital lease obligations | 71,510 | 85,540 |
Other liabilities | 17,353 | 17,203 |
Total long-term liabilities | 756,404 | 772,747 |
Total liabilities | 1,017,851 | 1,099,618 |
Alliance Resource Partners, L.P. ("ARLP") Partners' Capital: | ||
Limited Partners - Common Unitholders 74,597,036 and 74,375,025 units outstanding, respectively | 1,483,706 | 1,400,202 |
General Partners' deficit | (291,838) | (273,788) |
Accumulated other comprehensive loss | (38,035) | (38,540) |
Total ARLP Partners' Capital | 1,153,833 | 1,087,874 |
Noncontrolling interest | 5,734 | 5,550 |
Total Partners' Capital | 1,159,567 | 1,093,424 |
TOTAL LIABILITIES AND PARTNERS' CAPITAL | $ 2,177,418 | $ 2,193,042 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - shares | Jun. 30, 2017 | Dec. 31, 2016 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Limited Partners, Common Unitholders, units outstanding | 74,597,036 | 74,375,025 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
SALES AND OPERATING REVENUES: | ||||
Coal sales | $ 382,262 | $ 422,469 | $ 821,006 | $ 823,761 |
Transportation revenues | 7,328 | 5,482 | 16,924 | 12,040 |
Other sales and operating revenues | 9,130 | 11,199 | 21,870 | 16,178 |
Total revenues | 398,720 | 439,150 | 859,800 | 851,979 |
EXPENSES: | ||||
Operating expenses (excluding depreciation, depletion and amortization) | 238,668 | 251,947 | 501,460 | 515,526 |
Transportation expenses | 7,328 | 5,482 | 16,924 | 12,040 |
General and administrative | 14,944 | 17,663 | 30,977 | 34,901 |
Depreciation, depletion and amortization | 59,020 | 73,697 | 124,147 | 144,304 |
Total operating expenses | 319,960 | 348,789 | 673,508 | 706,771 |
INCOME FROM OPERATIONS | 78,760 | 90,361 | 186,292 | 145,208 |
Interest expense (net of interest capitalized for the three and six months ended June 30, 2017 and 2016 of $166, $46, $247 and $273, respectively) | (10,615) | (7,770) | (18,131) | (15,385) |
Interest income | 54 | 2 | 78 | 5 |
Equity in income (loss) of affiliates | 2,916 | (37) | 6,616 | (64) |
Debt extinguishment loss | (8,148) | (8,148) | ||
Other income | 389 | 161 | 1,687 | 252 |
INCOME BEFORE INCOME TAXES | 63,356 | 82,717 | 168,394 | 130,016 |
INCOME TAX EXPENSE (BENEFIT) | 4 | 6 | (8) | (3) |
NET INCOME | 63,352 | 82,711 | 168,402 | 130,019 |
LESS: NET LOSS (INCOME) ATTRIBUTABLE TO NONCONTROLLING INTEREST | (122) | 2 | (270) | 4 |
NET INCOME ATTRIBUTABLE TO ALLIANCE RESOURCE PARTNERS, L.P. ("NET INCOME OF ARLP") | 63,230 | 82,713 | 168,132 | 130,023 |
GENERAL PARTNERS' INTEREST IN NET INCOME OF ARLP | 604 | 20,430 | 20,750 | 40,152 |
LIMITED PARTNERS' INTEREST IN NET INCOME OF ARLP | $ 62,626 | $ 62,283 | $ 147,382 | $ 89,871 |
BASIC NET INCOME OF ARLP PER LIMITED PARTNER UNIT (Note 9) (in dollars per unit) | $ 0.82 | $ 0.82 | $ 1.93 | $ 1.18 |
DILUTED NET INCOME OF ARLP PER LIMITED PARTNER UNIT (Note 9) (in dollars per unit) | 0.82 | 0.82 | 1.93 | 1.18 |
DISTRIBUTIONS PAID PER LIMITED PARTNER UNIT (in dollars per unit) | $ 0.4375 | $ 0.4375 | $ 0.8750 | $ 1.1125 |
WEIGHTED AVERAGE NUMBER OF UNITS OUTSTANDING - BASIC (in units) | 74,597,036 | 74,375,025 | 74,550,426 | 74,333,070 |
WEIGHTED AVERAGE NUMBER OF UNITS OUTSTANDING - DILUTED (in units) | 74,597,036 | 74,375,025 | 74,550,426 | 74,333,070 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||
Interest expense, interest capitalized | $ 166 | $ 46 | $ 247 | $ 273 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | ||
NET INCOME | $ 63,352 | $ 82,711 | $ 168,402 | $ 130,019 | |
OTHER COMPREHENSIVE INCOME/(LOSS): | |||||
OTHER COMPREHENSIVE INCOME | 252 | 128 | 505 | 256 | |
COMPREHENSIVE INCOME | 63,604 | 82,839 | 168,907 | 130,275 | |
Less: Comprehensive (income) loss attributable to noncontrolling interest | (122) | 2 | (270) | 4 | |
COMPREHENSIVE INCOME ATTRIBUTABLE TO ARLP | 63,482 | 82,841 | 168,637 | 130,279 | |
Pension Plan | |||||
OTHER COMPREHENSIVE INCOME/(LOSS): | |||||
Amortization of prior service cost (1) | [1] | 47 | 94 | ||
Amortization of net actuarial (gain) loss (1) | [1] | 772 | 789 | 1,545 | 1,578 |
Total adjustments recognized | 819 | 789 | 1,639 | 1,578 | |
Pneumoconiosis benefits | |||||
OTHER COMPREHENSIVE INCOME/(LOSS): | |||||
Amortization of net actuarial (gain) loss (1) | [1] | (567) | (661) | (1,134) | (1,322) |
Total adjustments recognized | $ (567) | $ (661) | $ (1,134) | $ (1,322) | |
[1] | Amortization of prior service cost and net actuarial gain or loss is included in the computation of net periodic benefit cost (see Notes 10 and 12 for additional details). |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
CASH FLOWS FROM OPERATING ACTIVITIES | $ 294,478 | $ 212,342 |
Property, plant and equipment: | ||
Capital expenditures | (67,517) | (48,602) |
Increase (decrease) in accounts payable and accrued liabilities | 2,411 | (10,894) |
Proceeds from sale of property, plant and equipment | 540 | 749 |
Contributions to equity investments in affiliates | (12,587) | (33,185) |
Other | 1,829 | 960 |
Net cash used in investing activities | (75,324) | (90,972) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Borrowings under securitization facility | 75,700 | 32,100 |
Payments under securitization facility | (100,000) | (27,700) |
Payments on term loan | (50,000) | (56,250) |
Borrowings under revolving credit facilities | 40,000 | 140,000 |
Payments under revolving credit facilities | (295,000) | (75,000) |
Borrowings under long-term debt | 400,000 | |
Payment on long-term debt | (145,000) | |
Proceeds from sale-leaseback transactions | 33,881 | |
Payments on capital lease obligations | (13,389) | (9,660) |
Payment of debt issuance costs | (15,033) | |
Payment for debt extinguishment | (8,148) | |
Contributions to consolidated company from affiliate noncontrolling interest | 251 | 1,300 |
Net settlement of employee withholding taxes on vesting of Long-Term Incentive Plan | (2,988) | (1,336) |
Cash contributions by General Partners | 905 | 47 |
Distributions paid to Partners | (106,440) | (141,811) |
Other | (337) | |
Net cash used in financing activities | (219,479) | (104,429) |
NET CHANGE IN CASH AND CASH EQUIVALENTS | (325) | 16,941 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 39,782 | 33,431 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 39,457 | 50,372 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ||
Cash paid for interest | 11,469 | 14,873 |
Cash paid for income taxes | 7 | 3 |
NON-CASH INVESTING AND FINANCING ACTIVITY: | ||
Accounts payable for purchase of property, plant and equipment | 10,643 | 1,740 |
Assets acquired by capital lease | 35,994 | |
Market value of common units issued under Long-Term Incentive and Directors Deferred Compensation Plans before minimum statutory tax withholding requirements | $ 8,149 | $ 3,642 |
ORGANIZATION AND PRESENTATION
ORGANIZATION AND PRESENTATION | 6 Months Ended |
Jun. 30, 2017 | |
ORGANIZATION AND PRESENTATION | |
ORGANIZATION AND PRESENTATION | 1. Significant Relationships Referenced in Notes to Condensed Consolidated Financial Statements · References to "we," "us," "our" or "ARLP Partnership" mean the business and operations of Alliance Resource Partners, L.P., the parent company, as well as its consolidated subsidiaries. · References to "ARLP" mean Alliance Resource Partners, L.P., individually as the parent company, and not on a consolidated basis. · References to "MGP" mean Alliance Resource Management GP, LLC, ARLP's managing general partner, and following the Exchange Transaction discussed below, its sole general partner. · References to "SGP" mean Alliance Resource GP, LLC, ARLP's special general partner until the Exchange Transaction discussed below. · 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, as of June 30, 2017, held 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, as of June 30, 2017, held a 0.99% and a 1.0001% managing general partner interest in ARLP and the Intermediate Partnership, respectively, and a 0.001% managing member interest in Alliance Coal. AHGP is a Delaware limited partnership that was formed to become the owner and controlling member of MGP. AHGP completed its initial public offering on May 15, 2006. AHGP owns directly and indirectly 100% of the members' interest of MGP and as of June 30, 2017, 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. Exchange Transaction On July 28, 2017, MGP contributed to ARLP all of its IDRs and its general partner interest in ARLP in exchange for 56,100,000 ARLP common units and a non-economic general partner interest in ARLP. In conjunction with this transaction and on the same economic basis as MGP, SGP also contributed to ARLP its 0.01% general partner interests in both ARLP and the Intermediate Partnership in exchange for 7,181 ARLP common units (collectively the "Exchange Transaction"). In connection with the Exchange Transaction, ARLP amended its partnership agreement to reflect, among other things, cancellation of the IDRs and the economic general partner interest in ARLP and issuance of a non-economic general partner interest to MGP. MGP is the sole general partner of ARLP following the Exchange Transaction, and no control, management or governance changes otherwise occurred. ARLP now has 130,704,217 common units outstanding and AHGP now owns directly and indirectly 87,188,338 ARLP common units and a non-economic managing general partner interest in ARLP. AHGP continues to own, through MGP, its 1.0001% managing general partner interest in the Intermediate Partnership and its 0.001% managing member interest in Alliance Coal. Simultaneously with the Exchange Transaction discussed above, MGP became a wholly-owned subsidiary of MGP II, LLC ("MGP II") which is owned 100% directly and indirectly by AHGP and was created in connection with the Exchange Transaction. MGP II now holds the 56,100,000 ARLP common units discussed above. Basis of Presentation The accompanying condensed consolidated financial statements include the accounts and operations of the ARLP Partnership and present the consolidated financial position as of June 30, 2017 and December 31, 2016, the results of operations and comprehensive income for the three and six months ended June 30, 2017 and 2016, and cash flows for the six months ended June 30, 2017 and 2016 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. For the periods presented, 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 general partner interest in the ARLP Partnership. All intercompany transactions and accounts have been eliminated. See Note 7 – Variable Interest Entities for more information regarding ARLP's consolidation of the Intermediate Partnership and Alliance Coal. See Note 9 – Net Income of ARLP Per Limited Partner Unit for more information regarding allocations to the limited and general partner interests. These condensed consolidated financial statements and notes are unaudited. However, in the opinion of management, these financial statements reflect all normal recurring adjustments necessary for a fair presentation of the results for the periods presented. Results presented for prior periods have been recast to reflect an immaterial reclassification of depreciation, depletion, and amortization capitalized into coal inventory as an adjustment to Depreciation, depletion, and amortization rather than Operating expenses (excluding depreciation, depletion, and amortization) . This reclassification did not impact Total operating expenses , Income from operations , Net income , Net income of ARLP or Basic and diluted net income of ARLP per limited partner unit . Results for interim periods are not necessarily indicative of results to be expected for the full year ending December 31, 2017. These condensed consolidated financial statements and notes are prepared pursuant to the rules and regulations of the Securities and Exchange Commission for interim reporting and do not include all of the information normally included with financial statements prepared in accordance with generally accepted accounting principles ("GAAP") of the United States. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2016. Use of Estimates The preparation of the ARLP Partnership's condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in our condensed consolidated financial statements. Actual results could differ from those estimates. |
NEW ACCOUNTING STANDARDS
NEW ACCOUNTING STANDARDS | 6 Months Ended |
Jun. 30, 2017 | |
NEW ACCOUNTING STANDARDS | |
NEW ACCOUNTING STANDARDS | 2. New Accounting Standards Issued and Adopted In January 2017, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2017-04, Intangibles–Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ("ASU 2017-04"). The ASU simplifies the subsequent measurement of goodwill by eliminating the need for an entity to determine the implied fair value of goodwill to calculate an impairment charge. Under the new guidance an entity compares the fair value of the reporting unit containing the goodwill to its carrying value and records any excess carrying value as an impairment charge. This new standard is applied prospectively and is effective for annual and interim periods beginning after December 15, 2019; however, early adoption is permitted. We have early adopted this new standard and will apply the guidance to any future goodwill impairment assessments. 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 was effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods, with early adoption permitted. The adoption of ASU 2016-09 did not have a material impact on our condensed consolidated financial statements. 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 was applied prospectively and was effective for annual reporting periods beginning after December 15, 2016 and interim periods within those annual periods, with early adoption permitted. The adoption of ASU 2015-11 did not have a material impact on our condensed consolidated financial statements. New Accounting Standards Issued and Not Yet Adopted In March 2017, the FASB issued ASU 2017-07, Compensation–Retirement Benefits (Topic 715) ("ASU 2017-07"). ASU 2017-07 requires that an employer disaggregate the service cost component from the other components of net benefit cost. It also provides explicit guidance on how to present the service cost component and the other components of net benefit cost in the income statement and allows only the service cost component of net benefit cost to be eligible for capitalization. The new guidance will be applied retroactively to all periods presented. ASU 2017-07 is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. We are currently evaluating the effect of adopting ASU 2017-07, but do not anticipate it will have a material impact on our consolidated financial statements. 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, but do not anticipate it will 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 May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"). ASU 2014-09 is a new revenue recognition standard that provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle of the new standard is 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 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 also reviewed the expanded disclosure requirements under the new standard and determined the additional information to be disclosed. In addition, we reviewed our business processes, systems and internal controls over financial reporting to support the new recognition and disclosure requirements under the new standard. Based on the results of our assessment team, we have started our implementation of the new standard. We continue to report our implementation progress for the new standard to our management and audit committee of our managing general partner. 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 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 and a modified retrospective method. We have elected to use the modified retrospective method of adoption which allows a cumulative effect adjustment to equity as of the date of adoption. |
CONTINGENCIES
CONTINGENCIES | 6 Months Ended |
Jun. 30, 2017 | |
CONTINGENCIES | |
CONTINGENCIES | 3. Various lawsuits, claims and regulatory proceedings incidental to our business are pending against the ARLP Partnership. We record accruals for potential losses related to these matters when, in management's opinion, such losses are probable and reasonably estimable. Based on known facts and circumstances, we believe the ultimate outcome of these outstanding lawsuits, claims and regulatory proceedings will not have a material adverse effect on our financial condition, results of operations or liquidity. However, if the results of these matters were different from management's current opinion and in amounts greater than our accruals, then they could have a material adverse effect. |
INVENTORIES
INVENTORIES | 6 Months Ended |
Jun. 30, 2017 | |
INVENTORIES | |
INVENTORIES | 4. Inventories consist of the following: June 30, December 31, 2017 2016 (in thousands) Coal $ 79,033 $ 29,242 Supplies (net of reserve for obsolescence of $4,923 and $4,940, respectively) 35,984 31,809 Total inventories, net $ 115,017 $ 61,051 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Jun. 30, 2017 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | 5. The following table summarizes our fair value measurements within the hierarchy: June 30, 2017 December 31, 2016 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 (in thousands) Measured on a recurring basis: Contingent consideration $ — $ — $ 9,700 $ — $ — $ 9,700 Additional disclosures: Long-term debt — 505,068 — — 559,509 — Total $ — $ 505,068 $ 9,700 $ — $ 559,509 $ 9,700 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 6 – Long-Term Debt). The fair value of debt, which is based upon these interest rates, is classified as a Level 2 measurement under the fair value hierarchy. The estimated fair value of our contingent consideration arrangement is based on a probability-weighted discounted cash flow model. The assumptions in the model include a risk-adjusted discount rate, forward coal sales price curves, cost of debt and probabilities of meeting certain contractual threshold coal sales prices. The fair value measurement is based on significant inputs not observable in active markets and thus represents a Level 3 fair value measurement under the fair value hierarchy. |
LONG-TERM DEBT
LONG-TERM DEBT | 6 Months Ended |
Jun. 30, 2017 | |
LONG-TERM DEBT | |
LONG-TERM DEBT | 6. Long-term debt consists of the following: Unamortized Discount and Principal Debt Issuance Costs June 30, December 31, June 30, December 31, 2017 2016 2017 2016 (in thousands) Revolving Credit facility $ — $ 255,000 $ (6,953) $ (453) Senior notes 400,000 — (7,161) — Series B senior notes — 145,000 — (101) Term loan — 50,000 — (126) Securitization facility 75,700 100,000 — — 475,700 550,000 (14,114) (680) Less current maturities (75,700) (150,000) — 126 Total long-term debt $ 400,000 $ 400,000 $ (14,114) $ (554) 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 replaced 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. The Credit Agreement provided for a $776.5 million revolving credit facility, reducing to $494.75 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 and term loan balance under the Replaced Credit Agreement were deemed to have been advanced under the Credit Facility on January 27, 2017. On April 3, 2017, we entered into an amendment to the Credit Agreement (the "Amendment") to extend the termination date of the Revolving Credit Facility as to $461.25 million of commitments to May 23, 2021, eliminate the Cavalier Condition and the Senior Notes Condition (both as defined in the Credit Agreement) and effectuate certain other changes. In connection with the Amendment, we increased the commitments under the Revolving Credit Facility from $479.75 million to $494.75 million, effective May 23, 2017 (of which $33.5 million expire on May 23, 2019). We incurred debt issuance costs in 2017 of $7.7 million in connection with the Credit Agreement which were deferred and will be amortized as a component of interest expense over the remaining term. 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 Term Loan principal balance of $50.0 million was paid in full in May 2017. 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 margins for (i) or (ii), as applicable, that fluctuate depending upon the ratio of Consolidated Debt to Consolidated Cash Flow (each as defined in the Credit Agreement). We elected a Eurodollar Rate, which, with applicable margin, was 3.56% on borrowings outstanding as of June 30, 2017. At June 30, 2017, we had $8.1 million of letters of credit outstanding with $486.7 million available for borrowing under the Revolving Credit Facility. We currently incur an annual commitment fee of 0.35% on the undrawn portion of the Revolving Credit Facility. We utilize the Revolving Credit Facility, as appropriate, for working capital requirements, capital expenditures and investments in affiliates, scheduled debt payments and distribution payments. The Credit Agreement contains 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 certain fixed charge coverage ratio (as defined in the Credit Agreement). The Amendment lowered this fixed charge ratio from less than 1.25 to 1.0 to 1.15 to 1.0 for each rolling four-quarter period and further limited the Intermediate Partnership’s ability to incur certain unsecured debt. See Note 7 – Variable Interest Entities for further discussion of restrictions on the cash available for distribution. The Amendment raised the debt to cash flow ratio from 2.25 to 1.0 to 2.50 to 1.0 and also removed the requirement for the Intermediate Partnership to remain in control of a certain amount of mineable coal reserves relative to its annual production. The Credit Agreement requires the Intermediate Partnership maintain (a) a debt to cash flow ratio of not more than 2.5 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 debt to cash flow ratio and cash flow to interest expense ratio were 0.75 to 1.0 and 22.8 to 1.0, respectively, for the trailing twelve months ended June 30, 2017. We were in compliance with the covenants of the Credit Agreement as of June 30, 2017. On January 27, 2017, the Intermediate Partnership also amended the 2008 Note Purchase Agreement dated June 26, 2008, for $145.0 million of Series B Senior Notes which bore interest at 6.72% and were due to mature on June 26, 2018 with interest payable semi-annually (the "Series B Senior Notes"). The amendment provided 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 modified certain covenants to align them with the applicable covenants in the Credit Agreement. As discussed below, we repaid the Series B Senior Notes in May 2017. On April 24, 2017, the Intermediate Partnership and Alliance Resource Finance Corporation (as co-issuer), a wholly owned subsidiary of the Intermediate Partnership ("Alliance Finance"), issued an aggregate principal amount of $400.0 million of senior unsecured notes due 2025 ("Senior Notes") in a private placement to qualified institutional buyers. The Senior Notes have a term of eight years, maturing on May 1, 2025 (the "Term") and accrue interest at an annual rate of 7.5%. Interest is payable semi-annually in arrears on each May 1 and November 1, commencing on November 1, 2017. The indenture governing the Senior Notes contains customary terms, events of default and covenants relating to, among other things, the incurrence of debt, the payment of distributions or similar restricted payments, undertaking transactions with affiliates and limitations on asset sales. At any time prior to May 1, 2020, the issuers of the Senior Notes may redeem up to 35% of the aggregate principal amount of the Senior Notes with the net cash proceeds of one or more equity offerings at a redemption price equal to 107.5% of the principal amount redeemed, plus accrued and unpaid interest, if any, to the redemption date. The issuers of the Senior Notes may also redeem all or a part of the notes at any time on or after May 1, 2020, at redemption prices set forth in the indenture governing the Senior Notes. At any time prior to May 1, 2020, the issuers of the Senior Notes may redeem the Senior Notes at a redemption price equal to the principal amount of the Senior Notes plus a "make-whole" premium, plus accrued and unpaid interest, if any, to the redemption date. The net proceeds from issuance of the Senior Notes and cash on hand were used to repay the Revolving Credit Facility, Term Loan and Series B Senior Notes (including a make-whole payment of $8.1 million). We incurred discount and debt issuance costs of $7.3 million in connection with issuance of the Senior Notes which were deferred and will be amortized as a component of interest expense over the Term. 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"). Under the Securitization Facility, certain subsidiaries sell trade receivables on an ongoing basis to our Intermediate Partnership, which then sells the trade receivables to AROP Funding, LLC ("AROP Funding"), a wholly-owned bankruptcy-remote special purpose subsidiary of our Intermediate Partnership, which in turn borrows on a revolving basis up to $100.0 million secured by the trade receivables. After the sale, Alliance Coal, as servicer of the assets, collects the receivables on behalf of AROP Funding. The Securitization Facility bears interest based on a Eurodollar Rate. It was renewed in December 2016 and matures in December 2017. At June 30, 2017, we had $75.7 million outstanding under the Securitization Facility. On October 6, 2015, Cavalier Minerals JV, LLC ("Cavalier Minerals") (see Note 7 – Variable Interest Entities) entered into a credit agreement (the "Cavalier Credit Agreement") with Mineral Lending, LLC ("Mineral Lending") for a $100.0 million line of credit (the "Cavalier Credit Facility"). Mineral Lending is an entity owned by a) Alliance Resource Holdings II, Inc. ("ARH II," the parent of ARH), b) an entity owned by an officer of ARH who is also a director of ARH II ("ARH Officer") and c) foundations established by the President and Chief Executive Officer of MGP and Kathleen S. Craft. There is no commitment fee under the facility. Borrowings under the Cavalier Credit Facility bear interest at a one month LIBOR rate plus 6% with interest payable quarterly. Repayment of the principal balance will begin following the first fiscal quarter after the earlier of the date on which the aggregate amount borrowed exceeds $90.0 million or December 31, 2017, in quarterly payments of an amount equal to the greater of $1.3 million initially, escalated to $2.5 million after two years, or fifty percent of Cavalier Minerals' excess cash flow. The Cavalier Credit Facility matures September 30, 2024, at which time all amounts then outstanding are required to be repaid. To secure payment of the facility, Cavalier Minerals pledged all of its partnership interests, owned or later acquired, in AllDale Minerals, LP ("AllDale I") and AllDale Minerals II, LP ("AllDale II") (collectively "AllDale Minerals"). Cavalier Minerals may prepay the Cavalier Credit Facility at any time in whole or in part subject to terms and conditions described in the Cavalier Credit Agreement. As of June 30, 2017, Cavalier Minerals had not drawn on the Cavalier Credit Facility. Alliance Minerals, LLC ("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. |
VARIABLE INTEREST ENTITIES
VARIABLE INTEREST ENTITIES | 6 Months Ended |
Jun. 30, 2017 | |
VARIABLE INTEREST ENTITIES | |
VARIABLE INTEREST ENTITIES | 7. 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 6 – Long-Term Debt and is Cavalier Minerals' managing member. Alliance Minerals and Bluegrass Minerals initially committed funding of $48.0 million and $2.0 million, respectively, to Cavalier Minerals, and Cavalier Minerals committed funding of $49.0 million to AllDale I. On October 6, 2015, Alliance Minerals and Bluegrass Minerals committed to fund an additional $96.0 million and $4.0 million, respectively, to Cavalier Minerals, and Cavalier Minerals committed to fund $100.0 million to AllDale II. Contributions in 2017 sufficiently completed funding to Cavalier Minerals for these commitments. Cavalier Minerals is not expected to call on further funding of these commitments from Alliance Minerals and Bluegrass Minerals. Contributions made from Alliance Minerals and Bluegrass Minerals to Cavalier Minerals for each period presented are as follows: Three Months Ended Six Months Ended June 30, June 30, 2017 2016 2017 2016 (in thousands) Alliance Minerals Beginning cumulative commitment fulfilled $ 143,112 $ 82,977 $ 137,077 $ 63,498 Capital contributions - Cash — 12,096 6,035 31,176 Capital contributions - Net AllDale Minerals' distributions received by Cavalier Minerals (1) — 524 — 923 Ending cumulative commitment fulfilled 143,112 95,597 143,112 95,597 Remaining commitment 888 48,403 888 48,403 Total committed $ 144,000 $ 144,000 $ 144,000 $ 144,000 Bluegrass Minerals Beginning cumulative commitment fulfilled $ 5,963 $ 3,458 $ 5,712 $ 2,646 Capital contributions - Cash — 504 251 1,299 Capital contributions - Net AllDale Minerals' distributions received by Cavalier Minerals (1) — 21 — 38 Ending cumulative commitment fulfilled 5,963 3,983 5,963 3,983 Remaining commitment 37 2,017 37 2,017 Total committed $ 6,000 $ 6,000 $ 6,000 $ 6,000 (1) Represents distributions received from AllDale Minerals net of distributions reinvested and payments to Bluegrass Minerals for administration expense. 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: Three Months Ended Six Months Ended June 30, June 30, 2017 2016 2017 2016 (in thousands) Alliance Minerals $ 3,521 $ — $ 8,084 $ — Bluegrass Minerals 147 — 337 — Alliance Minerals' ownership interest in Cavalier Minerals at June 30, 2017 was 96%. The remainder of the equity ownership is held by Bluegrass Minerals. We have consolidated Cavalier Minerals' financial results as we concluded that Cavalier Minerals is a variable interest entity ("VIE") and we are the primary beneficiary because neither Bluegrass Minerals nor Alliance Minerals individually has both the power and the benefits related to Cavalier Minerals and we are most closely aligned with Cavalier Minerals through our substantial equity ownership. Bluegrass Minerals' equity ownership of Cavalier Minerals is accounted for as noncontrolling ownership interest in our condensed consolidated balance sheets. In addition, earnings attributable to Bluegrass Minerals are recognized as noncontrolling interest in our condensed consolidated statements of income. WKY CoalPlay On November 17, 2014, SGP Land, LLC ("SGP Land"), a wholly-owned subsidiary of SGP, and two limited liability companies ("Craft Companies") owned by irrevocable trusts established by the President and Chief Executive Officer of MGP entered into a limited liability company agreement to form WKY CoalPlay, LLC ("WKY CoalPlay"). WKY CoalPlay was formed, in part, to purchase and lease coal reserves. WKY CoalPlay is managed by the ARH Officer discussed in Note 6 – Long-Term Debt, who is also an employee of SGP Land and trustee of the irrevocable trusts owning the Craft Companies. In December 2014 and February 2015, we entered into various coal reserve leases with WKY CoalPlay. During the six months ended June 30, 2017, we paid $10.8 million of advanced royalties to WKY CoalPlay. As of June 30, 2017, we had $30.0 million of advanced royalties outstanding under the leases, which is reflected in the Advance royalties, net line items in our condensed consolidated balance sheets. We have concluded that WKY CoalPlay is a VIE because of our ability to exercise options to acquire reserves under lease with WKY CoalPlay, which is not within the control of the equity holders and, if it occurs, could potentially limit the expected residual return to the owners of WKY CoalPlay. We do not have any economic or governance rights related to WKY CoalPlay and our options that provide us with a variable interest in WKY CoalPlay's reserve assets do not give us any rights that constitute power to direct the primary activities that most significantly impact WKY CoalPlay's economic performance. SGP Land has the sole ability to replace the manager of WKY CoalPlay at its discretion and therefore has power to direct the activities of WKY CoalPlay. Consequently, we concluded that SGP Land is the primary beneficiary of WKY CoalPlay. Alliance Coal and the Intermediate Partnership Alliance Coal is a limited liability company designed to operate as the operating subsidiary of the Intermediate Partnership and holds the interests in the mining operations and Alliance Service, Inc. ("ASI"). The Intermediate Partnership is a limited 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 certain nominal distributions from the Intermediate Partnership and Alliance Coal). Available cash is determined as defined in the Agreements and represents all cash with the exception of cash reserves (i) for the proper conduct of the business including reserves for future capital expenditures and for anticipated credit needs of the Partnership Group, (ii) to comply with debt obligations or (iii) to provide funds for certain subsequent distributions. Cash reserves may not be established for the purpose of funding subsequent distributions if the effect would be to prevent ARLP from making the minimum quarterly distributions plus any cumulative distribution arrearage. MGP, as the managing member of Alliance Coal and the managing general partner of the Intermediate Partnership, is responsible for distributing this cash to ARLP so it can meet its distribution requirements. As discussed in Note 6 – Long-Term Debt, the Intermediate Partnership's debt covenants place additional restrictions on distributions to ARLP by limiting cash available for distribution from the Intermediate Partnership based on various debt covenants pertaining to the most recent preceding quarter. MGP does not have the ability, without the consent of the limited partners, to amend the Agreements. |
EQUITY INVESTMENTS
EQUITY INVESTMENTS | 6 Months Ended |
Jun. 30, 2017 | |
EQUITY INVESTMENTS | |
EQUITY INVESTMENT | 8. AllDale Minerals In November 2014, Cavalier Minerals (see Note 7 – Variable Interest Entities), was created to indirectly purchase, through its equity investments in AllDale Minerals, oil and gas mineral interests in various geographic locations within producing basins in the continental U.S. 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. 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 or AllDale III (collectively, the "AllDale Partnerships") that most significantly impact the economic performance of the AllDale Partnerships. As such, we account for our ownership interest in the income or loss of the AllDale Partnerships as equity investments and it is so reflected in our condensed consolidated financial statements. We record equity income or loss based on the AllDale Partnerships' individual distribution structures. The changes in our aggregate equity investment in the AllDale Partnerships for each of the periods presented were as follows: Three Months Ended Six Months Ended June 30, June 30, 2017 2016 2017 2016 (in thousands) Beginning balance $ 147,052 $ 84,234 $ 138,817 $ 64,509 Contributions 3,300 13,017 12,587 33,185 Equity in income (loss) of affiliates 2,916 (37) 6,616 (64) Distributions received (3,676) (544) (8,428) (960) Ending balance $ 149,592 $ 96,670 $ 149,592 $ 96,670 |
NET INCOME OF ARLP PER LIMITED
NET INCOME OF ARLP PER LIMITED PARTNER UNIT | 6 Months Ended |
Jun. 30, 2017 | |
NET INCOME OF ARLP PER LIMITED PARTNER UNIT | |
NET INCOME OF ARLP PER LIMITED PARTNER UNIT | 9. We utilize the two-class method in calculating basic and diluted earnings per unit ("EPU"). Net income of ARLP is allocated to the general partners and limited partners in accordance with their respective partnership percentages, after giving effect to any special income or expense allocations, including incentive distributions to our managing general partner. On July 28, 2017, MGP contributed to ARLP all of its IDRs and its general partner interest in ARLP in exchange for 56,100,000 ARLP common units and a non-economic general partner interest in ARLP. In conjunction with this transaction and on the same economic basis as MGP, SGP also contributed to ARLP its 0.01% general partner interests in both ARLP and the Intermediate Partnership in exchange for 7,181 ARLP common units. In connection with the Exchange Transaction, ARLP amended its partnership agreement to reflect, among other things, cancellation of the IDRs and the economic general partner interest in ARLP and issuance of a non-economic general partner interest to MGP. ARLP now has 130,704,217 common units outstanding. Under the IDR provisions of our partnership agreement prior to the Exchange Transaction, our managing general partner was entitled to receive 15% of the amount we distributed in excess of $0.1375 per unit, 25% of the amount we distributed in excess of $0.15625 per unit, and 50% of the amount we distributed in excess of $0.1875 per unit. Beginning with distributions declared for the three months ended June 30, 2017, payable in August 2017, we will no longer pay the IDR distribution. Outstanding awards under our Long-Term Incentive Plan ("LTIP") and phantom units in notional accounts under our Supplemental Executive Retirement Plan ("SERP") and the MGP Amended and Restated Deferred Compensation Plan for Directors ("Deferred Compensation Plan") include rights to nonforfeitable distributions or distribution equivalents and are therefore considered participating securities. As such, we allocate undistributed and distributed earnings to these outstanding awards in our calculation of EPU. The following is a reconciliation of net income of ARLP used for calculating basic earnings per unit and the weighted-average units used in computing EPU for the three and six months ended June 30, 2017 and 2016: Three Months Ended Six Months Ended June 30, June 30, 2017 2016 2017 2016 (in thousands, except per unit data) Net income of ARLP $ 63,230 $ 82,713 $ 168,132 $ 130,023 Adjustments: Managing general partner's priority distributions (1) — (19,159) (19,216) (38,318) General partners' equity ownership (1) (604) (1,271) (2,334) (1,834) General partners' special allocation of certain general and administrative expenses — — 800 — Limited partners' interest in net income of ARLP 62,626 62,283 147,382 89,871 Less: Distributions to participating securities (1,103) (878) (2,069) (1,753) Undistributed earnings attributable to participating securities — (782) (1,357) (582) Net income of ARLP available to limited partners $ 61,523 $ 60,623 $ 143,956 $ 87,536 Weighted-average limited partner units outstanding – basic and diluted 74,597 74,375 74,550 74,333 Basic and diluted net income of ARLP per limited partner unit (2) $ 0.82 $ 0.82 $ 1.93 $ 1.18 Pro forma basic and diluted net income of ARLP per limited partner unit (3) $ 0.47 $ 0.62 $ 1.26 $ 0.97 (1) Amounts for the three and six months ended June 30, 2017 reflect the impact of the Exchange Transaction eliminating second quarter distributions that would have been paid on August 14, 2017 for the IDRs and the 0.99% general partner interest in ARLP, both of which were held by MGP prior to the Exchange Transaction. MGP maintained its 1.0001% general partner interest in the Intermediate Partnership and thus continues to receive the Intermediate Partnership quarterly distribution as prior to the Exchange Transaction. Because the Exchange Transaction occurred prior to the August 7, 2017 record date for ARLP’s second quarter distributions, all of the second quarter earnings less the Intermediate Partnership’s general partner interest were allocated to ARLP's limited partners. The Exchange Transaction also shifted SGP’s nominal general partnership interest for its second quarter earnings and subsequent distributions to a limited partner interest. (2) Diluted EPU gives effect to all dilutive potential common units outstanding during the period using the treasury stock method. Diluted EPU excludes all dilutive potential units calculated under the treasury stock method if their effect is anti-dilutive. The combined total of LTIP, SERP and Deferred Compensation Plan units of 1,355 and 1,401 for the three and six months ended June 30, 2017, respectively, and 699 and 488 for the three and six months ended June 30, 2016, respectively, were considered anti-dilutive under the treasury stock method. (3) Pro forma amounts reflect basic and diluted EPU as if the Exchange Transaction had occurred as of January 1, 2016. Accordingly, the pro forma amounts reflect net income allocations as if distributions had been made based on the limited and general partner interests outstanding as a result of the Exchange Transaction, resulting in pro forma net income of ARLP available to limited partners of $61.5 million and $164.5 million for the three and six months ended June 30, 2017, respectively, and $80.6 million and $126.8 million for the three and six months ended June 30, 2016, respectively. Pro forma amounts also reflect the impact on the weighted average units outstanding during the periods as a result of the issuance of 56,107,181 ARLP common units in the Exchange Transaction. During the six months ended June 30, 2017, an affiliated entity controlled by Mr. Craft made a capital contribution of $0.8 million to AHGP for the purpose of funding certain general and administrative expenses. Upon AHGP's receipt of the 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 a special allocation to our managing general partner of certain general and administrative expenses equal to its contribution. Net income of ARLP allocated to the limited partners was not burdened by this expense. |
WORKERS' COMPENSATION AND PNEUM
WORKERS' COMPENSATION AND PNEUMOCONIOSIS | 6 Months Ended |
Jun. 30, 2017 | |
WORKERS' COMPENSATION AND PNEUMOCONIOSIS | |
WORKERS' COMPENSATION AND PNEUMOCONIOSIS | 10. The changes in the workers' compensation liability, including current and long-term liability balances, for each of the periods presented were as follows: Three Months Ended Six Months Ended June 30, June 30, 2017 2016 2017 2016 (in thousands) Beginning balance $ 47,600 $ 55,564 $ 48,131 $ 54,558 Accruals increase 12,700 2,187 14,674 5,424 Payments (2,517) (3,265) (5,442) (5,988) Interest accretion 420 492 840 984 Valuation loss (1) 1,778 1,425 1,778 1,425 Ending balance $ 59,981 $ 56,403 $ 59,981 $ 56,403 (1) Our liability for the estimated present value of current workers′ compensation benefits is based on our actuarial estimates. Our actuarial calculations are based on a blend of actuarial projection methods and numerous assumptions including claim development patterns, mortality, medical costs and interest rates. We conducted a mid-year review of our actuarial assumptions which resulted in a valuation loss in 2017 primarily attributable to a decrease in the discount rate used to calculate the estimated present value of future obligations from 3.52% at December 31, 2016 to 3.38% at June 30, 2017 and unfavorable changes in claims development. Our mid-year 2016 actuarial review resulted in a valuation loss primarily attributable to a decrease in the discount rate used to calculate the estimated present value of future obligations from 3.63% at December 31, 2015 to 2.89% at June 30, 2016, partially offset by favorable changes in claims development. Certain of our mine operating entities are liable under state statutes and the Federal Coal Mine Health and Safety Act of 1969, as amended, to pay pneumoconiosis, or black lung, benefits to eligible employees and former employees and their dependents. Components of the net periodic benefit cost for each of the periods presented are as follows: Three Months Ended Six Months Ended June 30, June 30, 2017 2016 2017 2016 (in thousands) Service cost $ 556 $ 644 $ 1,102 $ 1,292 Interest cost 628 626 1,257 1,253 Amortization of net actuarial gain (1) (567) (661) (1,134) (1,322) Net periodic benefit cost $ 617 $ 609 $ 1,225 $ 1,223 (1) Amortization of net actuarial gain is included in the Operating expenses (excluding depreciation, depletion and amortization) line item within our condensed consolidated statements of income. . |
COMPENSATION PLANS
COMPENSATION PLANS | 6 Months Ended |
Jun. 30, 2017 | |
COMPENSATION PLANS | |
COMPENSATION PLANS | 11. Long-Term Incentive Plan We have the LTIP for certain employees and officers of MGP and its affiliates who perform services for us. The LTIP awards are grants of non-vested "phantom" or notional units, also referred to as "restricted units", which upon satisfaction of time and performance-based vesting requirements, entitle the LTIP participant to receive ARLP common units. Annual grant levels and vesting provisions for designated participants are recommended by the President and Chief Executive Officer of MGP, subject to review and approval of the compensation committee of the MGP board of directors (the "Compensation Committee"). Vesting of all grants outstanding are subject to the satisfaction of certain financial tests, which management currently believes are 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 tax withholding obligations of LTIP participants. 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 six months ended June 30, 2017 is as follows: Number of units Weighted average grant date fair value per unit Intrinsic value (in thousands) Non-vested grants at January 1, 2017 1,604,748 $ $ 36,027 Granted Vested (1) Forfeited Non-vested grants at June 30, 2017 31,905 (1) During the six months ended June 30, 2017, we issued 222,011 unrestricted common units to the LTIP participants. The remaining vested units were settled in cash to satisfy tax withholding obligations of the LTIP participants. LTIP expense was $2.8 million and $3.0 million for the three months ended June 30, 2017 and 2016, respectively, and $5.4 million and $5.9 million for the six months ended June 30, 2017 and 2016, respectively. The total obligation associated with the LTIP as of June 30, 2017 was $16.1 million and is included in the partners' capital Limited partners-common unitholders line item in our condensed consolidated balance sheets. As of June 30, 2017, there was $17.0 million in total unrecognized compensation expense related to the non-vested LTIP grants that are expected to vest. That expense is expected to be recognized over a weighted-average period of 1.6 years. 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 six months ended June 30, 2017 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, 2017 494,018 $ $ 11,091 Granted Phantom units outstanding as of June 30, 2017 9,796 Total SERP and Deferred Compensation Plan expense was $0.4 million and $0.3 million for the three months ended June 30, 2017 and 2016, respectively, and $0.7 million and $0.6 million for the six months ended June 30, 2017 and 2016, respectively. As of June 30, 2017, the total obligation associated with the SERP and Deferred Compensation Plan was $15.3 million and is included in the partners' capital Limited partners-common unitholders line item in our condensed consolidated balance sheets. |
COMPONENTS OF PENSION PLAN NET
COMPONENTS OF PENSION PLAN NET PERIODIC BENEFIT COSTS | 6 Months Ended |
Jun. 30, 2017 | |
COMPONENTS OF PENSION PLAN NET PERIODIC BENEFIT COSTS | |
COMPONENTS OF PENSION PLAN NET PERIODIC BENEFIT COSTS | 12. Eligible employees at certain of our mining operations participate in a defined benefit plan (the "Pension Plan") that we sponsor. The 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. The benefit formula for the Pension Plan is a fixed dollar unit based on years of service. Components of the net periodic benefit cost for each of the periods presented are as follows: Three Months Ended Six Months Ended June 30, June 30, 2017 2016 2017 2016 (in thousands) Service cost $ — $ 598 $ — $ 1,196 Interest cost 1,135 1,131 2,270 2,263 Expected return on plan assets (1,251) (1,287) (2,503) (2,574) Amortization of prior service cost (1) 47 — 94 — Amortization of net loss (1) 772 789 1,545 1,578 Net periodic benefit cost $ 703 $ 1,231 $ 1,406 $ 2,463 (1) Amortization of prior service cost and net actuarial loss is included in the Operating expenses (excluding depreciation, depletion and amortization) line item within our condensed consolidated statements of income. During the six months ended June 30, 2017, we made contribution payments of $0.7 million to the Pension Plan for the 2016 plan year and $0.6 million for the 2017 plan year. On July 17, 2017, we made a contribution payment of $0.6 million for the 2017 plan year. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 6 Months Ended |
Jun. 30, 2017 | |
SEGMENT INFORMATION | |
SEGMENT INFORMATION | 13. We operate in the eastern U.S. as a producer and marketer of coal to major utilities and industrial users. We aggregate multiple operating segments into two reportable segments, Illinois Basin and Appalachia, and we have an "all other" category referred to as Other and Corporate. Our reportable segments correspond to major coal producing regions in the eastern U.S. Similar economic characteristics for our operating segments within each of these two reportable segments generally include coal quality, geology, coal marketing opportunities, mining and transportation methods and regulatory issues. The Illinois Basin reportable segment is comprised of multiple operating segments, including current operating mining complexes a) Webster County Coal, LLC's Dotiki mining complex, b) Gibson County Coal, LLC's mining complex, which includes the Gibson North (currently idled) and Gibson South mines, c) Warrior Coal, LLC's mining complex, d) River View Coal, LLC's mining complex and e) Hamilton County Coal, LLC's mining complex. 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, LLC's Pattiki mining complex ("Pattiki"), Hopkins County Coal, LLC's mining complex, which includes the Elk Creek mine, the Pleasant View surface mineable reserves and the Fies underground project, Sebree Mining, LLC's mining complex ("Sebree"), which includes the Onton mine, Steamport, LLC and certain Sebree reserves, CR Services, LLC, CR Machine Shop, LLC, certain properties and equipment of Alliance Resource Properties, ARP Sebree, LLC, ARP Sebree South, LLC and UC Coal, LLC and its subsidiaries, UC Mining, LLC and UC Processing, LLC (collectively "UC Coal"). The Pattiki mine ceased production in December 2016. The Elk Creek mine depleted its reserves in March 2016 and ceased production on April 1, 2016. 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. The Appalachia reportable segment is comprised of multiple operating segments, including the Mettiki mining complex, the Tunnel Ridge, LLC mining complex and the MC Mining, LLC mining complex. The Mettiki mining complex includes Mettiki Coal (WV), LLC's Mountain View mine and Mettiki Coal, LLC's preparation plant. Other and Corporate includes marketing and administrative activities, ASI and its subsidiary, Matrix Design Group, LLC and its subsidiaries Matrix Design International, LLC and Matrix Design Africa (PTY) LTD ("Matrix Design"), Alliance Design Group, LLC ("Alliance Design") (collectively, the Matrix Design entities and Alliance Design are referred to as the "Matrix Group"), ASI's ownership of aircraft, the Mt. Vernon Transfer Terminal, LLC ("Mt. Vernon") dock activities, Alliance Coal's coal brokerage activity, Mid-America Carbonates, LLC ("MAC"), certain of Alliance Resource Properties' land and mineral interest activities, Pontiki Coal, LLC's throughput receivables and prior workers' compensation and pneumoconiosis liabilities, Wildcat Insurance, LLC ("Wildcat Insurance"), Alliance Minerals, and its affiliate, Cavalier Minerals (Note 7 – Variable Interest Entities), both of which hold equity investments in various AllDale Partnerships (Note 8 – Equity Investment), AROP Funding and our new subsidiary formed March 30, 2017, Alliance Finance (both discussed in Note 6 - Long-Term Debt). On July 19, 2017, Alliance Minerals purchased $100 million of Series A-1 Preferred Interests from Kodiak Gas Services, LLC ("Kodiak") (Note 14 – Subsequent Events). Reportable segment results as of and for the three and six months ended June 30, 2017 and 2016 are presented below. Illinois Other and Elimination Basin Appalachia Corporate (1) Consolidated (in thousands) Three Months Ended June 30, 2017 Revenues - Outside $ 232,484 $ 135,706 $ 30,530 $ — $ Revenues - Intercompany 17,089 — 3,895 — Total revenues (2) 249,573 135,706 34,425 (20,984) 398,720 Segment Adjusted EBITDA Expense (3) 150,299 83,619 23,123 Segment Adjusted EBITDA (4)(5) 93,288 50,744 14,218 Capital expenditures 22,927 13,261 983 — Three Months Ended June 30, 2016 Revenues - Outside $ 285,557 $ 136,409 $ 17,184 $ — $ Revenues - Intercompany 10,323 1,625 4,393 — Total revenues (2) 295,880 138,034 21,577 (16,341) 439,150 Segment Adjusted EBITDA Expense (3) 161,045 88,003 16,165 Segment Adjusted EBITDA (4) 130,846 48,532 5,380 Capital expenditures 12,357 4,348 164 — Six Months Ended June 30, 2017 Revenues - Outside $ 496,834 $ 305,950 $ 57,016 $ — $ Revenues - Intercompany 28,294 — 8,008 — Total revenues (2) 525,128 305,950 65,024 (36,302) 859,800 Segment Adjusted EBITDA Expense (3) 311,736 178,936 40,961 Segment Adjusted EBITDA (4)(5) 199,551 123,931 30,679 Total assets (6) 1,445,624 473,699 369,185 Capital expenditures 40,116 26,041 1,360 — Six Months Ended June 30, 2016 Revenues - Outside $ 561,575 $ 252,554 $ 37,850 $ — $ Revenues - Intercompany 22,181 3,806 8,897 — Total revenues (2) 583,756 256,360 46,747 (34,884) 851,979 Segment Adjusted EBITDA Expense (3) 339,688 167,732 36,911 Segment Adjusted EBITDA (4) 235,618 85,202 9,608 Total assets (6) 1,658,518 516,584 358,569 Capital expenditures 30,371 17,011 1,220 — (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, 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. Results presented for Segment Adjusted EBITDA Expense for the three and six months ended June 30, 2016 have been recast to reflect a reclassification of depreciation and depletion capitalized into coal inventory as adjustments to Depreciation, depletion and amortization rather than Operating expenses (excluding depreciation, depletion and amortization) . The following is a reconciliation of consolidated Segment Adjusted EBITDA Expense to Operating expenses (excluding depreciation, depletion and amortization) : Three Months Ended Six Months Ended June 30, June 30, 2017 2016 2017 2016 (in thousands) Segment Adjusted EBITDA Expense $ 238,279 $ 251,786 $ 499,773 $ 515,274 Other income 389 161 1,687 252 Operating expenses (excluding depreciation, depletion and amortization) $ 238,668 $ 251,947 $ 501,460 $ 515,526 (4) Segment Adjusted EBITDA is defined as net income (prior to the allocation of noncontrolling interest) before net interest expense, income taxes, depreciation, depletion and amortization, general and administrative expenses and debt extinguishment loss. 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. Results presented for Segment Adjusted EBITDA for the three and six months ended June 30, 2016 have been recast to reflect a reclassification of depreciation and depletion capitalized into coal inventory as adjustments to Depreciation, depletion and amortization rather than Operating expenses (excluding depreciation, depletion and amortization) . Consolidated Segment Adjusted EBITDA is reconciled to net income as follows: Three Months Ended Six Months Ended June 30, June 30, 2017 2016 2017 2016 (in thousands) Consolidated Segment Adjusted EBITDA $ 156,029 $ 181,845 $ 349,719 $ 324,601 General and administrative (14,944) (17,663) (30,977) (34,901) Depreciation, depletion and amortization (59,020) (73,697) (124,147) (144,304) Interest expense, net (10,561) (7,768) (18,053) (15,380) Debt extinguishment loss (8,148) — (8,148) — Income tax (expense) benefit (4) (6) 8 3 Net income $ 63,352 $ 82,711 $ 168,402 $ 130,019 (5) Includes equity in income of affiliates for the three and six months ended June 30, 2017 of $2.9 million and $6.6 million, respectively, in Other and Corporate. (6) Total assets for Other and Corporate include investments in affiliates of $149.6 million and $96.7 million at June 30, 2017 and 2016, respectively. . |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2017 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 14. On July 28, 2017, we declared a quarterly distribution for the quarter ended June 30, 2017, of $0.50 per unit, on all common units outstanding, totaling approximately $66.0 million, including distributions of $0.7 million to MGP with respect to its general partner interest in the Intermediate Partnership, payable on August 14, 2017 to all unitholders of record as of August 7, 2017. The common units being paid distributions include the additional units issued in the Exchange Transaction. For further discussions regarding the Exchange Transaction, see Note 1 – Organization and Presentation and Note 9 – Net Income of ARLP Per Limited Partner Unit. On July 19, 2017, Alliance Minerals purchased $100 million of Series A-1 Preferred Interests from Kodiak, a privately-held gas compression company providing large-scale, high-utilization compression assets to customers operating primarily in the Permian Basin. This structured investment provides us with a quarterly cash or payment-in-kind return, and our ownership interests in Kodiak are senior to all other Kodiak equity interests and subordinate only to Kodiak's senior secured debt facility. Other than the events described above and in Notes 1, 9, 12 and 13 there were no other subsequent events. |
ORGANIZATION AND PRESENTATION (
ORGANIZATION AND PRESENTATION (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
ORGANIZATION AND PRESENTATION | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements include the accounts and operations of the ARLP Partnership and present the consolidated financial position as of June 30, 2017 and December 31, 2016, the results of operations and comprehensive income for the three and six months ended June 30, 2017 and 2016, and cash flows for the six months ended June 30, 2017 and 2016 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. For the periods presented, 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 general partner interest in the ARLP Partnership. All intercompany transactions and accounts have been eliminated. See Note 7 – Variable Interest Entities for more information regarding ARLP's consolidation of the Intermediate Partnership and Alliance Coal. See Note 9 – Net Income of ARLP Per Limited Partner Unit for more information regarding allocations to the limited and general partner interests. These condensed consolidated financial statements and notes are unaudited. However, in the opinion of management, these financial statements reflect all normal recurring adjustments necessary for a fair presentation of the results for the periods presented. Results presented for prior periods have been recast to reflect an immaterial reclassification of depreciation, depletion, and amortization capitalized into coal inventory as an adjustment to Depreciation, depletion, and amortization rather than Operating expenses (excluding depreciation, depletion, and amortization) . This reclassification did not impact Total operating expenses , Income from operations , Net income , Net income of ARLP or Basic and diluted net income of ARLP per limited partner unit . Results for interim periods are not necessarily indicative of results to be expected for the full year ending December 31, 2017. These condensed consolidated financial statements and notes are prepared pursuant to the rules and regulations of the Securities and Exchange Commission for interim reporting and do not include all of the information normally included with financial statements prepared in accordance with generally accepted accounting principles ("GAAP") of the United States. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2016. |
Use of Estimates | Use of Estimates The preparation of the ARLP Partnership's condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in our condensed consolidated financial statements. Actual results could differ from those estimates. |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
INVENTORIES | |
Schedule of inventories | June 30, December 31, 2017 2016 (in thousands) Coal $ 79,033 $ 29,242 Supplies (net of reserve for obsolescence of $4,923 and $4,940, respectively) 35,984 31,809 Total inventories, net $ 115,017 $ 61,051 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
FAIR VALUE MEASUREMENTS | |
Summary of fair value measurements within the hierarchy | June 30, 2017 December 31, 2016 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 (in thousands) Measured on a recurring basis: Contingent consideration $ — $ — $ 9,700 $ — $ — $ 9,700 Additional disclosures: Long-term debt — 505,068 — — 559,509 — Total $ — $ 505,068 $ 9,700 $ — $ 559,509 $ 9,700 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
LONG-TERM DEBT | |
Schedule of long-term debt | Unamortized Discount and Principal Debt Issuance Costs June 30, December 31, June 30, December 31, 2017 2016 2017 2016 (in thousands) Revolving Credit facility $ — $ 255,000 $ (6,953) $ (453) Senior notes 400,000 — (7,161) — Series B senior notes — 145,000 — (101) Term loan — 50,000 — (126) Securitization facility 75,700 100,000 — — 475,700 550,000 (14,114) (680) Less current maturities (75,700) (150,000) — 126 Total long-term debt $ 400,000 $ 400,000 $ (14,114) $ (554) |
VARIABLE INTEREST ENTITIES (Tab
VARIABLE INTEREST ENTITIES (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
VARIABLE INTEREST ENTITIES | |
Schedule of contributions and commitments | Three Months Ended Six Months Ended June 30, June 30, 2017 2016 2017 2016 (in thousands) Alliance Minerals Beginning cumulative commitment fulfilled $ 143,112 $ 82,977 $ 137,077 $ 63,498 Capital contributions - Cash — 12,096 6,035 31,176 Capital contributions - Net AllDale Minerals' distributions received by Cavalier Minerals (1) — 524 — 923 Ending cumulative commitment fulfilled 143,112 95,597 143,112 95,597 Remaining commitment 888 48,403 888 48,403 Total committed $ 144,000 $ 144,000 $ 144,000 $ 144,000 Bluegrass Minerals Beginning cumulative commitment fulfilled $ 5,963 $ 3,458 $ 5,712 $ 2,646 Capital contributions - Cash — 504 251 1,299 Capital contributions - Net AllDale Minerals' distributions received by Cavalier Minerals (1) — 21 — 38 Ending cumulative commitment fulfilled 5,963 3,983 5,963 3,983 Remaining commitment 37 2,017 37 2,017 Total committed $ 6,000 $ 6,000 $ 6,000 $ 6,000 (1) Represents distributions received from AllDale Minerals net of distributions reinvested and payments to Bluegrass Minerals for administration expense. |
Schedule of distributions | Three Months Ended Six Months Ended June 30, June 30, 2017 2016 2017 2016 (in thousands) Alliance Minerals $ 3,521 $ — $ 8,084 $ — Bluegrass Minerals 147 — 337 — |
EQUITY INVESTMENT (Tables)
EQUITY INVESTMENT (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
EQUITY INVESTMENTS | |
Schedule of changes in equity investment | Three Months Ended Six Months Ended June 30, June 30, 2017 2016 2017 2016 (in thousands) Beginning balance $ 147,052 $ 84,234 $ 138,817 $ 64,509 Contributions 3,300 13,017 12,587 33,185 Equity in income (loss) of affiliates 2,916 (37) 6,616 (64) Distributions received (3,676) (544) (8,428) (960) Ending balance $ 149,592 $ 96,670 $ 149,592 $ 96,670 |
NET INCOME OF ARLP PER LIMITE28
NET INCOME OF ARLP PER LIMITED PARTNER UNIT (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
NET INCOME OF ARLP PER LIMITED PARTNER UNIT | |
Reconciliation of net income and EPU calculations | Three Months Ended Six Months Ended June 30, June 30, 2017 2016 2017 2016 (in thousands, except per unit data) Net income of ARLP $ 63,230 $ 82,713 $ 168,132 $ 130,023 Adjustments: Managing general partner's priority distributions (1) — (19,159) (19,216) (38,318) General partners' equity ownership (1) (604) (1,271) (2,334) (1,834) General partners' special allocation of certain general and administrative expenses — — 800 — Limited partners' interest in net income of ARLP 62,626 62,283 147,382 89,871 Less: Distributions to participating securities (1,103) (878) (2,069) (1,753) Undistributed earnings attributable to participating securities — (782) (1,357) (582) Net income of ARLP available to limited partners $ 61,523 $ 60,623 $ 143,956 $ 87,536 Weighted-average limited partner units outstanding – basic and diluted 74,597 74,375 74,550 74,333 Basic and diluted net income of ARLP per limited partner unit (2) $ 0.82 $ 0.82 $ 1.93 $ 1.18 Pro forma basic and diluted net income of ARLP per limited partner unit (3) $ 0.47 $ 0.62 $ 1.26 $ 0.97 (1) Amounts for the three and six months ended June 30, 2017 reflect the impact of the Exchange Transaction eliminating second quarter distributions that would have been paid on August 14, 2017 for the IDRs and the 0.99% general partner interest in ARLP, both of which were held by MGP prior to the Exchange Transaction. MGP maintained its 1.0001% general partner interest in the Intermediate Partnership and thus continues to receive the Intermediate Partnership quarterly distribution as prior to the Exchange Transaction. Because the Exchange Transaction occurred prior to the August 7, 2017 record date for ARLP’s second quarter distributions, all of the second quarter earnings less the Intermediate Partnership’s general partner interest were allocated to ARLP's limited partners. The Exchange Transaction also shifted SGP’s nominal general partnership interest for its second quarter earnings and subsequent distributions to a limited partner interest. (2) Diluted EPU gives effect to all dilutive potential common units outstanding during the period using the treasury stock method. Diluted EPU excludes all dilutive potential units calculated under the treasury stock method if their effect is anti-dilutive. The combined total of LTIP, SERP and Deferred Compensation Plan units of 1,355 and 1,401 for the three and six months ended June 30, 2017, respectively, and 699 and 488 for the three and six months ended June 30, 2016, respectively, were considered anti-dilutive under the treasury stock method. (3) Pro forma amounts reflect basic and diluted EPU as if the Exchange Transaction had occurred as of January 1, 2016. Accordingly, the pro forma amounts reflect net income allocations as if distributions had been made based on the limited and general partner interests outstanding as a result of the Exchange Transaction, resulting in pro forma net income of ARLP available to limited partners of $61.5 million and $164.5 million for the three and six months ended June 30, 2017, respectively, and $80.6 million and $126.8 million for the three and six months ended June 30, 2016, respectively. Pro forma amounts also reflect the impact on the weighted average units outstanding during the periods as a result of the issuance of 56,107,181 ARLP common units in the Exchange Transaction. |
WORKERS' COMPENSATION AND PNE29
WORKERS' COMPENSATION AND PNEUMOCONIOSIS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Accrued Workers Compensation And Pneumoconiosis Benefits | |
Reconciliation of changes in workers' compensation liability | Three Months Ended Six Months Ended June 30, June 30, 2017 2016 2017 2016 (in thousands) Beginning balance $ 47,600 $ 55,564 $ 48,131 $ 54,558 Accruals increase 12,700 2,187 14,674 5,424 Payments (2,517) (3,265) (5,442) (5,988) Interest accretion 420 492 840 984 Valuation loss (1) 1,778 1,425 1,778 1,425 Ending balance $ 59,981 $ 56,403 $ 59,981 $ 56,403 (1) Our liability for the estimated present value of current workers′ compensation benefits is based on our actuarial estimates. Our actuarial calculations are based on a blend of actuarial projection methods and numerous assumptions including claim development patterns, mortality, medical costs and interest rates. We conducted a mid-year review of our actuarial assumptions which resulted in a valuation loss in 2017 primarily attributable to a decrease in the discount rate used to calculate the estimated present value of future obligations from 3.52% at December 31, 2016 to 3.38% at June 30, 2017 and unfavorable changes in claims development. Our mid-year 2016 actuarial review resulted in a valuation loss primarily attributable to a decrease in the discount rate used to calculate the estimated present value of future obligations from 3.63% at December 31, 2015 to 2.89% at June 30, 2016, partially offset by favorable changes in claims development. |
Pneumoconiosis benefits | |
Accrued Workers Compensation And Pneumoconiosis Benefits | |
Components of net periodic benefit cost | Three Months Ended Six Months Ended June 30, June 30, 2017 2016 2017 2016 (in thousands) Service cost $ 556 $ 644 $ 1,102 $ 1,292 Interest cost 628 626 1,257 1,253 Amortization of net actuarial gain (1) (567) (661) (1,134) (1,322) Net periodic benefit cost $ 617 $ 609 $ 1,225 $ 1,223 (1) Amortization of net actuarial gain is included in the Operating expenses (excluding depreciation, depletion and amortization) line item within our condensed consolidated statements of income. . |
COMPENSATION PLANS (Tables)
COMPENSATION PLANS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
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, 2017 1,604,748 $ $ 36,027 Granted Vested (1) Forfeited Non-vested grants at June 30, 2017 31,905 (1) During the six months ended June 30, 2017, we issued 222,011 unrestricted common units to the LTIP participants. The remaining vested units were settled in cash to satisfy tax withholding 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, 2017 494,018 $ $ 11,091 Granted Phantom units outstanding as of June 30, 2017 9,796 |
COMPONENTS OF PENSION PLAN NE31
COMPONENTS OF PENSION PLAN NET PERIODIC BENEFIT COSTS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Pension Plan | |
Employee Benefit Plans | |
Components of net periodic benefit cost | Three Months Ended Six Months Ended June 30, June 30, 2017 2016 2017 2016 (in thousands) Service cost $ — $ 598 $ — $ 1,196 Interest cost 1,135 1,131 2,270 2,263 Expected return on plan assets (1,251) (1,287) (2,503) (2,574) Amortization of prior service cost (1) 47 — 94 — Amortization of net loss (1) 772 789 1,545 1,578 Net periodic benefit cost $ 703 $ 1,231 $ 1,406 $ 2,463 (1) Amortization of prior service cost and net actuarial loss is included in the Operating expenses (excluding depreciation, depletion and amortization) line item within our condensed consolidated statements of income. |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
SEGMENT INFORMATION | |
Schedule of reportable segment results | Illinois Other and Elimination Basin Appalachia Corporate (1) Consolidated (in thousands) Three Months Ended June 30, 2017 Revenues - Outside $ 232,484 $ 135,706 $ 30,530 $ — $ Revenues - Intercompany 17,089 — 3,895 — Total revenues (2) 249,573 135,706 34,425 (20,984) 398,720 Segment Adjusted EBITDA Expense (3) 150,299 83,619 23,123 Segment Adjusted EBITDA (4)(5) 93,288 50,744 14,218 Capital expenditures 22,927 13,261 983 — Three Months Ended June 30, 2016 Revenues - Outside $ 285,557 $ 136,409 $ 17,184 $ — $ Revenues - Intercompany 10,323 1,625 4,393 — Total revenues (2) 295,880 138,034 21,577 (16,341) 439,150 Segment Adjusted EBITDA Expense (3) 161,045 88,003 16,165 Segment Adjusted EBITDA (4) 130,846 48,532 5,380 Capital expenditures 12,357 4,348 164 — Six Months Ended June 30, 2017 Revenues - Outside $ 496,834 $ 305,950 $ 57,016 $ — $ Revenues - Intercompany 28,294 — 8,008 — Total revenues (2) 525,128 305,950 65,024 (36,302) 859,800 Segment Adjusted EBITDA Expense (3) 311,736 178,936 40,961 Segment Adjusted EBITDA (4)(5) 199,551 123,931 30,679 Total assets (6) 1,445,624 473,699 369,185 Capital expenditures 40,116 26,041 1,360 — Six Months Ended June 30, 2016 Revenues - Outside $ 561,575 $ 252,554 $ 37,850 $ — $ Revenues - Intercompany 22,181 3,806 8,897 — Total revenues (2) 583,756 256,360 46,747 (34,884) 851,979 Segment Adjusted EBITDA Expense (3) 339,688 167,732 36,911 Segment Adjusted EBITDA (4) 235,618 85,202 9,608 Total assets (6) 1,658,518 516,584 358,569 Capital expenditures 30,371 17,011 1,220 — (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, 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. Results presented for Segment Adjusted EBITDA Expense for the three and six months ended June 30, 2016 have been recast to reflect a reclassification of depreciation and depletion capitalized into coal inventory as adjustments to Depreciation, depletion and amortization rather than Operating expenses (excluding depreciation, depletion and amortization) . The following is a reconciliation of consolidated Segment Adjusted EBITDA Expense to Operating expenses (excluding depreciation, depletion and amortization) : Three Months Ended Six Months Ended June 30, June 30, 2017 2016 2017 2016 (in thousands) Segment Adjusted EBITDA Expense $ 238,279 $ 251,786 $ 499,773 $ 515,274 Other income 389 161 1,687 252 Operating expenses (excluding depreciation, depletion and amortization) $ 238,668 $ 251,947 $ 501,460 $ 515,526 (4) Segment Adjusted EBITDA is defined as net income (prior to the allocation of noncontrolling interest) before net interest expense, income taxes, depreciation, depletion and amortization, general and administrative expenses and debt extinguishment loss. 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. Results presented for Segment Adjusted EBITDA for the three and six months ended June 30, 2016 have been recast to reflect a reclassification of depreciation and depletion capitalized into coal inventory as adjustments to Depreciation, depletion and amortization rather than Operating expenses (excluding depreciation, depletion and amortization) . Consolidated Segment Adjusted EBITDA is reconciled to net income as follows: Three Months Ended Six Months Ended June 30, June 30, 2017 2016 2017 2016 (in thousands) Consolidated Segment Adjusted EBITDA $ 156,029 $ 181,845 $ 349,719 $ 324,601 General and administrative (14,944) (17,663) (30,977) (34,901) Depreciation, depletion and amortization (59,020) (73,697) (124,147) (144,304) Interest expense, net (10,561) (7,768) (18,053) (15,380) Debt extinguishment loss (8,148) — (8,148) — Income tax (expense) benefit (4) (6) 8 3 Net income $ 63,352 $ 82,711 $ 168,402 $ 130,019 (5) Includes equity in income of affiliates for the three and six months ended June 30, 2017 of $2.9 million and $6.6 million, respectively, in Other and Corporate. (6) Total assets for Other and Corporate include investments in affiliates of $149.6 million and $96.7 million at June 30, 2017 and 2016, respectively. |
Reconciliation of consolidated Segment Adjusted EBITDA Expense to operating expenses (excluding depreciation, depletion and amortization) | Three Months Ended Six Months Ended June 30, June 30, 2017 2016 2017 2016 (in thousands) Segment Adjusted EBITDA Expense $ 238,279 $ 251,786 $ 499,773 $ 515,274 Other income 389 161 1,687 252 Operating expenses (excluding depreciation, depletion and amortization) $ 238,668 $ 251,947 $ 501,460 $ 515,526 |
Reconciliation of consolidated Segment Adjusted EBITDA to net income | Three Months Ended Six Months Ended June 30, June 30, 2017 2016 2017 2016 (in thousands) Consolidated Segment Adjusted EBITDA $ 156,029 $ 181,845 $ 349,719 $ 324,601 General and administrative (14,944) (17,663) (30,977) (34,901) Depreciation, depletion and amortization (59,020) (73,697) (124,147) (144,304) Interest expense, net (10,561) (7,768) (18,053) (15,380) Debt extinguishment loss (8,148) — (8,148) — Income tax (expense) benefit (4) (6) 8 3 Net income $ 63,352 $ 82,711 $ 168,402 $ 130,019 |
ORGANIZATION AND PRESENTATION -
ORGANIZATION AND PRESENTATION - Organization (Details) - shares | Jul. 28, 2017 | Jun. 30, 2017 | Dec. 31, 2016 |
Ownership interests | |||
ARLP common units outstanding | 74,597,036 | 74,375,025 | |
Subsequent event | |||
Ownership interests | |||
ARLP common units outstanding | 130,704,217 | ||
AHGP | Subsequent event | |||
Ownership interests | |||
Units owned by parent | 87,188,338 | ||
ARLP | SGP | |||
Ownership interests | |||
Ownership percentage by general partners | 0.01% | ||
ARLP | MGP | |||
Ownership interests | |||
Ownership percentage by general partners | 0.99% | ||
ARLP | AHGP | |||
Ownership interests | |||
Ownership percentage of managing general partner by parent | 100.00% | ||
Units owned by parent | 31,088,338 | ||
Intermediate Partnership | SGP | |||
Ownership interests | |||
Ownership percentage by general partners | 0.01% | ||
Intermediate Partnership | MGP | |||
Ownership interests | |||
Ownership percentage by general partners | 1.0001% | ||
Alliance Coal | MGP | |||
Ownership interests | |||
Ownership percentage by general partners | 0.001% | ||
Intermediate Partnership | AHGP | Subsequent event | |||
Ownership interests | |||
Ownership percentage of managing general partner by parent | 1.0001% | ||
Alliance Coal | AHGP | Subsequent event | |||
Ownership interests | |||
Ownership percentage of managing general partner by parent | 0.001% | ||
MGP II | AHGP | Subsequent event | |||
Ownership interests | |||
Ownership percentage of managing general partner by parent | 100.00% | ||
Units owned by parent | 56,100,000 | ||
Exchange Transaction | Subsequent event | |||
Ownership interests | |||
Common units issued in exchange | 56,107,181 | ||
Exchange Transaction | MGP | Subsequent event | |||
Ownership interests | |||
Common units issued in exchange | 56,100,000 | ||
Exchange Transaction | SGP | Subsequent event | |||
Ownership interests | |||
Common units issued in exchange | 7,181 | ||
Exchange Transaction | SGP | Intermediate Partnership | Subsequent event | |||
Ownership interests | |||
Ownership percentage by general partners | 0.01% |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
INVENTORIES | ||
Coal | $ 79,033 | $ 29,242 |
Supplies (net of reserve for obsolescence of $4,923 and $4,940, respectively) | 35,984 | 31,809 |
Total inventory | 115,017 | 61,051 |
Reserve for obsolescence | $ 4,923 | $ 4,940 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - Estimated fair value - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Level 2 | ||
FAIR VALUE MEASUREMENTS | ||
Long-term debt | $ 505,068 | $ 559,509 |
Total | 505,068 | 559,509 |
Level 3 | ||
FAIR VALUE MEASUREMENTS | ||
Total | 9,700 | 9,700 |
Recurring | Level 3 | ||
FAIR VALUE MEASUREMENTS | ||
Contingent consideration | $ 9,700 | $ 9,700 |
LONG-TERM DEBT - Components (De
LONG-TERM DEBT - Components (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Principal | ||
Long-term debt including current and non-current | $ 475,700 | $ 550,000 |
Less current maturities | (75,700) | (150,000) |
Total long-term debt | 400,000 | 400,000 |
Unamortized Debt Issuance Costs | ||
Unamortized debt issuance costs including current and non-current | (14,114) | (680) |
Less current maturities | 126 | |
Total unamortized debt issuance costs | (14,114) | (554) |
Series B Senior Notes | ||
Principal | ||
Long-term debt including current and non-current | 145,000 | |
Unamortized Debt Issuance Costs | ||
Unamortized debt issuance costs including current and non-current | (101) | |
Senior notes | ||
Principal | ||
Long-term debt including current and non-current | 400,000 | |
Unamortized Debt Issuance Costs | ||
Unamortized debt issuance costs including current and non-current | (7,161) | |
Securitization Facility | ||
Principal | ||
Long-term debt including current and non-current | 75,700 | 100,000 |
Credit Agreement | Revolving credit facility | ||
Unamortized Debt Issuance Costs | ||
Unamortized debt issuance costs including current and non-current | $ (6,953) | |
Replaced Credit Agreement | Replaced Revolving Credit Facility | ||
Principal | ||
Long-term debt including current and non-current | 255,000 | |
Unamortized Debt Issuance Costs | ||
Unamortized debt issuance costs including current and non-current | (453) | |
Replaced Credit Agreement | Replaced Term Loan | ||
Principal | ||
Long-term debt including current and non-current | 50,000 | |
Unamortized Debt Issuance Costs | ||
Unamortized debt issuance costs including current and non-current | $ (126) |
LONG-TERM DEBT - ARLP Debt Arra
LONG-TERM DEBT - ARLP Debt Arrangements (Details) | Jan. 27, 2017USD ($)item | May 31, 2017USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($) | Apr. 03, 2017USD ($) | Dec. 31, 2016USD ($) |
Long-Term Debt | |||||||
Outstanding | $ 475,700,000 | $ 475,700,000 | $ 550,000,000 | ||||
Debt issuance costs incurred | 15,033,000 | ||||||
Payments on term loan | 50,000,000 | $ 56,250,000 | |||||
ARLP Debt Arrangements | |||||||
Long-Term Debt | |||||||
ARLP debt arrangements requirements, period over which the ratios are required to be maintained | 12 months | ||||||
Actual debt to cash flow ratio for trailing twelve months | 0.75 | ||||||
Actual cash flow to interest expense ratio for trailing twelve months | 22.8 | ||||||
Revolving credit facility | Reduced Commitment as of May 23. 2017 | |||||||
Long-Term Debt | |||||||
Commitment expiring | $ 33,500,000 | ||||||
Series B Senior Notes | |||||||
Long-Term Debt | |||||||
Outstanding | 145,000,000 | ||||||
Credit Agreement | Revolving credit facility | |||||||
Long-Term Debt | |||||||
Debt issuance costs incurred | 7,700,000 | ||||||
Number of benchmarks | item | 3 | ||||||
Letters of credit outstanding | 8,100,000 | $ 8,100,000 | |||||
Line of credit facility, available for borrowing | $ 486,700,000 | $ 486,700,000 | |||||
Annual commitment fee percentage, undrawn portion | 0.35% | ||||||
Credit Agreement | Revolving credit facility | Eurodollar Rate | |||||||
Long-Term Debt | |||||||
Effective interest rate (as a percent) | 3.56% | 3.56% | |||||
Credit Agreement | Revolving credit facility | Initial Commitment expiring May 23, 2017 | |||||||
Long-Term Debt | |||||||
Maximum borrowing capacity | $ 776,500,000 | ||||||
Credit Agreement | Revolving credit facility | Reduced Commitment as of May 23. 2017 | |||||||
Long-Term Debt | |||||||
Maximum borrowing capacity | 494,750,000 | 494,750,000 | |||||
Credit Agreement | Revolving credit facility | Reduced Commitment as of May 23. 2017 | Before amendment | |||||||
Long-Term Debt | |||||||
Maximum borrowing capacity | 479,750,000 | ||||||
Credit Agreement | Revolving credit facility | Extended Commitment to May 23, 2021 | |||||||
Long-Term Debt | |||||||
Maximum borrowing capacity | $ 461,250,000 | ||||||
Credit Agreement | Term loan | |||||||
Long-Term Debt | |||||||
Principal amount | 50,000,000 | ||||||
Payments on term loan | $ 50,000,000 | ||||||
Credit Agreement | Letters of credit subfacility | |||||||
Long-Term Debt | |||||||
Maximum borrowing capacity | 125,000,000 | ||||||
Credit Agreement | Swingline subfacility | |||||||
Long-Term Debt | |||||||
Maximum borrowing capacity | 15,000,000 | ||||||
Replaced Credit Agreement | Replaced Revolving Credit Facility | |||||||
Long-Term Debt | |||||||
Maximum borrowing capacity | 700,000,000 | ||||||
Outstanding | 255,000,000 | ||||||
Replaced Credit Agreement | Replaced Term Loan | |||||||
Long-Term Debt | |||||||
Principal amount | 250,000,000 | ||||||
Outstanding | $ 50,000,000 | ||||||
Senior Notes | Series B Senior Notes | |||||||
Long-Term Debt | |||||||
Principal amount | $ 145,000,000 | ||||||
Interest rate (as a percent) | 6.72% | ||||||
Intermediate Partnership | ARLP Debt Arrangements | |||||||
Long-Term Debt | |||||||
ARLP debt arrangements requirements, period over which the ratios are required to be maintained | 12 months | ||||||
Intermediate Partnership | ARLP Debt Arrangements | Maximum | |||||||
Long-Term Debt | |||||||
ARLP debt arrangements requirements, fixed charge coverage ratio | 1.15 | ||||||
ARLP debt arrangements requirements, debt to cash flow ratio | 2.5 | ||||||
Intermediate Partnership | ARLP Debt Arrangements | Minimum | |||||||
Long-Term Debt | |||||||
ARLP debt arrangements requirements, cash flow to interest expense ratio | 3 | ||||||
Intermediate Partnership | ARLP Debt Arrangements | Before amendment | Maximum | |||||||
Long-Term Debt | |||||||
ARLP debt arrangements requirements, fixed charge coverage ratio | 1.25 | ||||||
ARLP debt arrangements requirements, debt to cash flow ratio | 2.25 |
LONG-TERM DEBT - 2025 Senior No
LONG-TERM DEBT - 2025 Senior Notes (Details) - USD ($) | Apr. 24, 2017 | Jun. 30, 2017 | Jun. 30, 2017 | Jan. 27, 2017 |
Issuance of Senior Notes | ||||
Make-whole payment | $ 8,148,000 | |||
Discount and debt issuance costs incurred | $ 15,033,000 | |||
Senior notes | Senior Notes | ||||
Issuance of Senior Notes | ||||
Discount and debt issuance costs incurred | $ 7,300,000 | |||
Series B Senior Notes | Senior Notes | ||||
Issuance of Senior Notes | ||||
Principal amount | $ 145,000,000 | |||
Interest rate (as a percent) | 6.72% | |||
Make-whole payment | $ 8,100,000 | |||
Intermediate Partnership and Alliance Finance | Senior notes | Senior Notes | ||||
Issuance of Senior Notes | ||||
Principal amount | $ 400,000,000 | |||
Term | 8 years | |||
Interest rate (as a percent) | 7.50% | |||
Percentage of debt that may be redeemed prior to May 1, 2020 | 35.00% | |||
Redemption price expressed as a percentage of principal | 107.50% |
LONG-TERM DEBT - Securitization
LONG-TERM DEBT - Securitization Facility (Details) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 | Dec. 05, 2014 |
Long-Term Debt | |||
Outstanding | $ 475,700,000 | $ 550,000,000 | |
Securitization Facility | |||
Long-Term Debt | |||
Maximum borrowing capacity | $ 100,000,000 | ||
Outstanding | $ 75,700,000 | $ 100,000,000 |
LONG-TERM DEBT - Cavalier (Deta
LONG-TERM DEBT - Cavalier (Details) - Cavalier Credit Agreement $ in Millions | Oct. 06, 2015USD ($) |
Long-Term Debt | |
Credit facility amount | $ 100 |
Annual commitment fee percentage, undrawn portion | 0.00% |
Threshold aggregate borrowings to trigger principal repayment | $ 90 |
Period for initial amount of payments | 2 years |
Minimum | |
Long-Term Debt | |
Initial quarterly payments | $ 1.3 |
Quarterly payments after initial period | $ 2.5 |
Quarterly payments as a percentage of excess cash flow | 50.00% |
One-month LIBOR | |
Long-Term Debt | |
Basis spread for variable interest rate (as a percent) | 6.00% |
VARIABLE INTEREST ENTITIES - Ca
VARIABLE INTEREST ENTITIES - Cavalier Minerals (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Jun. 30, 2016 | Oct. 06, 2015 | Nov. 10, 2014 |
Cavalier Minerals | All Dale I | ||||
Variable Interest Entities | ||||
Noncontrolling ownership interest (as a percent) | 71.70% | |||
Cavalier Minerals | All Dale II | ||||
Variable Interest Entities | ||||
Noncontrolling ownership interest (as a percent) | 72.80% | |||
Funding Commitments | Alliance Minerals | Cavalier Minerals | ||||
Variable Interest Entities | ||||
Funding commitment | $ 888 | $ 48,403 | ||
Funding Commitments | Bluegrass Minerals | Cavalier Minerals | ||||
Variable Interest Entities | ||||
Funding commitment | $ 37 | $ 2,017 | ||
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 - 42
VARIABLE INTEREST ENTITIES - Cavalier Minerals Commitments (Details) - Cavalier Minerals - Funding Commitments - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Alliance Minerals | ||||
Variable Interest Entities | ||||
Beginning cumulative commitment fulfilled | $ 143,112 | $ 82,977 | $ 137,077 | $ 63,498 |
Capital contributions - Cash | 0 | 12,096 | 6,035 | 31,176 |
Capital contributions - AllDale Minerals' distributions received by Cavalier Minerals | 524 | 923 | ||
Ending cumulative commitment fulfilled | 143,112 | 95,597 | 143,112 | 95,597 |
Remaining commitment | 888 | 48,403 | 888 | 48,403 |
Total committed | 144,000 | 144,000 | 144,000 | 144,000 |
Bluegrass Minerals | ||||
Variable Interest Entities | ||||
Beginning cumulative commitment fulfilled | 5,963 | 3,458 | 5,712 | 2,646 |
Capital contributions - Cash | 0 | 504 | 251 | 1,299 |
Capital contributions - AllDale Minerals' distributions received by Cavalier Minerals | 21 | 38 | ||
Ending cumulative commitment fulfilled | 5,963 | 3,983 | 5,963 | 3,983 |
Remaining commitment | 37 | 2,017 | 37 | 2,017 |
Total committed | $ 6,000 | $ 6,000 | $ 6,000 | $ 6,000 |
VARIABLE INTEREST ENTITIES - 43
VARIABLE INTEREST ENTITIES - Cavalier Minerals Distributions (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Variable Interest Entities | ||||
Distributions paid to Partners | $ 106,440 | $ 141,811 | ||
Alliance Minerals | ||||
Variable Interest Entities | ||||
Distributions paid to Partners | $ 3,521 | $ 0 | ||
Bluegrass Minerals | ||||
Variable Interest Entities | ||||
Distributions paid to Partners | $ 147 | $ 0 | ||
Cavalier Minerals | Alliance Minerals | ||||
Variable Interest Entities | ||||
Distributions paid to Partners | $ 8,084 | 0 | ||
Cavalier Minerals | Bluegrass Minerals | ||||
Variable Interest Entities | ||||
Incentive distribution for noncontrolling owners (as a percent) | 25.00% | |||
Distributions paid to Partners | $ 337 | $ 0 | ||
Cavalier Minerals | Variable Interest Entity, Primary Beneficiary | Alliance Minerals | ||||
Variable Interest Entities | ||||
Ownership interest in VIE (as a percent) | 96.00% |
VARIABLE INTEREST ENTITIES - Ot
VARIABLE INTEREST ENTITIES - Other VIEs (Details) $ in Millions | 6 Months Ended | |
Jun. 30, 2017USD ($) | Nov. 17, 2014company | |
Variable Interest Entities | ||
Percentage of available cash distributed | 100.00% | |
Variable Interest Entity, Primary Beneficiary | Alliance Coal | Intermediate Partnership | ||
Variable Interest Entities | ||
Ownership interest in VIE (as a percent) | 99.999% | |
Variable Interest Entity, Primary Beneficiary | Intermediate Partnership | ARLP | ||
Variable Interest Entities | ||
Ownership interest in VIE (as a percent) | 98.9899% | |
WKY CoalPlay | Variable Interest Entity, Not Primary Beneficiary | ||
Variable Interest Entities | ||
Number of limited liability companies related to MGP, that formed the related party together with SGP Land | company | 2 | |
WKY CoalPlay | Variable Interest Entity, Not Primary Beneficiary | Coal lease | ||
Variable Interest Entities | ||
Payments for earned royalties | $ 10.8 | |
Advance royalties | $ 30 | |
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 | Alliance Coal | ||
Variable Interest Entities | ||
Ownership percentage by general partners | 0.001% | |
MGP | Intermediate Partnership | ||
Variable Interest Entities | ||
Ownership percentage by general partners | 1.0001% |
EQUITY INVESTMENTS - AllDale (D
EQUITY INVESTMENTS - AllDale (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Feb. 28, 2017 | |
Changes in equity method investment | |||||
Beginning balance | $ 138,817 | ||||
Equity in income (loss) of affiliates | $ 2,916 | $ (37) | 6,616 | $ (64) | |
Ending balance | 149,592 | 149,592 | |||
AllDale Partnerships | |||||
Changes in equity method investment | |||||
Beginning balance | 147,052 | 84,234 | 138,817 | 64,509 | |
Contributions | 3,300 | 13,017 | 12,587 | 33,185 | |
Equity in income (loss) of affiliates | 2,916 | (37) | 6,616 | (64) | |
Distributions received | (3,676) | (544) | (8,428) | (960) | |
Ending balance | $ 149,592 | $ 96,670 | $ 149,592 | $ 96,670 | |
Funding Commitments | All Dale Minerals III | Alliance Minerals | |||||
Equity method investments, additional information | |||||
Investment commitment | $ 30,000 |
NET INCOME OF ARLP PER LIMITE46
NET INCOME OF ARLP PER LIMITED PARTNER UNIT - Exchange Transaction (Details) - shares | Jul. 28, 2017 | Jun. 30, 2017 | Dec. 31, 2016 |
Ownership interests | |||
ARLP common units outstanding | 74,597,036 | 74,375,025 | |
Subsequent event | |||
Ownership interests | |||
ARLP common units outstanding | 130,704,217 | ||
AHGP | Subsequent event | |||
Ownership interests | |||
Units owned by parent | 87,188,338 | ||
ARLP | SGP | |||
Ownership interests | |||
Ownership percentage by general partners | 0.01% | ||
ARLP | MGP | |||
Ownership interests | |||
Ownership percentage by general partners | 0.99% | ||
ARLP | AHGP | |||
Ownership interests | |||
Ownership percentage of managing general partner by parent | 100.00% | ||
Units owned by parent | 31,088,338 | ||
Intermediate Partnership | SGP | |||
Ownership interests | |||
Ownership percentage by general partners | 0.01% | ||
Intermediate Partnership | MGP | |||
Ownership interests | |||
Ownership percentage by general partners | 1.0001% | ||
Alliance Coal | MGP | |||
Ownership interests | |||
Ownership percentage by general partners | 0.001% | ||
Intermediate Partnership | AHGP | Subsequent event | |||
Ownership interests | |||
Ownership percentage of managing general partner by parent | 1.0001% | ||
Alliance Coal | AHGP | Subsequent event | |||
Ownership interests | |||
Ownership percentage of managing general partner by parent | 0.001% | ||
MGP II | AHGP | Subsequent event | |||
Ownership interests | |||
Ownership percentage of managing general partner by parent | 100.00% | ||
Units owned by parent | 56,100,000 | ||
Exchange Transaction | Subsequent event | |||
Ownership interests | |||
Common units issued in exchange | 56,107,181 | ||
Exchange Transaction | MGP | Subsequent event | |||
Ownership interests | |||
Common units issued in exchange | 56,100,000 | ||
Exchange Transaction | SGP | Subsequent event | |||
Ownership interests | |||
Common units issued in exchange | 7,181 | ||
Exchange Transaction | SGP | Intermediate Partnership | Subsequent event | |||
Ownership interests | |||
Ownership percentage by general partners | 0.01% |
NET INCOME OF ARLP PER LIMITE47
NET INCOME OF ARLP PER LIMITED PARTNER UNIT - Incentive Distributions (Details) - MGP | 6 Months Ended |
Jun. 30, 2017$ / 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 LIMITE48
NET INCOME OF ARLP PER LIMITED PARTNER UNIT - Reconciliation (Details) - USD ($) $ / shares in Units, $ in Thousands | Jul. 28, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||
Net income of ARLP | $ 63,230 | $ 82,713 | $ 168,132 | $ 130,023 | |
Managing general partner priority distributions | (19,159) | (19,216) | (38,318) | ||
General partners' 2% equity ownership | (604) | (1,271) | (2,334) | (1,834) | |
General partners' special allocation of certain general and administrative expenses | 800 | ||||
LIMITED PARTNERS' INTEREST IN NET INCOME OF ARLP | 62,626 | 62,283 | 147,382 | 89,871 | |
Distributions to participating securities | (1,103) | (878) | (2,069) | (1,753) | |
Undistributed earnings attributable to participating securities | (782) | (1,357) | (582) | ||
Net income of ARLP available to limited partners | $ 61,523 | $ 60,623 | $ 143,956 | $ 87,536 | |
Weighted average limited partner units outstanding - basic (in units) | 74,597,036 | 74,375,025 | 74,550,426 | 74,333,070 | |
Weighted average limited partner units outstanding - diluted (in units) | 74,597,036 | 74,375,025 | 74,550,426 | 74,333,070 | |
Basic net income of ARLP per limited partner unit (in dollars per unit) | $ 0.82 | $ 0.82 | $ 1.93 | $ 1.18 | |
Diluted net income of ARLP per limited partner unit (in dollars per unit) | 0.82 | 0.82 | 1.93 | 1.18 | |
Pro forma basic net income of ARLP per limited partner unit (3) (in dollars per share) | $ 0.47 | $ 0.62 | $ 1.26 | $ 0.97 | |
Anti-dilutive under the treasury stock method (in units) | 1,355,000 | 699,000 | 1,401,000 | 488,000 | |
ARLP | MGP | |||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||
Ownership percentage by general partners | 0.99% | ||||
Intermediate Partnership | MGP | |||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||
Ownership percentage by general partners | 1.0001% | ||||
Exchange Transaction | |||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||
Pro forma diluted net income of ARLP per limited partner unit (3) (in dollars per share) | $ 0.47 | $ 0.62 | $ 1.26 | $ 0.97 | |
Exchange Transaction | Pro Forma | |||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||
Net income of ARLP available to limited partners | $ 61,500 | $ 80,600 | $ 164,500 | $ 126,800 | |
Subsequent event | Exchange Transaction | |||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||
Common units issued in exchange | 56,107,181 |
NET INCOME OF ARLP PER LIMITE49
NET INCOME OF ARLP PER LIMITED PARTNER UNIT - Contribution by Affiliate (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2017USD ($) | |
Affiliated entity controlled by Mr. Craft | |
Related Party Transaction | |
Contributions from affiliates for general and administrative expenses | $ 0.8 |
WORKERS' COMPENSATION AND PNE50
WORKERS' COMPENSATION AND PNEUMOCONIOSIS - Workers' Compensation Liability (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 | Jun. 30, 2016 | Dec. 31, 2015 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 |
Reconciliation of changes in the workers' compensation liability | ||||||||
Beginning balance | $ 47,600 | $ 55,564 | $ 48,131 | $ 54,558 | ||||
Accruals increase | 12,700 | 2,187 | 14,674 | 5,424 | ||||
Payments | (2,517) | (3,265) | (5,442) | (5,988) | ||||
Interest accretion | 420 | 492 | 840 | 984 | ||||
Valuation loss (1) | 1,778 | 1,425 | 1,778 | 1,425 | ||||
Ending balance | $ 59,981 | $ 48,131 | $ 56,403 | $ 54,558 | $ 59,981 | $ 56,403 | $ 59,981 | $ 56,403 |
Workers' compensation discount rate | 3.38% | 3.52% | 2.89% | 3.63% |
WORKERS' COMPENSATION AND PNE51
WORKERS' COMPENSATION AND PNEUMOCONIOSIS - Periodic Benefit Cost (Details) - Pneumoconiosis benefits - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Accrued Workers Compensation And Pneumoconiosis Benefits | ||||
Service cost | $ 556 | $ 644 | $ 1,102 | $ 1,292 |
Interest cost | 628 | 626 | 1,257 | 1,253 |
Amortization of net actuarial gain (1) | (567) | (661) | (1,134) | (1,322) |
Net periodic benefit cost | $ 617 | $ 609 | $ 1,225 | $ 1,223 |
COMPENSATION PLANS - LTIP Grant
COMPENSATION PLANS - LTIP Grants Activity (Details) - ARLP LTIP - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Dec. 31, 2016 | |
Summary of non-vested grants (in units) | ||
Balance at the beginning of the period (in units) | 1,604,748 | |
Granted (in units) | 462,890 | |
Vested (in units) | (350,516) | |
Forfeited (in units) | (29,026) | |
Balance at the end of the period (in units) | 1,688,096 | |
Weighted average grant date fair value per unit | ||
Balance at the beginning of the period (in dollars per unit) | $ 23.19 | |
Granted (in dollars per unit) | 23.25 | |
Vested (in dollars per unit) | 40.73 | |
Forfeited (in dollars per unit) | 20.58 | |
Balance at the end of the period (in dollars per unit) | $ 19.61 | |
Intrinisic value (in dollars) | ||
Intrinsic value of outstanding grants (in dollars) | $ 31,905 | $ 36,027 |
Other information | ||
Common units issued upon vesting | 222,011 |
COMPENSATION PLANS - LTIP Other
COMPENSATION PLANS - LTIP Other Information (Details) - ARLP LTIP - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Other information | ||||
Unit-based compensation expense | $ 2.8 | $ 3 | $ 5.4 | $ 5.9 |
Total unit-based obligation recorded | 16.1 | 16.1 | ||
Unrecognized compensation expense (in dollars) | $ 17 | $ 17 | ||
Weighted-average period for recognition of expense | 1 year 7 months 6 days | |||
Common units issued upon vesting | 222,011 | |||
Units available for grant | 2,500,000 | 2,500,000 |
COMPENSATION PLANS - SERP and D
COMPENSATION PLANS - SERP and Directors Deferred Compensation Plans Activity (Details) - SERP and Deferred Compensation Plans - Phantom Share Units (PSUs) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Dec. 31, 2016 | |
Summary of non-vested grants (in units) | ||
Balance at the beginning of the period (in units) | 494,018 | |
Granted (in units) | 24,284 | |
Balance at the end of the period (in units) | 518,302 | |
Weighted average grant date fair value per unit | ||
Balance at the beginning of the period (in dollars per unit) | $ 29.77 | |
Granted (in dollars per unit) | 22.92 | |
Balance at the end of the period (in dollars per unit) | $ 29.45 | |
Intrinisic value (in dollars) | ||
Intrinsic value of outstanding grants (in dollars) | $ 9,796 | $ 11,091 |
COMPENSATION PLANS - SERP and55
COMPENSATION PLANS - SERP and Directors Deferred Compensation Plans (Details) - SERP and Deferred Compensation Plans - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Compensation Plans | ||||
Common unit-based compensation expense | $ 0.4 | $ 0.3 | $ 0.7 | $ 0.6 |
Total unit-based obligation recorded | $ 15.3 | $ 15.3 |
COMPONENTS OF PENSION PLAN NE56
COMPONENTS OF PENSION PLAN NET PERIODIC BENEFIT COSTS (Details) - USD ($) $ in Thousands | Jul. 17, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 |
Pension Plan | |||||
Components of net periodic benefit cost: | |||||
Service cost | $ 598 | $ 1,196 | |||
Interest cost | $ 1,135 | 1,131 | $ 2,270 | 2,263 | |
Expected return on plan assets | (1,251) | (1,287) | (2,503) | (2,574) | |
Amortization of prior service cost (1) | 47 | 94 | |||
Amortization of net loss (1) | 772 | 789 | 1,545 | 1,578 | |
Net periodic benefit cost | $ 703 | $ 1,231 | 1,406 | $ 2,463 | |
2016 plan year | |||||
Components of net periodic benefit cost: | |||||
Employer contribution payments | 700 | ||||
2017 plan year | |||||
Components of net periodic benefit cost: | |||||
Employer contribution payments | $ 600 | $ 600 |
SEGMENT INFORMATION - General I
SEGMENT INFORMATION - General Information (Details) $ in Millions | 6 Months Ended | |
Jun. 30, 2017segment | Jul. 19, 2017USD ($) | |
Reportable segment results | ||
Number of reportable segments | segment | 2 | |
Alliance Minerals | Kodiak | Subsequent event | ||
Reportable segment results | ||
Investment in affiliate | $ | $ 100 |
SEGMENT INFORMATION - Segment R
SEGMENT INFORMATION - Segment Results (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($)segment | Jun. 30, 2016USD ($) | Dec. 31, 2016USD ($) | |
Segment Information | |||||
Number of reportable segments | segment | 2 | ||||
Reportable segment results | |||||
Total revenues | $ 398,720 | $ 439,150 | $ 859,800 | $ 851,979 | |
Segment Adjusted EBITDA Expense | 238,279 | 251,786 | 499,773 | 515,274 | |
Segment Adjusted EBITDA | 156,029 | 181,845 | 349,719 | 324,601 | |
Total assets | 2,177,418 | 2,367,856 | 2,177,418 | 2,367,856 | $ 2,193,042 |
Capital expenditures | 37,171 | 16,869 | 67,517 | 48,602 | |
Additional information | |||||
Equity in income (loss) of affiliates | 2,916 | (37) | 6,616 | (64) | |
Investments in affiliate | 149,592 | 149,592 | $ 138,817 | ||
Illinois Basin | |||||
Reportable segment results | |||||
Total revenues | 232,484 | 285,557 | 496,834 | 561,575 | |
Appalachia | |||||
Reportable segment results | |||||
Total revenues | 135,706 | 136,409 | 305,950 | 252,554 | |
Other and Corporate | |||||
Reportable segment results | |||||
Total revenues | 30,530 | 17,184 | 57,016 | 37,850 | |
Operating segments | Illinois Basin | |||||
Reportable segment results | |||||
Total revenues | 249,573 | 295,880 | 525,128 | 583,756 | |
Segment Adjusted EBITDA Expense | 150,299 | 161,045 | 311,736 | 339,688 | |
Segment Adjusted EBITDA | 93,288 | 130,846 | 199,551 | 235,618 | |
Total assets | 1,445,624 | 1,658,518 | 1,445,624 | 1,658,518 | |
Capital expenditures | 22,927 | 12,357 | 40,116 | 30,371 | |
Additional information | |||||
Equity in income (loss) of affiliates | 2,900 | 6,600 | |||
Operating segments | Appalachia | |||||
Reportable segment results | |||||
Total revenues | 135,706 | 138,034 | 305,950 | 256,360 | |
Segment Adjusted EBITDA Expense | 83,619 | 88,003 | 178,936 | 167,732 | |
Segment Adjusted EBITDA | 50,744 | 48,532 | 123,931 | 85,202 | |
Total assets | 473,699 | 516,584 | 473,699 | 516,584 | |
Capital expenditures | 13,261 | 4,348 | 26,041 | 17,011 | |
Operating segments | Other and Corporate | |||||
Reportable segment results | |||||
Total revenues | 34,425 | 21,577 | 65,024 | 46,747 | |
Segment Adjusted EBITDA Expense | 23,123 | 16,165 | 40,961 | 36,911 | |
Segment Adjusted EBITDA | 14,218 | 5,380 | 30,679 | 9,608 | |
Total assets | 369,185 | 358,569 | 369,185 | 358,569 | |
Capital expenditures | 983 | 164 | 1,360 | 1,220 | |
Additional information | |||||
Investments in affiliate | 149,600 | 96,700 | 149,600 | 96,700 | |
Elimination | |||||
Reportable segment results | |||||
Total revenues | (20,984) | (16,341) | (36,302) | (34,884) | |
Segment Adjusted EBITDA Expense | (18,762) | (13,427) | (31,860) | (29,057) | |
Segment Adjusted EBITDA | (2,221) | (2,913) | (4,442) | (5,827) | |
Total assets | (111,090) | (165,815) | (111,090) | (165,815) | |
Elimination | Illinois Basin | |||||
Reportable segment results | |||||
Total revenues | 17,089 | 10,323 | 28,294 | 22,181 | |
Elimination | Appalachia | |||||
Reportable segment results | |||||
Total revenues | 1,625 | 3,806 | |||
Elimination | Other and Corporate | |||||
Reportable segment results | |||||
Total revenues | $ 3,895 | $ 4,393 | $ 8,008 | $ 8,897 |
SEGMENT INFORMATION - EBITDA Ex
SEGMENT INFORMATION - EBITDA Expense Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Reconciliation of consolidated Segment Adjusted EBITDA Expense to operating expenses (excluding depreciation, depletion and amortization) | ||||
Segment Adjusted EBITDA Expense | $ 238,279 | $ 251,786 | $ 499,773 | $ 515,274 |
Other income | 389 | 161 | 1,687 | 252 |
Operating expenses (excluding depreciation, depletion and amortization) | $ 238,668 | $ 251,947 | $ 501,460 | $ 515,526 |
SEGMENT INFORMATION - EBITDA Re
SEGMENT INFORMATION - EBITDA Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Reconciliation of consolidated Segment Adjusted EBITDA to net income | ||||
Consolidated Segment Adjusted EBITDA | $ 156,029 | $ 181,845 | $ 349,719 | $ 324,601 |
General and administrative | (14,944) | (17,663) | (30,977) | (34,901) |
Depreciation, depletion and amortization | (59,020) | (73,697) | (124,147) | (144,304) |
Interest expense, net | (10,561) | (7,768) | (18,053) | (15,380) |
Debt extinguishment loss | (8,148) | (8,148) | ||
Income tax (expense) benefit | (4) | (6) | 8 | 3 |
NET INCOME | $ 63,352 | $ 82,711 | $ 168,402 | $ 130,019 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent event $ / shares in Units, $ in Millions | Jul. 28, 2017USD ($)$ / shares |
Subsequent Event | |
Distribution declared (in dollars per unit) | $ / shares | $ 0.50 |
Approximate distribution to be paid | $ 66 |
General Partners | |
Subsequent Event | |
Approximate distribution to be paid | $ 0.7 |
SUBSEQUENT EVENTS - Investment
SUBSEQUENT EVENTS - Investment (Details) $ in Millions | Jul. 19, 2017USD ($) |
Alliance Minerals | Kodiak | Subsequent event | |
Subsequent Event | |
Investment in affiliate | $ 100 |