ST. LOUIS, Nov. 9, 2015 /PRNewswire/ --
Earnings
Highlights
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Quarter
Ended
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Nine Months
Ended
|
In $ millions,
except per share data
|
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9/30/15
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9/30/14
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9/30/15
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9/30/14
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Revenues
|
|
$688.5
|
|
$742.2
|
|
|
$2,010.0
|
|
$2,191.9
|
Loss from
Operations
|
|
($2,236.8)
|
|
($35.3)
|
|
|
($2,326.0)
|
|
($144.2)
|
Net
Loss
|
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($1,999.5)
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($97.2)
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($2,280.8)
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($318.2)
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Diluted
LPS
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($93.91)
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($4.58)
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($107.16)
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($15.00)
|
Adjusted Diluted
LPS 1
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($3.38)
|
|
($4.52)
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($15.66)
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|
($15.10)
|
Adjusted EBITDA
1
|
|
$134.8
|
|
$71.9
|
|
|
$261.9
|
|
$164.4
|
1/- Defined and
reconciled under "Reconciliation of non-GAAP
measures."
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Arch Coal, Inc. (NYSE: ACI) today reported a net loss of
$2.0 billion, or $93.91 per diluted share, for the quarter ending
September 30, 2015. The company
recorded a $2.1 billion asset
impairment charge during the quarter and incurred $149 million of losses related to the bankruptcy
of Patriot Coal. Excluding asset impairments, losses related to the
Patriot Coal bankruptcy and amortization of sales contracts, Arch's
third quarter 2015 adjusted net loss was $3.38 per diluted share compared with an adjusted
net loss of $4.52 per adjusted
diluted share in the prior-year quarter. Revenues totaled
$689 million in the third quarter of
2015, and adjusted earnings before interest, taxes, depreciation,
depletion and amortization ("EBITDA") was $135 million.
For the first nine months of 2015, Arch generated adjusted
EBITDA of $262 million compared with
$164 million in the prior-year
period. Total revenues declined to $2.0
billion for the nine months ended September 30, 2015, largely due to lower
metallurgical coal prices and output.
"From an operational perspective, Arch delivered an
exceptionally strong performance during the quarter," said
John W. Eaves, Arch's chairman and
chief executive officer. "Our results reflect the actions we
have taken to respond to the challenging market environment,
including reducing costs and enhancing efficiency across the
company. Thanks to the efforts of our skilled employees, we
increased cash margins in each of our three operating regions and
continued to build on our industry-leading safety and environmental
stewardship records. Despite these efforts, however, the
difficult conditions impacting the coal industry persist, and we
expect they will continue throughout 2016."
Financial Position
"As demonstrated by our third quarter results, our operations
continue to generate a significant amount of cash; and we are
maintaining sufficient liquidity to continue operating as normal,"
said John T. Drexler, Arch's senior
vice president and chief financial officer. "Our cash flow,
however, is not sufficient to service our debt sustainably in this
operating environment. As a result, Arch will require a
significant restructuring of its balance sheet to continue to
operate as a going concern over the long term. We are
currently in active dialogue with various creditors with respect to
a restructuring of our balance sheet. Our mining operations
and customer shipments are continuing as normal and we continue to
have sufficient liquidity and no near-term maturities.
Regardless of what path we ultimately choose, we expect to continue
providing our customers the same high quality services they have
come to expect from Arch."
Arch has elected to terminate its $250
million revolver which will become effective on November 11, 2015. The company had no
borrowings under its revolver and no intention to borrow under
it. On a pro-forma basis, taking into consideration the
termination of the revolver, Arch had liquidity of $704.4 million at September 30, 2015 with $694.5 million of that in cash and liquid
securities.
Core Values
Arch's focus on safety and environmental excellence led to
continued progress throughout 2015, with five complexes completing
the quarter with A Perfect Zero – the dual accomplishment of
operating without a reportable safety incident or environmental
violation. Through the end of the third quarter, Arch's
total-incident rate was three times better than the industry
average and on pace to be the best in the Company's history.
Also, Arch's year-to-date 2015 environmental performance
represents a nearly 40 percent improvement when compared to the
first nine months of 2014 and is on track to set a new company
record in environmental compliance.
During the third quarter, Arch's Mountain Laurel complex in
Appalachia was honored with the national Good Neighbor Award by the
U.S. Department of Interior for demonstrating the nation's best
stewardship practices of the past year. Arch Coal subsidiaries have
earned six national Good Neighbor Awards since the program was
established. Additionally, in September the Coal Creek mine in the
Powder River Basin completed two years without a reportable safety
incident.
"We are pleased that our exemplary stewardship practices and
community involvement were recognized at the national level," said
Paul A. Lang, Arch president and
chief operating officer. "These accomplishments and continued
improvements are a direct result of our employees' unwavering
commitment to our core values. We continue to make great progress
toward Arch's ultimate safety and environmental goals."
Operational Results
"In addition to continuing our focus on reducing costs and
operating efficiently, we also increased shipment levels in two of
our three operating regions," said Lang. "We reduced per-ton
cash costs by 22 percent in Appalachia, driven by the strong
productivity at our two longwall operations, and by 8 percent in
the Powder River Basin, helped by higher shipment levels."
|
Arch Coal,
Inc.
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3Q15
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2Q15
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3Q14
|
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|
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Tons sold (in
millions)
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34.8
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|
|
30.6
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35.1
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Average sales price
per ton
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$18.45
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$19.65
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$19.97
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Cash cost per
ton
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$14.10
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|
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$16.83
|
|
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$17.18
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Cash margin per
ton
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$4.35
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|
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$2.82
|
|
|
$2.79
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Total operating cost
per ton
|
|
$17.05
|
|
|
$19.96
|
|
|
$20.12
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Operating margin
per ton
|
|
$1.40
|
|
|
($0.31)
|
|
|
($0.15)
|
|
|
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|
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Consolidated
results may not tie to regional breakout due to exclusion of other
assets, rounding.
|
Cash cost per ton
is defined and reconciled under "Reconciliation of non-GAAP
measures."
|
Operating cost per
ton is the sum of cash costs and depreciation,
depletion and
amortization expense divided by tons sold.
|
Arch's operations increased operational cash flow margins during
the third quarter. On a consolidated basis, Arch earned
$4.35 per ton in cash margin during
the third quarter of 2015 compared with $2.82 per ton in the second quarter of 2015,
reflecting the impact of increased volumes in the company's Powder
River Basin segment, high productivity in its Appalachian segment
and lower per-ton costs across the operating platform.
Consolidated sales price per ton decreased more than 6 percent due
to continued weakness in coal markets and a larger percentage of
Powder River Basin volumes, but was more than offset by a decrease
in per-ton cash costs.
|
Powder River
Basin
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3Q15
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2Q15
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3Q14
|
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Tons sold (in
millions)
|
|
29.5
|
|
|
25.5
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|
29.3
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Average sales price
per ton
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$13.07
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|
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$13.24
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$13.03
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Cash cost per
ton
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$10.10
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|
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$10.99
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|
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$10.92
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Cash margin per
ton
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$2.97
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|
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$2.25
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|
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$2.11
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Total operating cost
per ton
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|
$11.71
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|
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$12.66
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|
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$12.42
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Operating margin
per ton
|
|
$1.36
|
|
|
$0.58
|
|
|
$0.61
|
|
|
|
|
|
|
|
|
|
|
|
Cash cost per ton
is defined and reconciled under "Reconciliation of non-GAAP
measures."
|
Operating cost per
ton is the sum of cash costs and depreciation,
depletion and
amortization expense divided by tons sold.
|
In the Powder River Basin, third quarter cash margin increased
$0.72 to $2.97 per ton versus the second quarter. The
increase was due to lower cash cost per ton largely attributable to
higher shipment levels and continuing cost control efforts.
The average sales price per ton declined reflecting lower
contracted pricing, particularly on indexed volumes.
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Appalachia
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|
3Q15
|
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2Q15
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3Q14
|
|
|
|
|
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|
|
|
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Tons sold (in
millions)
|
|
3.0
|
|
|
3.1
|
|
|
3.6
|
|
Average sales price
per ton
|
|
$62.24
|
|
|
$65.83
|
|
|
$68.72
|
|
Cash cost per
ton
|
|
$48.96
|
|
|
$62.86
|
|
|
$66.37
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|
Cash margin per
ton
|
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$13.28
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$2.97
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|
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$2.35
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|
Total operating cost
per ton
|
|
$63.70
|
|
|
$76.46
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|
|
$79.87
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Operating margin
per ton
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|
($1.46)
|
|
|
($10.63)
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|
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($11.15)
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|
|
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|
|
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|
Cash cost per ton
is defined and reconciled under "Reconciliation of non-GAAP
measures."
|
Operating cost per
ton is the sum of cash costs and depreciation,
depletion and
amortization expense divided by tons sold.
|
In Appalachia, Arch's cash margin per ton more than tripled to
$13.28 per ton from $2.97 per ton in the second quarter due to
significant improvement in cash costs per ton. The decrease
reflects increased output at Arch's two longwall operations,
particularly the Leer mine. Prior quarter per-ton costs were
impacted by longwall moves at both Leer and Mountain Laurel.
Average sales price per ton decreased due to continued
deterioration in metallurgical markets.
|
Bituminous
Thermal
|
|
|
3Q15
|
|
|
2Q15
|
|
|
3Q14
|
|
|
|
|
|
|
|
|
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Tons sold (in
millions)
|
|
2.3
|
|
|
1.9
|
|
|
2.2
|
|
Average sales price
per ton
|
|
$30.20
|
|
|
$30.37
|
|
|
$31.81
|
|
Cash cost per
ton
|
|
$19.85
|
|
|
$20.15
|
|
|
$19.48
|
|
Cash margin per
ton
|
|
$10.35
|
|
|
$10.22
|
|
|
$12.33
|
|
Total operating cost
per ton
|
|
$24.63
|
|
|
$25.77
|
|
|
$24.16
|
|
Operating margin
per ton
|
|
$5.57
|
|
|
$4.60
|
|
|
$7.65
|
|
|
|
|
|
|
|
|
|
|
|
Cash cost per ton
is defined and reconciled under "Reconciliation of non-GAAP
measures."
|
Operating cost per
ton is the sum of cash costs and depreciation,
depletion and
amortization expense divided by tons sold.
|
In the Bituminous Thermal segment, third quarter cash margin per
ton increased to $10.35 per ton, due
to a decrease in cash costs per ton. The improvement in cash costs
per ton was driven by increased shipment levels and production
volume at the West Elk mine. Average sales price per ton declined
slightly to $30.20, reflecting lower
pricing on contracted tons.
Market Trends
Low natural gas prices, record high natural gas inventories,
weak electric power demand and multiple coal plant closures
stemming from the implementation of new environmental regulations
led to a steep decline in domestic coal-based power
generation. As a result of these factors, Arch now expects
domestic thermal coal consumption to decline by 95 million tons
during 2015. While supply cuts are well underway and will
reduce U.S. thermal coal production markedly during the year, Arch
nevertheless expects stockpiles at U.S. power generators to climb
to more than 185 million tons, or over 90 days of supply, at
year-end. These inflated levels are expected to dampen
thermal coal demand and pricing throughout next year.
Conditions in U.S. metallurgical coal markets remain challenging
as well due to deteriorating global steel demand, continued strong
output from Australia and a strong
U.S. dollar that hinders U.S. competitiveness.
"We believe that announced production cuts and the continued
lack of investment in new metallurgical production simply will not
be enough to balance the market, and that additional reductions
will be necessary across our industry," Lang said. "As a
result, we expect pricing for both metallurgical and thermal coal
to remain under significant pressure throughout 2016."
|
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2015
|
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2016
|
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Tons
|
$ per
ton
|
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Tons
|
$ per
ton
|
Sales Volume
(in millions tons)
|
|
|
|
|
|
|
|
|
|
|
Thermal
|
|
|
120.0
|
-
|
124.0
|
|
|
|
|
|
|
Met
|
|
|
6.0
|
-
|
6.8
|
|
|
|
|
|
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Total
|
|
|
126.0
|
-
|
130.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Powder River
Basin
|
|
|
|
|
|
|
|
|
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Committed,
Priced
|
|
|
|
|
109.6
|
|
|
$13.18
|
|
66.0
|
$13.39
|
Committed,
Unpriced
|
|
|
|
0.6
|
|
|
|
|
5.9
|
|
Total
Committed
|
|
|
|
|
110.2
|
|
|
|
|
71.9
|
|
Average Cash
Cost
|
|
|
|
|
|
$10.60
|
-
|
$10.80
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Appalachia
|
|
|
|
|
|
|
|
|
|
|
|
Committed, Priced
Thermal
|
|
|
|
5.7
|
|
|
$54.23
|
|
2.3
|
$58.33
|
Committed, Unpriced
Thermal
|
|
|
|
-
|
|
|
|
|
-
|
|
Committed, Priced
Metallurgical
|
|
|
|
6.2
|
|
|
$71.91
|
|
1.4
|
$77.03
|
Committed, Unpriced
Metallurgical
|
|
|
-
|
|
|
|
|
0.7
|
|
Total
Committed
|
|
|
|
|
11.9
|
|
|
|
|
4.4
|
|
Average Cash
Cost
|
|
|
|
|
|
$55.50
|
-
|
$58.50
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bituminous
Thermal
|
|
|
|
|
|
|
|
|
|
|
Committed,
Priced
|
|
|
|
|
7.1
|
|
|
$31.35
|
|
3.8
|
$33.29
|
Committed,
Unpriced
|
|
|
|
0.1
|
|
|
|
|
-
|
|
Total
Committed
|
|
|
|
|
7.2
|
|
|
|
|
3.8
|
|
Average Cash
Cost
|
|
|
|
|
|
$22.00
|
-
|
$24.00
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate (in $
millions)
|
|
|
|
|
|
|
|
|
|
|
D,D&A
|
|
|
|
|
|
$385
|
-
|
$395
|
|
|
|
S,G&A
|
|
|
|
|
|
$95
|
-
|
$105
|
|
|
|
Interest
Expense
|
|
|
|
|
|
$385
|
-
|
$395
|
|
|
|
Capital
Expenditures
|
|
|
|
|
$120
|
-
|
$130
|
|
|
|
Liquidated
Damages
|
|
|
|
|
$50
|
-
|
$60
|
|
|
|
(1)
This outlook assumes operations in the
normal course and does not reflect the impact of any potential
restructuring.
|
In light of the Company's ongoing discussions with various
creditors, Arch will not host a conference call for investors this
quarter. Additional information will be available in the Company's
quarterly report on Form 10-Q, which will be filed with the
Securities and Exchange Commission and will be available online on
the Arch website, www.archcoal.com, and at www.SEC.gov.
U.S.-based Arch Coal, Inc. is one of the world's top coal
producers for the global steel and power generation industries,
serving customers on five continents. Its network of mining
complexes is the most diversified in the
United States, spanning every major coal basin in the
nation. The company controls more than 5 billion tons of
high-quality metallurgical and thermal coal reserves, with access
to all major railroads, inland waterways and a growing number of
seaborne trade channels. For more information, visit
www.archcoal.com.
Forward-Looking Statements: This press release contains
"forward-looking statements" – that is, statements related to
future, not past, events, including the Company outlook. In
this context, forward-looking statements often address our expected
future business and financial performance, and often contain words
such as "expects," "anticipates," "intends," "plans," "believes,"
"seeks," or "will." Forward-looking statements by their
nature address matters that are, to different degrees,
uncertain. For us, particular uncertainties arise from
changes in the demand for our coal by the domestic electric
generation industry; from legislation and regulations relating to
the Clean Air Act and other environmental initiatives; from
operational, geological, permit, labor and weather-related factors;
from fluctuations in the amount of cash we generate from
operations; from potential demands for additional collateral for
self-bonding; from any potential restructuring we do; from future
integration of acquired businesses; and from numerous other matters
of national, regional and global scale, including those of a
political, economic, business, competitive or regulatory
nature. These uncertainties may cause our actual future
results to be materially different than those expressed in our
forward-looking statements. We do not undertake to update our
forward-looking statements, whether as a result of new information,
future events or otherwise, except as may be required by law.
For a description of some of the risks and uncertainties that may
affect our future results, you should see the risk factors
described from time to time in the reports we file with the
Securities and Exchange Commission.
Arch Coal, Inc.
and Subsidiaries
|
Condensed
Consolidated Statements of Operations
|
(In thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
Revenues
|
$
688,544
|
|
$
742,180
|
|
$ 2,010,011
|
|
$ 2,191,927
|
|
|
|
|
|
|
|
|
Costs, expenses
and other operating
|
|
|
|
|
|
|
|
Cost of
sales
|
540,192
|
|
647,096
|
|
1,668,766
|
|
1,955,547
|
Depreciation,
depletion and amortization
|
103,965
|
|
105,155
|
|
306,211
|
|
312,042
|
Amortization of
acquired sales contracts, net
|
(1,994)
|
|
(3,013)
|
|
(7,028)
|
|
(9,948)
|
Change in fair value
of coal derivatives and coal trading activities, net
|
(3,559)
|
|
(3,733)
|
|
(1,128)
|
|
(5,811)
|
Asset impairment and
mine closure costs
|
2,120,292
|
|
5,060
|
|
2,139,438
|
|
6,572
|
Losses from disposed operations resulting from
Patriot Coal bankruptcy
|
149,314
|
|
-
|
|
149,314
|
|
-
|
Selling, general and
administrative expenses
|
25,731
|
|
28,136
|
|
72,604
|
|
87,203
|
Other operating
(income) expense, net
|
(8,625)
|
|
(1,221)
|
|
7,864
|
|
(9,451)
|
|
2,925,316
|
|
777,480
|
|
4,336,041
|
|
2,336,154
|
|
|
|
|
|
|
|
|
Loss from
operations
|
(2,236,772)
|
|
(35,300)
|
|
(2,326,030)
|
|
(144,227)
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
|
|
|
|
|
Interest
expense
|
(99,759)
|
|
(98,217)
|
|
(298,585)
|
|
(292,648)
|
Interest and
investment income
|
672
|
|
1,949
|
|
4,007
|
|
5,828
|
|
(99,087)
|
|
(96,268)
|
|
(294,578)
|
|
(286,820)
|
|
|
|
|
|
|
|
|
Nonoperating
expense
|
|
|
|
|
|
|
|
Expenses related to
debt restructuring
|
(7,482)
|
|
-
|
|
(11,498)
|
|
-
|
|
|
|
|
|
|
|
|
Loss before income
taxes
|
(2,343,341)
|
|
(131,568)
|
|
(2,632,106)
|
|
(431,047)
|
Benefit from income
taxes
|
(343,865)
|
|
(34,350)
|
|
(351,332)
|
|
(112,830)
|
|
|
|
|
|
|
|
|
Net
loss
|
$ (1,999,476)
|
|
$
(97,218)
|
|
$ (2,280,774)
|
|
$ (318,217)
|
|
|
|
|
|
|
|
|
Net loss per
common share
|
|
|
|
|
|
|
|
Basic and diluted LPS
- Net loss
|
$
(93.91)
|
|
$
(4.58)
|
|
$
(107.16)
|
|
$
(15.00)
|
|
|
|
|
|
|
|
|
Basic and diluted
weighted average shares outstanding
|
21,292
|
|
21,224
|
|
21,283
|
|
21,221
|
|
|
|
|
|
|
|
|
Dividends declared
per common share
|
$
-
|
|
$
-
|
|
$
-
|
|
$
0.10
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(A)
|
$
134,805
|
|
$
71,902
|
|
$
261,905
|
|
$
164,439
|
Adjusted diluted
Loss per common share (A)
|
$
(3.38)
|
|
$
(4.52)
|
|
$
(15.66)
|
|
$
(15.10)
|
|
|
|
|
|
|
|
|
(A) Adjusted EBITDA
and Adjusted diluted Loss per common share are defined and
reconciled under "Reconciliation of Non-GAAP Measures" later in
this release.
|
|
(A) Adjusted EBITDA
and Adjusted diluted Loss per common share are defined and
reconciled under "Reconciliation of Non-GAAP Measures" later in
this release.
|
Arch Coal, Inc.
and Subsidiaries
|
Condensed
Consolidated Balance Sheets
|
(In
thousands)
|
|
|
|
|
|
September
30,
|
|
December
31,
|
|
2015
|
|
2014
|
|
(Unaudited)
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$ 494,788
|
|
$ 734,231
|
Short term
investments
|
199,731
|
|
248,954
|
Restricted
cash
|
50,409
|
|
5,678
|
Trade accounts
receivable
|
217,667
|
|
211,506
|
Other
receivables
|
21,742
|
|
20,511
|
Inventories
|
239,035
|
|
190,253
|
Prepaid
royalties
|
10,352
|
|
11,118
|
Deferred income
taxes
|
20,454
|
|
52,728
|
Coal derivative
assets
|
13,743
|
|
13,257
|
Other current
assets
|
51,398
|
|
54,515
|
Total current
assets
|
1,319,319
|
|
1,542,751
|
|
|
|
|
Property, plant
and equipment, net
|
4,173,038
|
|
6,453,458
|
|
|
|
|
Other
assets
|
|
|
|
Prepaid
royalties
|
29,867
|
|
66,806
|
Equity
investments
|
206,347
|
|
235,842
|
Other noncurrent
assets
|
119,426
|
|
130,866
|
Total other
assets
|
355,640
|
|
433,514
|
Total
assets
|
$5,847,997
|
|
$8,429,723
|
|
|
|
|
Liabilities and
Stockholders' Deficit
|
|
|
|
Current
liabilities
|
|
|
|
Accounts
payable
|
$ 152,229
|
|
$ 180,113
|
Accrued expenses and
other current liabilities
|
310,747
|
|
302,396
|
Current maturities of
debt
|
32,237
|
|
36,885
|
Total current
liabilities
|
495,213
|
|
519,394
|
Long-term
debt
|
5,108,492
|
|
5,123,485
|
Asset retirement
obligations
|
414,194
|
|
398,896
|
Accrued pension
benefits
|
12,061
|
|
16,260
|
Accrued
postretirement benefits other than pension
|
33,966
|
|
32,668
|
Accrued workers'
compensation
|
95,905
|
|
94,291
|
Deferred income
taxes
|
44,806
|
|
422,809
|
Other noncurrent
liabilities
|
248,800
|
|
153,766
|
Total
liabilities
|
6,453,437
|
|
6,761,569
|
|
|
|
|
Stockholders'
deficit
|
|
|
|
Common
Stock
|
2,145
|
|
2,141
|
Paid-in
capital
|
3,052,910
|
|
3,048,460
|
Treasury stock, at
cost
|
(53,863)
|
|
(53,863)
|
Accumulated
deficit
|
(3,612,599)
|
|
(1,331,825)
|
Accumulated other
comprehensive income
|
5,967
|
|
3,241
|
Total
stockholders' deficit
|
(605,440)
|
|
1,668,154
|
Total liabilities and
stockholders' deficit
|
$5,847,997
|
|
$8,429,723
|
Arch Coal, Inc.
and Subsidiaries
|
Condensed
Consolidated Statements of Cash Flows
|
(In
thousands)
|
|
|
Nine Months Ended
September 30,
|
|
2015
|
|
2014
|
|
(Unaudited)
|
Operating
activities
|
|
|
|
Net loss
|
$(2,280,774)
|
|
$(318,217)
|
Adjustments to
reconcile to cash provided by operating activities:
|
|
|
|
Depreciation,
depletion and amortization
|
306,211
|
|
312,042
|
Amortization of
acquired sales contracts, net
|
(7,028)
|
|
(9,948)
|
Prepaid royalties
expensed
|
6,661
|
|
5,645
|
Employee stock-based
compensation expense
|
4,459
|
|
7,689
|
Asset impairment
costs
|
2,136,610
|
|
1,512
|
Losses from disposed
operations resulting from Patriot Coal bankruptcy
|
149,314
|
|
|
Gains on disposals
and divestitures
|
(1,191)
|
|
(21,965)
|
Amortization relating
to financing activities
|
18,960
|
|
12,349
|
Changes
in:
|
|
|
|
Receivables
|
(3,165)
|
|
(6,779)
|
Inventories
|
(48,848)
|
|
22,589
|
Accounts
payable, accrued expenses and other current liabilities
|
(19,338)
|
|
73,324
|
Income taxes,
net
|
(4,303)
|
|
(514)
|
Deferred
income taxes
|
(347,180)
|
|
(112,998)
|
Other
|
9,930
|
|
37,261
|
Cash provided
by (used in) operating activities
|
(79,682)
|
|
1,990
|
|
|
|
|
Investing
activities
|
|
|
|
Capital
expenditures
|
(109,250)
|
|
(118,701)
|
Additions to prepaid
royalties
|
(5,808)
|
|
(3,604)
|
Proceeds from
disposals and dispositions
|
1,020
|
|
50,971
|
Purchases of short
term investments
|
(203,094)
|
|
(181,546)
|
Proceeds from sales
of short term investments
|
248,362
|
|
178,293
|
Investments in and
advances to affiliates, net
|
(7,944)
|
|
(13,393)
|
Cash used in
investing activities
|
(76,714)
|
|
(87,980)
|
|
|
|
|
Financing
activities
|
|
|
|
Payments on term
loan
|
(14,625)
|
|
(14,625)
|
Net payments on other
debt
|
(12,192)
|
|
(10,187)
|
Expenses related to
debt restructuring
|
(11,498)
|
|
—
|
Debt financing
costs
|
—
|
|
(2,219)
|
Dividends
paid
|
—
|
|
(2,123)
|
Deposits of
restricted cash
|
(44,732)
|
|
(6)
|
Other
|
|
|
(15)
|
Cash used in
financing activities
|
(83,047)
|
|
(29,175)
|
|
|
|
|
Decrease in cash and
cash equivalents
|
(239,443)
|
|
(115,165)
|
Cash and cash
equivalents, beginning of period
|
734,231
|
|
911,099
|
|
|
|
|
Cash and cash
equivalents, end of period
|
$ 494,788
|
|
$ 795,934
|
Arch Coal, Inc.
and Subsidiaries
|
Schedule of
Consolidated Debt
|
(In
thousands)
|
|
|
|
September
30
|
|
December
31,
|
|
|
2015
|
|
2014
|
|
|
(Unaudited)
|
|
|
|
|
|
Term loan due 2018
($1.9 billion and $1.93 billion face value,
respectively)
|
|
$1,879,261
|
|
$1,890,846
|
7.00% senior notes
due 2019 at par
|
|
1,000,000
|
|
1,000,000
|
9.875% senior notes
($375.0 million face value) due 2019
|
|
365,050
|
|
363,493
|
8.00% senior secured
notes due 2019 at par
|
|
350,000
|
|
350,000
|
7.25% senior notes
due 2020 at par
|
|
500,000
|
|
500,000
|
7.25% senior notes
due 2021 at par
|
|
1,000,000
|
|
1,000,000
|
Other
|
|
46,418
|
|
56,031
|
|
|
5,140,729
|
|
5,160,370
|
Less: current
maturities of debt
|
32,237
|
|
36,885
|
Long-term
debt
|
|
$5,108,492
|
|
$5,123,485
|
|
|
|
|
|
Calculation of net
debt
|
|
|
|
|
Total debt
|
|
$5,140,729
|
|
$5,160,370
|
Less liquid
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
494,788
|
|
734,231
|
Short term
investments
|
|
199,731
|
|
248,954
|
|
|
694,519
|
|
983,185
|
Net debt
|
|
$4,446,210
|
|
$4,177,185
|
Arch Coal, Inc.
and Subsidiaries
|
Reconciliation of
Non-GAAP Measures
|
(In thousands,
except per share data)
|
|
|
|
|
|
|
|
|
Included in the
accompanying release, we have disclosed certain non-GAAP measures
as defined by Regulation G.
The following reconciles these items to net income and cash flows
as reported under GAAP.
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA is
defined as net income attributable to the Company before the effect
of net interest expense, income taxes, depreciation, depletion and amortization, and
the amortization of acquired sales contracts. Adjusted
EBITDA may also be adjusted for
items that may not reflect the trend of future results.
|
|
Adjusted EBITDA is
not a measure of financial performance in accordance with generally
accepted accounting principles,
and items excluded from Adjusted EBITDA are significant in
understanding and assessing our financial condition. Therefore, Adjusted EBITDA 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. We believe that
Adjusted EBITDA presents a useful measure of our ability to incur
and service debt based on ongoing
operations. Furthermore, analogous measures are used by industry
analysts to evaluate our operating
performance. In addition, acquisition related expenses are excluded
to make results more comparable between periods. Investors should be aware that
our presentation of Adjusted EBITDA may not be comparable to
similarly titled measures used by other
companies. The table below shows how we calculate Adjusted
EBITDA.
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
(Unaudited)
|
|
(Unaudited)
|
Net loss
|
$ (1,999,476)
|
|
$ (97,218)
|
|
$ (2,280,774)
|
|
$ (318,217)
|
Income tax (benefit)
expense
|
(343,865)
|
|
(34,350)
|
|
(351,332)
|
|
(112,830)
|
Interest expense,
net
|
99,087
|
|
96,268
|
|
294,578
|
|
286,820
|
Depreciation,
depletion and amortization
|
103,965
|
|
105,155
|
|
306,211
|
|
312,042
|
Amortization of
acquired sales contracts, net
|
(1,994)
|
|
(3,013)
|
|
(7,028)
|
|
(9,948)
|
Asset impairment and
mine closure costs
|
2,120,292
|
|
5,060
|
|
2,139,438
|
|
6,572
|
Losses from disposed
operations resulting from Patriot Coal bankruptcy
|
149,314
|
|
—
|
|
149,314
|
|
—
|
Expenses related to
debt restructuring
|
7,482
|
|
—
|
|
11,498
|
|
—
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$ 134,805
|
|
$ 71,902
|
|
$ 261,905
|
|
$ 164,439
|
|
Adjusted net loss
and adjusted diluted loss per share
|
|
Adjusted net loss and
adjusted diluted loss per common share are adjusted for the
after-tax impact of acquisition related costs and are not measures of financial
performance in accordance with generally accepted accounting
principles. We believe that
adjusted net loss and adjusted diluted loss per common share better
reflect the trend of our future results by excluding items relating to significant
transactions. The adjustments made to arrive at these measures
are significant in understanding
and assessing our financial condition. Therefore, adjusted
net loss and adjusted diluted loss per share should not be considered in isolation, nor as
an alternative to net loss or diluted loss per common share under
generally accepted accounting
principles.
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
(Unaudited)
|
|
(Unaudited)
|
Net
loss
|
$ (1,999,476)
|
|
$ (97,218)
|
|
$ (2,280,774)
|
|
$ (318,217)
|
|
|
|
|
|
|
|
|
Amortization of
acquired sales contracts, net
|
(1,994)
|
|
(3,013)
|
|
(7,028)
|
|
(9,948)
|
Asset impairment and
mine closure costs
|
2,120,292
|
|
5,060
|
|
2,139,438
|
|
6,572
|
Losses from disposed
operations resulting from Patriot Coal bankruptcy
|
149,314
|
|
-
|
|
149,314
|
|
-
|
Expenses related to
debt restructuring
|
7,482
|
|
-
|
|
11,498
|
|
-
|
Tax impact of
adjustment
|
(347,620)
|
|
(737)
|
|
(345,808)
|
|
1,215
|
|
|
|
|
|
|
|
|
Adjusted net
loss
|
$
(72,002)
|
|
$ (95,908)
|
|
$ (333,360)
|
|
$ (320,378)
|
|
|
|
|
|
|
|
|
Diluted weighted
average shares outstanding
|
21,292
|
|
21,224
|
|
21,283
|
|
21,221
|
|
|
|
|
|
|
|
|
Diluted loss per
share
|
$
(93.91)
|
|
$ (4.58)
|
|
$
(107.16)
|
|
$ (15.00)
|
|
|
|
|
|
|
|
|
Amortization of
acquired sales contracts, net
|
(0.09)
|
|
(0.14)
|
|
(0.33)
|
|
(0.47)
|
Asset impairment and
mine closure costs
|
99.58
|
|
0.24
|
|
100.52
|
|
0.31
|
Losses from disposed
operations resulting from Patriot Coal bankruptcy
|
7.01
|
|
-
|
|
7.02
|
|
-
|
Expenses related to
debt restructuring
|
0.35
|
|
-
|
|
0.54
|
|
-
|
Tax impact of
adjustments
|
(16.33)
|
|
(0.03)
|
|
(16.25)
|
|
0.06
|
Adjusted diluted loss
per share
|
$
(3.38)
|
|
$ (4.52)
|
|
$
(15.66)
|
|
$ (15.10)
|
|
Cash costs per
ton
|
|
Cash costs per ton
exclude the costs of depreciation, depletion and amortization and
pass-through transportation costs, and may be adjusted for other
items that, due to accounting rules, are classified in "other
income/expense" on the statement of operations, but relate directly
to the costs incurred to produce coal. Cash costs per ton are not
measures of financial performance in accordance with generally
accepted accounting principles. We believe cash costs per ton
better reflect our controllable costs and our operating results by
including all cash costs incurred to produce coal. The adjustments
made to arrive at these measures are significant in understanding
and assessing our financial condition. Therefore, cash costs
per ton should not be considered in isolation, nor as an
alternative to cost of sales per ton under generally accepted
accounting principles.
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
(Unaudited)
|
|
(Unaudited)
|
Cost of sales on
condensed consolidated statements of operations
|
$ 540,192
|
|
$ 647,096
|
|
$ 1,668,766
|
|
$ 1,955,547
|
Transportation costs
billed to customers
|
(11,097)
|
|
(41,280)
|
|
(98,426)
|
|
(198,853)
|
Settlements of
heating oil derivatives used to manage diesel fuel purchase price
risk
|
2,684
|
|
1,705
|
|
4,894
|
|
5,268
|
Other (other
operating segments, operating overhead, land management,
etc.)
|
(41,141)
|
|
(4,121)
|
|
(59,445)
|
|
(13,137)
|
|
|
|
|
|
|
|
|
Total cash
costs
|
$ 490,638
|
|
$ 603,400
|
|
$ 1,515,789
|
|
$ 1,748,825
|
Total tons
sold
|
34,802
|
|
35,128
|
|
98,483
|
|
99,148
|
Total cash cost per
ton
|
$
14.10
|
|
$ 17.18
|
|
$
15.39
|
|
$ 17.64
|
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SOURCE Arch Coal, Inc.