Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Feb. 22, 2019 | Jun. 29, 2018 | |
Document and Entity Information | |||
Entity Registrant Name | ALLIANCE RESOURCE PARTNERS LP | ||
Entity Central Index Key | 1,086,600 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 2,014,302,254 | ||
Entity Common Units Outstanding | 128,391,191 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 244,150 | $ 6,756 |
Trade receivables | 174,914 | 181,671 |
Other receivables | 395 | 146 |
Due from affiliates | 17 | 165 |
Inventories, net | 59,206 | 60,275 |
Advance royalties, net | 1,274 | 4,510 |
Prepaid expenses and other assets | 20,730 | 28,117 |
Total current assets | 500,686 | 281,640 |
PROPERTY, PLANT AND EQUIPMENT: | ||
Property, plant and equipment, at cost | 2,925,808 | 2,934,188 |
Less accumulated depreciation, depletion and amortization | (1,513,450) | (1,457,532) |
Total property, plant and equipment, net | 1,412,358 | 1,476,656 |
OTHER ASSETS: | ||
Advance royalties, net | 42,923 | 39,660 |
Equity method investments | 161,309 | 147,964 |
Equity securities | 122,094 | 106,398 |
Goodwill | 136,399 | 136,399 |
Other long-term assets | 18,979 | 30,654 |
Total other assets | 481,704 | 461,075 |
TOTAL ASSETS | 2,394,748 | 2,219,371 |
CURRENT LIABILITIES: | ||
Accounts payable | 96,397 | 96,958 |
Due to affiliates | 816 | 771 |
Accrued taxes other than income taxes | 16,762 | 20,336 |
Accrued payroll and related expenses | 43,113 | 35,751 |
Accrued interest | 5,022 | 5,005 |
Workers' compensation and pneumoconiosis benefits | 11,137 | 10,729 |
Current capital lease obligations | 46,722 | 28,613 |
Other current liabilities | 18,902 | 19,071 |
Current maturities, long-term debt, net | 92,000 | 72,400 |
Total current liabilities | 330,871 | 289,634 |
LONG-TERM LIABILITIES: | ||
Long-term debt, excluding current maturities, net | 564,004 | 415,937 |
Pneumoconiosis benefits | 68,828 | 71,875 |
Accrued pension benefit | 43,135 | 45,317 |
Workers' compensation | 41,669 | 46,694 |
Asset retirement obligations | 127,655 | 126,750 |
Long-term capital lease obligations | 10,595 | 57,091 |
Other liabilities | 20,304 | 14,587 |
Total long-term liabilities | 876,190 | 778,251 |
Total liabilities | 1,207,061 | 1,067,885 |
Alliance Resource Partners, L.P. ("ARLP") Partners' Capital: | ||
Limited Partners - Common Unitholders 128,095,511 and 130,704,217 units outstanding, respectively | 1,229,268 | 1,183,219 |
General Partner's interest | 14,859 | |
Accumulated other comprehensive loss | (46,871) | (51,940) |
Total ARLP Partners' Capital | 1,182,397 | 1,146,138 |
Noncontrolling interest | 5,290 | 5,348 |
Total Partners' Capital | 1,187,687 | 1,151,486 |
TOTAL LIABILITIES AND PARTNERS' CAPITAL | $ 2,394,748 | $ 2,219,371 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - shares | Dec. 31, 2018 | Dec. 31, 2017 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Common units outstanding | 128,095,511 | 130,704,217 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
SALES AND OPERATING REVENUES: | |||
Revenues | $ 2,002,857 | $ 1,796,220 | $ 1,931,453 |
EXPENSES: | |||
Operating expenses (excluding depreciation, depletion and amortization) | 1,207,713 | 1,091,855 | 1,122,678 |
Outside coal purchases | 1,466 | 1,514 | |
General and administrative | 68,298 | 61,760 | 72,529 |
Depreciation, depletion and amortization | 280,225 | 268,981 | 336,509 |
Settlement gain | (80,000) | ||
Asset impairment | 40,483 | ||
Total operating expenses | 1,630,570 | 1,464,296 | 1,563,341 |
INCOME FROM OPERATIONS | 372,287 | 331,924 | 368,112 |
Interest expense (net of interest capitalized of $1,306, $551 and $358, respectively) | (40,218) | (39,385) | (30,669) |
Interest income | 159 | 94 | 10 |
Equity method investment income | 22,189 | 13,860 | 3,543 |
Equity securities income | 15,696 | 6,398 | |
Debt extinguishment loss | (8,148) | ||
Other expense | (2,621) | (332) | (1,445) |
INCOME BEFORE INCOME TAXES | 367,492 | 304,411 | 339,551 |
INCOME TAX EXPENSE | 22 | 210 | 13 |
NET INCOME | 367,470 | 304,201 | 339,538 |
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST | (866) | (563) | (140) |
NET INCOME ATTRIBUTABLE TO ALLIANCE RESOURCE PARTNERS, L.P. ("NET INCOME OF ARLP") | 366,604 | 303,638 | 339,398 |
GENERAL PARTNERS' INTEREST IN NET INCOME OF ARLP | 1,560 | 21,904 | 80,911 |
LIMITED PARTNERS' INTEREST IN NET INCOME OF ARLP | $ 365,044 | $ 281,734 | $ 258,487 |
BASIC NET INCOME OF ARLP PER LIMITED PARTNER UNIT (in dollars per unit) | $ 2.74 | $ 2.80 | $ 3.39 |
DILUTED NET INCOME OF ARLP PER LIMITED PARTNER UNIT (in dollars per unit) | $ 2.74 | $ 2.80 | $ 3.39 |
WEIGHTED AVERAGE NUMBER OF UNITS OUTSTANDING - BASIC (in units) | 130,758,169 | 98,707,696 | 74,354,162 |
WEIGHTED AVERAGE NUMBER OF UNITS OUTSTANDING - DILUTED (in units) | 130,758,169 | 98,707,696 | 74,354,162 |
Coal | |||
SALES AND OPERATING REVENUES: | |||
Revenues | $ 1,844,808 | $ 1,711,114 | $ 1,861,788 |
Transportation revenues | |||
SALES AND OPERATING REVENUES: | |||
Revenues | 112,385 | 41,700 | 30,111 |
EXPENSES: | |||
Transportation expenses | 112,385 | 41,700 | 30,111 |
Other sales and operating revenues | |||
SALES AND OPERATING REVENUES: | |||
Revenues | $ 45,664 | $ 43,406 | $ 39,554 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | |||
Interest expense, interest capitalized | $ 1,306 | $ 551 | $ 358 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
NET INCOME | $ 367,470 | $ 304,201 | $ 339,538 | |
OTHER COMPREHENSIVE INCOME (LOSS): | ||||
Total adjustments | 5,069 | (13,400) | (3,983) | |
OTHER COMPREHENSIVE INCOME (LOSS) | 5,069 | (13,400) | (3,983) | |
COMPREHENSIVE INCOME | 372,539 | 290,801 | 335,555 | |
Less: Comprehensive income attributable to noncontrolling interest | (866) | (563) | (140) | |
COMPREHENSIVE INCOME ATTRIBUTABLE TO ARLP | 371,673 | 290,238 | 335,415 | |
Defined benefit pension plan | ||||
OTHER COMPREHENSIVE INCOME (LOSS): | ||||
Prior service cost | (1,498) | |||
Amortization of prior service cost | [1] | 186 | 186 | |
Net actuarial gain (loss) | (3,326) | (6,610) | (2,589) | |
Amortization of net actuarial loss (gain) | [1] | 3,608 | 3,054 | 2,952 |
Total adjustments | 468 | (3,370) | (1,135) | |
Pneumoconiosis benefits | ||||
OTHER COMPREHENSIVE INCOME (LOSS): | ||||
Net actuarial gain (loss) | 4,599 | (7,938) | (205) | |
Amortization of net actuarial loss (gain) | [1] | 2 | (2,092) | (2,643) |
Total adjustments | $ 4,601 | $ (10,030) | $ (2,848) | |
[1] | Amortization of prior service cost and actuarial gain or loss is included in the computation of net periodic benefit cost (see Notes 13 and 17 for additional details). |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income | $ 367,470 | $ 304,201 | $ 339,538 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation, depletion and amortization | 280,225 | 268,981 | 336,509 |
Non-cash compensation expense | 12,114 | 12,326 | 13,885 |
Asset retirement obligations | 3,926 | 3,793 | 3,769 |
Coal inventory adjustment to market | 1,455 | 449 | |
Equity investment income | (22,189) | (13,860) | (3,543) |
Distributions from equity method investments | 21,971 | 13,939 | 2,719 |
Income from equity securities paid-in-kind | (15,696) | (6,398) | |
Net gain on sale of property, plant and equipment | (1,285) | (696) | (76) |
Asset impairment | 40,483 | ||
Valuation allowance of deferred tax assets | (1,560) | (3,339) | (1,365) |
Debt extinguishment loss | 8,148 | ||
Other | 3,171 | 6,212 | 3,300 |
Changes in operating assets and liabilities: | |||
Trade receivables | 6,757 | (29,639) | (29,157) |
Other receivables | (249) | 133 | 417 |
Inventories, net | (747) | (1,449) | 44,948 |
Prepaid expenses and other assets | 7,387 | (6,067) | 17,023 |
Advance royalties, net | (8,782) | (13,591) | (2,464) |
Accounts payable | (813) | 25,499 | (15,140) |
Due to/from affiliates | 33 | (29) | 696 |
Accrued taxes other than income taxes | (3,614) | 2,063 | 2,652 |
Accrued payroll and related benefits | 7,362 | (5,825) | 4,545 |
Pneumoconiosis benefits | 1,837 | (159) | 447 |
Workers' compensation | (4,900) | (4,371) | (6,427) |
Other | (11) | (4,205) | (8,732) |
Total net adjustments | 326,875 | 251,915 | 364,006 |
Net cash provided by operating activities | 694,345 | 556,116 | 703,544 |
Property, plant and equipment: | |||
Capital expenditures | (233,480) | (145,088) | (91,056) |
Increase (decrease) in accounts payable and accrued liabilities | (1,051) | 7,404 | (4,402) |
Proceeds from sale of property, plant and equipment | 2,409 | 2,139 | 1,165 |
Contributions to equity method investments | (15,600) | (20,688) | (76,797) |
Purchase of equity security | (100,000) | ||
Distributions received from investments in excess of cumulative earnings | 2,473 | 11,462 | 3,313 |
Payment for acquisition of business | (1,011) | ||
Payment for acquisition of customer contracts | (23,000) | ||
Net cash used in investing activities | (245,249) | (244,771) | (191,788) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Borrowings under securitization facility | 304,600 | 100,000 | 44,600 |
Payments under securitization facility | (285,000) | (127,600) | (27,700) |
Payments on term loan | (50,000) | (156,250) | |
Borrowings under revolving credit facilities | 245,000 | 215,486 | 140,000 |
Payments under revolving credit facilities | (100,000) | (440,486) | (270,000) |
Borrowings under long-term debt | 400,000 | ||
Payment on long-term debt | (145,000) | ||
Proceeds on capital lease transactions | 33,881 | ||
Payments on capital lease obligations | (29,353) | (27,071) | (24,456) |
Payment of debt issuance costs | (16,487) | (101) | |
Payment for debt extinguishment | (8,148) | ||
Payments for purchases of units under unit repurchase program | (70,604) | ||
Contributions to consolidated company from affiliate noncontrolling interest | 251 | 3,014 | |
Net settlement of withholding taxes on issuance of units in deferred compensation plans | (2,081) | (2,988) | (1,336) |
Cash contributions by General Partners | 41 | 1,105 | 1,047 |
Cash contribution by affiliated entity | 2,142 | ||
Cash obtained in Simplification Transactions | 1,139 | ||
Distributions paid to Partners | (275,902) | (240,812) | (247,915) |
Other | (1,684) | (2,621) | (189) |
Net cash used in financing activities | (211,702) | (344,371) | (505,405) |
NET CHANGE IN CASH AND CASH EQUIVALENTS | 237,394 | (33,026) | 6,351 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 6,756 | 39,782 | 33,431 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ 244,150 | $ 6,756 | $ 39,782 |
CONSOLIDATED STATEMENT OF PARTN
CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL - USD ($) $ in Thousands | Limited Partners' Capital | General Partner's Capital (Deficit) | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interest | Total |
Balance at beginning of period at Dec. 31, 2015 | $ 1,280,218 | $ (258,883) | $ (34,557) | $ 2,585 | $ 989,363 |
Balance at beginning of period (in units) at Dec. 31, 2015 | 74,188,784 | ||||
Comprehensive income: | |||||
Net income | $ 258,487 | 80,911 | 140 | 339,538 | |
Actuarially determined long-term liability adjustments | (3,983) | (3,983) | |||
COMPREHENSIVE INCOME | 335,555 | ||||
Settlement of deferred compensation plans | $ (1,336) | (1,336) | |||
Settlement of deferred compensation plans (in units) | 186,241 | ||||
Common unit-based compensation | $ 13,885 | 13,885 | |||
Distributions on deferred common unit-based compensation | (3,355) | (3,355) | |||
General Partners contributions | 1,047 | 1,047 | |||
Contributions to consolidated company from affiliate noncontrolling interest | 3,014 | 3,014 | |||
Distributions from consolidated company to affiliate noncontrolling interest | (189) | (189) | |||
Distributions to Partners | (147,697) | (96,863) | (244,560) | ||
Balance at end of period at Dec. 31, 2016 | $ 1,400,202 | (273,788) | (38,540) | 5,550 | 1,093,424 |
Balance at end of period (in units) at Dec. 31, 2016 | 74,375,025 | ||||
Comprehensive income: | |||||
Net income | $ 281,734 | 21,904 | 563 | 304,201 | |
Actuarially determined long-term liability adjustments | (13,400) | (13,400) | |||
COMPREHENSIVE INCOME | 290,801 | ||||
Settlement of deferred compensation plans | $ (2,988) | (2,988) | |||
Settlement of deferred compensation plans (in units) | 222,011 | ||||
Issuance of units to MGP in Exchange Transaction | $ 14,171 | (14,171) | |||
Issuance of units to MGP in Exchange Transaction (in units) | 56,100,000 | ||||
Issuance of units to SGP in Exchange Transaction | $ (320,838) | 320,838 | |||
Issuance of units to SGP in Exchange Transaction (in units) | 7,181 | ||||
Exchange Transaction fees | $ (1,605) | (1,605) | |||
Common unit-based compensation | 12,326 | 12,326 | |||
Distributions on deferred common unit-based compensation | (3,248) | (3,248) | |||
General Partners contributions | 1,105 | 1,105 | |||
Contributions to consolidated company from affiliate noncontrolling interest | 251 | 251 | |||
Distributions from consolidated company to affiliate noncontrolling interest | (1,016) | (1,016) | |||
Distributions to Partners | (196,535) | (41,029) | (237,564) | ||
Balance at end of period at Dec. 31, 2017 | $ 1,183,219 | 14,859 | (51,940) | 5,348 | $ 1,151,486 |
Balance at end of period (in units) at Dec. 31, 2017 | 130,704,217 | 130,704,217 | |||
Comprehensive income: | |||||
Net income | $ 365,044 | 1,560 | 866 | $ 367,470 | |
Actuarially determined long-term liability adjustments | 5,069 | 5,069 | |||
COMPREHENSIVE INCOME | 372,539 | ||||
Settlement of deferred compensation plans | $ (2,745) | (2,745) | |||
Settlement of deferred compensation plans (in units) | 199,039 | ||||
Issuance of units to SGP in Exchange Transaction (in units) | 20,960 | ||||
Common unit-based compensation | $ 12,114 | 12,114 | |||
Distributions on deferred common unit-based compensation | (3,855) | (3,855) | |||
General Partners contributions | 41 | 41 | |||
Distributions from consolidated company to affiliate noncontrolling interest | (924) | (924) | |||
Issuance of units to Owners of SGP in Simplification Transactions | $ 14,742 | (15,106) | (364) | ||
Issuance of units to Owners of SGP in Simplification Transactions (in units) | 1,322,388 | ||||
Simplification Transactions fees | $ (96) | (96) | |||
Contribution of units and cash by affiliated entity | $ 2,142 | 2,142 | |||
Contribution of units by affiliated entity (in units) | (467,018) | ||||
Purchase of units under unit repurchase program | $ (70,604) | (70,604) | |||
Purchase of units under unit repurchase program (in units) | (3,684,075) | ||||
Distributions to Partners | $ (270,693) | $ (1,354) | (272,047) | ||
Balance at end of period at Dec. 31, 2018 | $ 1,229,268 | $ (46,871) | $ 5,290 | $ 1,187,687 | |
Balance at end of period (in units) at Dec. 31, 2018 | 128,095,511 | 128,095,511 |
ORGANIZATION AND PRESENTATION
ORGANIZATION AND PRESENTATION | 12 Months Ended |
Dec. 31, 2018 | |
ORGANIZATION AND PRESENTATION | |
ORGANIZATION AND PRESENTATION | 1. ORGANIZATION AND PRESENTATION Significant Relationships Referenced in Notes to Consolidated Financial Statements · References to "we," "us," "our" or "ARLP Partnership" mean the business and operations of Alliance Resource Partners, L.P., the parent company, as well as its consolidated subsidiaries. · References to "ARLP" mean Alliance Resource Partners, L.P., individually as the parent company, and not on a consolidated basis. · References to "MGP" mean Alliance Resource Management GP, LLC, ARLP's sole general partner and, prior to the Exchange Transaction discussed below, it was also referred to as the managing general partner to distinguish MGP from SGP. As a result of the Exchange Transaction, SGP no longer holds any general partner interests. · References to "SGP" mean Alliance Resource GP, LLC, ARLP's special general partner prior to the Exchange Transaction discussed below. SGP is indirectly wholly owned by Joseph W. Craft III, the Chairman, President and Chief Executive Officer ("CEO") of MGP, and Kathleen S. Craft, who are collectively referred to in such capacity as the "Owners of SGP." The Owners of SGP held approximately 34.48% of the outstanding AHGP common units prior to the Simplification Transactions 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. · References to "AHGP" mean Alliance Holdings GP, L.P., individually and not on a consolidated basis as the parent company of MGP prior to the Simplification Transactions discussed below and as a wholly owned subsidiary of ARLP subsequent to the Simplification Transactions. 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 and completed its initial public offering on August 19, 1999 when it acquired substantially all of the coal production and marketing assets of Alliance Resource Holdings, Inc., a Delaware corporation ("ARH"), and its subsidiaries. We are managed by our sole general partner, MGP, a Delaware limited liability company which holds a non-economic general partner interest in ARLP. Prior to the Simplification Transactions, MGP was a wholly owned indirect subsidiary of AHGP. Alliance GP, LLC ("AGP"), which is indirectly wholly owned by Mr. Craft, was the general partner of AHGP prior to the Simplification Transactions and became the direct owner of MGP as a result of the transactions. See discussions under Partnership Simplification regarding changes in ownership of ARLP and MGP as a result of the Exchange Transaction and Simplification Transactions. The Delaware limited partnership, limited liability companies and corporation that comprise our subsidiaries, giving effect to the subsequent events discussed in Note 23 – Subsequent Events, are as follows: Intermediate Partnership; Alliance Coal; Alliance Design Group, LLC ("Alliance Design"); AHGP; Alliance Land, LLC; Alliance Minerals, LLC ("Alliance Minerals"); Alliance Resource Properties; Alliance Resource Finance Corporation ("Alliance Finance"); AllDale Minerals, LP ("AllDale I"), AllDale Minerals II, LP ("AllDale II") (collectively, "AllDale I & II"); Alliance Royalty, LLC; AllRoy GP, LLC; ARM GP Holdings, Inc.; AROP Funding, LLC ("AROP Funding"); ARP Sebree, LLC ("ARP Sebree"); ARP Sebree South, LLC ("ARP Sebree South"); Alliance WOR Properties, LLC; Alliance Service, Inc. ("ASI"); Backbone Mountain, LLC; Cavalier Minerals JV, LLC ("Cavalier Minerals"); CavMM, LLC; CR Services, LLC ("CR Services"); CR Machine Shop, LLC ("CR Machine Shop"); Excel Mining, LLC; Gibson County Coal, LLC ("Gibson County Coal"); Hamilton County Coal, LLC ("Hamilton"); Hopkins County Coal, LLC ("Hopkins County Coal"); Matrix Design Group, LLC ("Matrix Design"); Matrix Design International, LLC; Matrix Design Africa (PTY) LTD; MC Mining, LLC ("MC Mining"); Mettiki Coal, LLC ("Mettiki (MD)"); Mettiki Coal (WV), LLC ("Mettiki (WV)"); Mid-America Carbonates, LLC ("MAC"); MGP II, LLC ("MGP II"); Mt. Vernon Transfer Terminal, LLC ("Mt. Vernon"); New AHGP GP, LLC; Penn Ridge Coal, LLC ("Penn Ridge"); Pontiki Coal, LLC ("Pontiki"); River View Coal, LLC ("River View"); Rough Creek Mining, LLC; Sebree Mining, LLC ("Sebree"); Steamport, LLC; Tunnel Ridge, LLC ("Tunnel Ridge"); UC Coal, LLC ("UC Coal"); UC Mining, LLC ("UC Mining"); UC Processing, LLC ("UC Processing"); Warrior Coal, LLC ("Warrior"); Webster County Coal, LLC ("Webster County Coal"); White County Coal, LLC ("White County Coal"); WOR Land 6, LLC and Wildcat Insurance, LLC ("Wildcat Insurance"). Partnership Simplification On July 28, 2017, the conflicts committee ("Conflicts Committee") of the board of directors ("Board of Directors") of MGP and AGP's board of directors approved a transaction to simplify our partnership structure. Pursuant to that transaction, which closed on the same date, MGP contributed to ARLP all of its incentive distribution rights ("IDRs") and its 0.99% managing 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 28,141 ARLP common units (collectively the "Exchange Transaction"). On February 22, 2018, the Board of Directors and the board of directors of AGP approved a simplification agreement (the "Simplification Agreement"), pursuant to which, among other things, through a series of transactions (the "Simplification Transactions"): i. AHGP would become a wholly owned subsidiary of ARLP, ii. all of the issued and outstanding AHGP common units would be canceled and converted into the right to receive the ARLP common units held by AHGP and its subsidiaries, iii. in exchange for a number of ARLP common units calculated pursuant to the Simplification Agreement, MGP's 1.0001% general partner interest in our Intermediate Partnership and MGP's 0.001% managing member interest in our subsidiary, Alliance Coal, would be contributed to us, and iv. MGP would remain ARLP's sole general partner and would be a wholly owned subsidiary of AGP, and thus no control, management, or governance changes with respect to our business would occur. The Simplification Agreement and the transactions contemplated thereby were approved by the written consent of approximately 68% of the holders of AHGP common units outstanding as of April 25, 2018, the record date for the consent solicitation. On May 31, 2018, ARLP, AHGP and the other parties to the Simplification Agreement completed the transactions contemplated by the Simplification Agreement. As part of the Simplification Transactions, (i) each AHGP common unit that was issued and outstanding at the effective time of the Simplification Transactions was canceled and converted into the right to receive a portion of the ARLP common units held by AHGP and its subsidiaries, and (ii) SGP became the sole limited partner in AHGP. Each outstanding AHGP common unit, other than certain AHGP common units held by the Owners of SGP, converted into the right to receive approximately 1.4782 ARLP common units held by AHGP and its subsidiaries. The remaining AHGP common units held by the Owners of SGP were canceled and converted into the right to receive 29,188,997 ARLP common units which equaled (i) the product of the number of certain AHGP common units held by the Owners of SGP multiplied by 1.4782, minus (ii) 1,322,388 ARLP common units. In addition, ARLP issued 1,322,388 ARLP common units to the Owners of SGP in exchange for causing SGP to contribute to ARLP its remaining limited partner interest in AHGP, which included AHGP's indirect ownership of a 1.0001% general partner interest in the Intermediate Partnership and a 0.001% managing member interest in Alliance Coal, resulting in an overall exchange ratio to the Owners of SGP equal to that of the other AHGP unitholders. Upon the issuance of ARLP common units to the Owners of SGP in exchange for the limited partner interest in AHGP, ARLP became a) the sole limited partner of AHGP and b) through AHGP, the indirect owner of a 1.0001% general partner interest in the Intermediate Partnership and a 0.001% managing member interest in Alliance Coal. Presentation The consolidated financial statements include the accounts and operations of the ARLP Partnership and present our financial position as of December 31, 2018 and 2017, and results of our operations, comprehensive income, cash flows and changes in partners' capital for each of the three years in the period ended December 31, 2018. All of our intercompany transactions and accounts have been eliminated. . |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2018 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Estimates — The preparation of consolidated financial statements in conformity with generally accepted accounting principles of the United States ("GAAP") requires management to make estimates and assumptions that affect the reported amounts and disclosures in the consolidated financial statements. Actual results could differ from those estimates. Significant estimates and assumptions include: · Impairment assessments of investments, property, plant and equipment, and goodwill; · Asset retirement obligations; · Pension valuation variables; · Workers' compensation and pneumoconiosis valuation variables; · Acquisition related purchase price allocations; and · Life of mine assumptions. These significant estimates and assumptions are discussed throughout these notes to the consolidated financial statements. Consolidation — The consolidated financial statements present the consolidated financial position, results of operations and cash flows of ARLP, the Intermediate Partnership, Alliance Coal and other directly and indirectly wholly- and majority-owned subsidiaries of ARLP. Prior to the Simplification Transactions, Alliance Coal and the Intermediate Partnership were variable interest entities. See Note 9 – Variable Interest Entities for more information on the Intermediate Partnership's and Alliance Coal's status as variable interest entities. For the periods presented prior to the Simplification Transactions, MGP's interests in both Alliance Coal and the Intermediate Partnership are reported as part of the general partner's interest in the ARLP Partnership's consolidated financial statements. For the periods presented prior to the Exchange Transaction, MGP's managing general partner interest and IDRs in ARLP and the SGP's special general partner interests in ARLP and the Intermediate Partnership are also reported as part of the general partners' interest in the ARLP Partnership's consolidated financial statements. All intercompany transactions and accounts have been eliminated. See Note 8 – Partners' Capital for more information regarding MGP's previously held IDR's in ARLP. See Note 1 – Organization and Presentation for more information regarding the Simplification Transactions and Exchange Transaction. Fair Value Measurements — We apply fair value measurements to certain assets and liabilities. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. Fair value is based upon assumptions that market participants would use when pricing an asset or liability, including assumptions about risk and risks inherent in valuation techniques and inputs to valuations. Fair value measurements assume that the transaction occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability (the market for which the reporting entity would be able to maximize the amount received or minimize the amount paid). Valuation techniques used in our fair value measurements are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our own market assumptions. We use the following fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels: · Level 1 – Quoted prices for identical assets and liabilities in active markets that we have the ability to access at the measurement date. · Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model derived valuations whose inputs are observable or whose significant value drivers are observable. · Level 3 – Unobservable inputs for the asset or liability including situations where there is little, if any, market activity for the asset or liability. The fair value hierarchy gives the highest priority to quoted prices in active markets (Level 1) and the lowest priority to unobservable data (Level 3). In some cases, the inputs used to measure fair value might fall into different levels of the fair value hierarchy. The lowest level input that is significant to a fair value measurement determines the applicable level in the fair value hierarchy. Assessing the significance of a particular input to the fair value measurement requires judgment, considering factors specific to the asset or liability. Significant fair value measurements are used in our significant estimates and are discussed throughout these notes. Cash and Cash Equivalents — Cash and cash equivalents include cash on hand and on deposit, including highly liquid investments with maturities of three months or less. Cash Management — The cash flows from operating activities section of our consolidated statements of cash flows reflects an adjustment for $14.0 million representing book overdrafts at December 31, 2017. We did not have material book overdrafts at December 31, 2018 and 2016. Inventories — Coal inventories are stated at the lower of cost or net realizable value on a first-in, first-out basis. Supply inventories are stated at an average cost basis, less a reserve for obsolete and surplus items. Business Combinations — For acquisitions accounted for as a business combination, we record the assets acquired, including identified intangible assets and liabilities assumed at their fair value, which in many instances involves estimates based on third-party valuations, such as appraisals, or internal valuations based on discounted cash flow analyses or other valuation techniques. Goodwill — Goodwill represents the excess of cost over the fair value of net assets of acquired businesses. Goodwill is not amortized, but instead is evaluated for impairment periodically. We evaluate goodwill for impairment annually on November 30th, or more often if events or circumstances indicate that goodwill might be impaired. The reporting unit or units used to evaluate and measure goodwill for impairment are determined primarily from the manner in which the business is managed or operated. A reporting unit is an operating segment or a component that is one level below an operating segment. There were no impairments of goodwill during 2018, 2017 or 2016. Property, Plant and Equipment — Expenditures which extend the useful lives of existing plant and equipment assets are capitalized. Interest costs associated with major asset additions are capitalized during the construction period. Maintenance and repairs that do not extend the useful life or increase productivity of the asset are charged to operating expense as incurred. Exploration expenditures are charged to operating expense as incurred, including costs related to drilling and study costs incurred to convert or upgrade mineral resources to reserves. Land, machinery and equipment under capital lease agreements are capitalized and amortized over the useful lives of the assets given that in each case, ownership transfers at the end of the lease term. Preparation plants, processing facilities and mineral rights, assuming current production estimates, are depreciated or depleted using the units-of-production method over a range from 1 to 22 years. Mining equipment and other plant and equipment assets are depreciated principally using the straight-line method over the estimated useful lives of the assets, ranging from 1 to 22 years, limited by the remaining estimated life of each mine. Depreciable lives for buildings, office equipment and improvements range from 1 to 23 years. Gains or losses arising from retirements are included in operating expenses. Depletion of mineral rights is provided on the basis of tonnage mined in relation to estimated recoverable tonnage, which equals estimated proven and probable reserves. Therefore, our mineral rights are depleted based on only proven and probable reserves derived in accordance with Industry Guide 7. At December 31, 2018 and 2017, land and mineral rights include $27.4 million and $34.5 million, respectively, representing the carrying value of coal reserves attributable to properties where we or a third party to which we lease reserves are not currently engaged in mining operations or leasing to third parties, and therefore, the coal reserves are not currently being depleted. We believe that the carrying value of these reserves will be recovered. Our accounting for operating leases not currently capitalized is expected to change upon the adoption of Accounting Standards Update ("ASU") 2016-02, Leases (Topic 842) ("ASU 2016-02"), as discussed below under New Accounting Standards Issued and Not Yet Adopted . Mine Development Costs — Mine development costs are capitalized until production, other than production incidental to the mine development process, commences and are amortized on a units of production method based on the estimated proven and probable reserves. Mine development costs represent costs incurred in establishing access to mineral reserves and include costs associated with sinking or driving shafts and underground drifts, permanent excavations, roads and tunnels. The end of the development phase and the beginning of the production phase takes place when construction of the mine for economic extraction is substantially complete. Coal extracted during the development phase is incidental to the mine's production capacity and is not considered to shift the mine into the production phase. Long-Lived Assets — We review the carrying value of long-lived assets and certain identifiable intangibles whenever events or changes in circumstances indicate that the carrying amount may not be recoverable based upon estimated undiscounted future cash flows. To the extent the carrying amount is not recoverable, the amount of impairment is measured by the difference between the carrying value and the fair value of the asset (See Note 3 – Long-Lived Asset Impairments). Intangibles — Intangibles subject to amortization include contracts with covenants not to compete, customer contracts acquired from other parties and mining permits. Intangibles other than customer contracts are amortized on a straight-line basis over their useful life. Intangibles for customer contracts are amortized on a per unit basis over the terms of the contracts. Amortization expense attributable to intangibles was $6.9 million, $10.5 million and $18.1 million for the years ending December 31, 2018, 2017 and 2016, respectively. Our intangibles are included in Prepaid expenses and other assets , Other long-term assets , Other current liabilities and Other liabilities on our consolidated balance sheets at December 31, 2018 and 2017. Our intangibles are summarized as follows: December 31, 2018 December 31, 2017 Accumulated Intangibles, Accumulated Intangibles, Original Cost Amortization Net Original Cost Amortization Net (in thousands) Non-compete agreements $ 9,697 $ (8,385) $ 1,312 $ 9,697 $ (7,378) $ 2,319 Customer contracts and other, net (1) 23,000 (16,293) 6,707 48,970 (36,462) 12,508 Mining permits 1,500 (241) 1,259 1,500 (178) 1,322 Total $ 34,197 $ (24,919) $ 9,278 $ 60,167 $ (44,018) $ 16,149 (1) Customer contracts of $26.0 million were fully amortized during the year ended December 31, 2018. Amortization expense attributable to intangible assets is estimated as follows: Year Ended December 31, (in thousands) 2019 $ 7,763 2020 381 2021 63 2022 63 2023 63 Thereafter 945 Investments —Our investments and ownership interests in equity securities without readily determinable fair values in entities in which we do not have a controlling financial interest or significant influence are accounted for using a measurement alternative other than fair value which is historical cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same entity. Distributions received on those investments are recorded as income unless those distributions are considered a return on investment, in which case the historical cost is reduced. We account for our ownership interests in Kodiak Gas Services, LLC ("Kodiak") as equity securities without readily determinable fair values. See Note 10 – Investments for further discussion of this investment. In the first quarter of 2019, Kodiak redeemed our preferred interests and therefore Kodiak ceased to be an equity security investment. See Note 23 – Subsequent Events for more information. Our investments and ownership interests in entities in which we do not have a controlling financial interest are accounted for under the equity method of accounting if we have the ability to exercise significant influence over the entity. Investments accounted for under the equity method are initially recorded at cost, and the difference between the basis of our investment and the underlying equity in the net assets of the joint venture at the investment date, if any, is amortized over the lives of the related assets that gave rise to the difference. As of December 31, 2018, our equity method investments included AllDale I & II, both held through Cavalier Minerals, and AllDale Minerals III, LP ("AllDale III") which is held through Alliance Minerals. AllDale III and AllDale I & II are collectively referred to as the "AllDale Partnerships." See Note 10 – Investments for further discussion of these equity method investments. In January 2019, ARLP acquired the general partner interests and all the limited partner interests not owned by Cavalier Minerals in AllDale I & II. As a result, ARLP will consolidate AllDale I & II and no longer account for them as equity method investments. We review our equity securities and equity method investments for impairment whenever events or changes in circumstances indicate a loss in the value of the investment may be other-than-temporary. Advance Royalties, net — Rights to coal mineral leases are often acquired and/or maintained through advance royalty payments. Where royalty payments represent prepayments recoupable against future production, they are recorded as an asset, with amounts expected to be recouped within one year classified as a current asset. As mining occurs on these leases, the royalty prepayments are charged to operating expenses. We assess the recoverability of royalty prepayments based on estimated future production. We have recorded a $15.3 million and $6.1 million allowance against these prepayments as of December 31, 2018 and 2017, respectively. Royalty prepayments estimated to be nonrecoverable are expensed. Our Advance royalties, net are summarized as follows: December 31, 2018 2017 (in thousands) Advance royalties, affiliates (see Note 18 – Related-Party Transactions) $ 32,645 $ 32,993 Advance royalties, third-parties 11,552 11,177 Total advance royalties, net $ 44,197 $ 44,170 Asset Retirement Obligations — The majority of our operations are governed by various state statutes and the Federal Surface Mining Control and Reclamation Act of 1977, which establish reclamation and mine closing standards. These regulations require, among other things, restoration of property in accordance with specified standards and an approved reclamation plan. We record a liability for the fair value of the estimated cost of future mine asset retirement and closing procedures, escalated for inflation then discounted, on a present value basis in the period incurred or acquired and a corresponding amount is capitalized by increasing the carrying amount of the related long-lived asset. Those costs relate to permanently sealing portals at underground mines and to reclaiming the final pits and support surface acreage for both our underground mines and past surface mines. Examples of these types of costs, common to both types of mining, include, but are not limited to, removing or covering refuse piles and settling ponds, water treatment obligations, and dismantling preparation plants, other facilities and roadway infrastructure. Accounting for asset retirement obligations also requires depreciation of the capitalized asset retirement cost and accretion of the asset retirement obligation over time. The depreciation is generally determined on a units-of-production basis and accretion is generally recognized over the life of the producing assets. As changes in estimates occur (such as mine plan revisions, changes in estimated costs or changes in timing of the performance of reclamation activities), the revisions to the obligation and asset are recognized at the appropriate credit-adjusted, risk-free interest rate. Federal and state laws require bonds to secure our obligations to reclaim lands used for mining and are typically renewable on a yearly basis. See Note 16 – Asset Retirement Obligations for more information. Pension Benefits — The funded status of our pension benefit plan is recognized separately in our consolidated balance sheets as either an asset or liability. The funded status is the difference between the fair value of plan assets and the plan's benefit obligation. Pension obligations and net periodic benefit costs are actuarially determined and impacted by various assumptions and estimates including expected return on assets, discount rates, mortality assumptions, employee turnover rates and retirement dates. We evaluate our assumptions periodically and make adjustments to these assumptions and the recorded liability as necessary (See Note 13 – Employee Benefit Plans). The discount rate is determined for our pension benefit plan based on an approach specific to our plan. The year-end discount rate is determined considering a yield curve comprised of high-quality corporate bonds and the timing of the expected benefit cash flows. The expected long-term rate of return on plan assets is determined based on broad equity and bond indices, the investment goals and objectives, the target investment allocation and on the average annual total return for each asset class. Unrecognized actuarial gains and losses and unrecognized prior service costs and credits are deferred and recorded in accumulated other comprehensive loss until amortized as a component of net periodic benefit cost. Unrecognized actuarial gains and losses in excess of 10% of the greater of the benefit obligation or the market-related value of plan assets are amortized over the participants' average remaining future years of service. Workers ' Compensation and Pneumoconiosis (Black Lung) Benefits — We are liable for workers' compensation benefits for traumatic injuries and benefits for black lung disease (or pneumoconiosis). Both traumatic claims and pneumoconiosis benefits are covered through our self-insured programs. In addition, certain of our mine operating entities are liable under state statutes and the Federal Coal Mine Health and Safety Act of 1969, as amended, to pay pneumoconiosis benefits to eligible employees and former employees and their dependents. We provide income replacement and medical treatment for work-related traumatic injury claims as required by applicable state laws. Workers' compensation laws also compensate survivors of workers who suffer employment related deaths. Our liability for traumatic injury claims is the estimated present value of current workers' compensation benefits, based on our actuarial estimates. Our actuarial calculations are based on a blend of actuarial projection methods and numerous assumptions including claim development patterns, mortality, medical costs and interest rates. Our pneumoconiosis benefits liability is calculated using the service cost method based on the actuarial present value of the estimated pneumoconiosis obligation. Our actuarial calculations are based on numerous assumptions including disability incidence, medical costs, mortality, death benefits, dependents and discount rates. Actuarial gains or losses are amortized over the remaining service period of active miners. See Note 17 – Accrued Workers' Compensation and Pneumoconiosis Benefits for more information on Workers' Compensation and Pneumoconiosis Benefits. Revenue Recognition — Revenues from coal supply contracts with customers are recognized at the point in time when control of the coal passes to the customer. We have determined that each ton of coal represents a separate and distinct performance obligation. Our coal supply contracts and other sales and operating revenue contracts vary in length from short-term to long-term contracts and do not typically have significant financing components. Transportation revenues represent the fulfillment costs incurred for the services provided to customers through third-party carriers and for which we are directly reimbursed. Other sales and operating revenues primarily consist of transloading fees, administrative service revenues from our affiliates, mine safety services and products, other coal contract fees and other handling and service fees. Performance obligations under these contracts are typically satisfied upon transfer of control of the goods or services to our customer which is determined by the contract and could be upon shipment or upon delivery. The estimated transaction price from each of our contracts is based on the total amount of consideration we expect to be entitled to under the contract. Included in the transaction price for certain coal supply contracts is the impact of variable consideration, including quality price adjustments, handling services, government imposition claims, per ton price fluctuations based on certain coal sales price indices and anticipated payments in lieu of shipments. We have constrained the expected value of variable consideration in our estimation of transaction price and only included this consideration to the extent that it is probable that a significant revenue reversal will not occur. The estimated transaction price for each contract is allocated to our performance obligations based on relative standalone selling prices determined at contract inception. Variable consideration is allocated to a specific part of the contract in many instances, such as if the variable consideration is based on production activities for coal delivered during a certain period or the outcome of a customer's ability to accept coal shipments over a certain period. Contract assets are recorded as trade receivables and reported separately in our consolidated balance sheet from other contract assets as title passes to the customer and our right to consideration becomes unconditional. Payments for coal shipments are typically due within two to four weeks of performance. We typically do not have material contract assets that are stated separately from trade receivables as our performance obligations are satisfied as control of the goods or services passes to the customer thereby granting us an unconditional right to receive consideration. Contract liabilities relate to consideration received in advance of the satisfaction of our performance obligations. Contract liabilities are recognized as revenue at the point in time when control of the good or service passes to the customer. Common Unit-Based Compensation — We have the Long-Term Incentive Plan ("LTIP") for certain employees and officers of MGP and its affiliates who perform services for us. The LTIP awards are grants of non-vested "phantom" or notional units, also referred to as "restricted units", which upon satisfaction of time and performance based vesting requirements, entitle the LTIP participant to receive ARLP common units. Annual grant levels and vesting provisions for designated participants are recommended by the Chairman, President and CEO of MGP, subject to review and approval of the compensation committee of our general partner ("Compensation Committee"). Vesting of all grants outstanding is subject to the satisfaction of certain financial tests, which management currently believes is probable. Grants issued to LTIP participants are expected to cliff vest on January 1st of the third year following issuance of the grants. We account for forfeitures of non-vested LTIP grants as they occur. 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 the 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 at the discretion of the Compensation Committee, in lieu of cash, phantom units credited to a bookkeeping account with value, equal to the cash distributions we make to unitholders during the vesting period. We utilize the Supplemental Executive Retirement Plan ("SERP") to provide deferred compensation benefits for certain officers and key employees. All allocations made to participants under the SERP are made in the form of "phantom" ARLP units and SERP distributions will be settled in the form of ARLP common units. The SERP is administered by the Compensation Committee. Our directors participate in the MGP Amended and Restated Deferred Compensation Plan for Directors ("Directors' Deferred Compensation Plan"). Pursuant to the Directors' 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 Directors' Deferred Compensation Plan as "phantom" units. Distributions from the Directors' Deferred Compensation Plan will be settled in the form of ARLP common units. For both the SERP and Directors' 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 Directors' Deferred Compensation Plan vest immediately. The fair value of restricted common unit grants under the LTIP, SERP and the Directors' Deferred Compensation Plan are determined on the grant date of the award and recognized as compensation expense on a pro rata basis for LTIP and SERP awards, as appropriate, over the requisite service period. Compensation expense is fully recognized on the grant date for quarterly distributions credited to SERP accounts and Directors' Deferred Compensation Plan awards. The corresponding liability is classified as equity and included in limited partners' capital in the consolidated financial statements (See Note 14 – Compensation Plans). Income Taxes —We are not a taxable entity for federal or state income tax purposes; the tax effect of our activities accrues to the unitholders. Although publicly traded partnerships as a general rule will be taxed as corporations, we qualify for an exemption because at least 90% of our income consists of qualifying income, as defined in Section 7704(c) of the Internal Revenue Code. Net income for financial statement purposes may differ significantly from taxable income reportable to unitholders as a result of differences between the tax basis and financial reporting basis of assets and liabilities and the taxable income allocation requirements under our partnership agreement. Individual unitholders have different investment bases depending upon the timing and price of acquisition of their partnership units. Furthermore, each unitholder's tax accounting, which is partially dependent upon the unitholder's tax position, differs from the accounting followed in our consolidated financial statements. Accordingly, the aggregate difference in the basis of our net assets for financial and tax reporting purposes cannot be readily determined because information regarding each unitholder's tax attributes in our partnership is not available to us. Our subsidiaries, ASI and Wildcat Insurance, are subject to federal and state income taxes. A valuation allowance is established if it is more likely than not that a deferred tax asset will not be realized. Our tax counsel has provided an opinion that ARLP, the Intermediate Partnership and Alliance Coal will each be treated as a partnership. However, as is customary, no ruling has been or will be requested from the Internal Revenue Service ("IRS") regarding our classification as a partnership for federal income tax purposes. Variable Interest Entity ("VIE") — VIEs are primarily entities that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders, as a group, lack one or more of the following characteristics: (a) direct or indirect ability to make decisions, (b) obligation to absorb expected losses or (c) right to receive expected residual returns. A VIE must be evaluated quantitatively and qualitatively to determine the primary beneficiary, which is the reporting entity that has (a) the power to direct activities of a VIE that most significantly impact the VIE's economic performance and (b) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. The primary beneficiary is required to consolidate the VIE for financial reporting purposes. To determine a VIE's primary beneficiary, we perform a qualitative assessment to determine which party, if any, has the power to direct activities of the VIE and the obligation to absorb losses and/or receive its benefits. This assessment involves identifying the activities that most significantly impact the VIE's economic performance and determine whether it, or another party, has the power to direct those activities. When evaluating whether we are the primary beneficiary of a VIE, we perform a qualitative analysis that considers the design of the VIE, the nature of our involvement and the variable interests held by other parties. See Note 9 – Variable Interest Entities for further information. Anticipated New Significant Accounting Policies – In January 2019, ARLP acquired the general partner interests and all of the limited partner interests not owned by Cavalier Minerals in AllDale I & II. As a result of the transaction, ARLP obtained control of AllDale I & II requiring the modification or the adoption of new significant accounting policies as outlined below. For more information on the transaction, see Note 23 – Subsequent Events. Estimates We will add the following significant estimates and assumptions to our estimates policy: · Oil & gas reserve quantities and carrying amounts; and · Determination of revenue accruals Oil & Gas Reserve Quantities and Carrying Amounts We will be wholly dependent on third-party operators to explore, develop, produce and operate the properties associated with our mineral interests. We will adopt the successful efforts method of accounting for our oil & gas mineral interests. Under this method, costs to acquire mineral and royalty interests in oil & gas properties will be capitalized when incurred. Acquisitions of mineral interests that include producing oil & gas properties are considered business combinations and are recorded at their estimated fair value as of the acquisition date. The costs of mineral interests in unproved properties will be capitalized pending the results of exploration and leasing efforts by operators. As mineral interests in unproved properties are determined to be proved, the related costs will be transferred to proved oil & gas properties. Mineral interests in oil & gas properties will be grouped using a reasonable aggregation of properties with a common geological structural feature or stratigraphic condition, which we may also refer to as a depletable unit. Mineral interests in proved oil & gas properties will be depleted based on the units-of-production method. Proved reserves are quantities of oil & gas that can be estimated with reasonable certainty to be economically producible from a given date forward, from known reservoirs, under existing economic conditions, operating methods, and government regulations. We will evaluate impairment of our mineral interests in proved properties whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. This evaluation will be performed on a depletable unit basis. We will compare the undiscounted projected future cash flows expected in connection with a depleta |
LONG-LIVED ASSET IMPAIRMENTS
LONG-LIVED ASSET IMPAIRMENTS | 12 Months Ended |
Dec. 31, 2018 | |
LONG-LIVED ASSET IMPAIRMENTS | |
LONG-LIVED ASSET IMPAIRMENTS | 3. LONG-LIVED ASSET IMPAIRMENTS In connection with our budgeting process in the fourth quarter, it was determined that, within our Illinois Basin segment, our Dotiki mine is expected to incur a reduction and related uncertainty in its economic mine life. Accordingly, we adjusted the carrying value of Dotiki's assets of $85.3 million to their fair value of $51.0 million resulting in an impairment charge of $34.3 million. Also within our Illinois Basin segment, a decrease in the fair value of an option entitling us to lease certain coal reserves resulted in an impairment charge of $6.2 million in the fourth quarter of 2018. The fair value of Dotiki's assets was determined using a combination of market and income approaches, both of which represent Level 3 fair value measurements under the fair value hierarchy. The fair value analysis used assumptions of marketability of certain assets as well as discounted cash flows over the remaining life of the mine. See Note 2 – Summary of Significant Accounting Policies – Long-Lived Assets for more information on our accounting policy for asset impairments. |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2018 | |
INVENTORIES | |
INVENTORIES | 4. INVENTORIES Inventories consist of the following : December 31, 2018 2017 (in thousands) Coal $ 20,929 $ 22,825 Supplies (net of reserve for obsolescence of $5,453 and $5,149, respectively) 38,277 37,450 Total inventories, net $ 59,206 $ 60,275 See Note 2 – Summary of Significant Accounting Policies for more information on our accounting policy for inventories. |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2018 | |
PROPERTY, PLANT AND EQUIPMENT | |
PROPERTY, PLANT AND EQUIPMENT | 5. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consist of the following: December 31, 2018 2017 (in thousands) Mining equipment and processing facilities $ 1,851,479 $ 1,847,037 Land and mineral rights 445,411 449,152 Buildings, office equipment and improvements 287,053 310,167 Construction and mine development in progress 71,190 47,223 Mine development costs 270,675 280,609 Property, plant and equipment, at cost 2,925,808 2,934,188 Less accumulated depreciation, depletion and amortization (1,513,450) (1,457,532) Total property, plant and equipment, net $ 1,412,358 $ 1,476,656 At December 31, 2018 and 2017, there were no capitalized development costs associated with mines in the development phase. All past capitalized development costs are associated with mines that shifted to the production phase and thus, these costs are being amortized. We believe that the carrying value of the past development costs will be recovered. For information regarding long-lived asset impairments please see Note 3 – Long-Lived Asset Impairments. Equipment leased by us under lease agreements which are determined to be capital leases are stated at an amount equal to the present value of the minimum lease payments during the lease term, less accumulated amortization. Equipment under capital leases included in mining equipment is amortized on the straight-line method over the shorter of its useful life or the related lease term. The provision for amortization of leased properties is included in depreciation, depletion and amortization expense. Capital leases included in mining equipment and related accumulated amortization are as follows: December 31, 2018 2017 (in thousands) Capital leases in mining equipment $ 141,019 $ 140,929 Accumulated amortization of capital leases (74,576) (55,603) Net capital leases in mining equipment $ 66,443 $ 85,326 Amortization expense related to our capital leases was $19.0 million, $24.9 million, and $27.2 million for the years ended December 31, 2018, 2017 and 2016, respectively. See Note 2 – Summary of Significant Accounting Policies for more information on our accounting policy for property, plant and equipment. |
LONG-TERM DEBT
LONG-TERM DEBT | 12 Months Ended |
Dec. 31, 2018 | |
LONG-TERM DEBT | |
LONG-TERM DEBT | 6. LONG-TERM DEBT Long-term debt consists of the following: Unamortized Discount and Principal Debt Issuance Costs December 31, December 31, 2018 2017 2018 2017 (in thousands) Revolving Credit facility $ 175,000 $ 30,000 $ (5,203) $ (7,356) Senior notes 400,000 400,000 (5,793) (6,707) Securitization facility 92,000 72,400 — — 667,000 502,400 (10,996) (14,063) Less current maturities (92,000) (72,400) — — Total long-term debt $ 575,000 $ 430,000 $ (10,996) $ (14,063) Credit Facility. On January 27, 2017, our Intermediate Partnership entered into a Fourth Amended and Restated Credit Agreement (the "Credit Agreement") with various financial institutions. The Credit Agreement provides for a $494.75 million revolving credit facility, 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"), with a termination date of May 23, 2021. We incurred debt issuance costs in 2017 of $9.2 million in connection with the Credit Agreement. These debt issuance costs are deferred and amortized as a component of interest expense over the term of the Revolving Credit Facility. 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. Borrowings under the Revolving 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). The Eurodollar Rate, with applicable margin, under the Revolving Credit Facility was 4.88% as of December 31, 2018. At December 31, 2018, we had $9.3 million of letters of credit outstanding with $310.5 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, scheduled debt payments and distribution payments. The Credit Agreement contains various restrictions affecting our Intermediate Partnership and its subsidiaries including, among other things, restrictions on 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 Credit Agreement requires the Intermediate Partnership to 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 0.98 to 1.0 and 17.8 to 1.0, respectively, for the trailing twelve months ended December 31, 2018. We remain in compliance with the covenants of the Credit Agreement as of December 31, 2018. Senior Notes. On April 24, 2017, the Intermediate Partnership and Alliance Finance (as co-issuer), a wholly owned subsidiary of the Intermediate Partnership, 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. 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 previous debt obligations (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. These costs are deferred and are currently being amortized as a component of interest expense over the Term. Accounts Receivable Securitization . On December 5, 2014, certain direct and indirect wholly owned subsidiaries of our Intermediate Partnership entered into a $100.0 million accounts receivable securitization facility ("Securitization Facility"). Under the Securitization Facility, certain subsidiaries sell trade receivables on an ongoing basis to our Intermediate Partnership, which then sells the trade receivables to AROP Funding, a wholly owned bankruptcy-remote special purpose subsidiary of our Intermediate Partnership, which in turn borrows on a revolving basis up to $100.0 million secured by the trade receivables. After the sale, Alliance Coal, as servicer of the assets, collects the receivables on behalf of AROP Funding. The Securitization Facility bears interest based on a Eurodollar Rate. In January 2018, we extended the term of the Securitization Facility to January 2019. It was renewed in January 2019 and now matures in January 2020. At December 31, 2018, we had $92.0 million outstanding under the Securitization Facility. Cavalier Credit Agreement . On October 6, 2015, Cavalier Minerals (see Note 9 – 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"). The commitment under the Cavalier Credit Facility is reduced by any distributions received from Cavalier Minerals' investment in AllDale II. As of December 31, 2018, the commitment under the Cavalier Credit Facility was $74.4 million. 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 Chairman, President and CEO of MGP and Kathleen S. Craft. There is no commitment fee under the facility. Mineral Lending's obligation to make the line of credit available terminates no later than October 6, 2019. Borrowings under the Cavalier Credit Facility bear interest at a one month LIBOR rate plus 6.0% with interest payable quarterly, and mature on September 30, 2024, at which time all amounts then outstanding are required to be repaid. The Cavalier Credit Agreement requires repayment of any principal balance beginning in 2018, 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. To secure payment of the facility, Cavalier Minerals pledged all of its partnership interests, owned or later acquired, in AllDale I & II. Cavalier Minerals may prepay the Cavalier Credit Facility at any time in whole or in part subject to terms and conditions described in the Cavalier Credit Agreement. As of December 31, 2018, Cavalier Minerals had not drawn on the Cavalier Credit Facility. Alliance Minerals has the right to require Cavalier Minerals to draw the full amount available under the Cavalier Credit Facility and distribute the proceeds to the members of Cavalier Minerals, including Alliance Minerals. Other. We also have an agreement with a bank to provide additional letters of credit in an amount of $5.0 million to maintain surety bonds to secure certain asset retirement obligations and our obligations for workers' compensation benefits. At December 31, 2018, we had $5.0 million in letters of credit outstanding under this agreement. Aggregate maturities of long-term debt are payable as follows: Year Ended December 31, (in thousands) 2019 $ 92,000 2020 — 2021 175,000 2022 — 2023 — Thereafter 400,000 $ 667,000 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2018 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | 7. FAIR VALUE MEASUREMENTS The following table summarizes our fair value measurements within the hierarchy not included elsewhere in these notes: December 31, 2018 December 31, 2017 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 (in thousands) Long-term debt $ — $ 669,864 $ — $ — $ 541,147 $ — Total $ — $ 669,864 $ — $ — $ 541,147 $ — See Note 2 – Summary of Significant Accounting Policies – Fair Value Measurements for more information regarding fair value hierarchy levels. The carrying amounts for cash equivalents, accounts receivable, accounts payable, accrued and other liabilities, due from affiliates and due to affiliates approximate fair value due to the short maturity of those instruments. The estimated fair value of our long-term debt, including current maturities, is based on interest rates that we believe are currently available to us in active markets for issuance of debt with similar terms and remaining maturities (See Note 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. |
PARTNERS' CAPITAL
PARTNERS' CAPITAL | 12 Months Ended |
Dec. 31, 2018 | |
PARTNERS' CAPITAL | |
PARTNERS' CAPITAL | 8. PARTNERS' CAPITAL Distributions We distribute 100% of our available cash that is not used for unit repurchases within 45 days after the end of each quarter to unitholders of record. Available cash is generally defined in the partnership agreement as all cash and cash equivalents on hand at the end of each quarter less reserves established by MGP in its reasonable discretion for future cash requirements. These reserves are retained to provide for the conduct of our business, the payment of debt principal and interest and to provide funds for future distributions. Prior to the Exchange Transaction in July 2017 (See Note 1 – Organization and Presentation – Partnership Simplification), as quarterly distributions of available cash exceeded certain target distribution levels, MGP received incentive distributions based on specified increasing percentages of the available cash that exceeded the target distribution levels. MGP 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. During the years ended December 31, 2017 and 2016, we paid to MGP incentive distributions of $37.6 million and $92.0 million, respectively. Beginning with distributions paid in the third quarter of 2017, we no longer make distributions with respect to the IDRs. The following table summarizes the quarterly per unit distribution paid during the respective quarter: Year Ended December 31, 2018 2017 2016 First Quarter $ 0.5100 $ 0.4375 $ 0.6750 Second Quarter $ 0.5150 $ 0.4375 $ 0.4375 Third Quarter $ 0.5200 $ 0.5000 $ 0.4375 Fourth Quarter $ 0.5250 $ 0.5050 $ 0.4375 On January 28, 2019, we declared a quarterly distribution of $0.53 per unit, totaling approximately $67.7 million, on all our common units outstanding, which was paid on February 14, 2019, to all unitholders of record on February 7, 2019. Exchange Transaction On July 28, 2017, as part of the Exchange Transaction discussed in Note 1 – Organization and Presentation – Partnership Simplification, MGP contributed to ARLP all of its IDRs and its 0.99% managing 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 28,141 ARLP common units. The Exchange Transaction constituted an exchange of equity interests between entities under common control and not a transfer of a business. Therefore, the exchange resulted in a reclassification, as of the date of the Exchange Transaction, of a $306.7 million deficit capital balance from the General Partners' interest line item to the Limited Partners - Common Unitholders line item in our consolidated balance sheets. The reclassification amounts represented the carrying value of the exchanged interests, which included the SGP's deficit balance associated with its prior special general partner interests in ARLP and the Intermediate Partnership, partially offset, by MGP's capital balance associated with its prior managing general partner interest in ARLP. The SGP deficit balance primarily resulted from contribution and assumption agreements associated with the formation of the ARLP Partnership in 1999. Simplification Transaction On May 31, 2018, as part of the Simplification Transactions discussed in Note 1 – Organization and Presentation, ARLP issued 1,322,388 ARLP common units to the Owners of SGP in exchange for causing SGP to contribute to ARLP all of SGP's limited partner interests in AHGP, which included AHGP's indirect ownership of a 1.0001% general partner interest in the Intermediate Partnership and a 0.001% managing member interest in Alliance Coal. The Simplification Transactions are accounted for prospectively as an exchange of equity interests between entities under common control. Since ARLP and AHGP were under common control both before and after the Simplification Transactions, no fair value adjustment was made to the assets or liabilities of AHGP and its subsidiaries and no gain or loss was recognized on our consolidated financial statements. Unit Repurchase Program In May 2018, the Board of Directors approved the establishment of a unit repurchase program authorizing us to repurchase and retire up to $100 million of ARLP common units. The program has no time limit and we may repurchase units from time to time in the open market or in other privately negotiated transactions. The unit repurchase program authorization does not obligate us to repurchase any dollar amount or number of units. As of December 31, 2018, we had repurchased and retired 3,684,075 units at an average unit price of $19.16 for an aggregate purchase price of $70.6 million. Total units repurchased includes the repurchase and retirement of 35 units representing fractional units as part of the Simplification Transactions which are not part of the unit repurchase program. Affiliated Entity Contributions An affiliated entity controlled by Mr. Craft and its members made capital contributions of $2.1 million, $1.0 million and $1.0 million during the years ended December 31, 2018, 2017 and 2016, respectively, for the purpose of funding certain general and administrative expenses. On June 29, 2018, the members of this affiliated entity also contributed 467,018 ARLP common units for similar purposes. |
VARIABLE INTEREST ENTITIES
VARIABLE INTEREST ENTITIES | 12 Months Ended |
Dec. 31, 2018 | |
VARIABLE INTEREST ENTITIES | |
VARIABLE INTEREST ENTITIES | 9. VARIABLE INTEREST ENTITIES Cavalier Minerals On November 10, 2014, our subsidiary, Alliance Minerals, and Bluegrass Minerals Management, LLC ("Bluegrass Minerals") entered into a limited liability company agreement (the "Cavalier Agreement") to create Cavalier Minerals, which was formed to indirectly acquire oil & 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. 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. Alliance Minerals and Bluegrass Minerals contributed $143.0 million and $6.0 million, respectively, to Cavalier Minerals, which sufficiently completed funding to Cavalier Minerals for these commitments. 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, if any, will be reduced by all distributions received by Bluegrass Minerals or its owner from the former general partners of AllDale I & II. Distributions paid to Alliance Minerals and Bluegrass Minerals from Cavalier Minerals are as follows: Year Ended December 31, 2018 2017 2016 (in thousands) Alliance Minerals $ 22,160 $ 24,385 $ 4,546 Bluegrass Minerals 924 1,016 189 Alliance Minerals' ownership interest in Cavalier Minerals at December 31, 2018 and 2017 was 96%. The remainder of the equity ownership, and the incentive distribution described above, is held by Bluegrass Minerals. We have consolidated Cavalier Minerals' financial results as we concluded that Cavalier Minerals is a VIE and we are the primary beneficiary because neither Bluegrass Minerals nor Alliance Minerals individually has both the power and the benefits related to Cavalier Minerals and we are most closely aligned with Cavalier Minerals through our substantial equity ownership. Bluegrass Minerals' equity ownership of Cavalier Minerals is accounted for as Noncontrolling interest in our consolidated balance sheets. In addition, earnings attributable to Bluegrass Minerals are recognized as Noncontrolling interest in our consolidated statements of income. On January 3, 2019, ARLP acquired the general partner interests and all of the limited partner interests not owned by Cavalier Minerals in AllDale I & II. As a result, ARLP will consolidate AllDale I & II in future periods. See Note 23 – Subsequent Events for further information. 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 Chairman, President and CEO 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. See Note 18 – Related-Party Transactions for further information on our lease terms with WKY CoalPlay. We have concluded that WKY CoalPlay is a VIE because of our ability to exercise options to acquire reserves under lease with WKY CoalPlay (Note 18 – Related-Party Transactions), which is not within the control of the equity holders and, if it occurs, could potentially limit the expected residual return to the owners of WKY CoalPlay. We do not have any economic or governance rights related to WKY CoalPlay and our options that provide us with a variable interest in WKY CoalPlay's reserve assets do not give us any rights that constitute power to direct the primary activities that most significantly impact WKY CoalPlay's economic performance. SGP Land has the sole ability to replace the manager of WKY CoalPlay at its discretion and therefore has power to direct the activities of WKY CoalPlay. Consequently, we concluded that SGP Land is the primary beneficiary of WKY CoalPlay. Alliance Coal and the Intermediate Partnership Alliance Coal is a limited liability company designed to operate as the operating subsidiary of the Intermediate Partnership and holds the interests in the mining operations and ASI. The Intermediate Partnership is a limited partnership that holds the non-managing member interest in Alliance Coal and the sole member interests in Alliance Resource Properties, Alliance Minerals and other entities. Both the Intermediate Partnership and Alliance Coal were designed to operate as the coal operating subsidiaries of ARLP and to distribute available cash to ARLP so that ARLP can distribute available cash to its partners. Prior to the Simplification Transactions discussed in Note 1 – Organization and Presentation, both Alliance Coal and the Intermediate Partnership were consolidated variable interest entities with ARLP being the primary beneficiary. In connection with the Simplification Transactions, Alliance Coal and the Intermediate Partnership became wholly owned subsidiaries of ARLP and are no longer variable interest entities. See Note 2 – Summary of Significant Accounting Policies for more information on our accounting policy for variable interest entities. |
INVESTMENTS
INVESTMENTS | 12 Months Ended |
Dec. 31, 2018 | |
INVESTMENTS | |
INVESTMENTS | 10. INVESTMENTS AllDale Partnerships In November 2014, Alliance Minerals indirectly invested in AllDale I & II through its investment in Cavalier Minerals (see Note 9 – Variable Interest Entities). AllDale I & II own oil & gas mineral interests in various geographic locations within producing basins in the continental United States. In February 2017, Alliance Minerals committed to directly invest $30.0 million in AllDale III rather than through its investment in Cavalier Minerals, and as of December 31, 2018, Alliance Minerals had no remaining commitment to AllDale III. AllDale III has acquired oil & gas mineral interests in the same geographic locations as AllDale I & II. Alliance Minerals and Cavalier Minerals are included in our Other and Corporate category (see Note 21 – Segment Information). We account for our ownership interest in the income or loss of the AllDale Partnerships as equity method investments. We record equity income or loss based on the AllDale Partnerships' individual distribution structures. The changes in our aggregate equity method investment in the AllDale Partnerships were as follows: Year Ended December 31, 2018 2017 2016 (in thousands) Beginning balance $ 147,964 $ 138,817 $ 64,509 Contributions 15,600 20,688 76,797 Equity method investment income 22,189 13,860 3,543 Distributions received (24,444) (25,401) (6,032) Ending balance $ 161,309 $ 147,964 $ 138,817 On January 3, 2019, ARLP acquired the general partner interests and all of the limited partner interests not owned by Cavalier Minerals in AllDale I & II. Beginning in 2019, AllDale I & II will be consolidated by ARLP and no longer accounted for as equity method investments. Beginning in 2019, the AllDale Partnerships will be included in a new Royalty reportable segment. See Note 23 – Subsequent Events for further information. Kodiak On July 19, 2017, Alliance Minerals purchased $100 million of Series A-1 Preferred Interests from Kodiak, a privately-held company providing large-scale, high-utilization gas compression assets to customers operating primarily in the Permian Basin. This structured investment provides us with a quarterly cash or payment-in-kind return. Our ownership interests in Kodiak are senior to all other Kodiak equity interests and subordinate only to Kodiak's senior secured debt facility. We accounted for our ownership interests in Kodiak as equity securities without readily determinable fair values. It is not practicable to estimate the fair value of our investment in Kodiak because of the lack of a quoted market price for our ownership interests, therefore we use a measurement alternative other than fair value to account for our investment. The changes in our investment in Kodiak were as follows: Year Ended December 31, 2018 2017 (in thousands) Beginning balance $ 106,398 $ — Contributions — 100,000 Payment-in-kind distributions received 15,696 6,398 Ending balance $ 122,094 $ 106,398 On February 8, 2019, Kodiak redeemed our preferred interests for $135.0 million cash. See Note 23 – Subsequent Events for more information. See Note 2 – Summary of Significant Accounting Policies for more information on our accounting policy for equity investments. |
REVENUE FROM CONTRACTS WITH CUS
REVENUE FROM CONTRACTS WITH CUSTOMERS | 12 Months Ended |
Dec. 31, 2018 | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | 11. REVENUE FROM CONTRACTS WITH CUSTOMERS The following table illustrates the disaggregation of our revenues by type, including a reconciliation to our segment presentation as presented in Note 21 – Segment Information. Illinois Other and Basin Appalachia Corporate Elimination Consolidated (in thousands) Year Ended December 31, 2018 Coal sales $ 1,197,143 $ 635,530 $ 43,393 $ (31,258) $ Transportation revenues 106,947 5,435 3 — Other sales and operating revenues 975 3,000 58,065 (16,376) Total revenues $ 1,305,065 $ 643,965 $ 101,461 $ (47,634) $ 2,002,857 Year Ended December 31, 2017 Coal sales $ 1,078,255 $ 616,305 $ 74,973 $ (58,419) $ Transportation revenues 35,585 6,115 — — Other sales and operating revenues 1,638 3,621 54,070 (15,923) Total revenues $ 1,115,478 $ 626,041 $ 129,043 $ (74,342) $ 1,796,220 Year Ended December 31, 2016 Coal sales $ 1,306,241 $ 534,796 $ 86,174 $ (65,423) $ Transportation revenues 23,233 6,714 164 — Other sales and operating revenues 7,686 3,404 46,216 (17,752) Total revenues $ 1,337,160 $ 544,914 $ 132,554 $ (83,175) $ 1,931,453 The following table illustrates the amount of our transaction price for all current coal supply contracts allocated to performance obligations that are unsatisfied or partially unsatisfied as of December 31, 2018 and disaggregated by segment and contract duration. 2022 and 2019 2020 2021 Thereafter Total (in thousands) Illinois Basin coal revenues $ 995,254 $ 475,128 $ 193,355 $ — $ Appalachia coal revenues 523,068 245,038 34,373 14,647 Other and Corporate coal revenues 22,666 — — — Elimination (17,035) — — — Total coal revenues (1) $ 1,523,953 $ 720,166 $ 227,728 $ 14,647 $ 2,486,494 (1) Coal revenues consists of coal sales and transportation revenues. |
NET INCOME OF ARLP PER LIMITED
NET INCOME OF ARLP PER LIMITED PARTNER UNIT | 12 Months Ended |
Dec. 31, 2018 | |
NET INCOME OF ARLP PER LIMITED PARTNER UNIT | |
NET INCOME OF ARLP PER LIMITED PARTNER UNIT | 12. NET INCOME OF ARLP PER LIMITED PARTNER UNIT We utilize the two-class method in calculating basic and diluted earnings per unit ("EPU"). After the Simplification Transactions, net income of ARLP is only allocated to limited partners and participating securities under deferred compensation plans. Prior to the Simplification Transactions, net income of ARLP was allocated to the general partners, limited partners and participating securities under deferred compensation plans in accordance with their respective partnership ownership percentages, after giving effect to any special income or expense allocations. Prior to the Exchange Transaction, net income of ARLP was also allocated to our general partner, MGP, for incentive distributions. Please see Note 1 – Organization and Presentation for more information on the Simplification Transactions and the Exchange Transaction. Our participating securities under deferred compensation plans include rights to nonforfeitable distributions or distribution equivalents. Our participating securities are outstanding awards under our LTIP and phantom units in notional accounts under our SERP and the Directors' Deferred Compensation Plan. 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. The IDR provisions of our partnership agreement prior to the Exchange Transaction are outlined in Note 8 – Partners' Capital. Beginning with distributions declared for the three months ended June 30, 2017, we no longer make distributions with respect to the IDRs. As a result of the Simplification Transactions, MGP no longer holds economic interests in the Intermediate Partnership or Alliance Coal. We no longer make distributions or allocate income and losses to MGP in our calculation of EPU. The following is a reconciliation of net income of ARLP used for calculating basic and diluted earnings per unit and the weighted-average units used in computing EPU. Year Ended December 31, 2018 2017 2016 (in thousands, except per unit data) Net income of ARLP $ 366,604 $ 303,638 $ 339,398 Adjustments: MGP's priority distributions (1) — (19,216) (76,636) General partners' equity ownership (1) (1,560) (3,688) (5,275) General partners' special allocation of certain general and administrative expenses (2) — 1,000 1,000 Limited partners' interest in net income of ARLP 365,044 281,734 258,487 Less: Distributions to participating securities (5,114) (4,339) (3,391) Undistributed earnings attributable to participating securities (1,641) (1,026) (3,281) Net income of ARLP available to limited partners $ 358,289 $ 276,369 $ 251,815 Weighted-average limited partner units outstanding – basic and diluted 130,758 98,708 74,354 Basic and diluted net income of ARLP per limited partner unit (3) $ 2.74 $ 2.80 $ 3.39 (1) Amounts for 2018 reflect the impact of the Simplification Transactions which ended net income allocations and quarterly cash distributions to MGP after May 31, 2018. Amounts for 2017 reflect the impact of the Exchange Transaction ending distributions that would have been paid for the IDRs and a 0.99% general partner interest in ARLP, both of which were held by MGP prior to the Exchange Transaction. For the time period between the Exchange Transaction and the Simplification Transactions, MGP maintained a 1.0001% general partner interest in the Intermediate Partnership and a 0.001% managing member interest in Alliance Coal and thus received quarterly distributions and income and loss allocations during this time period. (2) Prior to the Simplification Transactions, MGP made capital contributions of $1.0 million each year during 2017 and 2016 to Alliance Coal for the purpose of funding certain general and administrative expenses. As provided under our partnership agreement, we made special allocations to MGP of certain general and administrative expenses equal to its contributions. Net income of ARLP allocated to the limited partners was not burdened by this expense. (3) Diluted EPU gives effect to all potentially dilutive common units outstanding during the period using the treasury stock method. Diluted EPU excludes all potentially dilutive units calculated under the treasury stock method if their effect is anti-dilutive. For the year ended December 31, 2018, 2017 and 2016, the combined total of LTIP, SERP and Directors' Deferred Compensation Plan units of 1,658,908, 1,466,404 and 922,386, respectively, were considered anti-dilutive under the treasury stock method. On a pro forma basis, as if the Exchange Transaction and the Simplification Transactions had taken place on January 1, 2016, the reconciliation of net income of ARLP to basic and diluted earnings per unit and the weighted-average units used in computing EPU are as follows: Year Ended December 31, 2018 2017 2016 (in thousands, except per unit data) Net income of ARLP $ 366,604 $ 303,638 $ 339,398 Pro forma adjustments (1) (1,265) (1,943) (2,985) Pro forma net income of ARLP 365,339 301,695 336,413 Less: Distributions to participating securities (5,114) (4,339) (3,391) Undistributed earnings attributable to participating securities (1,627) (680) (1,548) Net income of ARLP available to limited partners (2) $ 358,598 $ 296,676 $ 331,474 Weighted-average limited partner units outstanding – basic and diluted (2) 131,310 132,024 131,805 Pro forma basic and diluted net income of ARLP per limited partner unit (3) $ 2.73 $ 2.25 $ 2.51 (1) Pro forma adjustments to the net income of ARLP primarily represent the elimination of administrative service revenues from AHGP and the inclusion of general and administrative expenses incurred at AHGP. (2) Net income of ARLP available to limited partners reflects net income allocations made for all periods presented based on the ownership structure subsequent to the Simplification Transactions. Accordingly, no general partner income allocations are presented above. Pro forma amounts above also reflect weighted average units outstanding as if the issuance of 56,128,141 ARLP common units in the Exchange Transaction and 1,322,388 ARLP common units in the Simplification Transactions applied to all periods presented. (3) Diluted EPU gives effect to all potentially dilutive common units outstanding during the period using the treasury stock method. Diluted EPU excludes all potentially dilutive units calculated under the treasury stock method if their effect is anti-dilutive. For the year ended December 31, 2018, 2017 and 2016, the combined total of LTIP, SERP and Directors' Deferred Compensation Plan units of 1,658,908, 1,466,404 and 922,386, respectively, were considered anti-dilutive under the treasury stock method. . |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2018 | |
EMPLOYEE BENEFIT PLANS | |
EMPLOYEE BENEFIT PLANS | 13. EMPLOYEE BENEFIT PLANS Defined Contribution Plans —Our eligible employees currently participate in a defined contribution profit sharing and savings plan ("PSSP") that we sponsor. The PSSP covers all regular full-time employees. PSSP participants may elect to make voluntary contributions to this plan up to a specified amount of their compensation. We make matching contributions based on a percent of an employee's eligible compensation and also make an additional non-matching contribution. Our contribution expense for the PSSP was approximately $19.9 million, $18.7 million and $18.2 million for the years ended December 31, 2018, 2017 and 2016, respectively. Defined Benefit Plan —Eligible employees at certain of our mining operations participate in a defined benefit plan (the "Pension Plan") that we sponsor. The Pension Plan is closed to new applicants and was amended in 2016 to remove any future benefit accruals for service effective January 31, 2017. The amendment did not materially affect pension benefits accrued prior to January 31, 2017. All participants can participate in enhanced benefits provisions under the PSSP. The benefit formula for the Pension Plan is a fixed-dollar unit based on years of service. The following sets forth changes in benefit obligations and plan assets for the years ended December 31, 2018 and 2017 and the funded status of the Pension Plan reconciled with the amounts reported in our consolidated financial statements: December 31, 2018 2017 (dollars in thousands) Change in benefit obligations: Benefit obligations at beginning of year $ 127,298 $ 113,482 Interest cost 4,462 4,587 Actuarial (gain) loss (8,562) 13,501 Benefits paid (4,240) (4,272) Benefit obligations at end of year 118,958 127,298 Change in plan assets: Fair value of plan assets at beginning of year 81,981 71,412 Employer contribution 4,187 2,971 Actual return on plan assets (6,105) 11,870 Benefits paid (4,240) (4,272) Fair value of plan assets at end of year 75,823 81,981 Funded status at the end of year $ (43,135) $ (45,317) Amounts recognized in balance sheet: Non-current liability $ (43,135) $ (45,317) Amounts recognized in accumulated other comprehensive income consists of: Prior service cost $ (1,126) $ (1,312) Net actuarial loss (41,697) (41,979) $ (42,823) $ (43,291) Weighted-average assumption to determine benefit obligations as of December 31, Discount rate Weighted-average assumptions used to determine net periodic benefit cost for the year ended December 31, Discount rate Expected return on plan assets The actuarial gain component of the change in benefit obligation in 2018 was primarily attributable to an increase in the discount rate compared to December 31, 2017 and updated mortality tables, offset in part by decreases in expected retirements and other demographic changes. The actuarial loss component of the change in benefit obligation in 2017 was primarily attributable to a decrease in the discount rate compared to December 31, 2016 and updated retirement and withdrawal rates, offset in part by improved life expectancies. The expected long-term rate of return used to determine our pension liability is based on a 1.5% active management premium in addition to an asset allocation assumption of: Asset allocation As of December 31, 2018 assumption Equity securities Fixed income securities Real estate The actual return on plan assets was (6.7)% and 18.0% for the years ended December 31, 2018 and 2017, respectively. Year Ended December 31, 2018 2017 2016 (in thousands) Components of net periodic benefit cost: Service cost $ — $ — $ 2,205 Interest cost 4,462 4,587 4,493 Expected return on plan assets (5,784) (4,978) (5,138) Amortization of prior service cost 186 186 — Amortization of net loss 3,608 3,054 2,952 Net periodic benefit cost (1) $ 2,472 $ 2,849 $ 4,512 (1) Nonservice components of net periodic benefit cost are included in the Other expense line item within our consolidated statements of income (see Note 2 – Summary of Significant Accounting Policies). Year Ended December 31, 2018 2017 (in thousands) Other changes in plan assets and benefit obligation recognized in accumulated other comprehensive loss: Net actuarial loss $ (3,326) $ (6,610) Reversal of amortization item: Prior service cost 186 186 Net actuarial loss 3,608 3,054 Total recognized in accumulated other comprehensive loss 468 (3,370) Net periodic benefit cost (2,472) (2,849) Total recognized in net periodic benefit cost and accumulated other comprehensive loss $ (2,004) $ (6,219) Estimated future benefit payments as of December 31, 2018 are as follows: Year Ended December 31, (in thousands) 2019 $ 4,870 2020 5,257 2021 5,666 2022 6,016 2023 6,254 2024-2028 34,153 $ 62,216 We expect to contribute $5.3 million to the Pension Plan in 2019. The Compensation Committee has appointed an investment manager with full investment authority with respect to Pension Plan investments subject to investment guidelines and compliance with ERISA or other applicable laws. The investment manager employs a series of asset allocation strategy phases to glide the portfolio risk commensurate with both plan characteristics and market conditions. The objective of the allocation policy is to reach and maintain fully funded status. The total portfolio allocation will be adjusted as the funded ratio of the Pension Plan changes and market conditions warrant. The target allocation includes investments in equity and fixed income commingled investment funds. Total account performance is reviewed at least annually, using a dynamic benchmark approach to track investment performance. General asset allocation guidelines at December 31, 2018 are as follows: Percentage of Total Portfolio Minimum Target Maximum Equity securities Fixed income securities Real estate Equity securities include domestic equity securities, developed international securities, emerging markets equity securities and real estate investment trust. Fixed income securities include domestic and international investment grade fixed income securities, high yield securities and emerging markets fixed income securities. Fixed income futures may also be utilized within the fixed income securities asset allocation. The following information discloses the fair values of our Pension Plan assets by asset category: December 31, 2018 December 31, 2017 (in thousands) Cash and cash equivalents (a) $ 5,277 $ 1,439 Commingled investment funds measured at net asset value (b): Equities - United States large-cap 21,862 26,031 Equities - United States small-cap 5,259 6,120 Equities - International developed markets 10,593 15,015 Equities - International emerging markets 4,808 6,528 Fixed income - Investment grade 15,777 13,546 Fixed income - High yield 4,508 4,325 Real estate 5,034 3,754 Other 2,705 5,223 Total $ 75,823 $ 81,981 (a) Cash and cash equivalents represents a Level 1 fair value measurement. See Note 2 – Summary of Significant Accounting Policies – Fair Value Measurements for more information regarding the definitions of fair value hierarchy levels. (b) Investments measured at fair value using the net asset value per share (or its equivalent) have not been classified within the fair value hierarchy. The fair values of all commingled investment funds are determined based on the net asset values per unit of each of the funds. The net asset values per unit represent the aggregate value of the fund's assets at fair value less liabilities, divided by the number of units outstanding. See Note 2 – Summary of Significant Accounting Policies for more information on our accounting policy for pension benefits. |
COMPENSATION PLANS
COMPENSATION PLANS | 12 Months Ended |
Dec. 31, 2018 | |
COMPENSATION PLANS | |
COMPENSATION PLANS | 14. COMPENSATION PLANS Long-Term Incentive Plan We maintain 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 Chairman, President and CEO of MGP, subject to review and approval of the Compensation Committee. Vesting of all grants outstanding is subject to the satisfaction of certain financial tests, which management currently believes is probable. Grants issued to LTIP participants are expected to cliff vest on January 1st of the third year following issuance of the grants. We account for forfeitures of non-vested LTIP grants as they occur. 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 employee tax withholding obligations of LTIP participants. As provided under the distribution equivalent rights ("DERs") 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, at the discretion of the Compensation Committee, phantom units in lieu of cash 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 is as follows: Number of units Weighted average grant date fair value per unit Intrinsic value (in thousands) Non-vested grants at January 1, 2016 939,793 $ $ 12,678 Granted Vested (1) Forfeited Non-vested grants at December 31, 2016 1,604,748 36,027 Granted Vested (1) Forfeited Non-vested grants at December 31, 2017 1,694,026 33,372 Granted Vested (1) Forfeited Non-vested grants at December 31, 2018 31,699 (1) During the years ended December 31, 2018, 2017 and 2016, we issued 191,858, 222,011 and 176,319, respectively, unrestricted common units to the LTIP participants. The remaining vested units were settled in cash primarily to satisfy tax withholding obligations of the LTIP participants. For the years ended December 31, 2018, 2017 and 2016, our LTIP expense was $10.8 million, $11.0 million and $12.7 million, respectively. The total obligation associated with the LTIP as of December 31, 2018 and 2017 was $20.8 million and $21.8 million, respectively, and is included in the partners' capital Limited partners-common unitholders line item in our consolidated balance sheets. As of December 31, 2018, there was $10.6 million in total unrecognized compensation expense related to the non-vested LTIP grants that are expected to vest. That expense is expected to be recognized over a weighted-average period of 0.8 years. On January 23, 2019, the Compensation Committee determined that the vesting requirements for the 2016 grants of 885,381 restricted units (which was net of 75,611 forfeitures and previously settled units) had been satisfied as of January 1, 2019. As a result of this vesting, on February 8, 2019, we issued 596,650 unrestricted common units to the LTIP participants. The remaining units were settled in cash to satisfy tax withholding obligations of the LTIP participants. On January 23, 2019, the Compensation Committee also authorized additional grants of 601,644 restricted units, of which 586,644 units were granted. After consideration of the January 1, 2019 vesting and subsequent issuance of 596,650 common units, approximately 1.9 million units remain available under the LTIP for issuance in the future, assuming all grants issued in 2019, 2018 and 2017 and currently outstanding are settled with common units, without reduction for tax withholding, no future forfeitures occur and DERs continue being paid in cash versus additional phantom units. 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 Directors' Deferred Compensation Plan. Pursuant to the Directors' 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 Directors' Deferred Compensation Plan as "phantom" units. Distributions from the Directors' Deferred Compensation Plan will be settled in the form of ARLP common units. For both the SERP and Directors' 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 Directors' Deferred Compensation Plan vest immediately. A summary of SERP and Directors' Deferred Compensation Plan activity 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, 2016 429,141 $ $ 5,789 Granted 74,799 Issued (9,922) Phantom units outstanding as of December 31, 2016 494,018 11,091 Granted Phantom units outstanding as of December 31, 2017 561,784 11,067 Granted 84,417 Issued (1) (10,364) Phantom units outstanding as of December 31, 2018 635,837 11,025 (1) During the year ended December 31, 2018, we issued 7,181 ARLP common units to a participant under the SERP. Units issued to this participant were net of units settled in cash to satisfy tax withholding obligations. Total SERP and Directors' Deferred Compensation Plan expense was $1.6 million, $1.4 million and $1.2 million for the years ended December 31, 2018, 2017 and 2016, respectively. As of December 31, 2018 and 2017, the total obligation associated with the SERP and Directors' Deferred Compensation Plan was $17.4 million and $16.1 million, respectively, and is included in the partners' capital Limited partners-common unitholders line item in our consolidated balance sheets. On January 9, 2019, we provided 115,484 ARLP common units to a director under the Directors' Deferred Compensation Plan. See Note 2 – Summary of Significant Accounting Policies for more information on our accounting policy for unit-based compensation. |
SUPPLEMENTAL CASH FLOW INFORMAT
SUPPLEMENTAL CASH FLOW INFORMATION | 12 Months Ended |
Dec. 31, 2018 | |
SUPPLEMENTAL CASH FLOW INFORMATION | |
SUPPLEMENTAL CASH FLOW INFORMATION | 15. SUPPLEMENTAL CASH FLOW INFORMATION Year Ended December 31, 2018 2017 2016 (in thousands) Cash Paid For: Interest $ 38,450 $ 31,692 $ 29,274 Income taxes $ 34 $ 210 $ 10 Non-Cash Activity: Accounts payable for purchase of property, plant and equipment $ 14,585 $ 15,636 $ 8,232 Assets acquired by capital lease $ 835 $ — $ 37,089 Market value of common units issued under deferred compensation plans before tax withholding requirements $ 6,142 $ 8,149 $ 3,642 |
ASSET RETIREMENT OBLIGATIONS
ASSET RETIREMENT OBLIGATIONS | 12 Months Ended |
Dec. 31, 2018 | |
ASSET RETIREMENT OBLIGATIONS | |
ASSET RETIREMENT OBLIGATIONS | 16. ASSET RETIREMENT OBLIGATIONS The majority of our operations are governed by various state statutes and the Federal Surface Mining Control and Reclamation Act of 1977, which establish reclamation and mine closing standards. These regulations require, among other things, restoration of property in accordance with specified standards and an approved reclamation plan. The following table presents the activity affecting the asset retirement and mine closing liability: Year Ended December 31, 2018 2017 (in thousands) Beginning balance $ 130,600 $ 125,701 Accretion expense 3,926 3,793 Payments (2,392) (1,046) Allocation of liability associated with acquisitions, mine development and change in assumptions 4,980 2,152 Ending balance $ 137,114 $ 130,600 For the year ended December 31, 2018, the allocation of liability associated with acquisition, mine development and change in assumptions was a net increase of $5.0 million. This net increase was attributable to the expansion of refuse sites primarily at the Hamilton and Tunnel Ridge mines, partially offset by decreased cost estimates for water related treatment at the Mettiki mine and completion of certain reclamation obligations at the Hopkins County Coal mining complex. For the year ended December 31, 2017, the allocation of liability associated with acquisition, mine development and change in assumptions was a net increase of $2.2 million. This increase was attributable to the net impact of increased expansion of refuse sites primarily at the Hamilton and River View mines, offset in part by current estimates of the costs and scope of remaining reclamation work and reclamation work completed. The impact of discounting our estimated cash flows resulted in reducing the accrual for asset retirement obligations by $100.3 million and $114.0 million at December 31, 2018 and 2017, respectively. Estimated payments of asset retirement obligations as of December 31, 2018 are as follows: Year Ended December 31, (in thousands) 2019 $ 9,459 2020 3,807 2021 3,279 2022 4,511 2023 2,684 Thereafter 213,675 Aggregate undiscounted asset retirement obligations 237,415 Effect of discounting (100,301) Total asset retirement obligations 137,114 Less: current portion (9,459) Asset retirement obligations $ 127,655 Federal and state laws require bonds to secure our obligations to reclaim lands used for mining and are typically renewable on a yearly basis. As of December 31, 2018 and 2017, we had approximately $169.3 million and $172.9 million, respectively, in surety bonds outstanding to secure the performance of our reclamation obligations. See Note 2 – Summary of Significant Accounting Policies for more information on our accounting policy for asset retirement obligations. |
ACCRUED WORKERS' COMPENSATION A
ACCRUED WORKERS' COMPENSATION AND PNEUMOCONIOSIS BENEFITS | 12 Months Ended |
Dec. 31, 2018 | |
WORKERS' COMPENSATION AND PNEUMOCONIOSIS | |
ACCRUED WORKERS' COMPENSATION AND PNEUMOCONIOSIS BENEFITS | 17. ACCRUED WORKERS' COMPENSATION AND PNEUMOCONIOSIS BENEFITS We provide income replacement and medical treatment for work-related traumatic injury claims as required by applicable state laws. Workers' compensation laws also compensate survivors of workers who suffer employment related deaths. Certain of our mine operating entities are liable under state statutes and the Federal Coal Mine Health and Safety Act of 1969, as amended, to pay benefits for black lung disease (or pneumoconiosis) to eligible employees and former employees and their dependents. Both pneumoconiosis and traumatic claims are covered through our self-insured programs. The following is a reconciliation of the changes in workers' compensation liability (including current and long-term liability balances): December 31, 2018 2017 (in thousands) Beginning balance $ 54,439 $ 48,131 Accruals increase 7,654 17,066 Payments (10,837) (10,769) Interest accretion 1,454 1,681 Valuation gain (3,171) (1,670) Ending balance $ 49,539 $ 54,439 The discount rate used to calculate the estimated present value of future obligations for workers' compensation was 3.89% and 3.22% at December 31, 2018 and 2017, respectively. The 2018 valuation gain was primarily attributable to an increase in the discount rate used to calculate the estimated present value of future obligations as well as favorable changes in claims development. The 2017 valuation gain was primarily attributable to favorable changes in claims development partially offset by the decrease in the discount rate used to calculate the estimated present value of future obligations. As of December 31, 2018 and 2017, we had $82.5 million and $89.2 million, respectively, in surety bonds and letters of credit outstanding to secure workers' compensation obligations. We limit our exposure to traumatic injury claims by purchasing a high deductible insurance policy that starts paying benefits after deductibles for the particular claim year have been met. Our workers' compensation liability above is presented on a gross basis and does not include our expected receivables on our insurance policy. Our receivables for traumatic injury claims under this policy as of December 31, 2018 and 2017 are $8.1 million and $9.0 million, respectively. Our receivables are included in Other long-term assets on our consolidated balance sheets. The following is a reconciliation of the changes in pneumoconiosis benefit obligations: December 31, 2018 2017 (in thousands) Benefit obligations at beginning of year $ 74,859 $ 64,988 Service cost 2,525 2,255 Interest cost 2,542 2,555 Actuarial (gain) loss (4,599) 7,938 Benefits and expenses paid (3,232) (2,877) Benefit obligations at end of year $ 72,095 $ 74,859 The following is a reconciliation of the changes in the pneumoconiosis benefit obligation recognized in accumulated other comprehensive loss: Year Ended December 31, 2018 2017 2016 (in thousands) Net actuarial gain (loss) $ 4,599 $ (7,938) $ (205) Reversal of amortization item: Net actuarial (gain) loss 2 (2,092) (2,643) Total recognized in accumulated other comprehensive loss $ 4,601 $ (10,030) $ (2,848) The discount rate used to calculate the estimated present value of future obligations for pneumoconiosis benefits was 4.13%, 3.49% and 3.97% at December 31, 2018, 2017 and 2016, respectively. Year Ended December 31, 2018 2017 2016 (in thousands) Amount recognized in accumulated other comprehensive loss consists of: Net actuarial loss (gain) $ 4,047 $ 8,648 $ (1,382) The actuarial gain component of the change in benefit obligations in 2018 was primarily attributable to an increase in the discount rate used to calculate the estimated present value of the future obligations, a decrease in the assumed future medical benefit and expense levels, and demographic changes in the at-risk population. The actuarial loss component of the change in benefit obligations in 2017 was primarily attributable to the decrease in the discount rate used to calculate the estimated present value of the future obligations, an increase in the assumed future medical benefits, and closure of a state fund which historically shared indemnity costs on state pneumoconiosis claims. Summarized below is information about the amounts recognized in the accompanying consolidated balance sheets for pneumoconiosis and workers' compensation benefits: December 31, 2018 2017 (in thousands) Workers' compensation claims $ 49,539 $ 54,439 Pneumoconiosis benefit claims 72,095 74,859 Total obligations 121,634 129,298 Less current portion (11,137) (10,729) Non-current obligations $ 110,497 $ 118,569 Both the pneumoconiosis benefit and workers' compensation obligations were unfunded at December 31, 2018 and 2017. The pneumoconiosis benefit and workers' compensation expense consists of the following components: Year Ended December 31, 2018 2017 2016 (in thousands) Black lung benefits: Service cost $ 2,525 $ 2,255 $ 2,578 Interest cost (1) 2,542 2,555 2,506 Net amortization (1) 2 (2,092) (2,643) Total pneumoconiosis expense 5,069 2,718 2,441 Workers' compensation expense 11,270 12,215 9,063 Net periodic benefit cost $ 16,339 $ 14,933 $ 11,504 ________________________________________ (1) Interest cost and net amortization is included in the Other expense line item within our consolidated statements of income (see Note 2 – Summary of Significant Accounting Policies). See Note 2 – Summary of Significant Accounting Policies for more information on our accounting policy for workers' compensation and pneumoconiosis benefits. |
RELATED-PARTY TRANSACTIONS
RELATED-PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2018 | |
RELATED-PARTY TRANSACTIONS | |
RELATED-PARTY TRANSACTIONS | 18. RELATED-PARTY TRANSACTIONS We have continuing related-party transactions with MGP and its affiliates. The Board of Directors and its Conflicts Committee review our related-party transactions that involve a potential conflict of interest between our general partner or its affiliates and ARLP or its subsidiaries or another partner to determine that such transactions are fair and reasonable to ARLP. As a result of these reviews, the Board of Directors and the Conflicts Committee approved each of the transactions described below that had such potential conflict of interest as fair and reasonable to ARLP. Affiliate Coal Lease Agreements The following table summarizes advanced royalties outstanding and related payments and recoupments under our affiliate coal lease agreements: WKY CoalPlay Towhead Webster Henderson WKY SGP Coal Coal Coal CoalPlay Henderson Henderson Tunnel & Union Webster Henderson & Union Ridge Counties, KY County, KY County, KY Counties, KY Total Acquired Acquired Acquired Acquired Acquired 2005 December 2014 December 2014 December 2014 February 2015 (in thousands) As of January 1, 2016 $ 5,413 $ 3,598 $ 2,526 $ 2,522 $ 2,131 $ 16,190 Payments 3,000 3,598 2,568 2,522 2,131 13,819 Recoupment (8,413) (1) (1,775) — — (10,189) As of December 31, 2016 — 7,195 3,319 5,044 4,262 19,820 Payments 6,000 3,598 2,568 2,522 2,131 16,819 Recoupment (3,000) (109) (531) — (6) (3,646) As of December 31, 2017 3,000 10,684 5,356 7,566 6,387 32,993 Payments — 3,597 2,570 2,520 2,131 10,818 Recoupment (3,000) (204) (31) — (36) (3,271) Unrecoupable — — (7,895) — — (7,895) As of December 31, 2018 $ — $ 14,077 $ — $ 10,086 $ 8,482 $ 32,645 SGP — In January 2005, we acquired Tunnel Ridge from ARH. In connection with this acquisition, we assumed a coal lease with SGP. Under the terms of the lease, Tunnel Ridge was required to pay SGP an annual minimum royalty of $3.0 million. The lease expires the earlier of January 1, 2033 or upon the exhaustion of the mineable and merchantable leased coal. In December 2016, Tunnel Ridge had recouped all past annual advances and made the first earned royalty payment to SGP, which was nominal. Tunnel Ridge incurred $6.0 million and $7.2 million in earned royalties in 2018 and 2017, respectively. The property subject to this lease is now owned by the Joseph W. Craft III Foundation and the Kathleen S. Craft Foundation, an undivided one-half interest each. Beginning in January 2019, the annual minimum royalty and earned royalty payments will be made to these charitable foundations. WKY CoalPlay — In February 2015, WKY CoalPlay entered into a coal lease agreement with Alliance Resource Properties regarding coal reserves located in Henderson and Union Counties, Kentucky. The lease has an initial term of 20 years and provides for earned royalty payments to WKY CoalPlay of 4.0% of the coal sales price and annual minimum royalty payments of $2.1 million. All annual minimum royalty payments are recoupable from future earned royalties. Alliance Resource Properties also was granted an option to acquire the leased reserves at any time during a three-year period beginning in February 2018 for a purchase price that would provide WKY CoalPlay a 7.0% internal rate of return on its investment in these reserves taking into account payments previously made under the lease (See Note 9 - Variable Interest Entities). In December 2014, WKY CoalPlay's subsidiaries, Towhead Coal Reserves, LLC and Henderson Coal Reserves, LLC entered into coal lease agreements with Alliance Resource Properties. The leases have initial terms of 20 years and provide for earned royalty payments of 4.0% of the coal sales price to both and annual minimum royalty payments of $3.6 million and $2.5 million, respectively. All annual minimum royalty payments for each agreement are recoupable from future earned royalties related to their respective agreements. Each agreement grants Alliance Resource Properties an option to acquire the leased reserves at any time during a three-year period beginning in December 2017 for a purchase price that would provide WKY CoalPlay a 7.0% internal rate of return on its investment in the reserves taking into account payments previously made under the leases (See Note 9 – Variable Interest Entities). In December 2014, WKY CoalPlay's subsidiary, Webster Coal Reserves, LLC entered into a coal lease agreement with Alliance Resource Properties. The lease has an initial term of 7 years and provides for earned royalty payments of 4.0% of the coal sales price and annual minimum payments of $2.6 million. The agreement grants Alliance Resource Properties an option to acquire the leased reserves at any time during a three year period beginning in December 2017 for a purchase price that would provide WKY CoalPlay a 7.0% internal rate of return on its investment in the reserves taking into account payments previously made under the lease (See Note 9 – Variable Interest Entities). In the fourth quarter of 2018 it was determined that the balance of advanced royalties and any future payments will not be recouped as a result of the uncertain mine life at our Dotiki mine. See note 3 – Long-Lived Asset Impairments for more information. SGP Land — In 2001, SGP Land, as successor in interest to an unaffiliated third party, entered into an amended mineral lease with MC Mining. Under the terms of the lease, MC Mining was required to pay an annual minimum royalty of $0.3 million until $6.0 million of cumulative annual minimum and/or earned royalty payments had been paid. The cumulative annual minimum lease requirement of $6.0 million was met in 2015. MC Mining paid to SGP Land earned royalties of $0.1 million for the year ended December 31, 2018 and $0.6 million in each of the years ended December 31, 2017 and 2016. The property subject to this lease is now owned by the Joseph W. Craft III Foundation and the Kathleen S. Craft Foundation, an undivided one-half interest each. Beginning in January 2019, all earned royalty payments will be made to these charitable foundations. Cavalier Minerals – As discussed in Note 9 – Variable Interest Entities, Alliance Minerals has a limited partnership interest in Cavalier which holds limited partner interests in AllDale I & II. See Note 10 - Investments for information on payments made and distributions received. On January 3, 2019, ARLP acquired the general partner interests and all of the limited partner interests not owned by Cavalier Minerals in AllDale I & II. As a result, ARLP will consolidate AllDale I & II in future periods. See Note 23 – Subsequent Events for further information. Mineral Lending– See Note 6 - Long-Term Debt for discussion of the Cavalier Credit Agreement and Mineral Lending. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2018 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 19. Commitments — We lease buildings and equipment under operating lease agreements that provide for the payment of both minimum and contingent rentals. We also have a noncancelable coal reserve lease as discussed in Note 18 – Related-Party Transactions and noncancelable leases with a third party for equipment under capital lease obligations. Future minimum lease payments are as follows: Other Operating Leases Capital Year Ending December 31, Lease Affiliate Others Total (in thousands) 2019 $ 48,810 240 9,087 $ 9,327 2020 8,748 — 3,787 3,787 2021 913 — 2,236 2,236 2022 912 — 2,172 2,172 2023 140 — 1,995 1,995 Thereafter 553 — 14,865 14,865 Total future minimum lease payments $ 60,076 $ 240 $ 34,142 $ 34,382 Less: amount representing interest (2,759) Present value of future minimum lease payments 57,317 Less: current portion (46,722) Long-term capital lease obligation $ 10,595 Rental expense (including rental expense incurred under operating lease agreements) was $15.0 million, $16.1 million and $17.0 million for the years ended December 31, 2018, 2017 and 2016, respectively. In accordance with the adoption of ASU 2016-02 in 2019, we will record right-to-use assets and corresponding lease liabilities on our consolidated balance sheets for our operating leases. See Note 2 – Summary of Significant Accounting Policies for further information. Contractual Commitments — In connection with planned capital projects, we have contractual commitments of approximately $88.2 million at December 31, 2018. As of December 31, 2018, we had no commitments to purchase coal from external production sources in 2019. In February 2017, Alliance Minerals committed to invest $30.0 million in AllDale III. As of December 31, 2018, Alliance Minerals had no remaining commitment to AllDale III. For more information on Alliance Minerals and AllDale III, see Note 10 – Investments. On June 29, 2016, we entered into various sale-leaseback transactions for certain mining equipment and received $33.9 million in proceeds. The lease agreements have terms ranging from three to four years with initial monthly rentals totaling $0.7 million. Balloon payments equal to 20% of the equipment cost under lease are due at the end of each lease term. As a result of this transaction, we recognized a deferred loss of $7.9 million which is being amortized over the life of the equipment. We have recognized this sales-leaseback transaction as a capital lease and included future payments within future minimum lease payments presented above. General Litigation — On March 9, 2018, we finalized an agreement with a customer and certain of its affiliates to settle breach of contract litigation we initiated in January 2015. The agreement provided for a $93.0 million cash payment to us, execution of a new coal supply agreement with the customer, continued export transloading capacity for our Appalachian mines and the acquisition of certain coal reserves for $2.0 million from an affiliate of the customer. The $93.0 million cash payment we received in March was the total compensation recorded in our consolidated statements of income for the agreement. We have paid or accrued in total, $13.0 million of legal fees and associated incentive compensation costs related to this settlement which resulted in a net gain of $80.0 million reflected in the Settlement gain line item in our consolidated statements of income. Various lawsuits, claims and regulatory proceedings incidental to our business are pending against the ARLP Partnership. We record an accrual for a potential loss related to these matters when, in management's opinion, such loss is probable and reasonably estimable. Based on known facts and circumstances, we believe the ultimate outcome of these outstanding lawsuits, claims and regulatory proceedings will not have a material adverse effect on our financial condition, results of operations or liquidity. However, if the results of these matters were different from management's current opinion and in amounts greater than our accruals, then they could have a material adverse effect. Other —Effective October 1, 2018, we renewed our annual property and casualty insurance program. Our property insurance was procured from our wholly owned captive insurance company, Wildcat Insurance. Wildcat Insurance charged certain of our subsidiaries for the premiums on this program and in return purchased reinsurance for the program in the standard market. The maximum limit in the commercial property program is $100.0 million per occurrence, excluding a $1.5 million deductible for property damage, a 60, 75, 90 or 120 day waiting period for underground business interruption depending on the mining complex and an additional $10.0 million overall aggregate deductible. We can make no assurances that we will not experience significant insurance claims in the future that could have a material adverse effect on our business, financial condition, results of operations and ability to purchase property insurance in the future. |
CONCENTRATION OF CREDIT RISK AN
CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS | 12 Months Ended |
Dec. 31, 2018 | |
CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS | |
CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS | 20. The international coal market has been a substantial part of our business with indirect sales to end users in Europe, Africa, Asia, North America and South America. Our sales into the international coal market are considered exports and are made through brokered transactions. During the years ended December 31, 2018, 2017 and 2016, export tons represented approximately 27.8%, 17.4% and 4.5% of tons sold, respectively. We use the end usage point as the basis for attributing tons to individual countries. Because title to our export shipments typically transfers to our brokerage customers at a point that does not necessarily reflect the end usage point, we attribute export tons to the country with the end usage point, if known. No individual country was attributed greater than 10% of total domestic and export tons sold during the years ended December 31, 2018, 2017 and 2016. We have significant long-term coal supply agreements, some of which contain prospective price adjustment provisions designed to reflect changes in market conditions, labor and other production costs and, in the infrequent circumstance when the coal is sold other than free on board the mine, changes in transportation rates. Our major customers are defined as those customers from which we derive at least ten percent of our total revenues, including transportation revenues. Total revenues from major customers are as follows: Year Ended December 31, Segment 2018 2017 2016 (in thousands) Customer A Illinois Basin $ — $ — $ 253,465 Customer B Illinois Basin 219,115 — 241,255 Customer C Illinois Basin/Appalachia/Other and Corporate — — 265,642 Trade accounts receivable from Customer B totaled approximately $12.8 million at December 31, 2018. Our bad debt experience has historically been insignificant. Financial conditions of our customers could result in a material change to our bad debt expense in future periods. The coal supply agreements with Customer B expire in 2020. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2018 | |
SEGMENT INFORMATION | |
SEGMENT INFORMATION | 21. We operate in the eastern United States 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 United States. 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 currently operating mining complexes (a) Webster County Coal's Dotiki mining complex, (b) Gibson County Coal's mining complex, which includes the Gibson North and Gibson South mines, (c) Warrior's mining complex, (d) River View's mining complex and (e) the Hamilton mining complex. The Gibson North mine had been idled since the fourth quarter of 2015 in response to market conditions but resumed production in May 2018. The Illinois Basin reportable segment also includes White County Coal's Pattiki mining complex, Hopkins County Coal's mining complex, which includes the Elk Creek mine, the Pleasant View surface mineable reserves and the Fies underground project, Sebree's mining complex, which includes the Onton mine, Steamport and certain reserves, CR Services, CR Machine Shop, certain properties and equipment of Alliance Resource Properties, ARP Sebree, ARP Sebree South and UC Coal and its subsidiaries, UC Mining and UC Processing. The Pattiki mine ceased production in December 2016. The Elk Creek mine depleted its reserves in March 2016 and ceased production on April 1, 2016. The Appalachia reportable segment is comprised of multiple operating segments, including the Mettiki mining complex, the Tunnel Ridge mining complex, the MC Mining mining complex and the Penn Ridge property. The Mettiki mining complex includes Mettiki (WV)'s Mountain View mine and Mettiki (MD)'s preparation plant. Other and Corporate includes marketing and administrative activities, ASI and its subsidiaries, Matrix Design and Alliance Design (collectively Matrix Design and Alliance Design are referred to as the "Matrix Group"), ASI's ownership of aircraft, our Mt. Vernon dock activities, Alliance Coal's coal brokerage activity, MAC, certain of Alliance Resource Properties' land and mineral interest activities, Pontiki's prior workers' compensation and pneumoconiosis liabilities, Wildcat Insurance, Alliance Minerals and Cavalier Minerals (see Note 9 – Variable Interest Entities), both of which hold equity investments in various AllDale Partnerships (see Note 10 – Investments), AROP Funding and 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 (see Note 10 – Investments). Reportable segment results are presented below. Illinois Other and Elimination Basin Appalachia Corporate (1) Consolidated (in thousands) Year Ended December 31, 2018 Revenues - Outside $ 1,273,874 643,898 85,085 — $ Revenues - Intercompany 31,191 67 16,376 — Total revenues (2) 1,305,065 643,965 101,461 (47,634) 2,002,857 Segment Adjusted EBITDA Expense (3) 790,072 398,243 62,564 Segment Adjusted EBITDA (4) 408,047 240,286 75,913 Total assets 1,371,579 440,518 759,654 Capital expenditures 165,709 64,037 3,734 — Year Ended December 31, 2017 Revenues - Outside $ 1,059,381 $ 623,720 $ 113,119 $ — $ Revenues - Intercompany 56,097 2,321 15,924 — Total revenues (2) 1,115,478 626,041 129,043 (74,342) 1,796,220 Segment Adjusted EBITDA Expense (3) 688,468 385,802 83,490 Segment Adjusted EBITDA (4) 391,426 234,124 65,247 Total assets 1,429,078 470,892 506,437 Capital expenditures 94,252 48,358 2,478 — Year Ended December 31, 2016 Revenues - Outside $ 1,275,543 $ 541,108 $ 114,802 $ — $ Revenues - Intercompany 61,617 3,806 17,752 — Total revenues (2) 1,337,160 544,914 132,554 (83,175) 1,931,453 Segment Adjusted EBITDA Expense (3) 761,644 346,712 89,594 Segment Adjusted EBITDA (4) 552,284 191,487 46,199 Total assets 1,460,924 480,745 404,153 Capital expenditures 52,505 36,213 2,338 — (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 expense. Transportation expenses are excluded as these expenses are passed through to our customers and consequently we do not realize any gain or loss on transportation revenues. We review Segment Adjusted EBITDA Expense per ton for cost trends. The following is a reconciliation of consolidated Segment Adjusted EBITDA Expense to Operating expenses (excluding depreciation, depletion and amortization): Year Ended December 31, 2018 2017 2016 (in thousands) Segment Adjusted EBITDA Expense $ 1,211,800 $ 1,092,187 $ 1,125,637 Outside coal purchases (1,466) — (1,514) Other expense (2,621) (332) (1,445) Operating expenses (excluding depreciation, depletion and amortization) $ 1,207,713 $ 1,091,855 $ 1,122,678 (4) Segment Adjusted EBITDA is defined as net income attributable to ARLP before net interest expense, income taxes, depreciation, depletion and amortization, general and administrative expense, settlement gain, debt extinguishment loss and asset impairment. Management therefore is able to focus solely on the evaluation of segment operating profitability as it relates to our revenues and operating expenses, which are primarily controlled by our segments. Consolidated Segment Adjusted EBITDA is reconciled to net income attributable to ARLP as follows: Year Ended December 31, 2018 2017 2016 (in thousands) Consolidated Segment Adjusted EBITDA $ 715,691 $ 682,028 $ 779,108 General and administrative (68,298) (61,760) (72,529) Depreciation, depletion and amortization (280,225) (268,981) (336,509) Settlement gain 80,000 — — Asset impairment (40,483) — — Interest expense, net (40,059) (39,291) (30,659) Debt extinguishment loss — (8,148) — Income tax expense (22) (210) (13) Net income attributable to ARLP $ 366,604 $ 303,638 $ 339,398 . |
SELECTED QUARTERLY FINANCIAL DA
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | 12 Months Ended |
Dec. 31, 2018 | |
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | |
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | 22. A summary of our consolidated quarterly operating results is as follows: Quarter Ended March 31, June 30, September 30, December 31, 2018 (1) 2018 2018 2018 (2) (in thousands, except unit and per unit data) Revenues $ 457,122 $ 516,137 $ 497,758 $ 531,840 Income from operations 160,226 88,160 74,625 49,276 Income before income taxes 156,046 86,380 73,974 51,092 Net income of ARLP 155,908 86,190 73,733 50,773 Basic and diluted net income of ARLP per limited partner unit $ 1.16 $ 0.64 $ 0.55 $ 0.38 Weighted-average number of units outstanding – basic and diluted (3) 130,819,217 131,279,910 131,169,538 129,771,010 Quarter Ended March 31, June 30, September 30, December 31, 2017 2017 (4) 2017 2017 (in thousands, except unit and per unit data) Revenues $ 461,080 $ 398,720 $ 453,189 $ 483,231 Income from operations 108,297 79,524 65,716 78,387 Income before income taxes 105,038 63,356 61,431 74,586 Net income of ARLP 104,902 63,230 61,271 74,235 Basic and diluted net income of ARLP per limited partner unit $ 1.10 $ 0.82 $ 0.52 $ 0.55 Weighted-average number of units outstanding – basic and diluted (3) 74,503,298 74,597,036 114,237,979 130,704,217 (1) Our March 31, 2018 quarterly results were affected by a settlement gain of $80.0 million reflecting cash payment received from the settlement of litigation, net of certain costs associated with the gain (Note 19 – Commitments and Contingencies). (2) Our December 31, 2018 quarterly results were affected by $40.5 million of non-cash impairment charges comprised of a $34.3 million impairment related to the reduction of the economic mine life at our Dotiki mine and a $6.2 million impairment as a result of a decrease in the fair value of an option entitling us to lease certain coal reserves in Illinois (Note 3 – Long-Lived Asset Impairments). (3) Weighted-average number of units outstanding – basic and diluted were impacted by the Exchange Transaction in July 2017 and the Simplification Transactions in May 2018 (Note 1 – Organization and Presentation – Partnership Simplification). They were also impacted by our unit buy-back program discussed in Note 8 – Partners' Capital. (4) Our June 30, 2017 quarterly results were affected by a debt extinguishment loss of $8.1 million related to early repayment of our Series B Senior Notes in May 2017 (Note 6 – Long-Term Debt). |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2018 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 23. Other than those events described below and in Notes 6, 8 and 14, there were no subsequent events. AllDale I & II Acquisition On January 3, 2019 (the "Acquisition Date"), ARLP acquired the general partner interests and all of the limited partner interests not owned by Cavalier Minerals in AllDale I & II for $176.0 million, which was funded with cash on hand and borrowings under the Revolving Credit Facility (the "Acquisition"). As a result of the Acquisition and our previous equity method investment held through Cavalier Minerals, ARLP now owns 100% of the general partner interests and approximately 97% of the limited partner interests in AllDale I & II. AllDale I & II control approximately 43,000 net royalty acres strategically positioned in the core of the Anadarko (SCOOP/STACK), Permian (Delaware and Midland), Williston (Bakken) and Appalachian basins. The Acquisition provides ARLP with diversified exposure to industry leading operators and is consistent with our general business strategy to pursue accretive acquisitions. Because the underlying mineral interests held by AllDale I & II include royalty interests in producing properties, we have determined that the Acquisition should be accounted for as a business combination and the underlying assets and liabilities of AllDale I & II should be recorded at their Acquisition Date fair value in the Partnership's consolidated balance sheet. We are in the process of performing our valuation of our previously held equity method investment and the acquired assets and liabilities. Given the recent date of the acquisition, we have not finalized our determination of the fair value of the various measurements as we continue to gather information to determine the assumptions we intend to use in our valuations. However, we currently anticipate recording a significant gain in the first quarter of 2019. Prior to the Acquisition Date, we accounted for our investment in AllDale I & II, held through Cavalier Minerals, as an equity method investment. We anticipate re-measuring our equity method investment immediately prior to the Acquisition using a discounted cash flow model. The assumptions to be used in the determination of the fair value measurement include estimated production, projected cash flows, forward oil & gas prices and a risk adjusted discount rate, among others. We anticipate determining the fair value of the mineral interests by determining an entity-wide value using discounted expected cash flows based on estimated production, projected cash flows, forward oil & gas prices and a risk adjusted discount rate. We anticipate using the carrying value for any acquired receivables, payables and cash, as this represents their fair value given their short-term nature. As discussed in Note 9 – Variable Interest Entities, our previous equity method investment was held through Cavalier Minerals in which Bluegrass Minerals holds a 4% limited member interest (the "Bluegrass interest"). This Bluegrass interest represents a noncontrolling interest in AllDale I & II. We anticipate determining the fair value of this noncontrolling interest using a discounted cash flow model. The assumptions to be used in the determination of the fair value measurement include estimated production, projected cash flows, forward oil & gas prices and a risk-adjusted discount rate, among others. Change in Reportable Segments After the Acquisition, ARLP holds a controlling financial interest in AllDale I & II and consolidate their assets and liabilities. This new control over the mineral interests reflects a strategic change in our business and how our operations are managed and allocated resources by our chief operating decision maker. Due to this strategic change we anticipate restructuring our reportable segments in 2019 to include the oil & gas mineral interests and our equity-method investment in AllDale III in a new Royalty reportable segment. Kodiak Redemption On January 26, 2019, Kodiak notified us of its intent to redeem our preferred interest for $135.0 million cash. On February 8, 2019, we received the cash proceeds resulting in an $11.5 million gain due to an early redemption premium. |
SCHEDULE II VALUATION AND QUALI
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Dec. 31, 2018 | |
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS | |
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS | SCHEDULE II ALLIANCE RESOURCE PARTNERS, L.P. AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS YEARS ENDED DECEMBER 31, 2018, 2017 AND 2016 Balance At Additions Beginning Charged to Balance At of Year Income Deductions End of Year (in thousands) 2018 Allowance for doubtful accounts $ — $ — $ — $ — 2017 Allowance for doubtful accounts $ — $ — $ — $ — 2016 Allowance for doubtful accounts $ — $ — $ — $ — |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Presentation | Presentation The consolidated financial statements include the accounts and operations of the ARLP Partnership and present our financial position as of December 31, 2018 and 2017, and results of our operations, comprehensive income, cash flows and changes in partners' capital for each of the three years in the period ended December 31, 2018. All of our intercompany transactions and accounts have been eliminated. |
Estimates | Estimates — The preparation of consolidated financial statements in conformity with generally accepted accounting principles of the United States ("GAAP") requires management to make estimates and assumptions that affect the reported amounts and disclosures in the consolidated financial statements. Actual results could differ from those estimates. Significant estimates and assumptions include: · Impairment assessments of investments, property, plant and equipment, and goodwill; · Asset retirement obligations; · Pension valuation variables; · Workers' compensation and pneumoconiosis valuation variables; · Acquisition related purchase price allocations; and · Life of mine assumptions. These significant estimates and assumptions are discussed throughout these notes to the consolidated financial statements. |
Consolidation | Consolidation — The consolidated financial statements present the consolidated financial position, results of operations and cash flows of ARLP, the Intermediate Partnership, Alliance Coal and other directly and indirectly wholly- and majority-owned subsidiaries of ARLP. Prior to the Simplification Transactions, Alliance Coal and the Intermediate Partnership were variable interest entities. See Note 9 – Variable Interest Entities for more information on the Intermediate Partnership's and Alliance Coal's status as variable interest entities. For the periods presented prior to the Simplification Transactions, MGP's interests in both Alliance Coal and the Intermediate Partnership are reported as part of the general partner's interest in the ARLP Partnership's consolidated financial statements. For the periods presented prior to the Exchange Transaction, MGP's managing general partner interest and IDRs in ARLP and the SGP's special general partner interests in ARLP and the Intermediate Partnership are also reported as part of the general partners' interest in the ARLP Partnership's consolidated financial statements. All intercompany transactions and accounts have been eliminated. See Note 8 – Partners' Capital for more information regarding MGP's previously held IDR's in ARLP. See Note 1 – Organization and Presentation for more information regarding the Simplification Transactions and Exchange Transaction. |
Fair Value of Financial Instruments | Fair Value Measurements — We apply fair value measurements to certain assets and liabilities. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. Fair value is based upon assumptions that market participants would use when pricing an asset or liability, including assumptions about risk and risks inherent in valuation techniques and inputs to valuations. Fair value measurements assume that the transaction occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability (the market for which the reporting entity would be able to maximize the amount received or minimize the amount paid). Valuation techniques used in our fair value measurements are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our own market assumptions. We use the following fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels: · Level 1 – Quoted prices for identical assets and liabilities in active markets that we have the ability to access at the measurement date. · Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model derived valuations whose inputs are observable or whose significant value drivers are observable. · Level 3 – Unobservable inputs for the asset or liability including situations where there is little, if any, market activity for the asset or liability. The fair value hierarchy gives the highest priority to quoted prices in active markets (Level 1) and the lowest priority to unobservable data (Level 3). In some cases, the inputs used to measure fair value might fall into different levels of the fair value hierarchy. The lowest level input that is significant to a fair value measurement determines the applicable level in the fair value hierarchy. Assessing the significance of a particular input to the fair value measurement requires judgment, considering factors specific to the asset or liability. Significant fair value measurements are used in our significant estimates and are discussed throughout these notes. |
Cash and Cash Equivalents | Cash and Cash Equivalents — Cash and cash equivalents include cash on hand and on deposit, including highly liquid investments with maturities of three months or less. |
Cash Management | Cash Management — The cash flows from operating activities section of our consolidated statements of cash flows reflects an adjustment for $14.0 million representing book overdrafts at December 31, 2017. We did not have material book overdrafts at December 31, 2018 and 2016. |
Inventories | Inventories — Coal inventories are stated at the lower of cost or net realizable value on a first-in, first-out basis. Supply inventories are stated at an average cost basis, less a reserve for obsolete and surplus items. |
Business Combinations | Business Combinations — For acquisitions accounted for as a business combination, we record the assets acquired, including identified intangible assets and liabilities assumed at their fair value, which in many instances involves estimates based on third-party valuations, such as appraisals, or internal valuations based on discounted cash flow analyses or other valuation techniques. |
Goodwill | Goodwill — Goodwill represents the excess of cost over the fair value of net assets of acquired businesses. Goodwill is not amortized, but instead is evaluated for impairment periodically. We evaluate goodwill for impairment annually on November 30th, or more often if events or circumstances indicate that goodwill might be impaired. The reporting unit or units used to evaluate and measure goodwill for impairment are determined primarily from the manner in which the business is managed or operated. A reporting unit is an operating segment or a component that is one level below an operating segment. There were no impairments of goodwill during 2018, 2017 or 2016. |
Property, Plant and Equipment | Property, Plant and Equipment — Expenditures which extend the useful lives of existing plant and equipment assets are capitalized. Interest costs associated with major asset additions are capitalized during the construction period. Maintenance and repairs that do not extend the useful life or increase productivity of the asset are charged to operating expense as incurred. Exploration expenditures are charged to operating expense as incurred, including costs related to drilling and study costs incurred to convert or upgrade mineral resources to reserves. Land, machinery and equipment under capital lease agreements are capitalized and amortized over the useful lives of the assets given that in each case, ownership transfers at the end of the lease term. Preparation plants, processing facilities and mineral rights, assuming current production estimates, are depreciated or depleted using the units-of-production method over a range from 1 to 22 years. Mining equipment and other plant and equipment assets are depreciated principally using the straight-line method over the estimated useful lives of the assets, ranging from 1 to 22 years, limited by the remaining estimated life of each mine. Depreciable lives for buildings, office equipment and improvements range from 1 to 23 years. Gains or losses arising from retirements are included in operating expenses. Depletion of mineral rights is provided on the basis of tonnage mined in relation to estimated recoverable tonnage, which equals estimated proven and probable reserves. Therefore, our mineral rights are depleted based on only proven and probable reserves derived in accordance with Industry Guide 7. At December 31, 2018 and 2017, land and mineral rights include $27.4 million and $34.5 million, respectively, representing the carrying value of coal reserves attributable to properties where we or a third party to which we lease reserves are not currently engaged in mining operations or leasing to third parties, and therefore, the coal reserves are not currently being depleted. We believe that the carrying value of these reserves will be recovered. Our accounting for operating leases not currently capitalized is expected to change upon the adoption of Accounting Standards Update ("ASU") 2016-02, Leases (Topic 842) ("ASU 2016-02"), as discussed below under New Accounting Standards Issued and Not Yet Adopted . |
Mine Development Costs | Mine Development Costs — Mine development costs are capitalized until production, other than production incidental to the mine development process, commences and are amortized on a units of production method based on the estimated proven and probable reserves. Mine development costs represent costs incurred in establishing access to mineral reserves and include costs associated with sinking or driving shafts and underground drifts, permanent excavations, roads and tunnels. The end of the development phase and the beginning of the production phase takes place when construction of the mine for economic extraction is substantially complete. Coal extracted during the development phase is incidental to the mine's production capacity and is not considered to shift the mine into the production phase. |
Long-Lived Assets | Long-Lived Assets — We review the carrying value of long-lived assets and certain identifiable intangibles whenever events or changes in circumstances indicate that the carrying amount may not be recoverable based upon estimated undiscounted future cash flows. To the extent the carrying amount is not recoverable, the amount of impairment is measured by the difference between the carrying value and the fair value of the asset (See Note 3 – Long-Lived Asset Impairments). |
Intangibles | Intangibles — Intangibles subject to amortization include contracts with covenants not to compete, customer contracts acquired from other parties and mining permits. Intangibles other than customer contracts are amortized on a straight-line basis over their useful life. Intangibles for customer contracts are amortized on a per unit basis over the terms of the contracts. Amortization expense attributable to intangibles was $6.9 million, $10.5 million and $18.1 million for the years ending December 31, 2018, 2017 and 2016, respectively. Our intangibles are included in Prepaid expenses and other assets , Other long-term assets , Other current liabilities and Other liabilities on our consolidated balance sheets at December 31, 2018 and 2017. Our intangibles are summarized as follows: December 31, 2018 December 31, 2017 Accumulated Intangibles, Accumulated Intangibles, Original Cost Amortization Net Original Cost Amortization Net (in thousands) Non-compete agreements $ 9,697 $ (8,385) $ 1,312 $ 9,697 $ (7,378) $ 2,319 Customer contracts and other, net (1) 23,000 (16,293) 6,707 48,970 (36,462) 12,508 Mining permits 1,500 (241) 1,259 1,500 (178) 1,322 Total $ 34,197 $ (24,919) $ 9,278 $ 60,167 $ (44,018) $ 16,149 (1) Customer contracts of $26.0 million were fully amortized during the year ended December 31, 2018. Amortization expense attributable to intangible assets is estimated as follows: Year Ended December 31, (in thousands) 2019 $ 7,763 2020 381 2021 63 2022 63 2023 63 Thereafter 945 |
Investments | Investments —Our investments and ownership interests in equity securities without readily determinable fair values in entities in which we do not have a controlling financial interest or significant influence are accounted for using a measurement alternative other than fair value which is historical cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same entity. Distributions received on those investments are recorded as income unless those distributions are considered a return on investment, in which case the historical cost is reduced. We account for our ownership interests in Kodiak Gas Services, LLC ("Kodiak") as equity securities without readily determinable fair values. See Note 10 – Investments for further discussion of this investment. In the first quarter of 2019, Kodiak redeemed our preferred interests and therefore Kodiak ceased to be an equity security investment. See Note 23 – Subsequent Events for more information. Our investments and ownership interests in entities in which we do not have a controlling financial interest are accounted for under the equity method of accounting if we have the ability to exercise significant influence over the entity. Investments accounted for under the equity method are initially recorded at cost, and the difference between the basis of our investment and the underlying equity in the net assets of the joint venture at the investment date, if any, is amortized over the lives of the related assets that gave rise to the difference. As of December 31, 2018, our equity method investments included AllDale I & II, both held through Cavalier Minerals, and AllDale Minerals III, LP ("AllDale III") which is held through Alliance Minerals. AllDale III and AllDale I & II are collectively referred to as the "AllDale Partnerships." See Note 10 – Investments for further discussion of these equity method investments. In January 2019, ARLP acquired the general partner interests and all the limited partner interests not owned by Cavalier Minerals in AllDale I & II. As a result, ARLP will consolidate AllDale I & II and no longer account for them as equity method investments. We review our equity securities and equity method investments for impairment whenever events or changes in circumstances indicate a loss in the value of the investment may be other-than-temporary. |
Advance Royalties, net | Advance Royalties, net — Rights to coal mineral leases are often acquired and/or maintained through advance royalty payments. Where royalty payments represent prepayments recoupable against future production, they are recorded as an asset, with amounts expected to be recouped within one year classified as a current asset. As mining occurs on these leases, the royalty prepayments are charged to operating expenses. We assess the recoverability of royalty prepayments based on estimated future production. We have recorded a $15.3 million and $6.1 million allowance against these prepayments as of December 31, 2018 and 2017, respectively. Royalty prepayments estimated to be nonrecoverable are expensed. Our Advance royalties, net are summarized as follows: December 31, 2018 2017 (in thousands) Advance royalties, affiliates (see Note 18 – Related-Party Transactions) $ 32,645 $ 32,993 Advance royalties, third-parties 11,552 11,177 Total advance royalties, net $ 44,197 $ 44,170 |
Asset Retirement Obligations | Asset Retirement Obligations — The majority of our operations are governed by various state statutes and the Federal Surface Mining Control and Reclamation Act of 1977, which establish reclamation and mine closing standards. These regulations require, among other things, restoration of property in accordance with specified standards and an approved reclamation plan. We record a liability for the fair value of the estimated cost of future mine asset retirement and closing procedures, escalated for inflation then discounted, on a present value basis in the period incurred or acquired and a corresponding amount is capitalized by increasing the carrying amount of the related long-lived asset. Those costs relate to permanently sealing portals at underground mines and to reclaiming the final pits and support surface acreage for both our underground mines and past surface mines. Examples of these types of costs, common to both types of mining, include, but are not limited to, removing or covering refuse piles and settling ponds, water treatment obligations, and dismantling preparation plants, other facilities and roadway infrastructure. Accounting for asset retirement obligations also requires depreciation of the capitalized asset retirement cost and accretion of the asset retirement obligation over time. The depreciation is generally determined on a units-of-production basis and accretion is generally recognized over the life of the producing assets. As changes in estimates occur (such as mine plan revisions, changes in estimated costs or changes in timing of the performance of reclamation activities), the revisions to the obligation and asset are recognized at the appropriate credit-adjusted, risk-free interest rate. Federal and state laws require bonds to secure our obligations to reclaim lands used for mining and are typically renewable on a yearly basis. See Note 16 – Asset Retirement Obligations for more information. |
Pension Benefits | Pension Benefits — The funded status of our pension benefit plan is recognized separately in our consolidated balance sheets as either an asset or liability. The funded status is the difference between the fair value of plan assets and the plan's benefit obligation. Pension obligations and net periodic benefit costs are actuarially determined and impacted by various assumptions and estimates including expected return on assets, discount rates, mortality assumptions, employee turnover rates and retirement dates. We evaluate our assumptions periodically and make adjustments to these assumptions and the recorded liability as necessary (See Note 13 – Employee Benefit Plans). The discount rate is determined for our pension benefit plan based on an approach specific to our plan. The year-end discount rate is determined considering a yield curve comprised of high-quality corporate bonds and the timing of the expected benefit cash flows. The expected long-term rate of return on plan assets is determined based on broad equity and bond indices, the investment goals and objectives, the target investment allocation and on the average annual total return for each asset class. Unrecognized actuarial gains and losses and unrecognized prior service costs and credits are deferred and recorded in accumulated other comprehensive loss until amortized as a component of net periodic benefit cost. Unrecognized actuarial gains and losses in excess of 10% of the greater of the benefit obligation or the market-related value of plan assets are amortized over the participants' average remaining future years of service. |
Workers' Compensation and Pneumoconiosis (Black Lung) Benefits | Workers ' Compensation and Pneumoconiosis (Black Lung) Benefits — We are liable for workers' compensation benefits for traumatic injuries and benefits for black lung disease (or pneumoconiosis). Both traumatic claims and pneumoconiosis benefits are covered through our self-insured programs. In addition, certain of our mine operating entities are liable under state statutes and the Federal Coal Mine Health and Safety Act of 1969, as amended, to pay pneumoconiosis benefits to eligible employees and former employees and their dependents. We provide income replacement and medical treatment for work-related traumatic injury claims as required by applicable state laws. Workers' compensation laws also compensate survivors of workers who suffer employment related deaths. Our liability for traumatic injury claims is the estimated present value of current workers' compensation benefits, based on our actuarial estimates. Our actuarial calculations are based on a blend of actuarial projection methods and numerous assumptions including claim development patterns, mortality, medical costs and interest rates. Our pneumoconiosis benefits liability is calculated using the service cost method based on the actuarial present value of the estimated pneumoconiosis obligation. Our actuarial calculations are based on numerous assumptions including disability incidence, medical costs, mortality, death benefits, dependents and discount rates. Actuarial gains or losses are amortized over the remaining service period of active miners. See Note 17 – Accrued Workers' Compensation and Pneumoconiosis Benefits for more information on Workers' Compensation and Pneumoconiosis Benefits. |
Revenue Recognition | Revenue Recognition — Revenues from coal supply contracts with customers are recognized at the point in time when control of the coal passes to the customer. We have determined that each ton of coal represents a separate and distinct performance obligation. Our coal supply contracts and other sales and operating revenue contracts vary in length from short-term to long-term contracts and do not typically have significant financing components. Transportation revenues represent the fulfillment costs incurred for the services provided to customers through third-party carriers and for which we are directly reimbursed. Other sales and operating revenues primarily consist of transloading fees, administrative service revenues from our affiliates, mine safety services and products, other coal contract fees and other handling and service fees. Performance obligations under these contracts are typically satisfied upon transfer of control of the goods or services to our customer which is determined by the contract and could be upon shipment or upon delivery. The estimated transaction price from each of our contracts is based on the total amount of consideration we expect to be entitled to under the contract. Included in the transaction price for certain coal supply contracts is the impact of variable consideration, including quality price adjustments, handling services, government imposition claims, per ton price fluctuations based on certain coal sales price indices and anticipated payments in lieu of shipments. We have constrained the expected value of variable consideration in our estimation of transaction price and only included this consideration to the extent that it is probable that a significant revenue reversal will not occur. The estimated transaction price for each contract is allocated to our performance obligations based on relative standalone selling prices determined at contract inception. Variable consideration is allocated to a specific part of the contract in many instances, such as if the variable consideration is based on production activities for coal delivered during a certain period or the outcome of a customer's ability to accept coal shipments over a certain period. Contract assets are recorded as trade receivables and reported separately in our consolidated balance sheet from other contract assets as title passes to the customer and our right to consideration becomes unconditional. Payments for coal shipments are typically due within two to four weeks of performance. We typically do not have material contract assets that are stated separately from trade receivables as our performance obligations are satisfied as control of the goods or services passes to the customer thereby granting us an unconditional right to receive consideration. Contract liabilities relate to consideration received in advance of the satisfaction of our performance obligations. Contract liabilities are recognized as revenue at the point in time when control of the good or service passes to the customer. |
Common Unit-Based Compensation | Common Unit-Based Compensation — We have the Long-Term Incentive Plan ("LTIP") for certain employees and officers of MGP and its affiliates who perform services for us. The LTIP awards are grants of non-vested "phantom" or notional units, also referred to as "restricted units", which upon satisfaction of time and performance based vesting requirements, entitle the LTIP participant to receive ARLP common units. Annual grant levels and vesting provisions for designated participants are recommended by the Chairman, President and CEO of MGP, subject to review and approval of the compensation committee of our general partner ("Compensation Committee"). Vesting of all grants outstanding is subject to the satisfaction of certain financial tests, which management currently believes is probable. Grants issued to LTIP participants are expected to cliff vest on January 1st of the third year following issuance of the grants. We account for forfeitures of non-vested LTIP grants as they occur. 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 the 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 at the discretion of the Compensation Committee, in lieu of cash, phantom units credited to a bookkeeping account with value, equal to the cash distributions we make to unitholders during the vesting period. We utilize the Supplemental Executive Retirement Plan ("SERP") to provide deferred compensation benefits for certain officers and key employees. All allocations made to participants under the SERP are made in the form of "phantom" ARLP units and SERP distributions will be settled in the form of ARLP common units. The SERP is administered by the Compensation Committee. Our directors participate in the MGP Amended and Restated Deferred Compensation Plan for Directors ("Directors' Deferred Compensation Plan"). Pursuant to the Directors' 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 Directors' Deferred Compensation Plan as "phantom" units. Distributions from the Directors' Deferred Compensation Plan will be settled in the form of ARLP common units. For both the SERP and Directors' 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 Directors' Deferred Compensation Plan vest immediately. The fair value of restricted common unit grants under the LTIP, SERP and the Directors' Deferred Compensation Plan are determined on the grant date of the award and recognized as compensation expense on a pro rata basis for LTIP and SERP awards, as appropriate, over the requisite service period. Compensation expense is fully recognized on the grant date for quarterly distributions credited to SERP accounts and Directors' Deferred Compensation Plan awards. The corresponding liability is classified as equity and included in limited partners' capital in the consolidated financial statements (See Note 14 – Compensation Plans). |
Income Taxes | Income Taxes —We are not a taxable entity for federal or state income tax purposes; the tax effect of our activities accrues to the unitholders. Although publicly traded partnerships as a general rule will be taxed as corporations, we qualify for an exemption because at least 90% of our income consists of qualifying income, as defined in Section 7704(c) of the Internal Revenue Code. Net income for financial statement purposes may differ significantly from taxable income reportable to unitholders as a result of differences between the tax basis and financial reporting basis of assets and liabilities and the taxable income allocation requirements under our partnership agreement. Individual unitholders have different investment bases depending upon the timing and price of acquisition of their partnership units. Furthermore, each unitholder's tax accounting, which is partially dependent upon the unitholder's tax position, differs from the accounting followed in our consolidated financial statements. Accordingly, the aggregate difference in the basis of our net assets for financial and tax reporting purposes cannot be readily determined because information regarding each unitholder's tax attributes in our partnership is not available to us. Our subsidiaries, ASI and Wildcat Insurance, are subject to federal and state income taxes. A valuation allowance is established if it is more likely than not that a deferred tax asset will not be realized. Our tax counsel has provided an opinion that ARLP, the Intermediate Partnership and Alliance Coal will each be treated as a partnership. However, as is customary, no ruling has been or will be requested from the Internal Revenue Service ("IRS") regarding our classification as a partnership for federal income tax purposes. |
Variable Interest Entities ("VIE") | Variable Interest Entity ("VIE") — VIEs are primarily entities that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders, as a group, lack one or more of the following characteristics: (a) direct or indirect ability to make decisions, (b) obligation to absorb expected losses or (c) right to receive expected residual returns. A VIE must be evaluated quantitatively and qualitatively to determine the primary beneficiary, which is the reporting entity that has (a) the power to direct activities of a VIE that most significantly impact the VIE's economic performance and (b) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. The primary beneficiary is required to consolidate the VIE for financial reporting purposes. To determine a VIE's primary beneficiary, we perform a qualitative assessment to determine which party, if any, has the power to direct activities of the VIE and the obligation to absorb losses and/or receive its benefits. This assessment involves identifying the activities that most significantly impact the VIE's economic performance and determine whether it, or another party, has the power to direct those activities. When evaluating whether we are the primary beneficiary of a VIE, we perform a qualitative analysis that considers the design of the VIE, the nature of our involvement and the variable interests held by other parties. See Note 9 – Variable Interest Entities for further information. |
Anticipated New Significant Accounting Policies | Anticipated New Significant Accounting Policies – In January 2019, ARLP acquired the general partner interests and all of the limited partner interests not owned by Cavalier Minerals in AllDale I & II. As a result of the transaction, ARLP obtained control of AllDale I & II requiring the modification or the adoption of new significant accounting policies as outlined below. For more information on the transaction, see Note 23 – Subsequent Events. Estimates We will add the following significant estimates and assumptions to our estimates policy: · Oil & gas reserve quantities and carrying amounts; and · Determination of revenue accruals Oil & Gas Reserve Quantities and Carrying Amounts We will be wholly dependent on third-party operators to explore, develop, produce and operate the properties associated with our mineral interests. We will adopt the successful efforts method of accounting for our oil & gas mineral interests. Under this method, costs to acquire mineral and royalty interests in oil & gas properties will be capitalized when incurred. Acquisitions of mineral interests that include producing oil & gas properties are considered business combinations and are recorded at their estimated fair value as of the acquisition date. The costs of mineral interests in unproved properties will be capitalized pending the results of exploration and leasing efforts by operators. As mineral interests in unproved properties are determined to be proved, the related costs will be transferred to proved oil & gas properties. Mineral interests in oil & gas properties will be grouped using a reasonable aggregation of properties with a common geological structural feature or stratigraphic condition, which we may also refer to as a depletable unit. Mineral interests in proved oil & gas properties will be depleted based on the units-of-production method. Proved reserves are quantities of oil & gas that can be estimated with reasonable certainty to be economically producible from a given date forward, from known reservoirs, under existing economic conditions, operating methods, and government regulations. We will evaluate impairment of our mineral interests in proved properties whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. This evaluation will be performed on a depletable unit basis. We will compare the undiscounted projected future cash flows expected in connection with a depletable unit to its unamortized carrying amount to determine recoverability. When the carrying amount of a depletable unit exceeds its estimated undiscounted future cash flows, the carrying amount will be written down to its fair value, which will be measured as the present value of the projected future cash flows of such properties. The factors used to determine fair value will include estimates of proved reserves, future commodity prices, timing of future production, future expenditures, and a risk-adjusted discount rate. Our mineral interests in unproved properties will also be assessed for impairment periodically on a depletable unit basis when facts and circumstances indicate that the carrying value may not be recoverable, at which point an impairment loss will be recognized to the extent the carrying value exceeds the estimated recoverable value. The carrying value of unproved properties, including unleased mineral rights, will be determined based on management's assessment of fair value using factors similar to those previously noted for proved properties, as well as geographic and geologic data. Upon the sale of a complete depletable unit, the book value thereof, less proceeds or salvage value, will be charged to income. Upon the sale or retirement of an aggregation of interests which make up less than a complete depletable unit, the proceeds will be credited to accumulated depreciation, depletion and amortization, unless doing so would significantly alter the depreciation, depletion and amortization rate of the depletable unit, in which case a gain or loss would be recorded. Revenue Recognition We will incorporate the following into our revenue recognition policy: Oil & gas royalty revenues will be recognized at the point in time when control of the product is transferred to the purchaser by the lessee and collectability of the sales price is reasonably assured. Oil is priced on the delivery date based upon prevailing prices published by purchasers with certain adjustments related to oil quality and physical location. The royalty we will receive is tied to a market index, with certain adjustments based on, among other factors, whether a well connects to a gathering or transmission line, quality and heat content of the product, and prevailing supply and demand conditions. We will also periodically earn revenue from lease bonuses. We will generate lease bonus revenue by leasing our mineral interests to exploration and production companies. A lease agreement represents our contract with a lessee which is generally an exploration and production company. The contract will a) generally transfer the rights to any oil or gas discovered, b) grant us a right to a specified royalty interest from the lessee, and c) require the lessee to commence drilling and completion operations within a specified time period. Control of the minerals will transfer to the lessee and we will have satisfied our performance obligation when the lease agreement is executed, such that revenue will be recognized when the lease bonus payment is received. At the time we execute the lease agreement, we will expect to receive the lease bonus payment within a reasonable time, though in no case more than one year, such that we will not adjust the expected amount of consideration for the effects of any significant financing component. As a non-operator, we will have limited visibility into the timing of when new wells start producing and production statements may not be received for 30 to 90 days or more after the date production is delivered. As a result, we will be required to estimate the amount of production delivered to the purchaser and the price that will be received for the sale of the product. The expected sales volumes and prices from our properties will be estimated and recorded within the Trade receivables line item in our consolidated balance sheets. Generally, the difference between our estimates and the actual amounts received for oil & gas royalty revenue will be recorded in the month that payment is received from the third-party purchaser. |
New Accounting Standards | New Accounting Standards Issued and Adopted – In March 2017, the Financial Accounting Standards Board ("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 adoption of ASU 2017-07 did not have a material impact on our consolidated financial statements. The new presentation requirements in the guidance were applied retrospectively to all periods presented using the amounts of other components of net benefit cost previously disclosed in prior period footnotes. The requirement under the guidance to only capitalize the service cost component was applied prospectively. In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10), Recognition and Measurement of Financial Assets and Financial Liabilities ("ASU 2016-01"). ASU 2016-01 requires entities to measure equity investments, except those accounted for under the equity method and those that result in consolidation of the investee, at fair value and recognize any changes in fair value in net income. The guidance removes the cost method of accounting for equity investments without a readily determinable fair value, but provides a new measurement alternative where entities may choose to measure those investments at cost, less any impairment, plus or minus any changes resulting from observable price changes in transactions for the same issuer. The adoption of ASU 2016-01 did not have a material impact on our consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"). ASU 2014-09 provides a five-step analysis of transactions to determine when and how revenue is recognized. The adoption of the standard did not have a material impact on our consolidated financial statements, but required 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 standard allows for two methods of adoption: a full retrospective adoption method and a modified retrospective method. We elected to use the modified retrospective method of adoption, which allows a cumulative effect adjustment to equity as of the date of adoption. As there was no change in the recognition pattern of our revenues, we did not have a cumulative effect adjustment upon adoption of the standard. See Note 11 – Revenue from Contracts with Customers for additional information. New Accounting Standards Issued and Not Yet Adopted – In June 2016, the FASB issued ASU 2016-13, Financial Instruments–Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). ASU 2016-13 changes the impairment model for most financial assets and certain other instruments to require the use of a new forward-looking "expected loss" model that generally will result in earlier recognition of allowances for losses. The new standard will require disclosure of significantly more information related to these items. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted for the fiscal year beginning after December 15, 2018, including interim periods. We do not have a history of credit losses on our financial instruments, therefore we do not anticipate ASU 2016-13 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 requires 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 the 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. The FASB continues to issue clarifications, updates and implementation guidance to ASU 2016-02 which we continue to monitor, such as ASU 2018-01, Leases (Topic 842) ("ASU 2018-01") and ASU 2018-11, Leases (Topic 842) ("ASU 2018-11") which provides practical expedients for transition to Topic 842. ASU 2018-01 allows for companies that did not previously recognize land easements as leases to continue this practice for existing leases, but will still require the evaluation of new lease arrangements, including land easements. ASU 2018-11 provides an option to apply the transition provisions of the new standard at its adoption date instead of at the earliest comparative period presented and permits lessors to not separate nonlease components from the associated lease component if certain conditions are met. We will elect to apply this option at the adoption date. We established an assessment team to determine the effect of adopting ASU 2016-02. As part of the assessment process, management has provided education and guidance to business units regarding the new standard. We have completed our review of our current population of leases and continue our efforts to update the population for new leases. We have also developed internal controls and systems for our implementation and ongoing accounting for leases. We will recognize lease liabilities and offsetting right-of-use assets of approximately $25 million in our consolidated balance sheets for operating leases upon adoption on January 1, 2019. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Summary of intangible assets | December 31, 2018 December 31, 2017 Accumulated Intangibles, Accumulated Intangibles, Original Cost Amortization Net Original Cost Amortization Net (in thousands) Non-compete agreements $ 9,697 $ (8,385) $ 1,312 $ 9,697 $ (7,378) $ 2,319 Customer contracts and other, net (1) 23,000 (16,293) 6,707 48,970 (36,462) 12,508 Mining permits 1,500 (241) 1,259 1,500 (178) 1,322 Total $ 34,197 $ (24,919) $ 9,278 $ 60,167 $ (44,018) $ 16,149 (1) Customer contracts of $26.0 million were fully amortized during the year ended December 31, 2018. |
Schedule of estimated amortization expense attributable to intangible assets | Year Ended December 31, (in thousands) 2019 $ 7,763 2020 381 2021 63 2022 63 2023 63 Thereafter 945 |
Summary of advance royalties | December 31, 2018 2017 (in thousands) Advance royalties, affiliates (see Note 18 – Related-Party Transactions) $ 32,645 $ 32,993 Advance royalties, third-parties 11,552 11,177 Total advance royalties, net $ 44,197 $ 44,170 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
INVENTORIES | |
Schedule of inventories | December 31, 2018 2017 (in thousands) Coal $ 20,929 $ 22,825 Supplies (net of reserve for obsolescence of $5,453 and $5,149, respectively) 38,277 37,450 Total inventories, net $ 59,206 $ 60,275 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
PROPERTY, PLANT AND EQUIPMENT | |
Schedule of property, plant and equipment | December 31, 2018 2017 (in thousands) Mining equipment and processing facilities $ 1,851,479 $ 1,847,037 Land and mineral rights 445,411 449,152 Buildings, office equipment and improvements 287,053 310,167 Construction and mine development in progress 71,190 47,223 Mine development costs 270,675 280,609 Property, plant and equipment, at cost 2,925,808 2,934,188 Less accumulated depreciation, depletion and amortization (1,513,450) (1,457,532) Total property, plant and equipment, net $ 1,412,358 $ 1,476,656 |
Schedule of capital leases | December 31, 2018 2017 (in thousands) Capital leases in mining equipment $ 141,019 $ 140,929 Accumulated amortization of capital leases (74,576) (55,603) Net capital leases in mining equipment $ 66,443 $ 85,326 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
LONG-TERM DEBT | |
Schedule of long-term debt | Unamortized Discount and Principal Debt Issuance Costs December 31, December 31, 2018 2017 2018 2017 (in thousands) Revolving Credit facility $ 175,000 $ 30,000 $ (5,203) $ (7,356) Senior notes 400,000 400,000 (5,793) (6,707) Securitization facility 92,000 72,400 — — 667,000 502,400 (10,996) (14,063) Less current maturities (92,000) (72,400) — — Total long-term debt $ 575,000 $ 430,000 $ (10,996) $ (14,063) |
Schedule of aggregate maturities of long-term debt | Year Ended December 31, (in thousands) 2019 $ 92,000 2020 — 2021 175,000 2022 — 2023 — Thereafter 400,000 $ 667,000 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
FAIR VALUE MEASUREMENTS | |
Summary of fair value measurements within the hierarchy | December 31, 2018 December 31, 2017 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 (in thousands) Long-term debt $ — $ 669,864 $ — $ — $ 541,147 $ — Total $ — $ 669,864 $ — $ — $ 541,147 $ — |
PARTNERS' CAPITAL (Tables)
PARTNERS' CAPITAL (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
PARTNERS' CAPITAL | |
Summary of quarterly per unit distribution paid | Year Ended December 31, 2018 2017 2016 First Quarter $ 0.5100 $ 0.4375 $ 0.6750 Second Quarter $ 0.5150 $ 0.4375 $ 0.4375 Third Quarter $ 0.5200 $ 0.5000 $ 0.4375 Fourth Quarter $ 0.5250 $ 0.5050 $ 0.4375 |
VARIABLE INTEREST ENTITIES (Tab
VARIABLE INTEREST ENTITIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
VARIABLE INTEREST ENTITIES | |
Schedule of distributions | Year Ended December 31, 2018 2017 2016 (in thousands) Alliance Minerals $ 22,160 $ 24,385 $ 4,546 Bluegrass Minerals 924 1,016 189 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
INVESTMENTS | |
Schedule of changes in equity method investment | Year Ended December 31, 2018 2017 2016 (in thousands) Beginning balance $ 147,964 $ 138,817 $ 64,509 Contributions 15,600 20,688 76,797 Equity method investment income 22,189 13,860 3,543 Distributions received (24,444) (25,401) (6,032) Ending balance $ 161,309 $ 147,964 $ 138,817 |
Schedule of changes in equity securities without readily determinable fair value | Year Ended December 31, 2018 2017 (in thousands) Beginning balance $ 106,398 $ — Contributions — 100,000 Payment-in-kind distributions received 15,696 6,398 Ending balance $ 122,094 $ 106,398 |
REVENUE FROM CONTRACTS WITH C_2
REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | |
Schedule of disaggregation of revenues by type | Illinois Other and Basin Appalachia Corporate Elimination Consolidated (in thousands) Year Ended December 31, 2018 Coal sales $ 1,197,143 $ 635,530 $ 43,393 $ (31,258) $ Transportation revenues 106,947 5,435 3 — Other sales and operating revenues 975 3,000 58,065 (16,376) Total revenues $ 1,305,065 $ 643,965 $ 101,461 $ (47,634) $ 2,002,857 Year Ended December 31, 2017 Coal sales $ 1,078,255 $ 616,305 $ 74,973 $ (58,419) $ Transportation revenues 35,585 6,115 — — Other sales and operating revenues 1,638 3,621 54,070 (15,923) Total revenues $ 1,115,478 $ 626,041 $ 129,043 $ (74,342) $ 1,796,220 Year Ended December 31, 2016 Coal sales $ 1,306,241 $ 534,796 $ 86,174 $ (65,423) $ Transportation revenues 23,233 6,714 164 — Other sales and operating revenues 7,686 3,404 46,216 (17,752) Total revenues $ 1,337,160 $ 544,914 $ 132,554 $ (83,175) $ 1,931,453 |
Schedule of current coal supply contracts allocated to performance obligations that are unsatisfied or partially unsatisfied | 2022 and 2019 2020 2021 Thereafter Total (in thousands) Illinois Basin coal revenues $ 995,254 $ 475,128 $ 193,355 $ — $ Appalachia coal revenues 523,068 245,038 34,373 14,647 Other and Corporate coal revenues 22,666 — — — Elimination (17,035) — — — Total coal revenues (1) $ 1,523,953 $ 720,166 $ 227,728 $ 14,647 $ 2,486,494 (1) Coal revenues consists of coal sales and transportation revenues. |
NET INCOME OF ARLP PER LIMITE_2
NET INCOME OF ARLP PER LIMITED PARTNER UNIT (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
NET INCOME OF ARLP PER LIMITED PARTNER UNIT | |
Reconciliation of net income and EPU calculations | Year Ended December 31, 2018 2017 2016 (in thousands, except per unit data) Net income of ARLP $ 366,604 $ 303,638 $ 339,398 Adjustments: MGP's priority distributions (1) — (19,216) (76,636) General partners' equity ownership (1) (1,560) (3,688) (5,275) General partners' special allocation of certain general and administrative expenses (2) — 1,000 1,000 Limited partners' interest in net income of ARLP 365,044 281,734 258,487 Less: Distributions to participating securities (5,114) (4,339) (3,391) Undistributed earnings attributable to participating securities (1,641) (1,026) (3,281) Net income of ARLP available to limited partners $ 358,289 $ 276,369 $ 251,815 Weighted-average limited partner units outstanding – basic and diluted 130,758 98,708 74,354 Basic and diluted net income of ARLP per limited partner unit (3) $ 2.74 $ 2.80 $ 3.39 (1) Amounts for 2018 reflect the impact of the Simplification Transactions which ended net income allocations and quarterly cash distributions to MGP after May 31, 2018. Amounts for 2017 reflect the impact of the Exchange Transaction ending distributions that would have been paid for the IDRs and a 0.99% general partner interest in ARLP, both of which were held by MGP prior to the Exchange Transaction. For the time period between the Exchange Transaction and the Simplification Transactions, MGP maintained a 1.0001% general partner interest in the Intermediate Partnership and a 0.001% managing member interest in Alliance Coal and thus received quarterly distributions and income and loss allocations during this time period. (2) Prior to the Simplification Transactions, MGP made capital contributions of $1.0 million each year during 2017 and 2016 to Alliance Coal for the purpose of funding certain general and administrative expenses. As provided under our partnership agreement, we made special allocations to MGP of certain general and administrative expenses equal to its contributions. Net income of ARLP allocated to the limited partners was not burdened by this expense. (3) Diluted EPU gives effect to all potentially dilutive common units outstanding during the period using the treasury stock method. Diluted EPU excludes all potentially dilutive units calculated under the treasury stock method if their effect is anti-dilutive. For the year ended December 31, 2018, 2017 and 2016, the combined total of LTIP, SERP and Directors' Deferred Compensation Plan units of 1,658,908, 1,466,404 and 922,386, respectively, were considered anti-dilutive under the treasury stock method. |
Pro Forma | |
NET INCOME OF ARLP PER LIMITED PARTNER UNIT | |
Reconciliation of net income and EPU calculations | Year Ended December 31, 2018 2017 2016 (in thousands, except per unit data) Net income of ARLP $ 366,604 $ 303,638 $ 339,398 Pro forma adjustments (1) (1,265) (1,943) (2,985) Pro forma net income of ARLP 365,339 301,695 336,413 Less: Distributions to participating securities (5,114) (4,339) (3,391) Undistributed earnings attributable to participating securities (1,627) (680) (1,548) Net income of ARLP available to limited partners (2) $ 358,598 $ 296,676 $ 331,474 Weighted-average limited partner units outstanding – basic and diluted (2) 131,310 132,024 131,805 Pro forma basic and diluted net income of ARLP per limited partner unit (3) $ 2.73 $ 2.25 $ 2.51 (1) Pro forma adjustments to the net income of ARLP primarily represent the elimination of administrative service revenues from AHGP and the inclusion of general and administrative expenses incurred at AHGP. (2) Net income of ARLP available to limited partners reflects net income allocations made for all periods presented based on the ownership structure subsequent to the Simplification Transactions. Accordingly, no general partner income allocations are presented above. Pro forma amounts above also reflect weighted average units outstanding as if the issuance of 56,128,141 ARLP common units in the Exchange Transaction and 1,322,388 ARLP common units in the Simplification Transactions applied to all periods presented. (3) Diluted EPU gives effect to all potentially dilutive common units outstanding during the period using the treasury stock method. Diluted EPU excludes all potentially dilutive units calculated under the treasury stock method if their effect is anti-dilutive. For the year ended December 31, 2018, 2017 and 2016, the combined total of LTIP, SERP and Directors' Deferred Compensation Plan units of 1,658,908, 1,466,404 and 922,386, respectively, were considered anti-dilutive under the treasury stock method. . |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) - Defined benefit pension plan | 12 Months Ended |
Dec. 31, 2018 | |
Employee Benefit Plans | |
Summary of benefit plans for employees | December 31, 2018 2017 (dollars in thousands) Change in benefit obligations: Benefit obligations at beginning of year $ 127,298 $ 113,482 Interest cost 4,462 4,587 Actuarial (gain) loss (8,562) 13,501 Benefits paid (4,240) (4,272) Benefit obligations at end of year 118,958 127,298 Change in plan assets: Fair value of plan assets at beginning of year 81,981 71,412 Employer contribution 4,187 2,971 Actual return on plan assets (6,105) 11,870 Benefits paid (4,240) (4,272) Fair value of plan assets at end of year 75,823 81,981 Funded status at the end of year $ (43,135) $ (45,317) Amounts recognized in balance sheet: Non-current liability $ (43,135) $ (45,317) Amounts recognized in accumulated other comprehensive income consists of: Prior service cost $ (1,126) $ (1,312) Net actuarial loss (41,697) (41,979) $ (42,823) $ (43,291) Weighted-average assumption to determine benefit obligations as of December 31, Discount rate Weighted-average assumptions used to determine net periodic benefit cost for the year ended December 31, Discount rate Expected return on plan assets |
Schedule of long-term rate of return assumptions | Asset allocation As of December 31, 2018 assumption Equity securities Fixed income securities Real estate |
Components of net periodic benefit cost | Year Ended December 31, 2018 2017 2016 (in thousands) Components of net periodic benefit cost: Service cost $ — $ — $ 2,205 Interest cost 4,462 4,587 4,493 Expected return on plan assets (5,784) (4,978) (5,138) Amortization of prior service cost 186 186 — Amortization of net loss 3,608 3,054 2,952 Net periodic benefit cost (1) $ 2,472 $ 2,849 $ 4,512 (1) Nonservice components of net periodic benefit cost are included in the Other expense line item within our consolidated statements of income (see Note 2 – Summary of Significant Accounting Policies). |
Schedule of other changes in plan assets and benefit obligation recognized in accumulated other comprehensive income | Year Ended December 31, 2018 2017 (in thousands) Other changes in plan assets and benefit obligation recognized in accumulated other comprehensive loss: Net actuarial loss $ (3,326) $ (6,610) Reversal of amortization item: Prior service cost 186 186 Net actuarial loss 3,608 3,054 Total recognized in accumulated other comprehensive loss 468 (3,370) Net periodic benefit cost (2,472) (2,849) Total recognized in net periodic benefit cost and accumulated other comprehensive loss $ (2,004) $ (6,219) |
Schedule of estimated future benefit payments | Year Ended December 31, (in thousands) 2019 $ 4,870 2020 5,257 2021 5,666 2022 6,016 2023 6,254 2024-2028 34,153 $ 62,216 |
Schedule of asset allocation guidelines, actual asset allocations and fair value of Pension Plan assets | General asset allocation guidelines at December 31, 2018 are as follows: Percentage of Total Portfolio Minimum Target Maximum Equity securities Fixed income securities Real estate Equity securities include domestic equity securities, developed international securities, emerging markets equity securities and real estate investment trust. Fixed income securities include domestic and international investment grade fixed income securities, high yield securities and emerging markets fixed income securities. Fixed income futures may also be utilized within the fixed income securities asset allocation. The following information discloses the fair values of our Pension Plan assets by asset category: December 31, 2018 December 31, 2017 (in thousands) Cash and cash equivalents (a) $ 5,277 $ 1,439 Commingled investment funds measured at net asset value (b): Equities - United States large-cap 21,862 26,031 Equities - United States small-cap 5,259 6,120 Equities - International developed markets 10,593 15,015 Equities - International emerging markets 4,808 6,528 Fixed income - Investment grade 15,777 13,546 Fixed income - High yield 4,508 4,325 Real estate 5,034 3,754 Other 2,705 5,223 Total $ 75,823 $ 81,981 (a) Cash and cash equivalents represents a Level 1 fair value measurement. See Note 2 – Summary of Significant Accounting Policies – Fair Value Measurements for more information regarding the definitions of fair value hierarchy levels. (b) Investments measured at fair value using the net asset value per share (or its equivalent) have not been classified within the fair value hierarchy. The fair values of all commingled investment funds are determined based on the net asset values per unit of each of the funds. The net asset values per unit represent the aggregate value of the fund's assets at fair value less liabilities, divided by the number of units outstanding. |
COMPENSATION PLANS (Tables)
COMPENSATION PLANS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2016 939,793 $ $ 12,678 Granted Vested (1) Forfeited Non-vested grants at December 31, 2016 1,604,748 36,027 Granted Vested (1) Forfeited Non-vested grants at December 31, 2017 1,694,026 33,372 Granted Vested (1) Forfeited Non-vested grants at December 31, 2018 31,699 (1) During the years ended December 31, 2018, 2017 and 2016, we issued 191,858, 222,011 and 176,319, respectively, unrestricted common units to the LTIP participants. The remaining vested units were settled in cash primarily to satisfy tax withholding obligations of the LTIP participants. |
SERP and Directors' 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, 2016 429,141 $ $ 5,789 Granted 74,799 Issued (9,922) Phantom units outstanding as of December 31, 2016 494,018 11,091 Granted Phantom units outstanding as of December 31, 2017 561,784 11,067 Granted 84,417 Issued (1) (10,364) Phantom units outstanding as of December 31, 2018 635,837 11,025 During the year ended December 31, 2018, we issued 7,181 ARLP common units to a participant under the SERP. Units issued to this participant were net of units settled in cash to satisfy tax withholding obligations. |
SUPPLEMENTAL CASH FLOW INFORM_2
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
SUPPLEMENTAL CASH FLOW INFORMATION | |
Schedule of supplemental cash flow information | Year Ended December 31, 2018 2017 2016 (in thousands) Cash Paid For: Interest $ 38,450 $ 31,692 $ 29,274 Income taxes $ 34 $ 210 $ 10 Non-Cash Activity: Accounts payable for purchase of property, plant and equipment $ 14,585 $ 15,636 $ 8,232 Assets acquired by capital lease $ 835 $ — $ 37,089 Market value of common units issued under deferred compensation plans before tax withholding requirements $ 6,142 $ 8,149 $ 3,642 |
ASSET RETIREMENT OBLIGATIONS (T
ASSET RETIREMENT OBLIGATIONS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
ASSET RETIREMENT OBLIGATIONS | |
Schedule of activity affecting the asset retirement and mine closing liability | Year Ended December 31, 2018 2017 (in thousands) Beginning balance $ 130,600 $ 125,701 Accretion expense 3,926 3,793 Payments (2,392) (1,046) Allocation of liability associated with acquisitions, mine development and change in assumptions 4,980 2,152 Ending balance $ 137,114 $ 130,600 |
Schedule of estimated payments of asset retirement obligations | Year Ended December 31, (in thousands) 2019 $ 9,459 2020 3,807 2021 3,279 2022 4,511 2023 2,684 Thereafter 213,675 Aggregate undiscounted asset retirement obligations 237,415 Effect of discounting (100,301) Total asset retirement obligations 137,114 Less: current portion (9,459) Asset retirement obligations $ 127,655 |
ACCRUED WORKERS' COMPENSATION_2
ACCRUED WORKERS' COMPENSATION AND PNEUMOCONIOSIS BENEFITS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accrued Workers Compensation And Pneumoconiosis Benefits | |
Reconciliation of changes in workers' compensation liability | December 31, 2018 2017 (in thousands) Beginning balance $ 54,439 $ 48,131 Accruals increase 7,654 17,066 Payments (10,837) (10,769) Interest accretion 1,454 1,681 Valuation gain (3,171) (1,670) Ending balance $ 49,539 $ 54,439 |
Reconciliation of changes in pneumoconiosis benefit obligation | December 31, 2018 2017 (in thousands) Benefit obligations at beginning of year $ 74,859 $ 64,988 Service cost 2,525 2,255 Interest cost 2,542 2,555 Actuarial (gain) loss (4,599) 7,938 Benefits and expenses paid (3,232) (2,877) Benefit obligations at end of year $ 72,095 $ 74,859 |
Components of pneumoconiosis and workers' compensation expense | Year Ended December 31, 2018 2017 2016 (in thousands) Black lung benefits: Service cost $ 2,525 $ 2,255 $ 2,578 Interest cost (1) 2,542 2,555 2,506 Net amortization (1) 2 (2,092) (2,643) Total pneumoconiosis expense 5,069 2,718 2,441 Workers' compensation expense 11,270 12,215 9,063 Net periodic benefit cost $ 16,339 $ 14,933 $ 11,504 ________________________________________ (1) Interest cost and net amortization is included in the Other expense line item within our consolidated statements of income (see Note 2 – Summary of Significant Accounting Policies). |
Pneumoconiosis benefits | |
Accrued Workers Compensation And Pneumoconiosis Benefits | |
Reconciliation of changes in the pneumoconiosis benefit obligation recognized in AOCI | Year Ended December 31, 2018 2017 2016 (in thousands) Net actuarial gain (loss) $ 4,599 $ (7,938) $ (205) Reversal of amortization item: Net actuarial (gain) loss 2 (2,092) (2,643) Total recognized in accumulated other comprehensive loss $ 4,601 $ (10,030) $ (2,848) |
Schedule of amount recognized in accumulated other comprehensive income | Year Ended December 31, 2018 2017 2016 (in thousands) Amount recognized in accumulated other comprehensive loss consists of: Net actuarial loss (gain) $ 4,047 $ 8,648 $ (1,382) |
Summary of information about amounts recognized in the consolidated balance sheets | December 31, 2018 2017 (in thousands) Workers' compensation claims $ 49,539 $ 54,439 Pneumoconiosis benefit claims 72,095 74,859 Total obligations 121,634 129,298 Less current portion (11,137) (10,729) Non-current obligations $ 110,497 $ 118,569 |
RELATED-PARTY TRANSACTIONS (Tab
RELATED-PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
RELATED-PARTY TRANSACTIONS | |
Summary of advanced royalties outstanding | WKY CoalPlay Towhead Webster Henderson WKY SGP Coal Coal Coal CoalPlay Henderson Henderson Tunnel & Union Webster Henderson & Union Ridge Counties, KY County, KY County, KY Counties, KY Total Acquired Acquired Acquired Acquired Acquired 2005 December 2014 December 2014 December 2014 February 2015 (in thousands) As of January 1, 2016 $ 5,413 $ 3,598 $ 2,526 $ 2,522 $ 2,131 $ 16,190 Payments 3,000 3,598 2,568 2,522 2,131 13,819 Recoupment (8,413) (1) (1,775) — — (10,189) As of December 31, 2016 — 7,195 3,319 5,044 4,262 19,820 Payments 6,000 3,598 2,568 2,522 2,131 16,819 Recoupment (3,000) (109) (531) — (6) (3,646) As of December 31, 2017 3,000 10,684 5,356 7,566 6,387 32,993 Payments — 3,597 2,570 2,520 2,131 10,818 Recoupment (3,000) (204) (31) — (36) (3,271) Unrecoupable — — (7,895) — — (7,895) As of December 31, 2018 $ — $ 14,077 $ — $ 10,086 $ 8,482 $ 32,645 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
COMMITMENTS AND CONTINGENCIES | |
Schedule of future minimum lease payments | Other Operating Leases Capital Year Ending December 31, Lease Affiliate Others Total (in thousands) 2019 $ 48,810 240 9,087 $ 9,327 2020 8,748 — 3,787 3,787 2021 913 — 2,236 2,236 2022 912 — 2,172 2,172 2023 140 — 1,995 1,995 Thereafter 553 — 14,865 14,865 Total future minimum lease payments $ 60,076 $ 240 $ 34,142 $ 34,382 Less: amount representing interest (2,759) Present value of future minimum lease payments 57,317 Less: current portion (46,722) Long-term capital lease obligation $ 10,595 |
CONCENTRATION OF CREDIT RISK _2
CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS | |
Schedule of total revenues from major customers | Year Ended December 31, Segment 2018 2017 2016 (in thousands) Customer A Illinois Basin $ — $ — $ 253,465 Customer B Illinois Basin 219,115 — 241,255 Customer C Illinois Basin/Appalachia/Other and Corporate — — 265,642 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
SEGMENT INFORMATION | |
Schedule of reportable segment results | Illinois Other and Elimination Basin Appalachia Corporate (1) Consolidated (in thousands) Year Ended December 31, 2018 Revenues - Outside $ 1,273,874 643,898 85,085 — $ Revenues - Intercompany 31,191 67 16,376 — Total revenues (2) 1,305,065 643,965 101,461 (47,634) 2,002,857 Segment Adjusted EBITDA Expense (3) 790,072 398,243 62,564 Segment Adjusted EBITDA (4) 408,047 240,286 75,913 Total assets 1,371,579 440,518 759,654 Capital expenditures 165,709 64,037 3,734 — Year Ended December 31, 2017 Revenues - Outside $ 1,059,381 $ 623,720 $ 113,119 $ — $ Revenues - Intercompany 56,097 2,321 15,924 — Total revenues (2) 1,115,478 626,041 129,043 (74,342) 1,796,220 Segment Adjusted EBITDA Expense (3) 688,468 385,802 83,490 Segment Adjusted EBITDA (4) 391,426 234,124 65,247 Total assets 1,429,078 470,892 506,437 Capital expenditures 94,252 48,358 2,478 — Year Ended December 31, 2016 Revenues - Outside $ 1,275,543 $ 541,108 $ 114,802 $ — $ Revenues - Intercompany 61,617 3,806 17,752 — Total revenues (2) 1,337,160 544,914 132,554 (83,175) 1,931,453 Segment Adjusted EBITDA Expense (3) 761,644 346,712 89,594 Segment Adjusted EBITDA (4) 552,284 191,487 46,199 Total assets 1,460,924 480,745 404,153 Capital expenditures 52,505 36,213 2,338 — (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 expense. Transportation expenses are excluded as these expenses are passed through to our customers and consequently we do not realize any gain or loss on transportation revenues. We review Segment Adjusted EBITDA Expense per ton for cost trends. The following is a reconciliation of consolidated Segment Adjusted EBITDA Expense to Operating expenses (excluding depreciation, depletion and amortization): Year Ended December 31, 2018 2017 2016 (in thousands) Segment Adjusted EBITDA Expense $ 1,211,800 $ 1,092,187 $ 1,125,637 Outside coal purchases (1,466) — (1,514) Other expense (2,621) (332) (1,445) Operating expenses (excluding depreciation, depletion and amortization) $ 1,207,713 $ 1,091,855 $ 1,122,678 (4) Segment Adjusted EBITDA is defined as net income attributable to ARLP before net interest expense, income taxes, depreciation, depletion and amortization, general and administrative expense, settlement gain, debt extinguishment loss and asset impairment. Management therefore is able to focus solely on the evaluation of segment operating profitability as it relates to our revenues and operating expenses, which are primarily controlled by our segments. Consolidated Segment Adjusted EBITDA is reconciled to net income attributable to ARLP as follows: Year Ended December 31, 2018 2017 2016 (in thousands) Consolidated Segment Adjusted EBITDA $ 715,691 $ 682,028 $ 779,108 General and administrative (68,298) (61,760) (72,529) Depreciation, depletion and amortization (280,225) (268,981) (336,509) Settlement gain 80,000 — — Asset impairment (40,483) — — Interest expense, net (40,059) (39,291) (30,659) Debt extinguishment loss — (8,148) — Income tax expense (22) (210) (13) Net income attributable to ARLP $ 366,604 $ 303,638 $ 339,398 |
Reconciliation of consolidated Segment Adjusted EBITDA Expense to operating expenses (excluding depreciation, depletion and amortization) | Year Ended December 31, 2018 2017 2016 (in thousands) Segment Adjusted EBITDA Expense $ 1,211,800 $ 1,092,187 $ 1,125,637 Outside coal purchases (1,466) — (1,514) Other expense (2,621) (332) (1,445) Operating expenses (excluding depreciation, depletion and amortization) $ 1,207,713 $ 1,091,855 $ 1,122,678 |
Reconciliation of consolidated Segment Adjusted EBITDA to net income | Year Ended December 31, 2018 2017 2016 (in thousands) Consolidated Segment Adjusted EBITDA $ 715,691 $ 682,028 $ 779,108 General and administrative (68,298) (61,760) (72,529) Depreciation, depletion and amortization (280,225) (268,981) (336,509) Settlement gain 80,000 — — Asset impairment (40,483) — — Interest expense, net (40,059) (39,291) (30,659) Debt extinguishment loss — (8,148) — Income tax expense (22) (210) (13) Net income attributable to ARLP $ 366,604 $ 303,638 $ 339,398 |
SELECTED QUARTERLY FINANCIAL _2
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | |
Summary of consolidated quarterly operating results | Quarter Ended March 31, June 30, September 30, December 31, 2018 (1) 2018 2018 2018 (2) (in thousands, except unit and per unit data) Revenues $ 457,122 $ 516,137 $ 497,758 $ 531,840 Income from operations 160,226 88,160 74,625 49,276 Income before income taxes 156,046 86,380 73,974 51,092 Net income of ARLP 155,908 86,190 73,733 50,773 Basic and diluted net income of ARLP per limited partner unit $ 1.16 $ 0.64 $ 0.55 $ 0.38 Weighted-average number of units outstanding – basic and diluted (3) 130,819,217 131,279,910 131,169,538 129,771,010 Quarter Ended March 31, June 30, September 30, December 31, 2017 2017 (4) 2017 2017 (in thousands, except unit and per unit data) Revenues $ 461,080 $ 398,720 $ 453,189 $ 483,231 Income from operations 108,297 79,524 65,716 78,387 Income before income taxes 105,038 63,356 61,431 74,586 Net income of ARLP 104,902 63,230 61,271 74,235 Basic and diluted net income of ARLP per limited partner unit $ 1.10 $ 0.82 $ 0.52 $ 0.55 Weighted-average number of units outstanding – basic and diluted (3) 74,503,298 74,597,036 114,237,979 130,704,217 (1) Our March 31, 2018 quarterly results were affected by a settlement gain of $80.0 million reflecting cash payment received from the settlement of litigation, net of certain costs associated with the gain (Note 19 – Commitments and Contingencies). (2) Our December 31, 2018 quarterly results were affected by $40.5 million of non-cash impairment charges comprised of a $34.3 million impairment related to the reduction of the economic mine life at our Dotiki mine and a $6.2 million impairment as a result of a decrease in the fair value of an option entitling us to lease certain coal reserves in Illinois (Note 3 – Long-Lived Asset Impairments). (3) Weighted-average number of units outstanding – basic and diluted were impacted by the Exchange Transaction in July 2017 and the Simplification Transactions in May 2018 (Note 1 – Organization and Presentation – Partnership Simplification). They were also impacted by our unit buy-back program discussed in Note 8 – Partners' Capital. Our June 30, 2017 quarterly results were affected by a debt extinguishment loss of $8.1 million related to early repayment of our Series B Senior Notes in May 2017 (Note 6 – Long-Term Debt). |
ORGANIZATION AND PRESENTATION (
ORGANIZATION AND PRESENTATION (Details) - shares | May 31, 2018 | Jul. 28, 2017 | Dec. 31, 2018 |
Limited Partners' Capital | |||
Ownership interests | |||
Issuance of units to Owners of SGP in Simplification Transactions (in units) | 1,322,388 | ||
MGP | ARLP | |||
Ownership interests | |||
Ownership percentage by general partners | 0.99% | ||
MGP | Intermediate Partnership | |||
Ownership interests | |||
Ownership percentage by general partners | 1.0001% | ||
MGP | Alliance Coal | |||
Ownership interests | |||
Ownership percentage by general partners | 0.001% | ||
SGP | AHGP | |||
Ownership interests | |||
Ownership interest held (as a percent) | 34.48% | ||
Exchange Transaction | |||
Ownership interests | |||
Common units issued in exchange | 56,128,141 | ||
Exchange Transaction | SGP | |||
Ownership interests | |||
Common units issued in exchange | 28,141 | ||
Exchange Transaction | MGP | |||
Ownership interests | |||
Common units issued in exchange | 56,100,000 | ||
Exchange Transaction | MGP | ARLP | |||
Ownership interests | |||
Ownership percentage by general partners | 0.99% | ||
Exchange Transaction | SGP | ARLP | |||
Ownership interests | |||
Ownership percentage by general partners | 0.01% | ||
Simplification Transactions | |||
Ownership interests | |||
Issuance of units to Owners of SGP in Simplification Transactions (in units) | 1,322,388 | ||
Simplification Transactions | SGP | |||
Ownership interests | |||
Common units issued in exchange | 29,188,997 | ||
Issuance of units to Owners of SGP in Simplification Transactions (in units) | 1,322,388 | ||
Simplification Transactions | Intermediate Partnership | |||
Ownership interests | |||
Ownership percentage by general partners | 1.0001% | ||
Simplification Transactions | Alliance Coal | |||
Ownership interests | |||
Ownership percentage by general partners | 0.001% | ||
Simplification Transactions | MGP | Intermediate Partnership | |||
Ownership interests | |||
Ownership percentage by general partners | 1.0001% | ||
Simplification Transactions | MGP | Alliance Coal | |||
Ownership interests | |||
Ownership percentage by general partners | 0.001% | ||
Simplification Transactions | SGP | Intermediate Partnership | |||
Ownership interests | |||
Ownership percentage by general partners | 1.0001% | ||
Simplification Transactions | SGP | Alliance Coal | |||
Ownership interests | |||
Ownership percentage by general partners | 0.001% | ||
Simplification Transactions | AHGP | |||
Ownership interests | |||
Approved written consent percent | 68.00% | ||
Units issued in exchange (in units) | 1.4782 | ||
Simplification Transactions | AHGP | Intermediate Partnership | |||
Ownership interests | |||
Ownership percentage by general partners | 1.0001% | ||
Simplification Transactions | AHGP | Alliance Coal | |||
Ownership interests | |||
Ownership percentage by general partners | 0.001% |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Cash and Goodwill (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash Management | |||
Book overdrafts | $ 0 | $ 14 | $ 0 |
Goodwill | |||
Impairments of goodwill | $ 0 | $ 0 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Tangible Assets (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment | ||
Coal reserves not subject to depletion | $ 27.4 | $ 34.5 |
Preparation plants, processing facilities and mineral rights | Minimum | ||
Property, Plant and Equipment | ||
Estimated useful life | 1 year | |
Preparation plants, processing facilities and mineral rights | Maximum | ||
Property, Plant and Equipment | ||
Estimated useful life | 22 years | |
Other plant and equipment and mining equipment | Minimum | ||
Property, Plant and Equipment | ||
Estimated useful life | 1 year | |
Other plant and equipment and mining equipment | Maximum | ||
Property, Plant and Equipment | ||
Estimated useful life | 22 years | |
Buildings, office equipment and improvements | Minimum | ||
Property, Plant and Equipment | ||
Estimated useful life | 1 year | |
Buildings, office equipment and improvements | Maximum | ||
Property, Plant and Equipment | ||
Estimated useful life | 23 years |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Intangible Assets | |||
Amortization expense attributable to intangible assets | $ 6,900 | $ 10,500 | $ 18,100 |
Original Cost | 34,197 | 60,167 | |
Accumulated Amortization | (24,919) | (44,018) | |
Intangibles, Net | 9,278 | 16,149 | |
Estimated amortization expense attributable to intangible assets | |||
2,019 | 7,763 | ||
2,020 | 381 | ||
2,021 | 63 | ||
2,022 | 63 | ||
2,023 | 63 | ||
Thereafter | 945 | ||
Noncompete agreement | |||
Intangible Assets | |||
Original Cost | 9,697 | 9,697 | |
Accumulated Amortization | (8,385) | (7,378) | |
Intangibles, Net | 1,312 | 2,319 | |
Customer contracts, net | |||
Intangible Assets | |||
Original Cost | 23,000 | 48,970 | |
Accumulated Amortization | (16,293) | (36,462) | |
Intangibles, Net | 6,707 | 12,508 | |
Fully amortized intangible assets | 26,000 | ||
Permits | |||
Intangible Assets | |||
Original Cost | 1,500 | 1,500 | |
Accumulated Amortization | (241) | (178) | |
Intangibles, Net | $ 1,259 | $ 1,322 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Advance Royalties (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Advance Royalties | ||
Allowance against royalty prepayments | $ 15,300 | $ 6,100 |
Advance royalties, affiliates | 32,645 | 32,993 |
Advance royalties, third-parties | 11,552 | 11,177 |
Total advance royalties, net | $ 44,197 | $ 44,170 |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Jan. 01, 2019 | |
Income Taxes | ||
Percentage of qualifying income for tax purposes | 90.00% | |
Minimum | ||
Revenue Recognition | ||
Coal shipments, payment period | 14 days | |
Maximum | ||
Revenue Recognition | ||
Coal shipments, payment period | 28 days | |
ASU 2016-02 | Forecast Adjustment | ||
Assets and Liabilities, Lessee | ||
Lease liabilities | $ 25 | |
Offsetting right-of-use assets | $ 25 | |
Defined benefit pension plan | ||
Employee Benefit Plans | ||
Threshold for amortization of unrecognized actuarial gains and losses (as a percent) | 10.00% |
LONG-LIVED ASSET IMPAIRMENTS (D
LONG-LIVED ASSET IMPAIRMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2018 | Sep. 30, 2018 | |
Asset impairment charges | |||
Asset impairment charges | $ 40,500 | $ 40,483 | |
Dotiki Mine | |||
Asset impairment charges | |||
Carrying value | 51,000 | $ 51,000 | $ 85,300 |
Asset impairment charges | 34,300 | ||
Coal reserves not to exercise lease option | |||
Asset impairment charges | |||
Asset impairment charges | $ 6,200 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
INVENTORIES | ||
Coal | $ 20,929 | $ 22,825 |
Supplies (net of reserve for obsolescence of $5,347 and $5,149, respectively) | 38,277 | 37,450 |
Total inventories, net | 59,206 | 60,275 |
Reserve for obsolescence | $ 5,453 | $ 5,149 |
PROPERTY, PLANT AND EQUIPMENT -
PROPERTY, PLANT AND EQUIPMENT - Summary (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
PROPERTY, PLANT AND EQUIPMENT | ||
Property, plant and equipment, at cost | $ 2,925,808 | $ 2,934,188 |
Less accumulated depreciation, depletion and amortization | (1,513,450) | (1,457,532) |
Total property, plant and equipment, net | 1,412,358 | 1,476,656 |
Mining equipment and processing facilities | ||
PROPERTY, PLANT AND EQUIPMENT | ||
Property, plant and equipment, at cost | 1,851,479 | 1,847,037 |
Land and mineral rights | ||
PROPERTY, PLANT AND EQUIPMENT | ||
Property, plant and equipment, at cost | 445,411 | 449,152 |
Buildings, office equipment and improvements | ||
PROPERTY, PLANT AND EQUIPMENT | ||
Property, plant and equipment, at cost | 287,053 | 310,167 |
Construction and mine development in progress | ||
PROPERTY, PLANT AND EQUIPMENT | ||
Property, plant and equipment, at cost | 71,190 | 47,223 |
Mine development costs | ||
PROPERTY, PLANT AND EQUIPMENT | ||
Property, plant and equipment, at cost | $ 270,675 | $ 280,609 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT - Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
PROPERTY, PLANT AND EQUIPMENT | |||
Capital leases in mining equipment | $ 141,019 | $ 140,929 | |
Accumulated amortization of capital leases | (74,576) | (55,603) | |
Net capital leases in mining equipment | 66,443 | 85,326 | |
Amortization expense related to capital leases | 19,000 | 24,900 | $ 27,200 |
Mine development costs | |||
PROPERTY, PLANT AND EQUIPMENT | |||
Capitalized development costs of mines in development phase | $ 0 | $ 0 |
LONG-TERM DEBT - Components (De
LONG-TERM DEBT - Components (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Apr. 24, 2017 |
Principal | |||
Aggregate maturities of long-term debt | $ 667,000 | $ 502,400 | |
Less current maturities | (92,000) | (72,400) | |
Total long-term debt | 575,000 | 430,000 | |
Unamortized Discount and Debt Issuance Costs | |||
Unamortized debt issuance costs including current and non-current | (10,996) | (14,063) | |
Total unamortized debt issuance costs | (10,996) | (14,063) | |
Revolving credit facility | |||
Principal | |||
Aggregate maturities of long-term debt | 175,000 | 30,000 | |
Unamortized Discount and Debt Issuance Costs | |||
Unamortized debt issuance costs including current and non-current | (5,203) | (7,356) | |
Senior notes due 2025 | |||
Principal | |||
Aggregate maturities of long-term debt | 400,000 | 400,000 | |
Unamortized Discount and Debt Issuance Costs | |||
Unamortized debt issuance costs including current and non-current | (5,793) | (6,707) | $ (7,300) |
Securitization Facility | |||
Principal | |||
Aggregate maturities of long-term debt | $ 92,000 | $ 72,400 |
LONG-TERM DEBT - Credit Facilit
LONG-TERM DEBT - Credit Facility (Details) $ in Thousands | Jan. 27, 2017USD ($)item | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Long-Term Debt | ||||
Debt issuance costs incurred | $ 16,487 | $ 101 | ||
Credit Agreement | ||||
Long-Term Debt | ||||
Debt issuance costs incurred | $ 9,200 | |||
Number of benchmarks | item | 3 | |||
ARLP debt arrangements requirements, debt to cash flow ratio | 2.5 | |||
ARLP debt arrangements requirements, cash flow to interest expense ratio | 3 | |||
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 | 0.98 | |||
Actual cash flow to interest expense ratio for trailing twelve months | 17.8 | |||
Credit Agreement | Eurodollar Rate | ||||
Long-Term Debt | ||||
Effective interest rate (as a percent) | 4.88% | |||
Revolving credit facility | ||||
Long-Term Debt | ||||
Maximum borrowing capacity | $ 494,750 | |||
Line of credit facility, available for borrowing | $ 310,500 | |||
Annual commitment fee percentage, undrawn portion | 0.35% | |||
Letters of credit subfacility | ||||
Long-Term Debt | ||||
Maximum borrowing capacity | 125,000 | |||
Letters of credit outstanding | $ 9,300 | |||
Swingline subfacility | ||||
Long-Term Debt | ||||
Maximum borrowing capacity | $ 15,000 |
LONG-TERM DEBT - Senior Notes d
LONG-TERM DEBT - Senior Notes due 2025 (Details) - USD ($) $ in Thousands | Apr. 24, 2017 | Dec. 31, 2017 | Dec. 31, 2018 |
Issuance of Senior Notes | |||
Make-whole payment | $ 8,148 | ||
Discount and debt issuance costs incurred | 14,063 | $ 10,996 | |
Senior notes due 2025 | |||
Issuance of Senior Notes | |||
Principal amount | $ 400,000 | ||
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% | ||
Make-whole payment | $ 8,100 | ||
Discount and debt issuance costs incurred | $ 7,300 | $ 6,707 | $ 5,793 |
LONG-TERM DEBT - Accounts Recei
LONG-TERM DEBT - Accounts Receivable Securitization (Details) - Securitization Facility - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 05, 2014 |
Long-Term Debt | ||
Maximum borrowing capacity | $ 100 | |
Line of credit facility outstanding amount | $ 92 |
LONG-TERM DEBT - Cavalier and O
LONG-TERM DEBT - Cavalier and Other (Details) - USD ($) $ in Millions | Oct. 06, 2015 | Dec. 31, 2018 |
Cavalier Credit Agreement | ||
Long-Term Debt | ||
Credit facility amount | $ 100 | $ 74.4 |
Annual commitment fee percentage, undrawn portion | 0.00% | |
Period for initial amount of payments | 2 years | |
Cavalier Credit Agreement | 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% | |
Cavalier Credit Agreement | One-month LIBOR | ||
Long-Term Debt | ||
Basis spread for variable interest rate (as a percent) | 6.00% | |
Letters of credit - Other | ||
Long-Term Debt | ||
Credit facility amount | 5 | |
Letters of credit outstanding | $ 5 |
LONG-TERM DEBT - Maturities (De
LONG-TERM DEBT - Maturities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Aggregate maturities of long-term debt | ||
2,019 | $ 92,000 | |
2,021 | 175,000 | |
Thereafter | 400,000 | |
Aggregate maturities of long-term debt | $ 667,000 | $ 502,400 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - Significant Observable Inputs (Level 2) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
FAIR VALUE MEASUREMENTS | ||
Long-term debt | $ 669,864 | $ 541,147 |
Total | $ 669,864 | $ 541,147 |
PARTNERS' CAPITAL - Distributio
PARTNERS' CAPITAL - Distributions (Details) - USD ($) $ / shares in Units, $ in Millions | Feb. 14, 2019 | Jan. 28, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Jun. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Distribution Made to Member or Limited Partner | ||||||||||||||||||
Percentage of available cash distributed | 100.00% | |||||||||||||||||
Period following quarter end for distribution of available cash | 45 days | |||||||||||||||||
Quarterly distribution paid (in dollars per unit) | $ 0.5250 | $ 0.5200 | $ 0.5150 | $ 0.5100 | $ 0.5050 | $ 0.5000 | $ 0.4375 | $ 0.4375 | $ 0.4375 | $ 0.4375 | $ 0.4375 | $ 0.6750 | ||||||
Distribution declared (in dollars per unit) | $ 0.53 | |||||||||||||||||
Quarterly distribution paid (in dollars per unit) | $ 0.53 | |||||||||||||||||
Quarterly distribution declared | $ 67.7 | |||||||||||||||||
Quarterly distribution paid | $ 67.7 | |||||||||||||||||
MGP | ||||||||||||||||||
Distribution Made to Member or Limited Partner | ||||||||||||||||||
Managing general partner incentive distributions (in dollars) | $ 37.6 | $ 92 | ||||||||||||||||
Excess Of $0.1375 Per Unit | MGP | ||||||||||||||||||
Distribution Made to Member or Limited Partner | ||||||||||||||||||
General partner incentive distribution percentage | 15.00% | |||||||||||||||||
Threshold distribution of net income per unit (in dollars per unit) | $ 0.1375 | |||||||||||||||||
Excess Of $0.15625 Per Unit | MGP | ||||||||||||||||||
Distribution Made to Member or Limited Partner | ||||||||||||||||||
General partner incentive distribution percentage | 25.00% | |||||||||||||||||
Threshold distribution of net income per unit (in dollars per unit) | $ 0.15625 | |||||||||||||||||
Excess Of $0.1875 Per Unit | MGP | ||||||||||||||||||
Distribution Made to Member or Limited Partner | ||||||||||||||||||
General partner incentive distribution percentage | 50.00% | |||||||||||||||||
Threshold distribution of net income per unit (in dollars per unit) | $ 0.1875 |
PARTNERS' CAPITAL - Narrative (
PARTNERS' CAPITAL - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Jun. 29, 2018 | May 31, 2018 | Jul. 28, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Partners' capital | ||||||
Purchase of units under unit repurchase program | $ 70,604 | |||||
Cash contribution by affiliated entity | 2,142 | |||||
Affiliated entity controlled by Mr. Craft | ||||||
Partners' capital | ||||||
Contribution of units by affiliated entity (in units) | 467,018 | |||||
Cash contribution by affiliated entity | $ 2,100 | $ 1,000 | $ 1,000 | |||
MGP | ARLP | ||||||
Partners' capital | ||||||
Ownership percentage by general partners | 0.99% | |||||
MGP | Intermediate Partnership | ||||||
Partners' capital | ||||||
Ownership percentage by general partners | 1.0001% | |||||
MGP | Alliance Coal | ||||||
Partners' capital | ||||||
Ownership percentage by general partners | 0.001% | |||||
Limited Partners' Capital | ||||||
Partners' capital | ||||||
Issuance of units to Owners of SGP in Simplification Transactions (in units) | 1,322,388 | |||||
Repurchase authorization | $ 100,000 | |||||
Purchase of units (in units) | 3,684,075 | |||||
Number of units retired | 3,684,075 | |||||
Repurchase price (in dollars per unit) | $ 19.16 | |||||
Purchase of units under unit repurchase program | $ 70,604 | |||||
Contribution of units by affiliated entity (in units) | (467,018) | |||||
Exchange Transaction | ||||||
Partners' capital | ||||||
Common units issued in exchange | 56,128,141 | |||||
Exchange Transaction | MGP | ARLP | ||||||
Partners' capital | ||||||
Ownership percentage by general partners | 0.99% | |||||
Exchange Transaction | SGP | ARLP | ||||||
Partners' capital | ||||||
Ownership percentage by general partners | 0.01% | |||||
Exchange Transaction | General Partner's Capital (Deficit) | ||||||
Partners' capital | ||||||
Partners' capital, Exchange Transaction reclassification | $ 306,700 | |||||
Exchange Transaction | Limited Partners' Capital | ||||||
Partners' capital | ||||||
Partners' capital, Exchange Transaction reclassification | $ (306,700) | |||||
Simplification Transactions | ||||||
Partners' capital | ||||||
Issuance of units to Owners of SGP in Simplification Transactions (in units) | 1,322,388 | |||||
Simplification Transactions | Intermediate Partnership | ||||||
Partners' capital | ||||||
Ownership percentage by general partners | 1.0001% | |||||
Simplification Transactions | Alliance Coal | ||||||
Partners' capital | ||||||
Ownership percentage by general partners | 0.001% | |||||
Simplification Transactions | MGP | Intermediate Partnership | ||||||
Partners' capital | ||||||
Ownership percentage by general partners | 1.0001% | |||||
Simplification Transactions | MGP | Alliance Coal | ||||||
Partners' capital | ||||||
Ownership percentage by general partners | 0.001% | |||||
Simplification Transactions | SGP | Intermediate Partnership | ||||||
Partners' capital | ||||||
Ownership percentage by general partners | 1.0001% | |||||
Simplification Transactions | SGP | Alliance Coal | ||||||
Partners' capital | ||||||
Ownership percentage by general partners | 0.001% | |||||
Simplification Transactions | Limited Partners' Capital | ||||||
Partners' capital | ||||||
Purchase of units (in units) | 35 | |||||
Number of units retired | 35 |
VARIABLE INTEREST ENTITIES - Ca
VARIABLE INTEREST ENTITIES - Cavalier Minerals (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Oct. 06, 2015 | Nov. 10, 2014 |
Cavalier Minerals | All Dale I | |||
Variable Interest Entities | |||
Noncontrolling ownership interest (as a percent) | 71.70% | ||
Funding commitment | $ 49 | ||
Cavalier Minerals | All Dale II | |||
Variable Interest Entities | |||
Noncontrolling ownership interest (as a percent) | 72.80% | ||
Funding commitment | $ 100 | ||
Cavalier Minerals | Alliance Minerals | |||
Variable Interest Entities | |||
Funding commitment | 96 | $ 48 | |
Cumulative commitment fulfilled | $ 143 | ||
Cavalier Minerals | Bluegrass Minerals | |||
Variable Interest Entities | |||
Funding commitment | $ 4 | $ 2 | |
Cumulative commitment fulfilled | $ 6 |
VARIABLE INTEREST ENTITIES - _2
VARIABLE INTEREST ENTITIES - Cavalier Minerals Distributions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Variable Interest Entities | |||
Distributions paid to Partners | $ 275,902 | $ 240,812 | $ 247,915 |
Cavalier Minerals | Alliance Minerals | |||
Variable Interest Entities | |||
Distributions paid to Partners | 22,160 | 24,385 | 4,546 |
Cavalier Minerals | Bluegrass Minerals | |||
Variable Interest Entities | |||
Distributions paid to Partners | $ 924 | $ 1,016 | $ 189 |
Cavalier Minerals | Bluegrass Minerals | |||
Variable Interest Entities | |||
Incentive distribution for noncontrolling owners (as a percent) | 25.00% | ||
Cavalier Minerals | Alliance Minerals | |||
Variable Interest Entities | |||
Ownership interest in VIE (as a percent) | 96.00% | 96.00% |
VARIABLE INTEREST ENTITIES - WK
VARIABLE INTEREST ENTITIES - WKY CoalPlay (Details) | Nov. 17, 2014company |
WKY CoalPlay | Variable Interest Entity, Not Primary Beneficiary | |
Variable Interest Entities | |
Number of limited liability companies related to MGP, that formed the related party together with SGP Land | 2 |
INVESTMENTS - AllDale (Details)
INVESTMENTS - AllDale (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Feb. 28, 2017 | |
Changes in equity method investment | ||||
Beginning balance | $ 147,964 | |||
Equity method investment income | 22,189 | $ 13,860 | $ 3,543 | |
Ending balance | 161,309 | 147,964 | ||
AllDale Partnerships | ||||
Changes in equity method investment | ||||
Beginning balance | 147,964 | 138,817 | 64,509 | |
Contributions | 15,600 | 20,688 | 76,797 | |
Equity method investment income | 22,189 | 13,860 | 3,543 | |
Distributions received | (24,444) | (25,401) | (6,032) | |
Ending balance | 161,309 | $ 147,964 | $ 138,817 | |
All Dale Minerals III | ||||
Equity method investments, additional information | ||||
Investment commitment | $ 0 | $ 30,000 |
INVESTMENTS - Kodiak (Details)
INVESTMENTS - Kodiak (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Jul. 19, 2017 | |
Equity securities without readily determinable fair value | |||
Equity securities | $ 106,398 | $ 106,398 | |
Changes in investments | |||
Beginning balance | 106,398 | ||
Contributions | 100,000 | ||
Payment-in-kind distributions received | 15,696 | 6,398 | |
Ending balance | 122,094 | 106,398 | |
Kodiak | |||
Equity securities without readily determinable fair value | |||
Equity securities | 106,398 | 0 | $ 100,000 |
Changes in investments | |||
Beginning balance | 106,398 | 0 | |
Contributions | 100,000 | ||
Payment-in-kind distributions received | 15,696 | 6,398 | |
Ending balance | $ 122,094 | $ 106,398 |
REVENUE FROM CONTRACTS WITH C_3
REVENUE FROM CONTRACTS WITH CUSTOMERS - Disaggregation of revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disaggregation of revenues | |||||||||||
Revenue | $ 531,840 | $ 497,758 | $ 516,137 | $ 457,122 | $ 2,002,857 | ||||||
Calculated under Revenue Guidance in Effect before Topic 606 | |||||||||||
Disaggregation of revenues | |||||||||||
Revenue | $ 483,231 | $ 453,189 | $ 398,720 | $ 461,080 | $ 1,796,220 | $ 1,931,453 | |||||
Coal | |||||||||||
Disaggregation of revenues | |||||||||||
Revenue | 1,844,808 | ||||||||||
Coal | Calculated under Revenue Guidance in Effect before Topic 606 | |||||||||||
Disaggregation of revenues | |||||||||||
Revenue | 1,711,114 | 1,861,788 | |||||||||
Transportation revenues | |||||||||||
Disaggregation of revenues | |||||||||||
Revenue | 112,385 | ||||||||||
Transportation revenues | Calculated under Revenue Guidance in Effect before Topic 606 | |||||||||||
Disaggregation of revenues | |||||||||||
Revenue | 41,700 | 30,111 | |||||||||
Other sales and operating revenues | |||||||||||
Disaggregation of revenues | |||||||||||
Revenue | 45,664 | ||||||||||
Other sales and operating revenues | Calculated under Revenue Guidance in Effect before Topic 606 | |||||||||||
Disaggregation of revenues | |||||||||||
Revenue | 43,406 | 39,554 | |||||||||
Illinois Basin | |||||||||||
Disaggregation of revenues | |||||||||||
Revenue | 1,273,874 | ||||||||||
Illinois Basin | Calculated under Revenue Guidance in Effect before Topic 606 | |||||||||||
Disaggregation of revenues | |||||||||||
Revenue | 1,059,381 | 1,275,543 | |||||||||
Appalachia | |||||||||||
Disaggregation of revenues | |||||||||||
Revenue | 643,898 | ||||||||||
Appalachia | Calculated under Revenue Guidance in Effect before Topic 606 | |||||||||||
Disaggregation of revenues | |||||||||||
Revenue | 623,720 | 541,108 | |||||||||
Other and Corporate | |||||||||||
Disaggregation of revenues | |||||||||||
Revenue | 85,085 | ||||||||||
Other and Corporate | Calculated under Revenue Guidance in Effect before Topic 606 | |||||||||||
Disaggregation of revenues | |||||||||||
Revenue | 113,119 | 114,802 | |||||||||
Operating segments | Illinois Basin | |||||||||||
Disaggregation of revenues | |||||||||||
Revenue | 1,305,065 | ||||||||||
Operating segments | Illinois Basin | Calculated under Revenue Guidance in Effect before Topic 606 | |||||||||||
Disaggregation of revenues | |||||||||||
Revenue | 1,115,478 | 1,337,160 | |||||||||
Operating segments | Illinois Basin | Coal | |||||||||||
Disaggregation of revenues | |||||||||||
Revenue | 1,197,143 | ||||||||||
Operating segments | Illinois Basin | Coal | Calculated under Revenue Guidance in Effect before Topic 606 | |||||||||||
Disaggregation of revenues | |||||||||||
Revenue | 1,078,255 | 1,306,241 | |||||||||
Operating segments | Illinois Basin | Transportation revenues | |||||||||||
Disaggregation of revenues | |||||||||||
Revenue | 106,947 | ||||||||||
Operating segments | Illinois Basin | Transportation revenues | Calculated under Revenue Guidance in Effect before Topic 606 | |||||||||||
Disaggregation of revenues | |||||||||||
Revenue | 35,585 | 23,233 | |||||||||
Operating segments | Illinois Basin | Other sales and operating revenues | |||||||||||
Disaggregation of revenues | |||||||||||
Revenue | 975 | ||||||||||
Operating segments | Illinois Basin | Other sales and operating revenues | Calculated under Revenue Guidance in Effect before Topic 606 | |||||||||||
Disaggregation of revenues | |||||||||||
Revenue | 1,638 | 7,686 | |||||||||
Operating segments | Appalachia | |||||||||||
Disaggregation of revenues | |||||||||||
Revenue | 643,965 | ||||||||||
Operating segments | Appalachia | Calculated under Revenue Guidance in Effect before Topic 606 | |||||||||||
Disaggregation of revenues | |||||||||||
Revenue | 626,041 | 544,914 | |||||||||
Operating segments | Appalachia | Coal | |||||||||||
Disaggregation of revenues | |||||||||||
Revenue | 635,530 | ||||||||||
Operating segments | Appalachia | Coal | Calculated under Revenue Guidance in Effect before Topic 606 | |||||||||||
Disaggregation of revenues | |||||||||||
Revenue | 616,305 | 534,796 | |||||||||
Operating segments | Appalachia | Transportation revenues | |||||||||||
Disaggregation of revenues | |||||||||||
Revenue | 5,435 | ||||||||||
Operating segments | Appalachia | Transportation revenues | Calculated under Revenue Guidance in Effect before Topic 606 | |||||||||||
Disaggregation of revenues | |||||||||||
Revenue | 6,115 | 6,714 | |||||||||
Operating segments | Appalachia | Other sales and operating revenues | |||||||||||
Disaggregation of revenues | |||||||||||
Revenue | 3,000 | ||||||||||
Operating segments | Appalachia | Other sales and operating revenues | Calculated under Revenue Guidance in Effect before Topic 606 | |||||||||||
Disaggregation of revenues | |||||||||||
Revenue | 3,621 | 3,404 | |||||||||
Operating segments | Other and Corporate | |||||||||||
Disaggregation of revenues | |||||||||||
Revenue | 101,461 | ||||||||||
Operating segments | Other and Corporate | Calculated under Revenue Guidance in Effect before Topic 606 | |||||||||||
Disaggregation of revenues | |||||||||||
Revenue | 129,043 | 132,554 | |||||||||
Operating segments | Other and Corporate | Coal | |||||||||||
Disaggregation of revenues | |||||||||||
Revenue | 43,393 | ||||||||||
Operating segments | Other and Corporate | Coal | Calculated under Revenue Guidance in Effect before Topic 606 | |||||||||||
Disaggregation of revenues | |||||||||||
Revenue | 74,973 | 86,174 | |||||||||
Operating segments | Other and Corporate | Transportation revenues | |||||||||||
Disaggregation of revenues | |||||||||||
Revenue | 3 | ||||||||||
Operating segments | Other and Corporate | Transportation revenues | Calculated under Revenue Guidance in Effect before Topic 606 | |||||||||||
Disaggregation of revenues | |||||||||||
Revenue | 164 | ||||||||||
Operating segments | Other and Corporate | Other sales and operating revenues | |||||||||||
Disaggregation of revenues | |||||||||||
Revenue | 58,065 | ||||||||||
Operating segments | Other and Corporate | Other sales and operating revenues | Calculated under Revenue Guidance in Effect before Topic 606 | |||||||||||
Disaggregation of revenues | |||||||||||
Revenue | 54,070 | 46,216 | |||||||||
Elimination | |||||||||||
Disaggregation of revenues | |||||||||||
Revenue | (47,634) | ||||||||||
Elimination | Calculated under Revenue Guidance in Effect before Topic 606 | |||||||||||
Disaggregation of revenues | |||||||||||
Revenue | (74,342) | (83,175) | |||||||||
Elimination | Coal | |||||||||||
Disaggregation of revenues | |||||||||||
Revenue | (31,258) | ||||||||||
Elimination | Coal | Calculated under Revenue Guidance in Effect before Topic 606 | |||||||||||
Disaggregation of revenues | |||||||||||
Revenue | (58,419) | (65,423) | |||||||||
Elimination | Other sales and operating revenues | |||||||||||
Disaggregation of revenues | |||||||||||
Revenue | (16,376) | ||||||||||
Elimination | Other sales and operating revenues | Calculated under Revenue Guidance in Effect before Topic 606 | |||||||||||
Disaggregation of revenues | |||||||||||
Revenue | (15,923) | (17,752) | |||||||||
Elimination | Illinois Basin | |||||||||||
Disaggregation of revenues | |||||||||||
Revenue | 31,191 | ||||||||||
Elimination | Illinois Basin | Calculated under Revenue Guidance in Effect before Topic 606 | |||||||||||
Disaggregation of revenues | |||||||||||
Revenue | 56,097 | 61,617 | |||||||||
Elimination | Appalachia | |||||||||||
Disaggregation of revenues | |||||||||||
Revenue | 67 | ||||||||||
Elimination | Appalachia | Calculated under Revenue Guidance in Effect before Topic 606 | |||||||||||
Disaggregation of revenues | |||||||||||
Revenue | 2,321 | 3,806 | |||||||||
Elimination | Other and Corporate | |||||||||||
Disaggregation of revenues | |||||||||||
Revenue | $ 16,376 | ||||||||||
Elimination | Other and Corporate | Calculated under Revenue Guidance in Effect before Topic 606 | |||||||||||
Disaggregation of revenues | |||||||||||
Revenue | $ 15,924 | $ 17,752 |
REVENUE FROM CONTRACTS WITH C_4
REVENUE FROM CONTRACTS WITH CUSTOMERS - Coal supply contracts (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Performance obligations unsatisfied or partially unsatisfied | |
Total | $ 2,486,494 |
Illinois Basin | |
Performance obligations unsatisfied or partially unsatisfied | |
Total | 1,663,737 |
Appalachia | |
Performance obligations unsatisfied or partially unsatisfied | |
Total | 817,126 |
Other and Corporate | |
Performance obligations unsatisfied or partially unsatisfied | |
Total | 22,666 |
Elimination | |
Performance obligations unsatisfied or partially unsatisfied | |
Total | (17,035) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | Operating segments | |
Performance obligations unsatisfied or partially unsatisfied | |
Total | 1,523,953 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | Operating segments | Illinois Basin | |
Performance obligations unsatisfied or partially unsatisfied | |
Total | 995,254 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | Operating segments | Appalachia | |
Performance obligations unsatisfied or partially unsatisfied | |
Total | 523,068 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | Operating segments | Other and Corporate | |
Performance obligations unsatisfied or partially unsatisfied | |
Total | 22,666 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | Elimination | |
Performance obligations unsatisfied or partially unsatisfied | |
Total | (17,035) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | Operating segments | |
Performance obligations unsatisfied or partially unsatisfied | |
Total | 720,166 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | Operating segments | Illinois Basin | |
Performance obligations unsatisfied or partially unsatisfied | |
Total | 475,128 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | Operating segments | Appalachia | |
Performance obligations unsatisfied or partially unsatisfied | |
Total | 245,038 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | Operating segments | |
Performance obligations unsatisfied or partially unsatisfied | |
Total | 227,728 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | Operating segments | Illinois Basin | |
Performance obligations unsatisfied or partially unsatisfied | |
Total | 193,355 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | Operating segments | Appalachia | |
Performance obligations unsatisfied or partially unsatisfied | |
Total | 34,373 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | Operating segments | |
Performance obligations unsatisfied or partially unsatisfied | |
Total | 14,647 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | Operating segments | Appalachia | |
Performance obligations unsatisfied or partially unsatisfied | |
Total | $ 14,647 |
REVENUE FROM CONTRACTS WITH C_5
REVENUE FROM CONTRACTS WITH CUSTOMERS - Coal supply contracts timing (Details) | Dec. 31, 2018 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | Operating segments | |
Performance obligations unsatisfied or partially unsatisfied | |
Expected timing of satisfaction period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | Operating segments | Illinois Basin | |
Performance obligations unsatisfied or partially unsatisfied | |
Expected timing of satisfaction period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | Operating segments | Appalachia | |
Performance obligations unsatisfied or partially unsatisfied | |
Expected timing of satisfaction period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | Operating segments | Other and Corporate | |
Performance obligations unsatisfied or partially unsatisfied | |
Expected timing of satisfaction period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | Elimination | |
Performance obligations unsatisfied or partially unsatisfied | |
Expected timing of satisfaction period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | Operating segments | |
Performance obligations unsatisfied or partially unsatisfied | |
Expected timing of satisfaction period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | Operating segments | Illinois Basin | |
Performance obligations unsatisfied or partially unsatisfied | |
Expected timing of satisfaction period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | Operating segments | Appalachia | |
Performance obligations unsatisfied or partially unsatisfied | |
Expected timing of satisfaction period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | Operating segments | |
Performance obligations unsatisfied or partially unsatisfied | |
Expected timing of satisfaction period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | Operating segments | Illinois Basin | |
Performance obligations unsatisfied or partially unsatisfied | |
Expected timing of satisfaction period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | Operating segments | Appalachia | |
Performance obligations unsatisfied or partially unsatisfied | |
Expected timing of satisfaction period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | Operating segments | |
Performance obligations unsatisfied or partially unsatisfied | |
Expected timing of satisfaction period | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | Operating segments | Appalachia | |
Performance obligations unsatisfied or partially unsatisfied | |
Expected timing of satisfaction period |
NET INCOME OF ARLP PER LIMITE_3
NET INCOME OF ARLP PER LIMITED PARTNER UNIT - Reconciliation (Details) - USD ($) $ / shares in Units, $ in Thousands | May 31, 2018 | Jul. 28, 2017 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||||||||||
Net income of ARLP | $ 50,773 | $ 73,733 | $ 86,190 | $ 155,908 | $ 74,235 | $ 61,271 | $ 63,230 | $ 104,902 | $ 366,604 | $ 303,638 | $ 339,398 | ||
Managing general partner priority distributions | (19,216) | (76,636) | |||||||||||
General partner's equity ownership | (1,560) | (3,688) | (5,275) | ||||||||||
General partner's special allocation of certain general and administrative expenses | 1,000 | 1,000 | |||||||||||
LIMITED PARTNERS' INTEREST IN NET INCOME OF ARLP | 365,044 | 281,734 | 258,487 | ||||||||||
Distributions to participating securities | (5,114) | (4,339) | (3,391) | ||||||||||
Undistributed earnings attributable to participating securities | (1,641) | (1,026) | (3,281) | ||||||||||
Net income of ARLP available to limited partners | $ 358,289 | $ 276,369 | $ 251,815 | ||||||||||
Weighted average limited partner units outstanding - basic (in units) | 129,771,010 | 131,169,538 | 131,279,910 | 130,819,217 | 130,704,217 | 114,237,979 | 74,597,036 | 74,503,298 | 130,758,169 | 98,707,696 | 74,354,162 | ||
Weighted average limited partner units outstanding - diluted (in units) | 129,771,010 | 131,169,538 | 131,279,910 | 130,819,217 | 130,704,217 | 114,237,979 | 74,597,036 | 74,503,298 | 130,758,169 | 98,707,696 | 74,354,162 | ||
Basic net income of ARLP per limited partner unit (in dollars per unit) | $ 0.38 | $ 0.55 | $ 0.64 | $ 1.16 | $ 0.55 | $ 0.52 | $ 0.82 | $ 1.10 | $ 2.74 | $ 2.80 | $ 3.39 | ||
Diluted net income of ARLP per limited partner unit (in dollars per unit) | $ 0.38 | $ 0.55 | $ 0.64 | $ 1.16 | $ 0.55 | $ 0.52 | $ 0.82 | $ 1.10 | $ 2.74 | $ 2.80 | $ 3.39 | ||
Anti-dilutive under the treasury stock method (in units) | 1,658,908 | 1,466,404 | 922,386 | ||||||||||
MGP | |||||||||||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||||||||||
Contributions from affiliates for general and administrative expenses | $ 1,000 | $ 1,000 | |||||||||||
MGP | ARLP | |||||||||||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||||||||||
Ownership percentage by general partners | 0.99% | ||||||||||||
MGP | Intermediate Partnership | |||||||||||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||||||||||
Ownership percentage by general partners | 1.0001% | ||||||||||||
MGP | Alliance Coal | |||||||||||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||||||||||
Ownership percentage by general partners | 0.001% | ||||||||||||
Pro Forma | |||||||||||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||||||||||
Net income of ARLP | $ 366,604 | 303,638 | 339,398 | ||||||||||
Pro forma adjustments | (1,265) | (1,943) | (2,985) | ||||||||||
LIMITED PARTNERS' INTEREST IN NET INCOME OF ARLP | 365,339 | 301,695 | 336,413 | ||||||||||
Distributions to participating securities | (5,114) | (4,339) | (3,391) | ||||||||||
Undistributed earnings attributable to participating securities | (1,627) | (680) | (1,548) | ||||||||||
Net income of ARLP available to limited partners | $ 358,598 | $ 296,676 | $ 331,474 | ||||||||||
Weighted average limited partner units outstanding - basic (in units) | 131,310,000 | 132,024,000 | 131,805,000 | ||||||||||
Weighted average limited partner units outstanding - diluted (in units) | 131,310,000 | 132,024,000 | 131,805,000 | ||||||||||
Basic net income of ARLP per limited partner unit (in dollars per unit) | $ 2.73 | $ 2.25 | $ 2.51 | ||||||||||
Diluted net income of ARLP per limited partner unit (in dollars per unit) | $ 2.73 | $ 2.25 | $ 2.51 | ||||||||||
Anti-dilutive under the treasury stock method (in units) | 1,658,908 | 1,466,404 | 922,386 | ||||||||||
Exchange Transaction | |||||||||||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||||||||||
Common units issued in exchange | 56,128,141 | ||||||||||||
Exchange Transaction | MGP | ARLP | |||||||||||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||||||||||
Ownership percentage by general partners | 0.99% | ||||||||||||
Simplification Transactions | |||||||||||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||||||||||
Issuance of units to Owners of SGP in Simplification Transactions (in units) | 1,322,388 | ||||||||||||
Simplification Transactions | Intermediate Partnership | |||||||||||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||||||||||
Ownership percentage by general partners | 1.0001% | ||||||||||||
Simplification Transactions | Alliance Coal | |||||||||||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||||||||||
Ownership percentage by general partners | 0.001% | ||||||||||||
Simplification Transactions | AHGP | Intermediate Partnership | |||||||||||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||||||||||
Ownership percentage by general partners | 1.0001% | ||||||||||||
Simplification Transactions | AHGP | Alliance Coal | |||||||||||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||||||||||
Ownership percentage by general partners | 0.001% | ||||||||||||
Simplification Transactions | MGP | Intermediate Partnership | |||||||||||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||||||||||
Ownership percentage by general partners | 1.0001% | ||||||||||||
Simplification Transactions | MGP | Alliance Coal | |||||||||||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||||||||||
Ownership percentage by general partners | 0.001% | ||||||||||||
SGP | Exchange Transaction | |||||||||||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||||||||||
Common units issued in exchange | 28,141 | ||||||||||||
SGP | Simplification Transactions | |||||||||||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||||||||||
Common units issued in exchange | 29,188,997 | ||||||||||||
Issuance of units to Owners of SGP in Simplification Transactions (in units) | 1,322,388 | ||||||||||||
MGP | Exchange Transaction | |||||||||||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||||||||||
Common units issued in exchange | 56,100,000 |
EMPLOYEE BENEFIT PLANS - Define
EMPLOYEE BENEFIT PLANS - Defined Contribution (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
PSSP | |||
Defined Contribution Plans | |||
Contribution expense | $ 19.9 | $ 18.7 | $ 18.2 |
EMPLOYEE BENEFIT PLANS - Benefi
EMPLOYEE BENEFIT PLANS - Benefit Obligations, Plan Assets and Reported Amounts (Details) - Defined benefit pension plan - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Change in benefit obligations: | |||
Benefit obligations at beginning of year | $ 127,298 | $ 113,482 | |
Interest cost | 4,462 | 4,587 | $ 4,493 |
Actuarial (gain) loss | (8,562) | 13,501 | |
Benefits paid | (4,240) | (4,272) | |
Benefit obligations at end of year | 118,958 | 127,298 | 113,482 |
Change in plan assets: | |||
Fair value of plan assets at beginning of year | 81,981 | 71,412 | |
Employer contribution | 4,187 | 2,971 | |
Actual return on plan assets | (6,105) | 11,870 | |
Benefits paid | (4,240) | (4,272) | |
Fair value of plan assets at end of year | 75,823 | 81,981 | $ 71,412 |
Funded status at the end of year | (43,135) | (45,317) | |
Amounts recognized in balance sheet: | |||
Non-current liability | (43,135) | (45,317) | |
Amount recognized in accumulated other comprehensive income consists of: | |||
Prior service cost | (1,126) | (1,312) | |
Net actuarial loss | (41,697) | (41,979) | |
Amounts recognized in accumulated other comprehensive income | $ (42,823) | $ (43,291) | |
Weighted-average assumption to determine benefit obligations | |||
Discount rate | 4.17% | 3.54% | |
Weighted-average assumptions used to determine net periodic benefit cost | |||
Discount rate | 3.54% | 4.06% | |
Expected return on plan assets | 7.00% | 7.00% |
EMPLOYEE BENEFIT PLANS - Assump
EMPLOYEE BENEFIT PLANS - Assumptions (Details) - Defined benefit pension plan | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Asset allocation assumptions | ||
Active management premium percentage | 1.50% | |
Asset allocation assumption | 100.00% | |
Actual return on plan assets (as a percent) | (6.70%) | 18.00% |
Equity securities | ||
Asset allocation assumptions | ||
Asset allocation assumption | 62.00% | |
Fixed income securities | ||
Asset allocation assumptions | ||
Asset allocation assumption | 33.00% | |
Real estate | ||
Asset allocation assumptions | ||
Asset allocation assumption | 5.00% |
EMPLOYEE BENEFIT PLANS - Period
EMPLOYEE BENEFIT PLANS - Periodic Benefit Cost and Other Changes (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Other changes in plan assets and benefit obligations recognized in accumulated other comprehensive loss: | ||||
Total adjustments | $ 5,069 | $ (13,400) | $ (3,983) | |
Defined benefit pension plan | ||||
Components of net periodic benefit cost: | ||||
Service cost | 2,205 | |||
Interest cost | 4,462 | 4,587 | 4,493 | |
Expected return on plan assets | (5,784) | (4,978) | (5,138) | |
Amortization of prior service cost | 186 | 186 | ||
Amortization of net loss | 3,608 | 3,054 | 2,952 | |
Net periodic benefit cost | 2,472 | 2,849 | 4,512 | |
Other changes in plan assets and benefit obligations recognized in accumulated other comprehensive loss: | ||||
Net actuarial loss | (3,326) | (6,610) | (2,589) | |
Reversal of amortization item: Prior service cost | [1] | 186 | 186 | |
Reversal of amortization item: net actuarial loss | [1] | 3,608 | 3,054 | 2,952 |
Total adjustments | 468 | (3,370) | (1,135) | |
Net periodic benefit cost | (2,472) | (2,849) | $ (4,512) | |
Total recognized in net periodic benefit cost and accumulated other comprehensive loss | $ (2,004) | $ (6,219) | ||
[1] | Amortization of prior service cost and actuarial gain or loss is included in the computation of net periodic benefit cost (see Notes 13 and 17 for additional details). |
EMPLOYEE BENEFIT PLANS - Estima
EMPLOYEE BENEFIT PLANS - Estimated Benefit Payments (Details) - Defined benefit pension plan $ in Thousands | Dec. 31, 2018USD ($) |
Estimated future benefit payments | |
2,019 | $ 4,870 |
2,020 | 5,257 |
2,021 | 5,666 |
2,022 | 6,016 |
2,023 | 6,254 |
2024-2028 | 34,153 |
Estimated future benefit payments | 62,216 |
Expected contribution for pension plan in next year | $ 5,300 |
EMPLOYEE BENEFIT PLANS - Asset
EMPLOYEE BENEFIT PLANS - Asset Allocations (Details) - Defined benefit pension plan | Dec. 31, 2018 |
Equity securities | |
Employee Benefit Plans | |
Target allocation | 62.00% |
Equity securities | Minimum | |
Employee Benefit Plans | |
Target allocation | 45.00% |
Equity securities | Maximum | |
Employee Benefit Plans | |
Target allocation | 80.00% |
Fixed income securities | |
Employee Benefit Plans | |
Target allocation | 33.00% |
Fixed income securities | Minimum | |
Employee Benefit Plans | |
Target allocation | 10.00% |
Fixed income securities | Maximum | |
Employee Benefit Plans | |
Target allocation | 55.00% |
Real estate | |
Employee Benefit Plans | |
Target allocation | 5.00% |
Real estate | Minimum | |
Employee Benefit Plans | |
Target allocation | 0.00% |
Real estate | Maximum | |
Employee Benefit Plans | |
Target allocation | 10.00% |
EMPLOYEE BENEFIT PLANS - Fair V
EMPLOYEE BENEFIT PLANS - Fair Value of Plan Assets (Details) - Defined benefit pension plan - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | $ 75,823 | $ 81,981 | $ 71,412 |
Cash And Cash Equivalents | Quoted Prices In Active Markets For Identical Assets (Level 1) | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | 5,277 | 1,439 | |
Equities - United States large-cap | Net asset value per share | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | 21,862 | 26,031 | |
Equities - United States small-cap | Net asset value per share | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | 5,259 | 6,120 | |
Equities - International developed markets | Net asset value per share | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | 10,593 | 15,015 | |
Equities - International emerging markets | Net asset value per share | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | 4,808 | 6,528 | |
Fixed income - Investment grade | Net asset value per share | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | 15,777 | 13,546 | |
Fixed income - High yield | Net asset value per share | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | 4,508 | 4,325 | |
Real estate | Net asset value per share | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | 5,034 | 3,754 | |
Pension Plan assets - Other | Net asset value per share | |||
Employee Benefit Plans | |||
Defined benefit plan, fair value of plan assets | $ 2,705 | $ 5,223 |
COMPENSATION PLANS - LTIP Grant
COMPENSATION PLANS - LTIP Grants Activity (Details) - ARLP LTIP - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Number of units | ||||
Balance at the beginning of the period (in units) | 1,694,026 | 1,604,748 | 939,793 | |
Granted (in units) | 511,305 | 475,310 | 960,992 | |
Vested (in units) | (331,502) | (350,516) | (284,272) | |
Forfeited (in units) | (45,749) | (35,516) | (11,765) | |
Balance at the end of the period (in units) | 1,828,080 | 1,694,026 | 1,604,748 | |
Weighted average grant date fair value per unit | ||||
Balance at the beginning of the period (in dollars per unit) | $ 19.62 | $ 23.19 | $ 36.80 | |
Granted (in dollars per unit) | 20.40 | 23.17 | 12.38 | |
Vested (in dollars per unit) | 34.61 | 40.73 | 31.51 | |
Forfeited (in dollars per unit) | 17.40 | 20.01 | 26.39 | |
Balance at the end of the period (in dollars per unit) | $ 17.18 | $ 19.62 | $ 23.19 | |
Intrinsic value (in dollars) | ||||
Intrinsic value of outstanding grants (in dollars) | $ 31,699 | $ 33,372 | $ 36,027 | $ 12,678 |
Other information | ||||
Common units issued upon vesting | 191,858 | 222,011 | 176,319 |
COMPENSATION PLANS - LTIP Other
COMPENSATION PLANS - LTIP Other Information (Details) - ARLP LTIP - USD ($) $ in Millions | Feb. 08, 2019 | Jan. 23, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Other information | |||||
Unit-based compensation expense | $ 10.8 | $ 11 | $ 12.7 | ||
Total unit-based obligation recorded | 20.8 | $ 21.8 | |||
Unrecognized compensation expense (in dollars) | $ 10.6 | ||||
Weighted-average period for recognition of expense | 9 months 18 days | ||||
Units for which vesting requirements were deemed satisfied | 331,502 | 350,516 | 284,272 | ||
Forfeitures (in units) | 45,749 | 35,516 | 11,765 | ||
Common units issued upon vesting | 191,858 | 222,011 | 176,319 | ||
Units granted | 511,305 | 475,310 | 960,992 | ||
Units available for grant | 1,900,000 | ||||
2016 Grants | |||||
Other information | |||||
Units for which vesting requirements were deemed satisfied | 885,381 | ||||
Forfeitures (in units) | 75,611 | ||||
Common units issued upon vesting | 596,650 | ||||
2019 Grants | |||||
Other information | |||||
Additional grants authorized (in units) | 601,644 | ||||
Units granted | 586,644 |
COMPENSATION PLANS - SERP and D
COMPENSATION PLANS - SERP and Directors Compensation Activity (Details) - SERP and Directors' Compensation Plans - USD ($) $ / shares in Units, $ in Thousands | Jan. 09, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Summary of units | |||||
Issued (in units) | (115,484) | ||||
Other information | |||||
Unit-based compensation expense | $ 1,600 | $ 1,400 | $ 1,200 | ||
Total unit-based obligation recorded | $ 17,400 | $ 16,100 | |||
Phantom Share Units (PSUs) | |||||
Summary of units | |||||
Balance at the beginning of the period (in units) | 561,784 | 494,018 | 429,141 | ||
Granted (in units) | 84,417 | 67,766 | 74,799 | ||
Issued (in units) | (10,364) | (9,922) | |||
Balance at the end of the period (in units) | 635,837 | 561,784 | 494,018 | ||
Weighted average grant date fair value per unit | |||||
Balance at the beginning of the period (in dollars per unit) | $ 28.64 | $ 29.77 | $ 32.25 | ||
Granted (in dollars per unit) | 18.78 | 20.38 | 16.31 | ||
Issued (in dollars per unit) | 27.92 | 33.76 | |||
Balance at the end of the period (in dollars per unit) | $ 27.34 | $ 28.64 | $ 29.77 | ||
Intrinsic value (in dollars) | |||||
Intrinsic value of outstanding grants (in dollars) | $ 11,025 | $ 11,067 | $ 11,091 | $ 5,789 | |
Other information | |||||
Common units issued upon vesting | 7,181 |
SUPPLEMENTAL CASH FLOW INFORM_3
SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash Paid For: | |||
Interest | $ 38,450 | $ 31,692 | $ 29,274 |
Income taxes | 34 | 210 | 10 |
Non-Cash Activity: | |||
Accounts payable for purchase of property, plant and equipment | 14,585 | 15,636 | 8,232 |
Assets acquired by capital lease | 835 | 37,089 | |
Market value of common units issued under deferred compensation plans before tax withholding requirements | $ 6,142 | $ 8,149 | $ 3,642 |
ASSET RETIREMENT OBLIGATIONS -
ASSET RETIREMENT OBLIGATIONS - Activity (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Asset retirement and mine closing liability | |||
Balance at the beginning of the period | $ 130,600 | $ 125,701 | |
Accretion expense | 3,926 | 3,793 | $ 3,769 |
Payments | (2,392) | (1,046) | |
Allocation of liability associated with acquisitions, mine development and change in assumptions | 4,980 | 2,152 | |
Balance at the end of the period | $ 137,114 | $ 130,600 | $ 125,701 |
ASSET RETIREMENT OBLIGATIONS _2
ASSET RETIREMENT OBLIGATIONS - Estimated Payments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Estimated payments of asset retirement obligations: | |||
2,019 | $ 9,459 | ||
2,020 | 3,807 | ||
2,021 | 3,279 | ||
2,022 | 4,511 | ||
2,023 | 2,684 | ||
Thereafter | 213,675 | ||
Aggregate undiscounted asset retirement obligations | 237,415 | ||
Effect of discounting | (100,301) | $ (114,000) | |
Total asset retirement obligations | 137,114 | 130,600 | $ 125,701 |
Less: current portion | (9,459) | ||
Asset retirement obligations | 127,655 | 126,750 | |
Surety bonds outstanding to performance of reclamation obligations | $ 169,300 | $ 172,900 |
ACCRUED WORKERS' COMPENSATION_3
ACCRUED WORKERS' COMPENSATION AND PNEUMOCONIOSIS BENEFITS - Workers' Compensation Liability (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation of changes in the workers' compensation liability | ||
Beginning balance | $ 54,439 | $ 48,131 |
Accruals increase | 7,654 | 17,066 |
Payments | (10,837) | (10,769) |
Interest accretion | 1,454 | 1,681 |
Valuation gain | (3,171) | (1,670) |
Ending balance | $ 49,539 | $ 54,439 |
Estimated present value of future obligations and other information | ||
Workers' compensation discount rate | 3.89% | 3.22% |
Letters of credit outstanding to secure workers compensation obligations | $ 82,500 | $ 89,200 |
Other long-term assets | ||
Estimated present value of future obligations and other information | ||
Receivables for traumatic injury claims | $ 8,100 | $ 9,000 |
ACCRUED WORKERS' COMPENSATION_4
ACCRUED WORKERS' COMPENSATION AND PNEUMOCONIOSIS BENEFITS - Benefit Obligations (Details) - Pneumoconiosis benefits - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of the changes in black lung benefit obligations | |||
Benefit obligations at beginning of year | $ 74,859 | $ 64,988 | |
Service cost | 2,525 | 2,255 | $ 2,578 |
Interest cost | 2,542 | 2,555 | 2,506 |
Actuarial (gain) loss | (4,599) | 7,938 | |
Benefits and expenses paid | (3,232) | (2,877) | |
Benefit obligations at end of year | $ 72,095 | $ 74,859 | $ 64,988 |
ACCRUED WORKERS' COMPENSATION_5
ACCRUED WORKERS' COMPENSATION AND PNEUMOCONIOSIS BENEFITS - Recognized in AOCI (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Other changes in plan assets and benefit obligations recognized in accumulated other comprehensive loss: | ||||
Total adjustments | $ 5,069 | $ (13,400) | $ (3,983) | |
Pneumoconiosis benefits | ||||
Other changes in plan assets and benefit obligations recognized in accumulated other comprehensive loss: | ||||
Net actuarial loss | 4,599 | (7,938) | (205) | |
Reversal of amortization item: net actuarial gain | [1] | 2 | (2,092) | (2,643) |
Total adjustments | $ 4,601 | $ (10,030) | $ (2,848) | |
Estimated present value of future obligations and other information | ||||
Pneumoconiosis discount rate | 4.13% | 3.49% | 3.97% | |
Amount recognized in accumulated other comprehensive income consists of: | ||||
Net actuarial loss | $ 4,047 | $ 8,648 | $ (1,382) | |
[1] | Amortization of prior service cost and actuarial gain or loss is included in the computation of net periodic benefit cost (see Notes 13 and 17 for additional details). |
ACCRUED WORKERS' COMPENSATION_6
ACCRUED WORKERS' COMPENSATION AND PNEUMOCONIOSIS BENEFITS - Recognized in Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
WORKERS' COMPENSATION AND PNEUMOCONIOSIS | |||
Workers' compensation claims | $ 49,539 | $ 54,439 | $ 48,131 |
Pneumoconiosis benefit claims | 72,095 | 74,859 | |
Total obligations | 121,634 | 129,298 | |
Less current portion | (11,137) | (10,729) | |
Non-current obligations | $ 110,497 | $ 118,569 |
ACCRUED WORKERS' COMPENSATION_7
ACCRUED WORKERS' COMPENSATION AND PNEUMOCONIOSIS BENEFITS - Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Accrued Workers Compensation And Pneumoconiosis Benefits | |||
Workers' compensation expense | $ 11,270 | $ 12,215 | $ 9,063 |
Total expense | 16,339 | 14,933 | 11,504 |
Pneumoconiosis benefits | |||
Accrued Workers Compensation And Pneumoconiosis Benefits | |||
Service cost | 2,525 | 2,255 | 2,578 |
Interest cost | 2,542 | 2,555 | 2,506 |
Net amortization | 2 | (2,092) | (2,643) |
Net periodic benefit cost | $ 5,069 | $ 2,718 | $ 2,441 |
RELATED-PARTY TRANSACTIONS - Af
RELATED-PARTY TRANSACTIONS - Affliliate Royalty Agreements (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Related Party Transaction | |||
As of the beginning of period | $ 44,170 | ||
As of the end of period | 44,197 | $ 44,170 | |
Coal lease | |||
Related Party Transaction | |||
As of the beginning of period | 32,993 | 19,820 | $ 16,190 |
Payments | 10,818 | 16,819 | 13,819 |
Recoupment | (3,271) | (3,646) | (10,189) |
Unrecoupable | (7,895) | ||
As of the end of period | 32,645 | 32,993 | 19,820 |
SGP | Tunnel Ridge | |||
Related Party Transaction | |||
As of the beginning of period | 3,000 | 5,413 | |
Payments | 6,000 | 3,000 | |
Recoupment | (3,000) | (3,000) | (8,413) |
As of the end of period | 3,000 | ||
WKY CoalPlay | December 2014 coal lease - Henderson and Union Counties, Kentucky | |||
Related Party Transaction | |||
As of the beginning of period | 10,684 | 7,195 | 3,598 |
Payments | 3,597 | 3,598 | 3,598 |
Recoupment | (204) | (109) | (1) |
As of the end of period | 14,077 | 10,684 | 7,195 |
WKY CoalPlay | December 2014 coal lease - Webster County, Kentucky | |||
Related Party Transaction | |||
As of the beginning of period | 5,356 | 3,319 | 2,526 |
Payments | 2,570 | 2,568 | 2,568 |
Recoupment | (31) | (531) | (1,775) |
Unrecoupable | (7,895) | ||
As of the end of period | 5,356 | 3,319 | |
WKY CoalPlay | December 2014 coal lease - Henderson County, Kentucky | |||
Related Party Transaction | |||
As of the beginning of period | 7,566 | 5,044 | 2,522 |
Payments | 2,520 | 2,522 | 2,522 |
As of the end of period | 10,086 | 7,566 | 5,044 |
WKY CoalPlay | February 2015 coal lease - Henderson and Union Counties, Kentucky | |||
Related Party Transaction | |||
As of the beginning of period | 6,387 | 4,262 | 2,131 |
Payments | 2,131 | 2,131 | 2,131 |
Recoupment | (36) | (6) | |
As of the end of period | $ 8,482 | $ 6,387 | $ 4,262 |
RELATED-PARTY TRANSACTIONS - _2
RELATED-PARTY TRANSACTIONS - Affliliate Royalty Agreements - SGP (Details) - Tunnel Ridge - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Related Party Transaction | ||
Payments for earned royalties | $ 6 | $ 7.2 |
Joseph W Craft III Foundation | Tunnel Ridge | ||
Related Party Transaction | ||
Property ownership (as a percent) | 0.50% | |
Kathleen S Craft Foundation | Tunnel Ridge | ||
Related Party Transaction | ||
Property ownership (as a percent) | 0.50% | |
SGP | ||
Related Party Transaction | ||
Annual minimum royalties | $ 3 |
RELATED-PARTY TRANSACTIONS - WK
RELATED-PARTY TRANSACTIONS - WKY CoalPlay (Details) - WKY CoalPlay - USD ($) $ in Millions | 1 Months Ended | |
Feb. 28, 2015 | Dec. 31, 2014 | |
February 2015 coal lease - Henderson and Union Counties, Kentucky | ||
Related Party Transaction | ||
Initial term of lease | 20 years | |
Percentage of earned royalty on coal sale price | 4.00% | |
Annual minimum royalties | $ 2.1 | |
Period for option to acquire the leased reserves | 3 years | |
Percentage of internal rate of return on purchase price, if leased reserves acquired | 7.00% | |
December 2014 coal lease - Henderson and Union Counties, Kentucky | ||
Related Party Transaction | ||
Initial term of lease | 20 years | |
Percentage of earned royalty on coal sale price | 4.00% | |
Annual minimum royalties | $ 3.6 | |
Period for option to acquire the leased reserves | 3 years | |
Percentage of internal rate of return on purchase price, if leased reserves acquired | 7.00% | |
December 2014 coal lease - Webster County, Kentucky | ||
Related Party Transaction | ||
Initial term of lease | 7 years | |
Percentage of earned royalty on coal sale price | 4.00% | |
Annual minimum royalties | $ 2.6 | |
Period for option to acquire the leased reserves | 3 years | |
Percentage of internal rate of return on purchase price, if leased reserves acquired | 7.00% | |
December 2014 coal lease - Henderson County, Kentucky | ||
Related Party Transaction | ||
Annual minimum royalties | $ 2.5 |
RELATED-PARTY TRANSACTIONS - _3
RELATED-PARTY TRANSACTIONS - Affliliate Royalty Agreements - SGP Land (Details) - Mineral lease - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Joseph W Craft III Foundation | Mineral lease | |||
Related Party Transaction | |||
Property ownership (as a percent) | 0.50% | ||
Kathleen S Craft Foundation | Mineral lease | |||
Related Party Transaction | |||
Property ownership (as a percent) | 0.50% | ||
SGP Land, LLC | |||
Related Party Transaction | |||
Annual minimum royalties | $ 0.3 | ||
Cumulative annual minimum and/or earned royalty payments | 6 | ||
Payments for earned royalties | $ 0.1 | $ 0.6 | $ 0.6 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Capital Leases (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Future minimum lease payments, Capital Lease | ||
2,019 | $ 48,810 | |
2,020 | 8,748 | |
2,021 | 913 | |
2,022 | 912 | |
2,023 | 140 | |
Thereafter | 553 | |
Total future minimum lease payments | 60,076 | |
Less: amount representing interest | (2,759) | |
Present value of future minimum lease payments | 57,317 | |
Less: current portion | (46,722) | $ (28,613) |
Long-term capital lease obligation | $ 10,595 | $ 57,091 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Operating Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Future minimum lease payments, Other Operating Leases | |||
2,019 | $ 9,327 | ||
2,020 | 3,787 | ||
2,021 | 2,236 | ||
2,022 | 2,172 | ||
2,023 | 1,995 | ||
Thereafter | 14,865 | ||
Total future minimum lease payments | 34,382 | ||
Rental expense | 15,000 | $ 16,100 | $ 17,000 |
Other Operating Leases, Affiliate | |||
Future minimum lease payments, Other Operating Leases | |||
2,019 | 240 | ||
Total future minimum lease payments | 240 | ||
Other Operating Leases, Others | |||
Future minimum lease payments, Other Operating Leases | |||
2,019 | 9,087 | ||
2,020 | 3,787 | ||
2,021 | 2,236 | ||
2,022 | 2,172 | ||
2,023 | 1,995 | ||
Thereafter | 14,865 | ||
Total future minimum lease payments | $ 34,142 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES - Purchase Commitments (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Mar. 09, 2018 | |
Contractual Commitments | ||
Commitments to purchase coal | $ 2 | |
Commitments for external coal purchases | ||
Contractual Commitments | ||
Commitments to purchase coal | $ 0 | |
Commitments related to planned capital projects | ||
Contractual Commitments | ||
Contractual amount | $ 88.2 |
COMMITMENTS AND CONTINGENCIES_4
COMMITMENTS AND CONTINGENCIES - Funding and Sale-Leaseback (Details) - USD ($) $ in Thousands | Jun. 29, 2016 | Dec. 31, 2016 | Dec. 31, 2018 | Feb. 28, 2017 |
Contractual Commitments | ||||
Proceeds from sale-leaseback transactions | $ 33,881 | |||
Sale-leaseback transactions | ||||
Contractual Commitments | ||||
Proceeds from sale-leaseback transactions | $ 33,900 | |||
Monthly rent under lease agreement | $ 700 | |||
Balloon payment due at end of lease term (as a percent) | 20.00% | |||
Deferred loss | $ (7,900) | |||
Sale-leaseback transactions | Minimum | ||||
Contractual Commitments | ||||
Term of lease | 3 years | |||
Sale-leaseback transactions | Maximum | ||||
Contractual Commitments | ||||
Term of lease | 4 years | |||
All Dale Minerals III | ||||
Contractual Commitments | ||||
Investment commitment | $ 0 | $ 30,000 |
COMMITMENTS AND CONTINGENCIES_5
COMMITMENTS AND CONTINGENCIES - General Litigation (Details) - USD ($) $ in Thousands | Mar. 09, 2018 | Mar. 31, 2018 | Dec. 31, 2018 |
Loss Contingency, Information about Litigation Matters [Abstract] | |||
Settlement per agreement | $ 93,000 | ||
Purchase of coal reserves, agreed amount | 2,000 | ||
Legal and other costs of settlement | 13,000 | ||
Net gain from settlement | $ 80,000 | $ 80,000 | $ 80,000 |
COMMITMENTS AND CONTINGENCIES_6
COMMITMENTS AND CONTINGENCIES - Insurance (Details) - Property and casualty insurance $ in Millions | Oct. 01, 2018USD ($) |
Commitments And Contingencies | |
Aggregate maximum insurance limit | $ 100 |
Insurance deductible | $ 1.5 |
Waiting period one | 60 days |
Waiting period two | 75 days |
Waiting period three | 90 days |
Waiting period | 120 days |
Overall aggregate deductible | $ 10 |
CONCENTRATION OF CREDIT RISK _3
CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Major Customers | |||||||
Revenues | $ 531,840 | $ 497,758 | $ 516,137 | $ 457,122 | $ 2,002,857 | ||
Trade receivables | 174,914 | $ 174,914 | $ 181,671 | ||||
Revenue | Geographic Concentration Risk | |||||||
Major Customers | |||||||
Concentration of risk (as a percent) | 27.80% | 17.40% | 4.50% | ||||
Revenue | Customer Concentration Risk | Customer A | |||||||
Major Customers | |||||||
Revenues | $ 253,465 | ||||||
Revenue | Customer Concentration Risk | Customer B | |||||||
Major Customers | |||||||
Revenues | $ 219,115 | 241,255 | |||||
Revenue | Customer Concentration Risk | Customer C | |||||||
Major Customers | |||||||
Revenues | $ 265,642 | ||||||
Trade accounts receivable | Customer Concentration Risk | Customer B | |||||||
Major Customers | |||||||
Trade receivables | $ 12,800 | $ 12,800 |
SEGMENT INFORMATION - General I
SEGMENT INFORMATION - General Information (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018USD ($)segment | Dec. 31, 2017USD ($) | Jul. 19, 2017USD ($) | Dec. 31, 2016USD ($) | |
Reportable segment results | ||||
Number of reportable segments | segment | 2 | |||
Equity securities | $ 122,094 | $ 106,398 | ||
Kodiak | ||||
Reportable segment results | ||||
Equity securities | $ 122,094 | $ 106,398 | $ 100,000 | $ 0 |
SEGMENT INFORMATION - Segment R
SEGMENT INFORMATION - Segment Results (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reportable segment results | |||||||||||
Revenues | $ 531,840 | $ 497,758 | $ 516,137 | $ 457,122 | $ 2,002,857 | ||||||
Segment Adjusted EBITDA Expense | 1,211,800 | $ 1,092,187 | $ 1,125,637 | ||||||||
Segment Adjusted EBITDA | 715,691 | 682,028 | 779,108 | ||||||||
Total assets | 2,394,748 | $ 2,219,371 | 2,394,748 | 2,219,371 | 2,193,042 | ||||||
Capital expenditures | 233,480 | 145,088 | 91,056 | ||||||||
Illinois Basin | |||||||||||
Reportable segment results | |||||||||||
Revenues | 1,273,874 | ||||||||||
Segment Adjusted EBITDA Expense | 761,644 | ||||||||||
Segment Adjusted EBITDA | 552,284 | ||||||||||
Total assets | 1,460,924 | ||||||||||
Capital expenditures | 52,505 | ||||||||||
Appalachia | |||||||||||
Reportable segment results | |||||||||||
Revenues | 643,898 | ||||||||||
Segment Adjusted EBITDA Expense | 346,712 | ||||||||||
Segment Adjusted EBITDA | 191,487 | ||||||||||
Total assets | 480,745 | ||||||||||
Capital expenditures | 36,213 | ||||||||||
Other and Corporate | |||||||||||
Reportable segment results | |||||||||||
Revenues | 85,085 | ||||||||||
Segment Adjusted EBITDA Expense | 89,594 | ||||||||||
Segment Adjusted EBITDA | 46,199 | ||||||||||
Total assets | 404,153 | ||||||||||
Capital expenditures | 2,338 | ||||||||||
Operating segments | Illinois Basin | |||||||||||
Reportable segment results | |||||||||||
Revenues | 1,305,065 | ||||||||||
Segment Adjusted EBITDA Expense | 790,072 | 688,468 | |||||||||
Segment Adjusted EBITDA | 408,047 | 391,426 | |||||||||
Total assets | 1,371,579 | 1,429,078 | 1,371,579 | 1,429,078 | |||||||
Capital expenditures | 165,709 | 94,252 | |||||||||
Operating segments | Appalachia | |||||||||||
Reportable segment results | |||||||||||
Revenues | 643,965 | ||||||||||
Segment Adjusted EBITDA Expense | 398,243 | 385,802 | |||||||||
Segment Adjusted EBITDA | 240,286 | 234,124 | |||||||||
Total assets | 440,518 | 470,892 | 440,518 | 470,892 | |||||||
Capital expenditures | 64,037 | 48,358 | |||||||||
Operating segments | Other and Corporate | |||||||||||
Reportable segment results | |||||||||||
Revenues | 101,461 | ||||||||||
Segment Adjusted EBITDA Expense | 62,564 | 83,490 | |||||||||
Segment Adjusted EBITDA | 75,913 | 65,247 | |||||||||
Total assets | 759,654 | 506,437 | 759,654 | 506,437 | |||||||
Capital expenditures | 3,734 | 2,478 | |||||||||
Elimination | |||||||||||
Reportable segment results | |||||||||||
Revenues | (47,634) | ||||||||||
Segment Adjusted EBITDA Expense | (39,079) | (65,573) | (72,313) | ||||||||
Segment Adjusted EBITDA | (8,555) | (8,769) | (10,862) | ||||||||
Total assets | $ (177,003) | (187,036) | (177,003) | (187,036) | (152,780) | ||||||
Elimination | Illinois Basin | |||||||||||
Reportable segment results | |||||||||||
Revenues | 31,191 | ||||||||||
Elimination | Appalachia | |||||||||||
Reportable segment results | |||||||||||
Revenues | 67 | ||||||||||
Elimination | Other and Corporate | |||||||||||
Reportable segment results | |||||||||||
Revenues | $ 16,376 | ||||||||||
Calculated under Revenue Guidance in Effect before Topic 606 | |||||||||||
Reportable segment results | |||||||||||
Revenues | $ 483,231 | $ 453,189 | $ 398,720 | $ 461,080 | 1,796,220 | 1,931,453 | |||||
Calculated under Revenue Guidance in Effect before Topic 606 | Illinois Basin | |||||||||||
Reportable segment results | |||||||||||
Revenues | 1,059,381 | 1,275,543 | |||||||||
Calculated under Revenue Guidance in Effect before Topic 606 | Appalachia | |||||||||||
Reportable segment results | |||||||||||
Revenues | 623,720 | 541,108 | |||||||||
Calculated under Revenue Guidance in Effect before Topic 606 | Other and Corporate | |||||||||||
Reportable segment results | |||||||||||
Revenues | 113,119 | 114,802 | |||||||||
Calculated under Revenue Guidance in Effect before Topic 606 | Operating segments | Illinois Basin | |||||||||||
Reportable segment results | |||||||||||
Revenues | 1,115,478 | 1,337,160 | |||||||||
Calculated under Revenue Guidance in Effect before Topic 606 | Operating segments | Appalachia | |||||||||||
Reportable segment results | |||||||||||
Revenues | 626,041 | 544,914 | |||||||||
Calculated under Revenue Guidance in Effect before Topic 606 | Operating segments | Other and Corporate | |||||||||||
Reportable segment results | |||||||||||
Revenues | 129,043 | 132,554 | |||||||||
Calculated under Revenue Guidance in Effect before Topic 606 | Elimination | |||||||||||
Reportable segment results | |||||||||||
Revenues | (74,342) | (83,175) | |||||||||
Calculated under Revenue Guidance in Effect before Topic 606 | Elimination | Illinois Basin | |||||||||||
Reportable segment results | |||||||||||
Revenues | 56,097 | 61,617 | |||||||||
Calculated under Revenue Guidance in Effect before Topic 606 | Elimination | Appalachia | |||||||||||
Reportable segment results | |||||||||||
Revenues | 2,321 | 3,806 | |||||||||
Calculated under Revenue Guidance in Effect before Topic 606 | Elimination | Other and Corporate | |||||||||||
Reportable segment results | |||||||||||
Revenues | $ 15,924 | $ 17,752 |
SEGMENT INFORMATION - EBITDA Ex
SEGMENT INFORMATION - EBITDA Expense Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of consolidated Segment Adjusted EBITDA Expense to operating expenses (excluding depreciation, depletion and amortization) | |||
Segment Adjusted EBITDA Expense | $ 1,211,800 | $ 1,092,187 | $ 1,125,637 |
Outside coal purchases | (1,466) | (1,514) | |
Other income (expense) | (2,621) | (332) | (1,445) |
Operating expenses (excluding depreciation, depletion and amortization) | $ 1,207,713 | $ 1,091,855 | $ 1,122,678 |
SEGMENT INFORMATION - EBITDA Re
SEGMENT INFORMATION - EBITDA Reconciliation (Details) - USD ($) $ in Thousands | Mar. 09, 2018 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Reconciliation of consolidated Segment Adjusted EBITDA to net income | ||||||||||||
Consolidated Segment Adjusted EBITDA | $ 715,691 | $ 682,028 | $ 779,108 | |||||||||
General and administrative | (68,298) | (61,760) | (72,529) | |||||||||
Depreciation, depletion and amortization | (280,225) | (268,981) | (336,509) | |||||||||
Settlement gain | $ 80,000 | $ 80,000 | 80,000 | |||||||||
Asset impairment charge | $ (40,500) | (40,483) | ||||||||||
Interest expense, net | (40,059) | (39,291) | (30,659) | |||||||||
Debt extinguishment loss | (8,148) | |||||||||||
Income tax (expense) benefit | (22) | (210) | (13) | |||||||||
NET INCOME ATTRIBUTABLE TO ALLIANCE RESOURCE PARTNERS, L.P. ("NET INCOME OF ARLP") | $ 50,773 | $ 73,733 | $ 86,190 | $ 155,908 | $ 74,235 | $ 61,271 | $ 63,230 | $ 104,902 | $ 366,604 | $ 303,638 | $ 339,398 |
SELECTED QUARTERLY FINANCIAL _3
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 09, 2018 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | ||||||||||||
Revenues | $ 531,840 | $ 497,758 | $ 516,137 | $ 457,122 | $ 2,002,857 | |||||||
Income from operations | 49,276 | 74,625 | 88,160 | 160,226 | $ 78,387 | $ 65,716 | $ 79,524 | $ 108,297 | 372,287 | $ 331,924 | $ 368,112 | |
Income before income taxes | 51,092 | 73,974 | 86,380 | 156,046 | 74,586 | 61,431 | 63,356 | 105,038 | 367,492 | 304,411 | 339,551 | |
Net income of ARLP | $ 50,773 | $ 73,733 | $ 86,190 | $ 155,908 | $ 74,235 | $ 61,271 | $ 63,230 | $ 104,902 | $ 366,604 | $ 303,638 | $ 339,398 | |
Basic net income of ARLP per limited partner unit (in dollars per unit) | $ 0.38 | $ 0.55 | $ 0.64 | $ 1.16 | $ 0.55 | $ 0.52 | $ 0.82 | $ 1.10 | $ 2.74 | $ 2.80 | $ 3.39 | |
Diluted net income of ARLP per limited partner unit (in dollars per unit) | $ 0.38 | $ 0.55 | $ 0.64 | $ 1.16 | $ 0.55 | $ 0.52 | $ 0.82 | $ 1.10 | $ 2.74 | $ 2.80 | $ 3.39 | |
Weighted average limited partner units outstanding - basic (in units) | 129,771,010 | 131,169,538 | 131,279,910 | 130,819,217 | 130,704,217 | 114,237,979 | 74,597,036 | 74,503,298 | 130,758,169 | 98,707,696 | 74,354,162 | |
Weighted average limited partner units outstanding - diluted (in units) | 129,771,010 | 131,169,538 | 131,279,910 | 130,819,217 | 130,704,217 | 114,237,979 | 74,597,036 | 74,503,298 | 130,758,169 | 98,707,696 | 74,354,162 | |
Other information | ||||||||||||
Settlement gain | $ 80,000 | $ 80,000 | $ 80,000 | |||||||||
Asset Impairment Charges | $ 40,500 | $ 40,483 | ||||||||||
Dotiki Mine | ||||||||||||
Other information | ||||||||||||
Asset Impairment Charges | 34,300 | |||||||||||
Coal reserves not to exercise lease option | ||||||||||||
Other information | ||||||||||||
Asset Impairment Charges | $ 6,200 | |||||||||||
Calculated under Revenue Guidance in Effect before Topic 606 | ||||||||||||
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | ||||||||||||
Revenues | $ 483,231 | $ 453,189 | $ 398,720 | $ 461,080 | $ 1,796,220 | $ 1,931,453 | ||||||
ARLP Series B Senior Notes | ||||||||||||
Other information | ||||||||||||
Debt extinguishment loss | $ 8,100 |
SUBSEQUENT EVENTS - AllDale Acq
SUBSEQUENT EVENTS - AllDale Acquisition (Details) - Subsequent event $ in Millions | Jan. 03, 2019USD ($)a |
Bluegrass Minerals | AllDale I and II | |
Subsequent Event | |
Noncontrolling ownership interest (as a percent) | 4.00% |
AllDale I and II | |
Subsequent Event | |
Purchase price paid in cash | $ | $ 176 |
Royalty acres, net | a | 43,000 |
AllDale I and II | General Partner's Capital (Deficit) | |
Subsequent Event | |
Ownership interest in acquiree in step acquisition (as a percent) | 100.00% |
AllDale I and II | Limited Partners' Capital | |
Subsequent Event | |
Ownership interest in acquiree in step acquisition (as a percent) | 97.00% |
SUBSEQUENT EVENTS - Kodiak Rede
SUBSEQUENT EVENTS - Kodiak Redemption (Details) - Kodiak - Subsequent event $ in Millions | Feb. 08, 2019USD ($) |
Subsequent Event | |
Redemption of preferred interest | $ 135 |
Gain on redemption | $ 11.5 |
SCHEDULE II VALUATION AND QUA_2
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS (Details) - Allowance for doubtful accounts - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Valuation And Qualifying Accounts | |||
Balance At Beginning of Year | $ 0 | $ 0 | $ 0 |
Additions Charged to Income | 0 | 0 | 0 |
Deductions | 0 | 0 | 0 |
Balance At End of Year | $ 0 | $ 0 | $ 0 |