Contura Announces Fourth Quarter and Full-Year 2018 Results
BRISTOL, Tenn., April 1, 2019 /PRNewswire/ -- Contura Energy, Inc. (NYSE: CTRA), a leading U.S. coal supplier, today reported results for the fourth quarter and full-year 2018 through December 31, 2018.
Highlights include:
- Net income from continuing operations of $156 million for the fourth quarter 2018 compared with net income of $115 million in the same period last year(1)
- Adjusted EBITDA of $111 million for the quarter compared with $44 million in the same period last year(1)(2)
- Merger-related synergies progressing ahead of schedule
(millions, except per share) | ||||
Three months ended Dec. 31, | Twelve months ended Dec. 31, | |||
2018(1) | 2017(1) | 2018(1) | 2017(1) | |
Net income(3) | $155.9 | $114.7 | $302.9 | $173.7 |
Net income(3) per diluted share | $9.85 | $10.83 | $25.86 | $16.13 |
Adjusted EBITDA(2) | $111.2 | $44.4 | $335.1 | $278.5 |
Operating cash flow(4) | $(17.9) | $54.3 | $158.4 | $314.3 |
Capital expenditures | $25.2 | $24.4 | $81.9 | $72.7 |
Tons of coal sold | 5.5 | 3.4 | 17.6 | 15.7 |
1. | Excludes discontinued operations, except as noted. | |
2. | These are non-GAAP financial measures. A reconciliation of Net Income to Adjusted EBITDA is included in tables accompanying the financial schedules. | |
3. | From continuing operations. | |
4. | Includes discontinued operations. | |
"Between the successful completion of our merger with Alpha and the refinancing of our term loans, along with our listing on the New York Stock Exchange, the fourth quarter of 2018 was filled with significant strategic milestones for the future of our company," said Kevin Crutchfield, chief executive officer. "Immediately after the closing of those transactions, our focus shifted towards integration and synergy realization – and we are making excellent progress on both fronts with synergies progressing ahead of our initial expectations. In addition to emphasizing operational enhancements, we continue to increase our investor outreach to expand our visibility as a recently-listed NYSE company."
Financial Performance
The following fourth quarter results reflect a full quarter of Contura results and a partial quarter of Alpha results post-merger. Contura has four reportable segments: Central Appalachia (CAPP) - Met, CAPP - Thermal, Northern Appalachia (NAPP), and Trading and Logistics (T&L).
Total revenues in the fourth quarter were $572.1 million. Coal revenues in the fourth quarter, excluding freight and handling fulfillment revenues, were $479.2 million, with CAPP - Met coal revenues accounting for $247.2 million, T&L accounting for $106.4 million, and NAPP coal revenues totaling $89.9 million. CAPP - Thermal revenues were $35.7 million for a partial fourth quarter 2018. Comparatively, in the fourth quarter 2017, CAPP - Met revenues were $90.2 million, T&L revenues were $141.1 million, and NAPP revenues were $61.1 million of the $292.4 million in total coal revenues.
CAPP - Met coal shipments for the fourth quarter 2018 were 2.1 million tons at an average per-ton realization of $119.37, compared to 0.8 million tons at $109.09 per ton in the prior year's fourth quarter. Contura shipped 2.0 million tons of NAPP coal during the quarter at an average per-ton realization of $45.63, up from 1.4 million tons at $43.89 per ton in the fourth quarter 2017. CAPP - Thermal shipments for a partial quarter were 0.6 million tons. In the T&L segment, coal volumes were 0.8 million tons in the fourth quarter of 2018, down from 1.2 million tons in the fourth quarter 2017. Fourth quarter 2018 included Alpha-related T&L sales only through the merger closing on November 9, after which they are accounted for as part of captive CAPP - Met sales. The average T&L realization increased from $115.37 per ton in the prior year's fourth quarter to $127.88 per ton during fourth quarter 2018.
Freight and handling fulfillment revenues in the fourth quarter 2018 were $95.1 million compared with $56.0 million in the prior year period.
Total costs and expenses during the fourth quarter 2018 were $554.7 million and cost of coal sales was $366.7 million, compared with $304.9 million and $245.2 million, respectively, in the same period a year ago. The cost of coal sales in CAPP - Met for the quarter averaged $84.14 per ton, up from $74.68 in the prior year period. CAPP - Met costs include $0.49 per ton in idle costs. The main drivers of increased costs versus last year expectations were higher labor costs, which accounted for approximately $4.00 a ton of the increased costs, and higher supply and maintenance costs, which increased costs by approximately $3.50 per ton. Also, higher sales-related costs resulting from strong metallurgical coal realizations contributed to higher costs per ton by approximately $1.00. CAPP - Thermal cost of coal sales averaged $67.40 per ton in the fourth quarter 2018, including idle costs of $0.32 per ton, and were elevated due to accelerated reclamation at a surface mine.
NAPP cost of coal sales was $32.64 per ton compared with $46.04 per ton in the year-ago period, which was negatively impacted by a previously disclosed roof fall. In the T&L segment, the cost of coal sales during the fourth quarter 2018 was $101.68 per ton versus $97.62 per ton in the fourth quarter 2017.
Selling, general and administrative (SG&A) expenses for the fourth quarter 2018 were $15.8 million, up from $11.4 million in the year-ago period. The year-ago period included approximately $2.7 million in non-cash stock compensation and charges related to the company's incentive plan. Included in the SG&A costs for the fourth quarter 2018 is approximately $3.1 million in non-cash stock compensation. Depreciation, depletion and amortization was $43.6 million during the fourth quarter 2018 and amortization of acquired intangibles was $(17.9) million, compared with $9.6 million and $9.9 million, respectively, in the same period last year, excluding discontinued operations.
Contura reported net income from continuing operations of $155.9 million, or $9.85 per diluted share from continuing operations, for the fourth quarter 2018. In the fourth quarter 2017, the company had net income from continuing operations of $114.7 million or $10.83 per diluted share from continuing operations.
Total adjusted EBITDA was $111.2 million for the fourth quarter, compared with $44.4 million in the fourth quarter of 2017, adjusted to remove the impact of discontinued operations.
Liquidity and Capital Resources
Cash used for operating activities for the fourth quarter 2018, including discontinued operations, was $17.9 million and capital expenditures for the fourth quarter were $25.2 million. In the prior year period, the cash provided by operating activities was $54.3 million and capital expenditures were $24.4 million. Capital expenditures of $2.3 million from discontinued operations are excluded from the prior year's total.
At the end of December 2018, Contura had $233.6 million in unrestricted cash. Total long-term debt, including the current portion of long-term debt as of December 31, 2018, was approximately $588.0 million. At the end of the quarter, the company had total liquidity of $429.9 million, including cash and cash equivalents of $233.6 million and $196.3 million of unused commitments available under the Asset-Based Revolving Credit Facility. As of December 31, 2018, the company had no borrowings and $28.7 million in letters of credit outstanding under the Asset-Based Revolving Credit Facility. Additionally, as a result of the merger with Alpha, the Company assumed $135.7 million in letters of credit outstanding under the Amended and Restated Letter of Credit Agreement and $11.9 million in letters of credit outstanding under the Credit and Security Agreement.
Merger Update
On November 9, 2018, Contura's merger with ANR, Inc. and Alpha Natural Resources Holdings, Inc. (together "Alpha") was completed, creating the largest metallurgical coal supplier in the U.S., complemented by a cost-competitive thermal coal portfolio.
In conjunction with the transaction closing, Contura ("CTRA") shares were listed and began trading on the New York Stock Exchange. Concurrently, the company refinanced its and legacy-Alpha's term loans with a new $550 million, 7-year term loan credit facility. In addition, the company increased its asset-backed revolving credit facility from $125 million to $225 million.
The company is making solid strides on the integration front and the anticipated synergy realizations on a run-rate basis are progressing ahead of the company's initial schedule, which targeted $30 million to $50 million in 2019.
Conference Call
The company plans to hold a conference call regarding its fourth quarter and full-year 2018 results on April 3, 2019, at 9:00 a.m. EST. The conference call will be available live on the investor section of the company's website at http://investors.conturaenergy.com/investors. Analysts who would like to participate in the conference call should dial 877-791-0213 (domestic toll-free) or 647-689-5651 (international) approximately 10 minutes prior to the start of the call.
ABOUT CONTURA ENERGY
Contura Energy (NYSE: CTRA) is a Tennessee-based coal supplier with affiliate mining operations across major coal basins in Pennsylvania, Virginia and West Virginia. With customers across the globe, high-quality reserves and significant port capacity, Contura Energy reliably supplies both metallurgical coal to produce steel and thermal coal to generate power. For more information, visit www.conturaenergy.com.
FORWARD-LOOKING STATEMENTS
This news release includes forward-looking statements. These forward-looking statements are based on Contura's expectations and beliefs concerning future events and involve risks and uncertainties that may cause actual results to differ materially from current expectations. These factors are difficult to predict accurately and may be beyond Contura's control. Forward-looking statements in this news release or elsewhere speak only as of the date made. New uncertainties and risks arise from time to time, and it is impossible for Contura to predict these events or how they may affect Contura. Except as required by law, Contura has no duty to, and does not intend to, update or revise the forward-looking statements in this news release or elsewhere after the date this release is issued. In light of these risks and uncertainties, investors should keep in mind that results, events or developments discussed in any forward-looking statement made in this news release may not occur.
INVESTOR CONTACT [email protected]
Alex Rotonen, CFA 423.573.0396
MEDIA CONTACTS [email protected]
Rick Axthelm 423.573.0304
Emily O'Quinn 423.573.0369
FINANCIAL TABLES FOLLOW
Use of Non-GAAP Measures
In addition to the results prepared in accordance with generally accepted accounting principles in the United States (GAAP) provided throughout this press release, Contura has presented the following non-GAAP financial measures: "Adjusted EBITDA" and "Adjusted Cost of Produced Coal Sold." The company uses Adjusted EBITDA to measure the operating performance of its segments and allocate resources to the segments. This non-GAAP financial measure excludes various items detailed in the attached reconciliation tables. Adjusted EBITDA does not purport to be an alternative to net income (loss) as a measure of operating performance. The Company uses Adjusted Cost of Produced Coal Sold to distinguish the cost of captive produced coal from the effects of purchased coal, idle costs and acquisition accounting requirements. The presentation of these measures should not be considered in isolation, or as a substitute for analysis of our results as reported under GAAP.
Management uses non-GAAP financial measures to supplement GAAP results to provide a more complete understanding of the factors and trends affecting the business than GAAP results alone. The definition of these non-GAAP measures may be changed periodically by management to adjust for significant items important to an understanding of operating trends. Because not all companies use identical calculations, the presentations of these measures may not be comparable to other similarly titled measures of other companies and can differ significantly from company to company depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which companies operate, and capital investments.
Included below are reconciliations of non-GAAP financial measures to GAAP financial measures.
CONTURA ENERGY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in thousands, except share and per share data) | |||||||||||||||
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Revenues: | |||||||||||||||
Coal revenues | $ | 574,351 | $ | 292,403 | $ | 2,020,889 | $ | 1,392,481 | |||||||
Freight and handling revenues | — | 55,991 | — | 247,402 | |||||||||||
Other revenues | (2,267) | 4,251 | 10,316 | 10,086 | |||||||||||
Total revenues | 572,084 | 352,645 | 2,031,205 | 1,649,969 | |||||||||||
Costs and expenses: | |||||||||||||||
Cost of coal sales (exclusive of items shown separately below) | 366,718 | 245,244 | 1,297,990 | 1,079,895 | |||||||||||
Freight and handling costs | 95,111 | 55,991 | 363,128 | 247,402 | |||||||||||
Depreciation, depletion and amortization | 43,598 | 9,618 | 77,549 | 34,910 | |||||||||||
Accretion on asset retirement obligations | 4,421 | 2,427 | 9,966 | 9,934 | |||||||||||
Amortization of acquired intangibles, net | (17,860) | 9,896 | (5,392) | 59,007 | |||||||||||
Selling, general and administrative expenses (exclusive of depreciation, depletion and amortization shown separately above) | 15,781 | 11,365 | 59,271 | 67,459 | |||||||||||
Merger related costs | 46,736 | — | 51,800 | — | |||||||||||
Secondary offering costs | — | (8) | — | 4,491 | |||||||||||
Total other operating (income) loss: | |||||||||||||||
Mark-to-market adjustment for acquisition-related obligations | 24 | — | 24 | 3,221 | |||||||||||
Gain on settlement of acquisition-related obligations | (170) | (29,686) | (580) | (38,886) | |||||||||||
Other expense (income) | 354 | 89 | (16,311) | 178 | |||||||||||
Total costs and expenses | 554,713 | 304,936 | 1,837,445 | 1,467,611 | |||||||||||
Income from operations | 17,371 | 47,709 | 193,760 | 182,358 | |||||||||||
Other income (expense): | |||||||||||||||
Interest expense | (12,272) | (7,897) | (38,810) | (35,977) | |||||||||||
Interest income | 1,120 | 94 | 1,949 | 210 | |||||||||||
Loss on modification and extinguishment of debt | (12,042) | — | (12,042) | (38,701) | |||||||||||
Equity loss in affiliates | (3,255) | (1,219) | (6,112) | (3,339) | |||||||||||
Bargain purchase gain | — | — | — | 1,011 | |||||||||||
Miscellaneous income, net | (517) | 544 | (1,254) | 194 | |||||||||||
Total other expense, net | (26,966) | (8,478) | (56,269) | (76,602) | |||||||||||
(Loss) income from continuing operations before income taxes | (9,595) | 39,231 | 137,491 | 105,756 | |||||||||||
Income tax benefit | 165,496 | 75,419 | 165,363 | 67,979 | |||||||||||
Net income from continuing operations | 155,901 | 114,650 | 302,854 | 173,735 | |||||||||||
Discontinued operations: | |||||||||||||||
Loss from discontinued operations before income taxes | (664) | (36,618) | (4,994) | (36,894) | |||||||||||
Income tax benefit from discontinued operations | 1,305 | 18,610 | 1,305 | 17,681 | |||||||||||
Income (loss) from discontinued operations | 641 | (18,008) | (3,689) | (19,213) | |||||||||||
Net income | $ | 156,542 | $ | 96,642 | $ | 299,165 | $ | 154,522 | |||||||
Basic income (loss) per common share: | |||||||||||||||
Income from continuing operations | $ | 10.38 | $ | 11.50 | $ | 27.61 | $ | 17.01 | |||||||
Income (loss) from discontinued operations | 0.04 | (1.81) | (0.33) | (1.89) | |||||||||||
Net income | $ | 10.42 | $ | 9.69 | $ | 27.28 | $ | 15.12 | |||||||
Diluted income (loss) per common share: | |||||||||||||||
Income from continuing operations | $ | 9.85 | $ | 10.83 | $ | 25.86 | $ | 16.13 | |||||||
Income (loss) from discontinued operations | 0.04 | (1.70) | (0.32) | (1.78) | |||||||||||
Net income | $ | 9.89 | $ | 9.13 | $ | 25.54 | $ | 14.35 | |||||||
Weighted average shares - basic | 15,014,994 | 9,971,877 | 10,967,014 | 10,216,464 | |||||||||||
Weighted average shares - diluted | 15,822,037 | 10,583,744 | 11,712,653 | 10,770,005 | |||||||||||
CONTURA ENERGY, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Amounts in thousands, except share and per share data) | |||||||
December 31, 2018 | December 31, 2017 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 233,599 | $ | 141,924 | |||
Trade accounts receivable, net of allowance for doubtful accounts of $0 as of December 31, 2018 and December 31, 2017 | 292,617 | 127,326 | |||||
Inventories, net | 121,965 | 69,561 | |||||
Prepaid expenses and other current assets | 158,945 | 83,845 | |||||
Current assets - discontinued operations | 22,475 | 40,498 | |||||
Total current assets | 829,601 | 463,154 | |||||
Property, plant, and equipment, net of accumulated depreciation and amortization of $106,766 and $39,943 as of December 31, 2018 and December 31, 2017 | 699,990 | 179,952 | |||||
Owned and leased mineral rights, net of accumulated depletion and amortization of $11,390 and $6,512 as of December 31, 2018 and December 31, 2017 | 528,232 | 16,627 | |||||
Goodwill | 95,624 | — | |||||
Other acquired intangibles, net of accumulated amortization of $20,267 and $28,662 as of December 31, 2018 and December 31, 2017 | 154,584 | 18,458 | |||||
Long-term restricted cash | 227,173 | 40,421 | |||||
Deferred income taxes | 27,179 | 78,744 | |||||
Other non-current assets | 183,675 | 31,612 | |||||
Non-current assets - discontinued operations | — | 7,632 | |||||
Total assets | $ | 2,746,058 | $ | 836,600 | |||
Liabilities and Stockholders' Equity | |||||||
Current liabilities: | |||||||
Current portion of long-term debt | $ | 42,743 | $ | 10,730 | |||
Trade accounts payable | 114,568 | 76,319 | |||||
Acquisition-related obligations - current | 27,334 | 15,080 | |||||
Liabilities held for sale | 1,351 | 27,161 | |||||
Accrued expenses and other current liabilities | 147,348 | 58,771 | |||||
Current liabilities - discontinued operations | 21,892 | 54,114 | |||||
Total current liabilities | 355,236 | 242,175 | |||||
Long-term debt | 545,269 | 361,973 | |||||
Acquisition-related obligations - long-term | 72,996 | 20,332 | |||||
Workers' compensation and black lung obligations | 249,294 | 41,658 | |||||
Pension obligations | 180,802 | — | |||||
Asset retirement obligations | 203,694 | 52,434 | |||||
Deferred income taxes | 15,118 | — | |||||
Other non-current liabilities | 52,415 | 17,618 | |||||
Non-current liabilities - discontinued operations | 94 | 7,762 | |||||
Total liabilities | 1,674,918 | 743,952 | |||||
Commitments and Contingencies | |||||||
Stockholders' Equity | |||||||
Preferred stock - par value $0.01, 5.0 million shares authorized at December 31, 2018 and 2.0 million shares authorized at December 31, 2017, none issued | — | — | |||||
Common stock - par value $0.01, 50.0 million shares authorized, 20.2 million issued and 19.1 million outstanding at December 31, 2018 and 20.0 million shares authorized, 10.7 million issued and 9.9 million outstanding at December 31, 2017 | 202 | 108 | |||||
Additional paid-in capital | 761,301 | 40,616 | |||||
Accumulated other comprehensive loss | (23,130) | (1,948) | |||||
Treasury stock, at cost: 1.1 million shares at December 31, 2018 and 0.8 million shares at December 31, 2017 | (70,362) | (50,092) | |||||
Retained earnings | 403,129 | 103,964 | |||||
Total stockholders' equity | 1,071,140 | 92,648 | |||||
Total liabilities and stockholders' equity | $ | 2,746,058 | $ | 836,600 | |||
CONTURA ENERGY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands) | |||||||
Year Ended December 31, 2018 | Year EndedDecember 31, 2017 | ||||||
Operating activities: | |||||||
Net income | $ | 299,165 | $ | 154,522 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation, depletion and amortization | 77,549 | 65,000 | |||||
Amortization of acquired intangibles, net | (5,392) | 59,007 | |||||
Accretion of acquisition-related obligations discount | 5,627 | 7,531 | |||||
Amortization of debt issuance costs and accretion of debt discount | 4,483 | 2,884 | |||||
Mark-to-market adjustment for acquisition-related obligations | 24 | 3,221 | |||||
Gain on settlement of acquisition-related obligations | (580) | (38,886) | |||||
(Gain) loss on disposal of assets | (16,852) | (570) | |||||
Bargain purchase gain | — | (1,011) | |||||
Accretion on asset retirement obligations | 9,966 | 21,275 | |||||
Employee benefit plans, net | 9,231 | 11,739 | |||||
Deferred income taxes | (66,682) | (78,744) | |||||
Loss on sale of Powder River Basin | — | 36,086 | |||||
Loss on modification and extinguishment of debt | 12,042 | 38,701 | |||||
Stock-based compensation | 13,354 | 20,372 | |||||
Equity in loss of affiliates | 6,112 | 3,325 | |||||
Other, net | 1,643 | — | |||||
Changes in operating assets and liabilities | |||||||
Trade accounts receivable, net | (84,139) | 34,840 | |||||
Inventories, net | 33,232 | 441 | |||||
Prepaid expenses and other current assets | (44,266) | (40,425) | |||||
Deposits | (7,493) | 38,447 | |||||
Other non-current assets | (36,655) | 24,498 | |||||
Trade accounts payable | (7,075) | 6,102 | |||||
Accrued expenses and other current liabilities | (7,345) | (12,207) | |||||
Acquisition-related obligations | (14,500) | (22,800) | |||||
Asset retirement obligations | (3,175) | (2,567) | |||||
Other non-current liabilities | (19,893) | (16,521) | |||||
Net cash provided by operating activities | 158,381 | 314,260 | |||||
Investing activities: | |||||||
Capital expenditures | (81,881) | (83,121) | |||||
Payments on disposal of assets | (10,250) | — | |||||
Proceeds on disposal of assets | 997 | 2,579 | |||||
Capital contributions to equity affiliates | (5,253) | (5,691) | |||||
Cash, cash equivalents and restricted cash acquired in acquisition, net of amounts paid | 198,506 | — | |||||
Purchase of additional ownership interest in equity affiliate | — | (13,293) | |||||
Cash paid on sale of Powder River Basin | — | (21,375) | |||||
Purchase of investment securities - held to maturity | (3,280) | (406) | |||||
Maturity of investment securities - held to maturity | 3,360 | — | |||||
Other, net | (3) | — | |||||
Net cash provided by (used in) investing activities | 102,196 | (121,307) | |||||
Financing activities: | |||||||
Proceeds from borrowings on debt | 537,750 | 396,000 | |||||
Principal repayments of debt | (471,704) | (369,500) | |||||
Principal repayments of capital lease obligations | (533) | (1,009) | |||||
Form S-4 costs | (3,918) | — | |||||
Debt issuance costs | (14,931) | (14,385) | |||||
Debt extinguishment costs | — | (25,036) | |||||
Debt amendment costs | — | (4,520) | |||||
Common stock repurchases and related expenses | (20,270) | (49,932) | |||||
Special dividend paid | — | (100,735) | |||||
Principal repayments of notes payable | (3,844) | (1,517) | |||||
Other, net | 159 | 352 | |||||
Net cash provided by (used in) financing activities | 22,709 | (170,282) | |||||
Net increase in cash and cash equivalents and restricted cash | 283,286 | 22,671 | |||||
Cash and cash equivalents and restricted cash at beginning of period | 193,960 | 171,289 | |||||
Cash and cash equivalents and restricted cash at end of period | $ | 477,246 | $ | 193,960 | |||
Supplemental cash flow information: | |||||||
Cash paid for interest | $ | 27,340 | $ | 40,635 | |||
Cash paid for taxes | $ | 37 | $ | 13,328 | |||
Cash received for income tax refunds | $ | 14,157 | $ | — | |||
Supplemental disclosure of non-cash investing and financing activities: | |||||||
Capital leases and capital financing - equipment | $ | 6,513 | $ | 1,574 | |||
Accrued capital expenditures | $ | 6,879 | $ | 9,408 | |||
Issuance of equity in connection with acquisition | $ | 664,460 | $ | — | |||
Net balance due to Alpha deemed effectively settled | $ | 47,048 | $ | — | |||
The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the Consolidated Balance Sheets that sum to the total of the same such amounts shown in the Consolidated Statements of Cash Flows. | |||||||
Year Ended December 31, 2018 | Year Ended December 31, 2017 | ||||||
Cash and cash equivalents | $ | 233,599 | $ | 141,924 | |||
Short-term restricted cash (included in Prepaid expenses and other current assets) | 16,474 | 11,615 | |||||
Long-term restricted cash | 227,173 | 40,421 | |||||
Total cash and cash equivalents and restricted cash | $ | 477,246 | $ | 193,960 | |||
CONTURA ENERGY, INC. AND SUBSIDIARIES ADJUSTED EBITDA RECONCILIATION (Amounts in thousands) | |||||||||||||||||||||||
Reconciliation of Non-GAAP measures: | |||||||||||||||||||||||
Three Months Ended December 31, 2018 | |||||||||||||||||||||||
CAPP - Met | CAPP - Thermal | NAPP | Trading and Logistics | All Other | Consolidated | ||||||||||||||||||
Net income (loss) from continuing operations | $ | 45,635 | $ | (18,974) | $ | 17,211 | $ | 36,553 | $ | 75,476 | $ | 155,901 | |||||||||||
Interest expense | (56) | 1 | (447) | — | 12,774 | 12,272 | |||||||||||||||||
Interest income | (5) | — | (10) | — | (1,105) | (1,120) | |||||||||||||||||
Income tax benefit | — | — | — | — | (165,496) | (165,496) | |||||||||||||||||
Depreciation, depletion and amortization | 22,694 | 10,596 | 7,512 | — | 2,796 | 43,598 | |||||||||||||||||
Merger related costs | — | 1 | — | 22 | 46,713 | 46,736 | |||||||||||||||||
Non-cash stock compensation expense | 73 | 24 | — | 335 | 3,306 | 3,738 | |||||||||||||||||
Mark-to-market adjustment - acquisition-related obligations | — | — | — | — | 24 | 24 | |||||||||||||||||
Gain on settlement of acquisition-related obligations | — | — | — | — | (170) | (170) | |||||||||||||||||
Accretion on asset retirement obligations | 1,708 | 1,298 | 941 | — | 474 | 4,421 | |||||||||||||||||
Loss on modification and extinguishment of debt | — | — | — | — | 12,042 | 12,042 | |||||||||||||||||
Cost impact of coal inventory fair value adjustment (1) | 11,547 | 5,517 | — | — | — | 17,064 | |||||||||||||||||
Amortization of acquired intangibles, net | 2,746 | 662 | — | (21,268) | — | (17,860) | |||||||||||||||||
Adjusted EBITDA | $ | 84,342 | $ | (875) | $ | 25,207 | $ | 15,642 | $ | (13,166) | $ | 111,150 | |||||||||||
(1) The cost impact of the coal inventory fair value adjustment as a result of the Alpha Merger is exepected to have short-term impact. | |||||||||||||||||||||||
Segment Information: | |||||||||||||||||||||||
Three Months Ended December 31, 2018 | |||||||||||||||||||||||
CAPP - Met | CAPP - Thermal | NAPP | Trading and Logistics | All Other | Consolidated | ||||||||||||||||||
Total revenues | $ | 247,562 | $ | 36,222 | $ | 89,623 | $ | 198,275 | $ | 402 | $ | 572,084 | |||||||||||
Depreciation, depletion, and amortization | $ | 22,694 | $ | 10,596 | $ | 7,512 | $ | — | $ | 2,796 | $ | 43,598 | |||||||||||
Amortization of acquired intangibles, net | $ | 2,746 | $ | 662 | $ | — | $ | (21,268) | $ | — | $ | (17,860) | |||||||||||
Adjusted EBITDA | $ | 84,342 | $ | (875) | $ | 25,207 | $ | 15,642 | $ | (13,166) | $ | 111,150 | |||||||||||
Capital expenditures | $ | 15,805 | $ | 1,280 | $ | 8,024 | $ | — | $ | 50 | $ | 25,159 | |||||||||||
Reconciliation of Non-GAAP measures: | |||||||||||||||||||||||
Successor | |||||||||||||||||||||||
Year Ended December 31, 2018 | |||||||||||||||||||||||
CAPP - Met | CAPP - Thermal | NAPP | Trading and Logistics | All Other | Consolidated | ||||||||||||||||||
Net income (loss) from continuing operations | $ | 193,422 | $ | (18,974) | $ | 18,651 | $ | 107,196 | $ | 2,559 | $ | 302,854 | |||||||||||
Interest expense | 260 | 1 | (1,286) | — | 39,835 | 38,810 | |||||||||||||||||
Interest income | (22) | — | (34) | (18) | (1,875) | (1,949) | |||||||||||||||||
Income tax benefit | — | — | — | — | (165,363) | (165,363) | |||||||||||||||||
Depreciation, depletion and amortization | 40,330 | 10,596 | 23,273 | — | 3,350 | 77,549 | |||||||||||||||||
Merger related costs | — | 1 | — | 22 | 51,777 | 51,800 | |||||||||||||||||
Management restructuring costs (1) | — | — | — | — | 2,659 | 2,659 | |||||||||||||||||
Non-cash stock compensation expense | 73 | 24 | — | 335 | 11,546 | 11,978 | |||||||||||||||||
Mark-to-market adjustment - acquisition-related obligations | — | — | — | — | 24 | 24 | |||||||||||||||||
Gain on settlement of acquisition-related obligations | — | — | — | — | (580) | (580) | |||||||||||||||||
Gain on sale of disposal group (2) | (16,386) | — | — | — | — | (16,386) | |||||||||||||||||
Accretion on asset retirement obligations | 4,430 | 1,298 | 3,764 | — | 474 | 9,966 | |||||||||||||||||
Loss on modification and extinguishment of debt | — | — | — | — | 12,042 | 12,042 | |||||||||||||||||
Cost impact of coal inventory fair value adjustment (3) | 11,547 | 5,517 | — | — | — | 17,064 | |||||||||||||||||
Amortization of acquired intangibles, net | 2,746 | 662 | — | (8,800) | — | (5,392) | |||||||||||||||||
Adjusted EBITDA | $ | 236,400 | $ | (875) | $ | 44,368 | $ | 98,735 | $ | (43,552) | $ | 335,076 | |||||||||||
(1) Management restructuring costs are related to severance expense associated with senior management changes in the year ended December 31, 2018. | |||||||||||||||||||||||
(2) During the fourth quarter of 2017, the Company entered into an asset purchase agreement to sell a disposal group (comprised of property, plant and equipment and associated asset retirement obligations) within our CAPP - Met segment. From the date the Company entered into the asset purchase agreement through the transaction close date, the property, plant and equipment and associated asset retirement obligations were classified as held for sale in amounts representing the fair value of the disposal group. Upon permit transfer, the transaction closed on April 2, 2018. The Company paid $10,000 in connection with the transaction, which was paid into escrow on March 27, 2018 and transferred to the buyer at the transaction close date, and expects to pay a series of additional cash payments in the aggregate amount of $1,500, per the terms stated in the agreement, and recorded a gain on sale of $16,386 within gain on disposal of assets within the Consolidated Statements of Operations. | |||||||||||||||||||||||
(3) The cost impact of the coal inventory fair value adjustment as a result of the Alpha Merger is expected to have short-term impact. | |||||||||||||||||||||||
Segment Information: | |||||||||||||||||||||||
Successor | |||||||||||||||||||||||
Year Ended December 31, 2018 | |||||||||||||||||||||||
CAPP - Met | CAPP - Thermal | NAPP | Trading and Logistics | All Other | Consolidated | ||||||||||||||||||
Total revenues | $ | 650,385 | $ | 36,222 | $ | 285,796 | $ | 1,055,505 | $ | 3,297 | $ | 2,031,205 | |||||||||||
Depreciation, depletion, and amortization | $ | 40,330 | $ | 10,596 | $ | 23,273 | $ | — | $ | 3,350 | $ | 77,549 | |||||||||||
Amortization of acquired intangibles, net | $ | 2,746 | $ | 662 | $ | — | $ | (8,800) | $ | — | $ | (5,392) | |||||||||||
Adjusted EBITDA | $ | 236,400 | $ | (875) | $ | 44,368 | $ | 98,735 | $ | (43,552) | $ | 335,076 | |||||||||||
Capital expenditures | $ | 39,634 | $ | 1,280 | $ | 40,635 | $ | — | $ | 332 | $ | 81,881 | |||||||||||
Reconciliation of Non-GAAP measures: | |||||||||||||||||||||||
Three Months Ended December 31, 2017 | |||||||||||||||||||||||
CAPP - Met | CAPP - Thermal | NAPP | Trading and Logistics | All Other | Consolidated | ||||||||||||||||||
Net income (loss) from continuing operations | $ | 21,720 | $ | — | $ | (5,251) | $ | 12,436 | $ | 85,745 | $ | 114,650 | |||||||||||
Interest expense | 2 | — | (872) | — | 8,767 | 7,897 | |||||||||||||||||
Interest income | (14) | — | (1) | — | (79) | (94) | |||||||||||||||||
Income tax benefit | — | — | — | — | (75,419) | (75,419) | |||||||||||||||||
Depreciation, depletion and amortization | 5,494 | — | 3,881 | — | 243 | 9,618 | |||||||||||||||||
Non-cash stock compensation expense | — | — | — | 270 | 8,027 | 8,297 | |||||||||||||||||
Gain on settlement of acquisition-related obligations | — | — | — | — | (29,686) | (29,686) | |||||||||||||||||
Secondary offering costs | — | — | — | — | (8) | (8) | |||||||||||||||||
Accretion on asset retirement obligations | 1,386 | — | 1,041 | — | — | 2,427 | |||||||||||||||||
Amortization of acquired intangibles, net | — | — | — | 9,896 | — | 9,896 | |||||||||||||||||
Expenses related to Special Dividend | (262) | — | 27 | — | (2,934) | (3,169) | |||||||||||||||||
Adjusted EBITDA (1) (2) | $ | 28,326 | $ | — | $ | (1,175) | $ | 22,602 | $ | (5,344) | $ | 44,409 | |||||||||||
(1) The Company's Adjusted EBITDA calculation has been modified to add back non-cash stock compensation expense and accretion on asset retirement obligations to align with industry peer group methodology. | |||||||||||||||||||||||
(2) Pursuant to the PRB divestiture and classification as a discontinued operation, the Company is no longer presenting a PRB reporting segment. The former PRB reporting segment had Adjusted EBITDA of $8,574 for the three months ended December 31, 2017. | |||||||||||||||||||||||
Segment Information: | |||||||||||||||||||||||
Three Months Ended December 31, 2017 | |||||||||||||||||||||||
CAPP - Met | CAPP - Thermal | NAPP | Trading and Logistics | All Other | Consolidated | ||||||||||||||||||
Total revenues | $ | 90,423 | $ | — | $ | 62,958 | $ | 198,990 | $ | 274 | $ | 352,645 | |||||||||||
Depreciation, depletion, and amortization | $ | 5,494 | $ | — | $ | 3,881 | $ | — | $ | 243 | $ | 9,618 | |||||||||||
Amortization of acquired intangibles, net | $ | — | $ | — | $ | — | $ | 9,896 | $ | — | $ | 9,896 | |||||||||||
Adjusted EBITDA | $ | 28,326 | $ | — | $ | (1,175) | $ | 22,602 | $ | (5,344) | $ | 44,409 | |||||||||||
Capital expenditures | $ | 9,660 | $ | — | $ | 14,642 | $ | — | $ | 142 | $ | 24,444 | |||||||||||
Reconciliation of Non-GAAP measures: | |||||||||||||||||||||||
Successor | |||||||||||||||||||||||
Year Ended December 31, 2017 | |||||||||||||||||||||||
CAPP - Met | CAPP - Thermal | NAPP | Trading and Logistics | All Other | Consolidated | ||||||||||||||||||
Net income (loss) from continuing operations | $ | 150,304 | $ | — | $ | 36,604 | $ | 29,639 | $ | (42,812) | $ | 173,735 | |||||||||||
Interest expense | (90) | — | (1,505) | — | 37,572 | 35,977 | |||||||||||||||||
Interest income | (22) | — | (1) | — | (187) | (210) | |||||||||||||||||
Income tax benefit | — | — | — | — | (67,979) | (67,979) | |||||||||||||||||
Depreciation, depletion and amortization | 18,941 | — | 15,087 | — | 882 | 34,910 | |||||||||||||||||
Non-cash stock compensation expense | — | — | — | 650 | 19,559 | 20,209 | |||||||||||||||||
Mark-to-market adjustment - acquisition-related obligations | — | — | — | — | 3,221 | 3,221 | |||||||||||||||||
Gain on settlement of acquisition-related obligations | — | — | — | — | (38,886) | (38,886) | |||||||||||||||||
Secondary offering costs | — | — | — | — | 4,491 | 4,491 | |||||||||||||||||
Loss on modification and extinguishment of debt | — | — | — | — | 38,701 | 38,701 | |||||||||||||||||
Bargain purchase gain | — | — | — | — | (1,011) | (1,011) | |||||||||||||||||
Accretion on asset retirement obligations | 5,770 | — | 4,164 | — | — | 9,934 | |||||||||||||||||
Amortization of acquired intangibles, net | — | — | — | 59,007 | — | 59,007 | |||||||||||||||||
Expenses related to the dividend | 115 | — | 84 | — | 6,168 | 6,367 | |||||||||||||||||
Adjusted EBITDA (1) (2) | $ | 175,018 | $ | — | $ | 54,433 | $ | 89,296 | $ | (40,281) | $ | 278,466 | |||||||||||
(1) The Company's Adjusted EBITDA calculation has been modified to add back non-cash stock compensation expense and accretion on asset retirement obligations to align with industry peer group methodology. | |||||||||||||||||||||||
(2) Pursuant to the PRB divestiture and classification as a discontinued operation, the Company is no longer presenting a PRB reporting segment. The former PRB reporting segment had Adjusted EBITDA of $41,863 for the year ended December 31, 2017. | |||||||||||||||||||||||
Segment Information: | |||||||||||||||||||||||
Successor | |||||||||||||||||||||||
Year Ended December 31, 2017 | |||||||||||||||||||||||
CAPP - Met | CAPP - Thermal | NAPP | Trading and Logistics | All Other | Consolidated | ||||||||||||||||||
Total revenues | $ | 460,023 | $ | — | $ | 306,563 | $ | 882,548 | $ | 835 | $ | 1,649,969 | |||||||||||
Depreciation, depletion, and amortization | $ | 18,941 | $ | — | $ | 15,087 | $ | — | $ | 882 | $ | 34,910 | |||||||||||
Amortization of acquired intangibles, net | $ | — | $ | — | $ | — | $ | 59,007 | $ | — | $ | 59,007 | |||||||||||
Adjusted EBITDA | $ | 175,018 | $ | — | $ | 54,433 | $ | 89,296 | $ | (40,281) | $ | 278,466 | |||||||||||
Capital expenditures | $ | 20,494 | $ | — | $ | 51,007 | $ | — | $ | 1,200 | $ | 72,701 | |||||||||||
CONTURA ENERGY, INC. AND SUBSIDIARIES RESULTS OF OPERATIONS | ||||||||||||||
Three Months Ended December 31, | Increase (Decrease) | |||||||||||||
(In thousands, except for per ton data) | 2018 | 2017 | $ or Tons | % | ||||||||||
Revenues: | ||||||||||||||
Coal revenues: | ||||||||||||||
Met | $ | 363,163 | $ | 232,680 | $ | 130,483 | 56.1 | % | ||||||
Thermal | 116,077 | 59,723 | 56,354 | 94.4 | % | |||||||||
Freight and handling fulfillment revenues (1) | 95,111 | 55,991 | 39,120 | 69.9 | % | |||||||||
Other revenues | (2,267) | 4,251 | (6,518) | (153.3) | % | |||||||||
Total revenues | $ | 572,084 | $ | 352,645 | $ | 219,439 | 62.2 | % | ||||||
Tons sold: | ||||||||||||||
Met | 2,957 | 2,061 | 896 | 43.5 | % | |||||||||
Thermal | 2,549 | 1,381 | 1,168 | 84.6 | % | |||||||||
Total | 5,506 | 3,442 | 2,064 | 60.0 | % | |||||||||
Coal sales realization per ton (2): | ||||||||||||||
Met | $ | 122.81 | $ | 112.90 | $ | 9.91 | 8.8 | % | ||||||
Thermal | $ | 45.54 | $ | 43.25 | $ | 2.29 | 5.3 | % | ||||||
Average | $ | 87.04 | $ | 84.95 | $ | 2.09 | 2.5 | % | ||||||
Three Months Ended December 31, | Increase (Decrease) | |||||||||||||
(In thousands, except for per ton data) | 2018 | 2017 | $ or Tons | % | ||||||||||
Coal revenues (2): | ||||||||||||||
CAPP - Met operations | $ | 247,211 | $ | 90,220 | $ | 156,991 | 174.0 | % | ||||||
CAPP - Thermal operations | 35,685 | — | 35,685 | 100.0 | % | |||||||||
NAPP operations | 89,946 | 61,089 | 28,857 | 47.2 | % | |||||||||
Trading and Logistics operations | 106,398 | 141,094 | (34,696) | (24.6) | % | |||||||||
Total coal revenues | $ | 479,240 | $ | 292,403 | $ | 186,837 | 63.9 | % | ||||||
Tons sold: | ||||||||||||||
CAPP - Met operations | 2,071 | 827 | 1,244 | 150.4 | % | |||||||||
CAPP - Thermal operations | 632 | — | 632 | 100.0 | % | |||||||||
NAPP Operations | 1,971 | 1,392 | 579 | 41.6 | % | |||||||||
Trading and Logistics operations | 832 | 1,223 | (391) | (32.0) | % | |||||||||
Coal sales realization per ton (2): | ||||||||||||||
CAPP - Met operations | $ | 119.37 | $ | 109.09 | $ | 10.28 | 9.4 | % | ||||||
CAPP - Thermal operations | $ | 56.46 | $ | — | $ | 56.46 | 100.0 | % | ||||||
NAPP operations | $ | 45.63 | $ | 43.89 | $ | 1.74 | 4.0 | % | ||||||
Trading and Logistics operations | $ | 127.88 | $ | 115.37 | $ | 12.51 | 10.8 | % | ||||||
Average | $ | 87.04 | $ | 84.95 | $ | 2.09 | 2.5 | % | ||||||
(1) Subsequent to the adoption of Accounting Standards Codification 606 during the current year, freight and handling fulfillment revenues for the three months ended December 31, 2018 are included within coal revenues. | ||||||||||||||
(2) Does not include $95.1 million of freight and handling fulfillment revenues for the three months ended December 31, 2018. | ||||||||||||||
Three Months Ended December 31, | Increase (Decrease) | |||||||||||||
(In thousands, except for per ton data) | 2018 | 2017 | $ or Tons | % | ||||||||||
Cost of coal sales (exclusive of items shown separately below) | $ | 366,718 | $ | 245,244 | $ | 121,474 | 49.5 | % | ||||||
Freight and handling costs | 95,111 | 55,991 | 39,120 | 69.9 | % | |||||||||
Depreciation, depletion and amortization | 43,598 | 9,618 | 33,980 | 353.3 | % | |||||||||
Accretion on asset retirement obligations | 4,421 | 2,427 | 1,994 | 82.2 | % | |||||||||
Amortization of acquired intangibles, net | (17,860) | 9,896 | (27,756) | (280.5) | % | |||||||||
Selling, general and administrative expenses (exclusive of depreciation, depletion and amortization shown separately above) | 15,781 | 11,365 | 4,416 | 38.9 | % | |||||||||
Merger related costs | 46,736 | — | 46,736 | 100.0 | % | |||||||||
Secondary offering costs | — | (8) | 8 | 100.0 | % | |||||||||
Total other operating (income) loss: | ||||||||||||||
Mark-to-market adjustment for acquisition-related obligations | 24 | — | 24 | 100.0 | % | |||||||||
Gain on settlement of acquisition-related obligations | (170) | (29,686) | 29,516 | 99.4 | % | |||||||||
Other expenses | 354 | 89 | 265 | 297.8 | % | |||||||||
Total costs and expenses | 554,713 | 304,936 | $ | 249,777 | 81.9 | % | ||||||||
Other income (expense): | ||||||||||||||
Interest expense | (12,272) | (7,897) | (4,375) | (55.4) | % | |||||||||
Interest income | 1,120 | 94 | 1,026 | 1,091.5 | % | |||||||||
Loss on modification and extinguishment of debt | (12,042) | — | (12,042) | (100.0) | % | |||||||||
Equity loss in affiliates | (3,255) | (1,219) | (2,036) | (167.0) | % | |||||||||
Miscellaneous income, net | (517) | 544 | (1,061) | (195.0) | % | |||||||||
Total other expense, net | (26,966) | (8,478) | (18,488) | (218.1) | % | |||||||||
Income tax benefit | 165,496 | 75,419 | 90,077 | 119.4 | % | |||||||||
Net income from continuing operations | $ | 155,901 | $ | 114,650 | $ | 41,251 | 36.0 | % | ||||||
Cost of coal sales: | ||||||||||||||
CAPP - Met operations | $ | 174,244 | $ | 61,760 | $ | 112,484 | 182.1 | % | ||||||
CAPP - Thermal operations | $ | 42,594 | $ | — | $ | 42,594 | 100.0 | % | ||||||
NAPP operations | $ | 64,338 | $ | 64,091 | $ | 247 | 0.4 | % | ||||||
Trading and Logistics operations | $ | 84,601 | $ | 119,393 | $ | (34,792) | (29.1) | % | ||||||
Tons sold: | ||||||||||||||
CAPP - Met operations | 2,071 | 827 | 1,244 | 150.4 | % | |||||||||
CAPP - Thermal operations | 632 | — | 632 | 100.0 | % | |||||||||
NAPP operations | 1,971 | 1,392 | 579 | 41.6 | % | |||||||||
Trading and Logistics operations | 832 | 1,223 | (391) | (32.0) | % | |||||||||
Cost of coal sales per ton: | ||||||||||||||
CAPP - Met operations | $ | 84.14 | $ | 74.68 | $ | 9.46 | 12.7 | % | ||||||
CAPP - Thermal operations | $ | 67.40 | $ | — | $ | 67.40 | 100.0 | % | ||||||
NAPP operations | $ | 32.64 | $ | 46.04 | $ | (13.40) | (29.1) | % | ||||||
Trading and Logistics operations | $ | 101.68 | $ | 97.62 | $ | 4.06 | 4.2 | % | ||||||
Coal margin per ton (1): | ||||||||||||||
CAPP - Met operations | $ | 35.23 | $ | 34.41 | $ | 0.82 | 2.4 | % | ||||||
CAPP - Thermal operations | $ | (10.94) | $ | — | $ | (10.94) | (100.0) | % | ||||||
NAPP operations | $ | 12.99 | $ | (2.15) | $ | 15.14 | (704.2) | % | ||||||
Trading and Logistics operations | $ | 26.20 | $ | 17.75 | $ | 8.45 | 47.6 | % | ||||||
(1) Coal margin per ton for our reportable segments is calculated as coal sales realization per ton for our reportable segments less cost of coal sales per ton for our reportable segments. Coal margin per ton is not shown for our All Other category since it has no coal sales or coal production related to our continuing operations. | ||||||||||||||
Year Ended December 31, | Increase (Decrease) | |||||||||||||
(In thousands, except for per ton data) | 2018 | 2017 | $ or Tons | % | ||||||||||
Revenues: | ||||||||||||||
Coal revenues: | ||||||||||||||
Met | $ | 1,378,747 | $ | 1,105,819 | $ | 272,928 | 24.7 | % | ||||||
Thermal | 279,014 | 286,662 | (7,648) | (2.7) | % | |||||||||
Freight and handling fulfillment revenues (1) | 363,128 | 247,402 | 115,726 | 46.8 | % | |||||||||
Other revenues | 10,316 | 10,086 | 230 | 2.3 | % | |||||||||
Total revenues | $ | 2,031,205 | $ | 1,649,969 | $ | 381,236 | 23.1 | % | ||||||
Tons sold: | ||||||||||||||
Met | 11,121 | 8,916 | 2,205 | 24.7 | % | |||||||||
Thermal | 6,466 | 6,741 | (275) | (4.1) | % | |||||||||
Total | 17,587 | 15,657 | 1,930 | 12.3 | % | |||||||||
Coal sales realization per ton (2): | ||||||||||||||
Met | $ | 123.98 | $ | 124.03 | $ | (0.05) | — | % | ||||||
Thermal | $ | 43.15 | $ | 42.53 | $ | 0.62 | 1.5 | % | ||||||
Average | $ | 94.26 | $ | 88.94 | $ | 5.32 | 6.0 | % | ||||||
Year Ended December 31, | Increase (Decrease) | |||||||||||||
(In thousands, except for per ton data) | 2018 | 2017 | $ or Tons | % | ||||||||||
Coal revenues (2): | ||||||||||||||
CAPP - Met operations | $ | 649,041 | $ | 458,806 | $ | 190,235 | 41.5 | % | ||||||
CAPP - Thermal operations | 35,685 | — | 35,685 | 100.0 | % | |||||||||
NAPP operations | 281,175 | 301,789 | (20,614) | (6.8) | % | |||||||||
Trading and Logistics operations | 691,860 | 631,886 | 59,974 | 9.5 | % | |||||||||
Total coal revenues | $ | 1,657,761 | $ | 1,392,481 | $ | 265,280 | 19.1 | % | ||||||
Tons sold: | ||||||||||||||
CAPP - Met operations | 5,196 | 3,901 | 1,295 | 33.2 | % | |||||||||
CAPP - Thermal operations | 632 | — | 632 | 100.0 | % | |||||||||
NAPP operations | 6,273 | 6,904 | (631) | (9.1) | % | |||||||||
Trading and Logistics operations | 5,486 | 4,852 | 634 | 13.1 | % | |||||||||
Coal sales realization per ton (2): | ||||||||||||||
CAPP - Met operations | $ | 124.91 | $ | 117.61 | $ | 7.30 | 6.2 | % | ||||||
CAPP - Thermal operations | $ | 56.46 | $ | — | $ | 56.46 | 100.0 | % | ||||||
NAPP operations | $ | 44.82 | $ | 43.71 | $ | 1.11 | 2.5 | % | ||||||
Trading and Logistics operations | $ | 126.11 | $ | 130.23 | $ | (4.12) | (3.2) | % | ||||||
Average | $ | 94.26 | $ | 88.94 | $ | 5.32 | 6.0 | % | ||||||
(1) Subsequent to the adoption of Accounting Standards Codification 606 during the current year, freight and handling fulfillment revenues for the year ended December 31, 2018 are included within coal revenues. | ||||||||||||||
(2) Does not include $363.1 million of freight and handling fulfillment revenues for the year ended December 31, 2018. | ||||||||||||||
Year Ended December 31, | Increase (Decrease) | |||||||||||||
(In thousands, except for per ton data) | 2018 | 2017 | $ or Tons | % | ||||||||||
Cost of coal sales (exclusive of items shown separately below) | $ | 1,297,990 | $ | 1,079,895 | $ | 218,095 | 20.2 | % | ||||||
Freight and handling costs | 363,128 | 247,402 | 115,726 | 46.8 | % | |||||||||
Depreciation, depletion and amortization | 77,549 | 34,910 | 42,639 | 122.1 | % | |||||||||
Accretion on asset retirement obligations | 9,966 | 9,934 | 32 | 0.3 | % | |||||||||
Amortization of acquired intangibles, net | (5,392) | 59,007 | (64,399) | (109.1) | % | |||||||||
Selling, general and administrative expenses (exclusive of depreciation, depletion and amortization shown separately above) | 59,271 | 67,459 | (8,188) | (12.1) | % | |||||||||
Merger related costs | 51,800 | — | 51,800 | 100.0 | % | |||||||||
Secondary offering costs | — | 4,491 | (4,491) | (100.0) | % | |||||||||
Total other operating (income) loss: | ||||||||||||||
Mark-to-market adjustment for acquisition-related obligations | 24 | 3,221 | (3,197) | (99.3) | % | |||||||||
Gain on settlement of acquisition-related obligations | (580) | (38,886) | 38,306 | 98.5 | % | |||||||||
Other (income) expense | (16,311) | 178 | (16,489) | (9,263.5) | % | |||||||||
Total costs and expenses | 1,837,445 | 1,467,611 | $ | 369,834 | 25.2 | % | ||||||||
Other income (expense): | ||||||||||||||
Interest expense | (38,810) | (35,977) | (2,833) | (7.9) | % | |||||||||
Interest income | 1,949 | 210 | 1,739 | 828.1 | % | |||||||||
Loss on modification and extinguishment of debt | (12,042) | (38,701) | 26,659 | 68.9 | % | |||||||||
Equity loss in affiliates | (6,112) | (3,339) | (2,773) | (83.0) | % | |||||||||
Bargain purchase gain | — | 1,011 | (1,011) | (100.0) | % | |||||||||
Miscellaneous income, net | (1,254) | 194 | (1,448) | (746.4) | % | |||||||||
Total other expense, net | (56,269) | (76,602) | 20,333 | 26.5 | % | |||||||||
Income tax benefit | 165,363 | 67,979 | 97,384 | 143.3 | % | |||||||||
Net income from continuing operations | $ | 302,854 | $ | 173,735 | $ | 129,119 | 74.3 | % | ||||||
Cost of coal sales: | ||||||||||||||
CAPP - Met operations | $ | 424,946 | $ | 284,634 | $ | 140,312 | 49.3 | % | ||||||
CAPP - Thermal operations | $ | 42,594 | $ | — | $ | 42,594 | 100.0 | % | ||||||
NAPP operations | $ | 241,652 | $ | 252,113 | $ | (10,461) | (4.1) | % | ||||||
Trading and Logistics operations | $ | 587,857 | $ | 543,148 | $ | 44,709 | 8.2 | % | ||||||
Tons sold: | ||||||||||||||
CAPP - Met operations | 5,196 | 3,901 | 1,295 | 33.2 | % | |||||||||
CAPP - Thermal operations | 632 | — | 632 | 100.0 | % | |||||||||
NAPP operations | 6,273 | 6,904 | (631) | (9.1) | % | |||||||||
Trading and Logistics operations | 5,486 | 4,852 | 634 | 13.1 | % | |||||||||
Cost of coal sales per ton: | ||||||||||||||
CAPP - Met operations | $ | 81.78 | $ | 72.96 | $ | 8.82 | 12.1 | % | ||||||
CAPP - Thermal operations | $ | 67.40 | $ | — | $ | 67.40 | 100.0 | % | ||||||
NAPP operations | $ | 38.52 | $ | 36.52 | $ | 2.00 | 5.5 | % | ||||||
Trading and Logistics operations | $ | 107.16 | $ | 111.94 | $ | (4.78) | (4.3) | % | ||||||
Coal margin per ton (1): | ||||||||||||||
CAPP - Met operations | $ | 43.13 | $ | 44.65 | $ | (1.52) | (3.4) | % | ||||||
CAPP - Thermal operations | $ | (10.94) | $ | — | $ | (10.94) | (100.0) | % | ||||||
NAPP operations | $ | 6.30 | $ | 7.19 | $ | (0.89) | (12.4) | % | ||||||
Trading and Logistics operations | $ | 18.95 | $ | 18.29 | $ | 0.66 | 3.6 | % | ||||||
(1) Coal margin per ton for our reportable segments is calculated as coal sales realization per ton for our reportable segments less cost of coal sales per ton for our reportable segments. Coal margin per ton is not shown for our All Other category since it has no coal sales or coal production related to our continuing operations. | ||||||||||||||
Our cost of coal sales includes idle and closed mine costs and purchased coal costs. Additionally due to the Merger, our cost of coal sales includes the cost impact of coal inventory fair value adjustments. In the following table, we calculate adjusted cost of produced coal sold as cost of coal sales less idle and closed mine costs, cost impact of coal inventory fair value adjustments and purchased coal costs. | |||||||||||||||||||||||
Three Months Ended December 31, 2018 | |||||||||||||||||||||||
(In thousands, except for per ton data) | CAPP - Met | CAPP - Thermal | NAPP | Trading and Logistics | All Other | Consolidated | |||||||||||||||||
Cost of coal sales: | |||||||||||||||||||||||
Cost of produced coal sold | $ | 143,297 | $ | 34,690 | $ | 64,403 | $ | — | $ | 220 | $ | 242,610 | |||||||||||
Cost of purchased coal sold | 18,385 | 2,185 | — | 84,601 | — | 105,171 | |||||||||||||||||
Cost impact of coal inventory fair value (1) | 11,547 | 5,517 | — | — | — | 17,064 | |||||||||||||||||
Idle and closed mine costs | 1,015 | 202 | (65) | — | 721 | 1,873 | |||||||||||||||||
Total cost of coal sales | $ | 174,244 | $ | 42,594 | $ | 64,338 | $ | 84,601 | $ | 941 | $ | 366,718 | |||||||||||
Tons sold | 2,071 | 632 | 1,971 | 832 | — | 5,506 | |||||||||||||||||
Cost of coal sales per ton | $ | 84.14 | $ | 67.40 | $ | 32.64 | $ | 101.68 | $ | — | $ | 66.60 | |||||||||||
Total cost of coal sales | $ | 174,244 | $ | 42,594 | $ | 64,338 | $ | 84,601 | $ | 941 | $ | 366,718 | |||||||||||
Less: cost of purchased coal sold | (18,385) | (2,185) | — | (84,601) | — | (105,171) | |||||||||||||||||
Less: cost impact of coal inventory fair value | (11,547) | (5,517) | — | — | — | (17,064) | |||||||||||||||||
Less: idle and closed mine costs | (1,015) | (202) | 65 | — | (721) | (1,873) | |||||||||||||||||
Cost of produced coal sold | $ | 143,297 | $ | 34,690 | $ | 64,403 | $ | — | $ | 220 | $ | 242,610 | |||||||||||
Produced tons sold | 1,910 | 595 | 1,971 | — | — | 4,476 | |||||||||||||||||
Cost of produced coal sold per ton | $ | 75.02 | $ | 58.30 | $ | 32.68 | $ | — | $ | — | $ | 54.20 | |||||||||||
(1) | The cost impact of the coal inventory fair value adjustment as a result of the Alpha Merger is expected to have short-term impact. |
Year Ended December 31, 2018 | |||||||||||||||||||||||
(In thousands, except for per ton data) | CAPP - Met | CAPP - Thermal | NAPP | Trading and Logistics | All Other | Consolidated | |||||||||||||||||
Cost of coal sales: | |||||||||||||||||||||||
Cost of produced coal sold | $ | 360,164 | $ | 34,690 | $ | 238,876 | $ | — | $ | 220 | $ | 633,950 | |||||||||||
Cost of purchased coal sold | 49,383 | 2,185 | — | 587,857 | — | 639,425 | |||||||||||||||||
Cost impact of coal inventory fair value adjustment (1) | 11,547 | 5,517 | — | — | — | 17,064 | |||||||||||||||||
Idle and closed mine costs | 3,852 | 202 | 2,776 | — | 721 | 7,551 | |||||||||||||||||
Total cost of coal sales | $ | 424,946 | $ | 42,594 | $ | 241,652 | $ | 587,857 | $ | 941 | $ | 1,297,990 | |||||||||||
Tons sold | 5,196 | 632 | 6,273 | 5,486 | — | 17,587 | |||||||||||||||||
Cost of coal sales per ton | $ | 81.78 | $ | 67.40 | $ | 38.52 | $ | 107.16 | $ | — | $ | 73.80 | |||||||||||
Total cost of coal sales | $ | 424,946 | $ | 42,594 | $ | 241,652 | $ | 587,857 | $ | 941 | $ | 1,297,990 | |||||||||||
Less: cost of purchased coal sold | (49,383) | (2,185) | — | (587,857) | — | (639,425) | |||||||||||||||||
Less: cost impact of coal inventory fair value adjustment | (11,547) | (5,517) | — | — | — | (17,064) | |||||||||||||||||
Less: idle and closed mine costs | (3,852) | (202) | (2,776) | — | (721) | (7,551) | |||||||||||||||||
Cost of produced coal sold | $ | 360,164 | $ | 34,690 | $ | 238,876 | $ | — | $ | 220 | $ | 633,950 | |||||||||||
Produced tons sold | 4,750 | 595 | 6,273 | — | — | 11,618 | |||||||||||||||||
Cost of produced coal sold per ton | $ | 75.82 | $ | 58.30 | $ | 38.08 | $ | — | $ | — | $ | 54.57 | |||||||||||
(1) The cost impact of the coal inventory fair value adjustment as a result of the Alpha Merger is expected to have short-term impact. | |||||||||||||||||||||||
Three Months Ended December 31, 2017 | |||||||||||||||||||||||
(In thousands, except for per ton data) | CAPP - Met | CAPP - Thermal | NAPP | Trading and Logistics | All Other | Consolidated | |||||||||||||||||
Cost of coal sales: | |||||||||||||||||||||||
Cost of produced coal sold | $ | 54,720 | $ | — | $ | 63,786 | $ | — | $ | — | $ | 118,506 | |||||||||||
Cost of purchased coal sold | 6,435 | — | — | 119,393 | — | 125,828 | |||||||||||||||||
Idle mine costs | 605 | — | 305 | — | — | 910 | |||||||||||||||||
Total cost of coal sales | $ | 61,760 | $ | — | $ | 64,091 | $ | 119,393 | $ | — | $ | 245,244 | |||||||||||
Tons sold | 827 | — | 1,392 | 1,223 | — | 3,442 | |||||||||||||||||
Cost of coal sales per ton | $ | 74.68 | $ | — | $ | 46.04 | $ | 97.62 | $ | — | $ | 71.25 | |||||||||||
Total cost of coal sales | $ | 61,760 | $ | — | $ | 64,091 | $ | 119,393 | $ | — | $ | 245,244 | |||||||||||
Less: cost of purchased coal sold | (6,435) | — | — | (119,393) | — | (125,828) | |||||||||||||||||
Less: idle mine costs | (605) | — | (305) | — | — | (910) | |||||||||||||||||
Cost of produced coal sold | $ | 54,720 | $ | — | $ | 63,786 | $ | — | $ | — | $ | 118,506 | |||||||||||
Produced tons sold | 780 | — | — | — | — | 780 | |||||||||||||||||
Cost of produced coal sold per ton | $ | 70.15 | $ | — | $ | — | $ | — | $ | — | $ | 151.93 | |||||||||||
Year Ended December 31, 2017 | |||||||||||||||||||||||
(In thousands, except for per ton data) | CAPP - Met | CAPP - Thermal | NAPP | Trading and Logistics | All Other | Consolidated | |||||||||||||||||
Cost of coal sales: | |||||||||||||||||||||||
Cost of produced coal sold | $ | 267,121 | $ | — | $ | 248,344 | $ | — | $ | — | $ | 515,465 | |||||||||||
Cost of purchased coal sold | 14,734 | — | 47 | 543,148 | — | 557,929 | |||||||||||||||||
Idle and closed mine costs | 2,779 | — | 3,722 | — | — | 6,501 | |||||||||||||||||
Total cost of coal sales | $ | 284,634 | $ | — | $ | 252,113 | $ | 543,148 | $ | — | $ | 1,079,895 | |||||||||||
Tons sold | 3,901 | — | 6,904 | 4,852 | — | 15,657 | |||||||||||||||||
Cost of coal sales per ton | $ | 72.96 | $ | — | $ | 36.52 | $ | 111.94 | $ | — | $ | 68.97 | |||||||||||
Total cost of coal sales | $ | 284,634 | $ | — | $ | 252,113 | $ | 543,148 | $ | — | $ | 1,079,895 | |||||||||||
Less: cost of purchased coal sold | (14,734) | — | (47) | (543,148) | — | (557,929) | |||||||||||||||||
Less: idle and closed mine costs | (2,779) | — | (3,722) | — | — | (6,501) | |||||||||||||||||
Cost of produced coal sold | $ | 267,121 | $ | — | $ | 248,344 | $ | — | $ | — | $ | 515,465 | |||||||||||
Produced tons sold | 3,757 | — | 6,902 | — | — | 10,659 | |||||||||||||||||
Cost of produced coal sold per ton | $ | 71.10 | $ | — | $ | 35.98 | $ | — | $ | — | $ | 48.36 | |||||||||||
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SOURCE Contura Energy, Inc.