ARCH COAL INC ST. LOUIS, Nov. 9, 2015 /PRNewswire/ --
Earnings Highlights
-------------------
Quarter Ended Nine Months Ended
In $ millions, except per
share data 9/30/15 9/30/14 9/30/15 9/30/14
------------------------- ------- ------- ------- -------
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 ($1,999.5) ($97.2) ($2,280.8) ($318.2)
Diluted LPS ($93.91) ($4.58) ($107.16) ($15.00)
----------- ------- ------ -------- -------
Adjusted Diluted LPS (1) ($3.38) ($4.52) ($15.66) ($15.10)
Adjusted EBITDA (1) $134.8 $71.9 $261.9 $164.4
1/- Defined and reconciled under "Reconciliation of non-GAAP measures."
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.
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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.
3Q15 2Q15 3Q14
---- ---- ----
Tons sold (in millions) 34.8 30.6 35.1
Average sales price per
ton $18.45 $19.65 $19.97
Cash cost per ton $14.10 $16.83 $17.18
Cash margin per ton $4.35 $2.82 $2.79
Total operating cost
per ton $17.05 $19.96 $20.12
Operating margin per
ton $1.40 ($0.31) ($0.15)
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
3Q15 2Q15 3Q14
---- ---- ----
Tons sold (in
millions) 29.5 25.5 29.3
Average sales price
per ton $13.07 $13.24 $13.03
Cash cost per ton $10.10 $10.99 $10.92
Cash margin per ton $2.97 $2.25 $2.11
Total operating cost
per ton $11.71 $12.66 $12.42
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.
Appalachia
3Q15 2Q15 3Q14
---- ---- ----
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
Cash margin per ton $13.28 $2.97 $2.35
Total operating cost
per ton $63.70 $76.46 $79.87
Operating margin per
ton ($1.46) ($10.63) ($11.15)
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
---- ---- ----
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."
2015 2016
---- ----
Tons $ per ton Tons $ per ton
---- --------- ---- ---------
Sales Volume (in millions tons)
------------------------------
Thermal 120.0 - 124.0
Met 6.0 - 6.8
--- --- ---
Total 126.0 - 130.8
Powder River Basin
------------------
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
Three Months Ended September Nine Months Ended September
30, 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.
