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SEC Filings

10-Q
ARCH COAL INC filed this Form 10-Q on 10/31/2017
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Reconciliation of Segment Adjusted EBITDAR to Net Income
 
The discussion in “Results of Operations” above includes references to our Adjusted EBITDAR for each of our reportable segments. Adjusted EBITDAR is defined as net income attributable to the Company before the effect of net interest expense, income taxes, depreciation, depletion and amortization, the amortization of sales contracts, the accretion on asset retirement obligations, and reorganization items, net. Adjusted EBITDAR may also be adjusted for items that may not reflect the trend of future results by excluding transactions that are not indicative of our core operating performance. We use Adjusted EBITDAR to measure the operating performance of our segments and allocate resources to our segments. Adjusted EBITDAR is not a measure of financial performance in accordance with generally accepted accounting principles, and items excluded from Adjusted EBITDAR are significant in understanding and assessing our financial condition. Therefore, Adjusted EBITDAR should not be considered in isolation, nor as an alternative to net income, income from operations, cash flows from operations or as a measure of our profitability, liquidity or performance under generally accepted accounting principles. Investors should be aware that our presentation of Adjusted EBITDAR may not be comparable to similarly titled measures used by other companies. The table below shows how we calculate Adjusted EBITDAR.

 
 
Successor
Predecessor
 
Successor
Predecessor
 
Three Months Ended September 30,
Three Months Ended September 30,
 
Nine Months Ended September 30,
Nine Months Ended September 30,
 
2017
2016
 
2017
2016
(In thousands)
 
 
 
 
 
Reported Segment Adjusted EBITDAR
$
123,331

$
116,676

 
$
388,139

$
156,484

EBITDA from idled or otherwise disposed operations
(3,824
)
(7,674
)
 
(10,758
)
(14,514
)
Selling, general, and administrative expenses
(21,052
)
(20,498
)
 
(63,721
)
(59,343
)
Other
5,815

829

 
6,476

4,676

Adjusted EBITDAR
104,270

89,333

 
320,136

87,303

Benefit from income taxes
1,643

3,270

 
484

4,626

Interest expense, net
(5,252
)
(45,582
)
 
(19,311
)
(133,235
)
Depreciation, depletion and amortization
(31,914
)
(69,423
)
 
(94,536
)
(191,581
)
Accretion on asset retirement obligations
(7,580
)
(7,965
)
 
(22,826
)
(24,321
)
Amortization of sales contracts, net
(13,861
)
(104
)
 
(42,903
)
728

Asset impairment and mine closure costs

(46
)
 

(129,267
)
Gain on sale of Lone Mountain Processing, Inc.
21,574


 
21,574


Net loss resulting from early retirement of debt and debt restructuring
(486
)

 
(2,547
)
(2,213
)
Reorganization items, net
(43
)
(20,904
)
 
(2,892
)
(46,050
)
Net income (loss)
$
68,351

$
(51,421
)
 
$
157,179

$
(434,010
)
 

Other includes primarily income from our equity investments, certain actuarial adjustments, and certain changes in the fair value of coal derivatives and coal trading activities.
    
Liquidity and Capital Resources
 
Our primary sources of liquidity are proceeds from coal sales to customers and certain financing arrangements. Excluding significant investing activity, we intend to satisfy our working capital requirements and fund capital expenditures and debt-service obligations with cash generated from operations and cash on hand. Our focus is prudently managing costs, including capital expenditures, maintaining a strong balance sheet, and insuring adequate liquidity.

On April 27, 2017, our Board of Directors authorized a share repurchase program for up to $300 million of our common stock, and a quarterly common stock cash dividend of $0.35 per share. During the third quarter of 2017, we repurchased 2,208,133 shares of our stock for approximately $167 million including 750,000 shares purchased directly from Monarch Alternative Capital LP for approximately $56 million. Total shares repurchased during first nine months of 2017 were 2,918,834 for approximately $216 million. Also during the third quarter of 2017, we paid a quarterly cash dividend of $0.35 per share, totaling approximately $8.2 million.
    

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