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Section 1: 8-K (8-K)

felp-8k_20170811.htm

UNITED STATES

SECURITIES AND EXCHANGE

COMMISSION

WASHINGTON, DC 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (date of earliest event reported): August 11, 2017

 

 

FORESIGHT ENERGY LP

(Exact Name of Registrant as Specified in Charter)

 

 

Delaware

 

001-36503

 

80-0778894

(State or Other Jurisdiction

of Incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

 

211 North Broadway

Suite 2600

Saint Louis, MO

 

 

 

63102

(Address of Principal Executive Offices)

 

 

 

(Zip Code)

 

Registrant’s telephone number, including area code: (314) 932-6160

 

 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 ((§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

 

 

 


 

ITEM 2.02

RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On August 11, 2017, Foresight Energy LP (the “Partnership”) announced via press release its earnings and operating results for the three months ended June 30, 2017.  A copy of the Partnership’s press release is attached hereto as Exhibit 99.1.

The information in this Current Report on Form 8-K (including the exhibits attached hereto) is being furnished under Item 2.02 and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of such section or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

 

ITEM 5.02

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On August 11, 2017, Mr. James T. Murphy, Vice President and Chief Accounting Officer notified the registrant of his intent to resign effective September 30, 2017. Mr. Murphy will continue to serve as Vice President and Chief Accounting Officer until his resignation date. Mr. Murphy’s resignation was not as a result of any disagreement with the Partnership regarding any matter related to its operations, policies or practices.

 

ITEM 9.01

FINANCIAL STATEMENTS AND EXHIBITS.

 

(d)

Exhibits

 

 

99.1 Press release issued by Foresight Energy LP on August 11, 2017.

 

 


 

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

Foresight Energy LP

 

 

By:

 

Foresight Energy GP LLC,

 

 

its general partner

 

 

By:

 

/s/ Robert D. Moore

 

 

Robert D. Moore

 

 

President, Chairman and Chief Executive Officer

 

 

Date: August 11, 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


EXHIBIT INDEX

 

 

 

 

Exhibit
No.

  

Description

 

 

99.1

  

Press release issued by Foresight Energy LP on August 11, 2017.

 

 

 

 

 

 

 

 

 

 

 

 

 

(Back To Top)

Section 2: EX-99.1 (EX-99.1)

felp-ex991_6.htm

 

 

Exhibit 99.1

 

Foresight Energy LP Reports Second Quarter 2017 Results

 

Second Quarter 2017 Highlights:

 

Coal sales of $204.5 million on sales volumes of 4.8 million tons

Net loss attributable to limited partner units of $16.3 million or $(0.12) per unit

Adjusted EBITDA of $84.5 million

Cash flows from operations of $38.5 million

 

Declared cash distribution to common unitholders of $0.0647 per unit

 

ST.  LOUIS, Missouri (BUSINESS WIRE) August 11, 2017 — Foresight Energy LP (“Foresight” or the “Partnership”) (NYSE: FELP) today reported financial and operating results for the second quarter of 2017.  Foresight generated quarterly coal sales revenues of $204.5 million on sales volumes of 4.8 million tons resulting in Adjusted EBITDA of $84.5 million, cash flows from operations of $38.5 million and a net loss attributable to limited partner units of $16.3 million, or $(0.12) per unit.  Results for the second quarter 2017 included $12.8 million of insurance recoveries related to the combustion event at the Hillsboro operation, approximately $10.2 million of incremental depreciation, depletion and amortization (“DD&A”), and a non-cash charge of $8.7 million related to contract amortization.  The incremental DD&A and contract amortization is a function of pushdown accounting adopted in conjunction with the March 27 refinancing transaction.  

 

As mentioned during the prior quarter, Foresight adopted pushdown reporting as of March 31, 2017 as a result of Murray Energy obtaining control of its general partner.  As such, operational results for the quarter ended June 30, 2017 were recorded on the successor financial statements.  As required by pushdown reporting, the Partnership revalued its balance sheet on the change of control date and therefore certain financial statement line items are not comparable to prior periods.  However, pushdown reporting did not materially affect coal sales and cost of coal produced, which are generally comparable to prior periods.        

    

“Foresight had another solid operating quarter driven by exceptional production at our operations. We produced approximately 5.7 million tons during the quarter, an increase of 16% compared to the same period last year.  This production level yielded costs below $22.00 per ton.  With all of our scheduled calendar year 2017 longwall moves now complete, we expect to improve our industry-leading cost structure over the remainder of the year,” stated Mr. Robert D. Moore, Chairman, President, and Chief Executive Officer.  

 

Second Quarter Financial Results

 

Coal sales totaled $204.5 million for the second quarter 2017 compared to $224.1 million for the second quarter 2016, representing a decline of $19.6 million.  The decrease in coal sales revenues was driven by lower sales volumes and anticipated reductions in coal sales realizations per ton.  Sales volumes were unfavorably impacted 0.2 million tons due to the continued lack of performance by one rail service provider and certain customers deferring shipments during the quarter due to maintenance and operational issues.   The reduction in coal sales realizations of $2.01 per ton was principally driven by customer mix relative to the prior year quarter as well as the rolling off of certain legacy sales contracts with more favorable pricing.      

 

Cost of coal produced was $105.8 million, or $21.88 per ton sold, for the second quarter 2017 compared to $112.1 million, or $22.16 per ton sold, for the same period of 2016.  The decrease during the current year quarter was driven largely by lower sales volumes and also included a non-cash charge of $4.6 million related to the revaluation of coal inventory related to the pushdown accounting adopted.   

 

 

1

 

 


 

 

Transportation costs decreased $9.3 million, or $1.59 per ton sold, from the prior year period due to lower sales volumes and lower charges for minimum contractual rail and export terminal throughput requirements.  The lower contractual minimums are driven by the expectation of higher export shipments during 2017.    

 

Other operating (income) expense for the second quarter 2017 increased $13.7 million from the second quarter 2016 due to the receipt of $12.8 million of insurance proceeds related to the Hillsboro combustion event.  Foresight continues to pursue additional remedies under its insurance policies; however, there can be no assurances of any future recoveries related to this incident.  

 

Foresight generated operating cash flows of $38.5 million during second quarter 2017 and it ended the quarter with $7.2 million in cash and $158.5 million of available borrowing capacity, net of outstanding letters of credit, under its revolving credit facility.  During the second quarter 2017, capital expenditures totaled $21.7 million, an increase of $13.5 million compared to the quarter ended June 30, 2016.  Capital spending in the prior year period was lower as a result of the timing of capital outlays related to the maintenance of mining operations.  

 

Guidance for 2017

 

Based on Foresight’s contracted position, recent performance, and its current outlook on pricing and the coal markets in general, the Partnership is reaffirming, updating or providing the following guidance for 2017:

 

Sales Volumes – Based on year-to-date sales volumes, current committed position and expectations for the remainder of 2017, Foresight is reaffirming projected sales volumes to be between 20.5 and 22.0 million tons, with over 5.0 million tons expected to go into the international market.  Foresight has current commitments of approximately 20.0 million tons for 2017.

 

Adjusted EBITDA – Based on the projected sales volumes and operating cost structure, Foresight currently expects to generate Adjusted EBITDA in a range of $285 to $310 million  

 

Capital Expenditures – Total 2017 capital expenditures are estimated to be between $70 and $77 million.  

 

Quarterly Distribution and Strategy

 

As noted earlier, during the quarter, Foresight generated cash from operations of $38.5 million and capital expenditures of $21.7 million.  As a result of the provided guidance, liquidity position and ability to generate cash in the coming quarters, the Board of Directors of its General Partner approved the restoration of a quarterly cash distribution of $0.0647 per common unit.  The distribution is payable on August 31, 2017, for common unitholders of record on August 21, 2017.

 

“As it relates to deleveraging our balance sheet, we expect debt reductions to occur by way of required amortization payments under our various facilities and also the excess cash flow sweep under our term loan facility.  In addition to this, the Partnership plans to distribute any excess cash to its common unitholders in the form of ongoing distributions.  The distribution declared today will be the first distribution paid to common unitholders since the third quarter 2015 and represents the Partnership’s  commitment to returning capital to its unitholders.  However, future distributions will be subject to board review and will be based on a number of factors including our leverage levels, market conditions, excess cash flow remaining after required excess cash flow sweeps and our projected future financial and operating performance,” said Mr. Moore.

 

 

Forward-Looking Statements

 

This press release contains forward-looking statements within the meaning of the federal securities laws.  These statements contain words such aspossible, intend, will, if and expect” and can be impacted by numerous factors, including risks relating to the securities markets, the impact of adverse market conditions affecting business of the Partnership, adverse changes in laws including with respect to tax and regulatory matters and other risks.  There can be no assurance that actual results will not differ from those expected by management of the Partnership.  Known material factors that could cause actual results to differ from those in the forward-looking statements are described in Part I, Item 1A.  Risk Factors of the Partnerships Annual Report on Form 10-K filed on March 12017.  The Partnership undertakes no obligation to update or revise such forward-looking statements to reflect events or circumstances that occur, or which the Partnership becomes aware of, after the date hereof.

 


 

2

 

 


 

 

Non-GAAP Financial Measures

 

Adjusted EBITDA is a non-GAAP supplemental financial measure that management and external users of the Partnership’s consolidated financial statements, such as industry analysts, investors, lenders and rating agencies, may use to assess:

 

the Partnerships operating performance as compared to other publicly traded partnerships, without regard to historical cost basis or, in the case of Adjusted EBITDA, financing methods;

the Partnerships ability to incur and service debt and fund capital expenditures; and

the viability of acquisitions and other capital expenditure projects and the returns on investment of various expansion and

growth opportunities.

 

The Partnership defines Adjusted EBITDA as net income (loss) attributable to controlling interests before interest, income taxes, depreciation, depletion, amortization and accretion.  Adjusted EBITDA is also adjusted for equity-based compensation, losses/gains on commodity derivative contracts, settlements of derivative contracts, a change in the fair value of the warrant liability and material nonrecurring or other items which may not reflect the trend of future results.  As it relates to commodity derivative contracts, the Adjusted EBITDA calculation removes the total impact of derivative gains/losses on net income (loss) during the period and then adds/deducts to Adjusted EBITDA the amount of aggregate settlements during the period.  

The Partnership believes the presentation of Adjusted EBITDA provides useful information to investors in assessing the Partnership’s financial condition and results of operations.  Adjusted EBITDA should not be considered an alternative to net (loss) income, operating income, or any other measure of financial performance presented in accordance with U.S. GAAP, nor should Adjusted EBITDA be considered an alternative to operating surplus, adjusted operating surplus or other definitions in the Partnership’s partnership agreement.  Adjusted EBITDA has important limitations as an analytical tool because it excludes some, but not all, of the items that affects net (loss) income.  Additionally, because Adjusted EBITDA may be defined differently by other companies in the industry, and the Partnerships definition of Adjusted EBITDA may not be comparable to similarly titled measures of other companies, the utility of such a measure is diminished.  For a reconciliation of Adjusted EBITDA to net (loss) income attributable to controlling interests, please see the table below.

 

This press release references forward-looking estimates of Adjusted EBITDA projected to be generated by the Partnership during the year ending December 31, 2017. A reconciliation of estimated 2017 Adjusted EBITDA to U.S. GAAP net income (loss) is not provided because U.S. GAAP net income (loss) for the projection period is not assessable. The exercise of fair valuing Foresight’s assets and liabilities as of March 31, 2017 is not yet complete; therefore, an estimate of net income (loss), or a reconciliation thereof to Adjusted EBITDA, cannot reasonably be provided at this time. The effects of applying pushdown accounting are generally excluded from Adjusted EBITDA therefore it does not materially impact our ability to forecast Adjusted EBITDA.

 

About Foresight Energy LP

 

Foresight is a leading producer and marketer of thermal coal controlling over 2 billion tons of coal reserves in the Illinois Basin. Foresight currently operates two longwall mining complexes with three longwall mining systems (Williamson (one longwall mining system) and Sugar Camp (two longwall mining systems)), one continuous mining operation (Macoupin) and the Sitran river terminal on the Ohio River. Foresight’s operations are strategically located near multiple rail and river transportation access points, providing transportation cost certainty and flexibility to direct shipments to the domestic and international markets.

 

Contact

 

Gary M.  Broadbent

Director of Investor and Media Relations

740-338-3100

Investor.relations@foresight.com

Media@coalsource.com

 

 

 

 

 

 

 


 

3

 

 


 

 

Foresight Energy LP

Unaudited Condensed Consolidated Balance Sheets

(In Thousands)

 

 

(Successor)

 

 

 

(Predecessor)

 

 

June 30,

 

 

 

December 31,

 

 

2017

 

 

 

2016

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

7,208

 

 

 

$

103,690

 

Accounts receivable

 

33,374

 

 

 

 

54,905

 

Due from affiliates

 

22,631

 

 

 

 

16,891

 

Financing receivables - affiliate

 

3,019

 

 

 

 

2,904

 

Inventories, net

 

71,990

 

 

 

 

43,052

 

Prepaid royalties

 

1,977

 

 

 

 

3,136

 

Deferred longwall costs

 

4,087

 

 

 

 

13,310

 

Coal derivative assets

 

1,318

 

 

 

 

7,650

 

Other prepaid expenses and current assets

 

23,661

 

 

 

 

21,443

 

Contract-based intangibles

 

36,340

 

 

 

 

 

Total current assets

 

205,605

 

 

 

 

266,981

 

Property, plant, equipment and development, net

 

2,533,933

 

 

 

 

1,318,937

 

Due from affiliates

 

947

 

 

 

 

1,843

 

Financing receivables - affiliate

 

65,696

 

 

 

 

67,235

 

Prepaid royalties

 

417

 

 

 

 

13,765

 

Other assets

 

2,783

 

 

 

 

20,250

 

Contract-based intangibles

 

11,032

 

 

 

 

 

Total assets

$

2,820,413

 

 

 

$

1,689,011

 

Liabilities and partners’ capital (deficit)

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Current portion of long-term debt and capital lease obligations

$

69,635

 

 

 

$

368,993

 

Current portion of sale-leaseback financing arrangements

 

1,573

 

 

 

 

1,372

 

Accrued interest

 

16,250

 

 

 

 

29,760

 

Accounts payable

 

72,370

 

 

 

 

60,971

 

Accrued expenses and other current liabilities

 

54,893

 

 

 

 

43,592

 

Asset retirement obligations

 

8,167

 

 

 

 

7,273

 

Due to affiliates

 

8,387

 

 

 

 

20,904

 

Contract-based intangibles

 

23,197

 

 

 

 

 

Total current liabilities

 

254,472

 

 

 

 

532,865

 

Long-term debt and capital lease obligations

 

1,286,382

 

 

 

 

1,022,070

 

Sale-leaseback financing arrangements

 

199,363

 

 

 

 

190,497

 

Asset retirement obligations

 

37,635

 

 

 

 

37,644

 

Warrant liability

 

 

 

 

 

51,169

 

Other long-term liabilities

 

45,584

 

 

 

 

9,359

 

Contract-based intangibles

 

124,937

 

 

 

 

 

Total liabilities

 

1,948,373

 

 

 

 

1,843,604

 

Limited partners' capital (deficit):

 

 

 

 

 

 

 

 

Common unitholders (77,235 and 66,105 units outstanding as of June 30, 2017 and December 31, 2016, respectively)

 

527,225

 

 

 

 

100,628

 

Subordinated unitholder (64,955 units outstanding as of June 30, 2017 and December 31, 2016)

 

344,815

 

 

 

 

(255,221

)

Total partners' capital (deficit)

 

872,040

 

 

 

 

(154,593

)

Total liabilities and partners' capital (deficit)

$

2,820,413

 

 

 

$

1,689,011

 

 

 

4

 

 


 

 

Foresight Energy LP

Unaudited Condensed Consolidated Statements of Operations

(In Thousands)

 

 

(Successor)

 

 

(Predecessor)

 

 

(Successor)

 

 

(Predecessor)

 

 

(Predecessor)

 

 

Three Months Ended

June 30, 2017

 

 

Three Months Ended

June 30, 2016

 

 

Period From

April 1, 2017 through

June 30, 2017

 

 

Period From

January 1, 2017

through

March 31, 2017

 

 

Six Months Ended

June 30, 2016

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Coal sales

$

204,516

 

 

$

224,093

 

 

$

204,516

 

 

$

227,813

 

 

$

387,190

 

Other revenues

 

2,577

 

 

 

1,907

 

 

 

2,577

 

 

 

2,581

 

 

 

4,895

 

Total revenues

 

207,093

 

 

 

226,000

 

 

 

207,093

 

 

 

230,394

 

 

 

392,085

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of coal produced (excluding depreciation, depletion and amortization)

 

105,790

 

 

 

112,070

 

 

 

105,790

 

 

 

117,762

 

 

 

201,246

 

Cost of coal purchased

 

 

 

 

 

 

 

 

 

 

7,973

 

 

 

551

 

Transportation

 

28,258

 

 

 

37,557

 

 

 

28,258

 

 

 

37,726

 

 

 

63,355

 

Depreciation, depletion and amortization

 

49,537

 

 

 

45,467

 

 

 

49,537

 

 

 

39,298

 

 

 

81,884

 

Contract amortization

 

8,733

 

 

 

 

 

 

8,733

 

 

 

 

 

 

 

Accretion on asset retirement obligations

 

728

 

 

 

844

 

 

 

728

 

 

 

710

 

 

 

1,688

 

Selling, general and administrative

 

7,277

 

 

 

5,588

 

 

 

7,277

 

 

 

6,554

 

 

 

11,308

 

Transition and reorganization costs

 

 

 

 

950

 

 

 

 

 

 

 

 

 

6,889

 

Loss on commodity derivative contracts

 

1,117

 

 

 

10,760

 

 

 

1,117

 

 

 

1,492

 

 

 

11,283

 

Other operating (income) expense, net

 

(13,490

)

 

 

179

 

 

 

(13,490

)

 

 

451

 

 

 

91

 

Operating income

 

19,143

 

 

 

12,585

 

 

 

19,143

 

 

 

18,428

 

 

 

13,790

 

Other expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

35,420

 

 

 

34,335

 

 

 

35,420

 

 

 

43,380

 

 

 

67,330

 

Debt restructuring costs

 

 

 

 

5,920

 

 

 

 

 

 

 

 

 

15,630

 

Change in fair value of warrants

 

 

 

 

 

 

 

 

 

 

(9,278

)

 

 

 

Loss on early extinguishment of debt

 

 

 

 

 

 

 

 

 

 

95,510

 

 

 

107

 

Net loss

 

(16,277

)

 

 

(27,670

)

 

 

(16,277

)

 

 

(111,184

)

 

 

(69,277

)

Less: net income attributable to noncontrolling interests

 

 

 

 

116

 

 

 

 

 

 

 

 

 

214

 

Net loss attributable to controlling interests

$

(16,277

)

 

$

(27,786

)

 

$

(16,277

)

 

$

(111,184

)

 

$

(69,491

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss available to limited partner units - basic and diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common unitholders

$

(8,790

)

 

$

(13,995

)

 

$

(8,790

)

 

$

(56,259

)

 

$

(34,886

)

Subordinated unitholder

$

(7,487

)

 

$

(13,791

)

 

$

(7,487

)

 

$

(54,925

)

 

$

(34,605

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per limited partner unit - basic and diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common unitholders

$

(0.12

)

 

$

(0.21

)

 

$

(0.12

)

 

$

(0.85

)

 

$

(0.53

)

Subordinated unitholder

$

(0.12

)

 

$

(0.21

)

 

$

(0.12

)

 

$

(0.85

)

 

$

(0.53

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average limited partner units outstanding - basic and diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common units

 

76,270

 

 

 

65,917

 

 

 

76,270

 

 

 

66,533

 

 

 

65,555

 

Subordinated units

 

64,955

 

 

 

64,955

 

 

 

64,955

 

 

 

64,955

 

 

 

64,955

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distributions declared per limited partner unit

$

 

 

$

 

 

$

 

 

$

 

 

$

 

 

5

 

 


 

 

Foresight Energy LP

Unaudited Condensed Consolidated Statements of Cash Flows

(In Thousands)

 

(Successor)

 

 

(Predecessor)

 

 

 

 

 

 

Period From

April 1, 2017 through

June 30, 2017

 

 

Period From

January 1, 2017

through

March 31, 2017

 

 

(Predecessor)

Six Months Ended

June 30, 2016

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

 

 

 

Net loss

$

(16,277

)

 

$

(111,184

)

 

$

(69,277

)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

 

 

Depreciation, depletion and amortization

 

49,537

 

 

 

39,298

 

 

 

81,884

 

Amortization of debt discount and deferred issuance costs

 

628

 

 

 

6,365

 

 

 

3,447

 

Contract amortization

 

8,733

 

 

 

 

 

 

 

Equity-based compensation

 

211

 

 

 

318

 

 

 

4,427

 

Loss on commodity derivative contracts

 

1,117

 

 

 

1,492

 

 

 

11,283

 

Settlements of commodity derivative contracts

 

444

 

 

 

3,724

 

 

 

9,921

 

Realized gains on coal derivatives included in investing activities

 

 

 

 

(3,520

)

 

 

 

Transition and reorganization expenses paid by Foresight Reserves

 

 

 

 

 

 

 

2,333

 

Change in fair value of warrants

 

 

 

 

(9,278

)

 

 

 

Debt extinguishment expense

 

 

 

 

95,510

 

 

 

 

Other

 

5,867

 

 

 

1,321

 

 

 

2,501

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable

 

1,836

 

 

 

19,695

 

 

 

(3,849

)

Due from/to affiliates, net

 

(4,204

)

 

 

(13,157

)

 

 

13,783

 

Inventories

 

(19,863

)

 

 

(917

)

 

 

(1,296

)

Prepaid expenses and other current assets

 

(8,833

)

 

 

(2,375

)

 

 

(5,690

)

Prepaid royalties

 

4,276

 

 

 

(241

)

 

 

2,314

 

Commodity derivative assets and liabilities

 

(303

)

 

 

(532

)

 

 

2,089

 

Accounts payable

 

4,075

 

 

 

7,324

 

 

 

(8,703

)

Accrued interest

 

11,801

 

 

 

(9,803

)

 

 

22,870

 

Accrued expenses and other current liabilities

 

423

 

 

 

(3,430

)

 

 

5,135

 

Other

 

(965

)

 

 

1,782

 

 

 

440

 

Net cash provided by operating activities

 

38,503

 

 

 

22,392

 

 

 

73,612

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

 

 

 

Investment in property, plant, equipment and development

 

(21,732

)

 

 

(19,908

)

 

 

(13,293

)

Return of investment on financing arrangements with Murray Energy

 

719

 

 

 

705

 

 

 

1,319

 

Settlement of certain coal derivatives

 

 

 

 

3,520

 

 

 

 

Proceeds from sale of property, plant and equipment

 

 

 

 

1,898

 

 

 

83

 

Net cash used in investing activities

 

(21,013

)

 

 

(13,785

)

 

 

(11,891

)

Cash flows from financing activities

 

 

 

 

 

 

 

 

 

 

 

Net change in borrowings under revolving credit facility

 

 

 

 

(352,500

)

 

 

(10,100

)

Net change in borrowings under A/R securitization program

 

(100

)

 

 

7,000

 

 

 

 

Proceeds from other long-term debt

 

 

 

 

1,234,438

 

 

 

 

Payments on other long-term debt and capital lease obligations

 

(12,287

)

 

 

(970,721

)

 

 

(22,726

)

Proceeds from issuance of common units to Murray Energy

 

 

 

 

60,586

 

 

 

 

Debt extinguishment costs

 

 

 

 

(57,645

)

 

 

 

Debt issuance costs paid

 

 

 

 

(27,328

)

 

 

 

Other

 

(2,130

)

 

 

(1,892

)

 

 

(1,258

)

Net cash used in financing activities

 

(14,517

)

 

 

(108,062

)

 

 

(34,084

)

Net increase (decrease) in cash and cash equivalents

 

2,973

 

 

 

(99,455

)

 

 

27,637

 

Cash and cash equivalents, beginning of period

 

4,235

 

 

 

103,690

 

 

 

17,538

 

Cash and cash equivalents, end of period

$

7,208

 

 

$

4,235

 

 

$

45,175

 

Supplemental disclosures of non-cash financing activities:

 

 

 

 

 

 

 

 

 

 

 

Non-cash capital contribution from Foresight Reserves LP

$

 

 

$

 

 

$

1,046

 

Short-term insurance financing and vendor financing

$

2,188

 

 

$

 

 

$

603

 

Reclassification of warrant liability to partners' capital

$

 

 

$

41,888

 

 

$

 

 

6

 

 


 

 

 

Reconciliation of U.S. GAAP Net Loss Attributable to Controlling Interests to Adjusted EBITDA (In Thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Successor)

Three Months Ended

June 30, 2017

 

 

(Predecessor)

Three Months Ended

June 30, 2016

 

 

(Successor)

Period From

April 1, 2017 through

June 30, 2017

 

 

(Predecessor)

Period From

January 1, 2017

through

March 31, 2017

 

 

Combined - Period From

January 1, 2017

through

June 30, 2017

 

 

(Predecessor)

Six Months Ended

June 30, 2016

 

 

Net loss attributable to controlling interests (1)

$

(16,277

)

 

$

(27,786

)

 

$

(16,277

)

 

$

(111,184

)

 

$

(127,461

)

 

$

(69,491

)

 

Interest expense, net

 

35,420

 

 

 

34,335

 

 

 

35,420

 

 

 

43,380

 

 

 

78,800

 

 

 

67,330

 

 

Depreciation, depletion and amortization

 

49,537

 

 

 

45,467

 

 

 

49,537

 

 

 

39,298

 

 

 

88,835

 

 

 

81,884

 

 

Accretion on asset retirement obligations

 

728

 

 

 

844

 

 

 

728

 

 

 

710

 

 

 

1,438

 

 

 

1,688

 

 

Contract amortization

 

8,733

 

 

 

 

 

 

8,733

 

 

 

 

 

 

8,733

 

 

 

 

 

Noncash impact of recording coal inventory to fair value in pushdown accounting

 

4,562

 

 

 

 

 

 

4,562

 

 

 

 

 

 

4,562

 

 

 

 

 

Transition and reorganization costs  (excluding amounts included in equity-based compensation below) (2)

 

 

 

 

333

 

 

 

 

 

 

 

 

 

 

 

 

2,575

 

 

Equity-based compensation

 

211

 

 

 

435

 

 

 

211

 

 

 

318

 

 

 

529

 

 

 

4,427

 

 

Loss on commodity derivative contracts

 

1,117

 

 

 

10,760

 

 

 

1,117

 

 

 

1,492

 

 

 

2,609

 

 

 

11,283

 

 

Settlements of commodity derivative contracts

 

444

 

 

 

4,801

 

 

 

444

 

 

 

3,724

 

 

 

4,168

 

 

 

9,921

 

 

Debt restructuring costs

 

 

 

 

5,920

 

 

 

 

 

 

 

 

 

 

 

 

15,630

 

 

Change in fair value of warrants

 

 

 

 

 

 

 

 

 

 

(9,278

)

 

 

(9,278

)

 

 

 

 

Loss on early extinguishment of debt

 

 

 

 

 

 

 

 

 

 

95,510

 

 

 

95,510

 

 

 

107

 

 

Adjusted EBITDA

$

84,475

 

 

$

75,109

 

 

$

84,475

 

 

$

63,970

 

 

$

148,445

 

 

$

125,354

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) - Included in net loss attributable to controlling interests during the three months ended June 30, 2017 and the combined period from January 1, 2017 through June 30, 2017 was insurance proceeds of $12.8 million from the Hillsboro mine combustion event.

 

 

(2) - Excludes equity-based compensation of $0.6 million and $4.3 million which was recorded in transition and reorganization costs in the statement of operations for the three and six months ended June 30, 2016.

 

7