Cloud Peak Energy Inc. (NYSE:CLD), one of the largest U.S. coal
producers and the only pure-play Powder River Basin (PRB) coal company,
today announced results for the second quarter and first six months of
2012.
2012 Second Quarter and Six Months Highlights
Adjusted EBITDA(1) of $65.6 million in the second quarter
of 2012 compared with $88.3 million in the second quarter of 2011;
Adjusted EBITDA of $141.4 million compared with $170.9 million for the
first six months of 2011.
Net income of $33.7 million resulting in Adjusted EPS(1) of
$0.34 compared to $0.72 in the second quarter of 2011; for the six
months of 2012, net income of $60.3 million resulting in Adjusted EPS
of $0.81 compared to $1.16 in the first six months of 2011.
Diluted EPS of $0.55 compared to $1.56 in the second quarter of 2011;
diluted EPS of $0.99 compared to $2.00 in the first six months of 2011.
Generated cash from operations of $81.3 million for the first six
months of 2012.
Acquired Youngs Creek project containing approximately 450 million
tons of in-place coal and 38,800 acres of surface land in the Northern
Powder River Basin (NPRB) to further Cloud Peak Energy′s potential for
increased Asian exports.
Implemented an oil hedging program using costless collars for 75% of
our expected usage through March 2013.
(1) Defined later.
'We are pleased with our operational and financial performance during
what we knew would be a very challenging second quarter. As expected,
shipments were unusually slow as some customers continued to substitute
low price natural gas for coal at a time when they had high coal
stockpiles and low electricity demand. During the second quarter, the
operations did a good job of controlling costs as we managed our
business in line with the reduced demand. We were very pleased to
announce our successful acquisition of the significant Youngs Creek coal
and land assets. This transaction builds our Northern PRB asset base to
allow us to meet anticipated strong international demand for our coal,?
said Colin Marshall, President and Chief Executive Officer.
Operating Highlights(1)
?
?
?
?
Q2
?
?
?
?
Q2
?
?
?
?
First Six Months
?
?
?
?
First Six Months
2012
2011
2012
2011
Tons sold (in millions)
20.1
23.0
42.6
46.1
Realized price per ton sold
$
13.11
$
12.94
$
13.21
$
12.86
Average cost of product sold per ton
$
10.09
$
9.23
$
9.93
$
9.09
?
(1) Includes the three company-operated mines only.
For the second quarter, sales from our three company-operated mines were
20.1 million tons, down from 23.0 million tons in the second quarter of
2011. Reduced sales were driven by the high utility stockpiles built up
after the very warm winter and related low natural gas prices. This
compounded the impact of the second quarter 'shoulder season? when low
demand for electricity allows utilities to complete annual plant
maintenance. Shipments from the Spring Creek mine were further reduced
by flooding at the MERC terminal on Lake Superior in mid-June that
delayed approximately 400,000 tons of shipments to the second half of
the year. Adjusted EBITDA declined to $65.6 million, driven primarily by
the lower volumes. Realized price increased to $13.11 per ton. Average
cost of product sold per ton was in line with our expectations at
$10.09, up from last year primarily due to the impact of fixed costs
when selling fewer tons.
Health, Safety and Environment Record
During the second quarter of 2012, of our approximately 1,400 mine site
employees, three suffered minor reportable injuries resulting in a
year-to-date MSHA All Injury Frequency Rate of 0.68, a decrease over the
full year 2011 rate of 1.18. During the 17 MSHA inspector days in the
second quarter of 2012, we were issued one substantial and significant
(S&S) citation, which has been satisfactorily resolved and resulted in a
total proposed fine of $5,961.
Cloud Peak Energy was proud to be awarded the Office of Surface Mining
Excellence in Surface Coal Mining Good Neighbor Award recognizing our
commitment to outstanding and innovative reclamation practices across
our three managed mines.
Northern PRB Projects
Cloud Peak Energy acquired the Youngs Creek Mining Company, LLC (Youngs
Creek) joint venture and other related coal and surface assets for $300
million in June 2012. Of this purchase price, $195 million is allocated
to the lease of approximately 450 million tons of in-place coal, of
which the undeveloped Youngs Creek mine permit includes 291 million
recoverable tons and $105 million to the purchase and lease of 38,800
acres of land. The coal and land are well suited to support potential
increased exports through the Pacific Northwest to our Asian customers.
Youngs Creek is a permitted but undeveloped surface mine project in the
Northern Powder River Basin located 13 miles north of Sheridan, Wyoming,
contiguous with the Wyoming-Montana state line. It is 7 miles south of
Cloud Peak Energy′s Spring Creek mine and 7 miles from the mainline
railroad. There are a number of alternatives we are considering with
respect to the potential development of this property, and until we have
a definitive mine plan for the property, we are not able to classify the
coal assets as reserves.
'The significant coal and surface assets we acquired position Cloud Peak
Energy well for future growth in our Asian exports as additional
terminal capacity becomes available. The quality of the coal is similar
to that of our Spring Creek mine and offers lower sodium levels to
further meet the needs of our domestic and international customers,?
said Colin Marshall, President and Chief Executive Officer, of Cloud
Peak Energy.
In addition, on July 23, 2012, we announced that we reached tentative
agreements with the Crow Tribe of Indians regarding exploration rights
and exclusive options to lease and develop up to an estimated 1.4
billion tons of in-place Northern Powder River Basin coal on the Crow
Indian Reservation in southeast Montana, near our Spring Creek mine.
These tentative agreements have not been executed and have been
submitted to the Crow Tribal Legislature for review.
Balance Sheet and Cash Flow
Cash flow from operations totaled $81.3 million for the first six months
of 2012. Cash spent on capital expenditures was $21.9 million (excluding
capitalized interest). In addition, in June, the Youngs Creek assets
were acquired for $300 million and installment payments of $69.2 million
were made on the North Maysdorf and West Antelope II coal tract LBAs.
The Youngs Creek acquisition of $300 million was financed from cash on
the balance sheet, leaving unrestricted cash and investments of $221.8
million at June 30, 2012. Cloud Peak Energy′s balance sheet continues to
be well positioned with total available liquidity of $722 million at
June 30, 2012.
During the quarter, Cloud Peak Energy entered into financial swaps to
create a 'costless collar? to mitigate against large increases in crude
oil prices. The initial transactions covered 75% of projected diesel
usage through March 2013 with a range of plus or minus approximately $20
per barrel from the then prevailing oil price of approximately $85 per
barrel. This is expected to be a rolling program with future quarterly
transactions being put in place to give some protection from large
increases in oil prices up to four quarters ahead.
Exports
We continue to expect to export approximately 4.3 million tons for the
full year 2012. During the second quarter, Cloud Peak Energy shipped
approximately 1 million tons to our Asian customers, bringing the
six-month total to 2 million tons. This expected slight reduction in
export shipments was due to the completion of our low margin contracts
through the Ridley Terminal and reduced capacity at the Westshore
Terminal, which successfully completed one of two expansion shutdowns
scheduled this year early in the quarter.
Outlook
While the impact of the very warm winter on coal stockpiles and low
natural gas prices will take some time to work through, the hot start to
the summer is beginning to have a positive impact. Shipments have picked
up since April and increased significantly in July as utilities take
their contracted coal. Shipments are expected to continue to increase
throughout the third quarter. The outlook for coal demand for the rest
of the year will depend on remaining summer temperatures, economic
growth and the level of gas production and prices.
For 2012, Cloud Peak Energy has contracted to sell 92.6 million tons, of
which 90.5 million tons are under fixed-price contracts with a
weighted-average price of $13.34 per ton. Assuming current low OTC
prices for our contracted but unpriced 2012 tons, our weighted-average
price would be $13.23 per ton. As reported last quarter, a small number
of our customers had contacted us to discuss reducing 2012 shipments. At
this time, we have renegotiated 1.7 million tons, mostly deferred to
2013, and continue discussions with a small number of customers. We are
not expecting to make any significant additional sales for delivery in
2012 and will be focusing on working with our customers to help ensure
delivery of contracted tonnages. During the second quarter of 2012, our
contracted position for 2013 only increased by 6.4 million tons to 81.2
million tons due to limited activity in the markets. Of this committed
2013 production, 68.6 million tons are under fixed-price contracts with
a weighted-average price of $13.83 per ton. No additional export sales
were contracted during the second quarter as international coal prices
weakened.
During the second quarter, the mines concentrated on controlling costs
and making sure they were well positioned for the expected increased
shipments in the second half of the year. To that end, pre-stripping and
reclamation work has been completed and current coal inventories leave
us well placed to efficiently meet anticipated increased demand. The
impact of recent drops in crude oil prices are beginning to reduce our
diesel costs, which should help with second half cost control.
The current regulatory environment is making it increasingly difficult
for coal burning utilities to operate existing, or to invest in new,
coal power plants. The regulations include the Cross-State Air Pollution
Rule, Utility MATS, coal ash regulation and the proposed carbon dioxide
new source performance standard, the combined impacts of which are
highly uncertain. It is possible some of the regulations will increase
demand for low sulfur PRB coal, such as from our Antelope mine; however,
we believe the cumulative effect will be to decrease U.S. demand for
coal and significantly increase the cost of domestic electricity.
Marshall said, 'While we knew the second quarter was going to be
characterized by low sales and reduced earnings, I am pleased by the way
the operations were able to respond. By being fully contracted at the
start of the year, reducing the use of contractors and managing
overtime, we have been able to work through this period with minimal
impact on our underlying operational capability. I am hopeful that a
continued hot summer will reduce coal stockpiles and increase shipments
in the second half of the year when hydro generation will be reduced.
Our exports are on track for around 4.3 million tons this year, and I am
optimistic that international prices will improve by the fourth quarter
when 2013 contracts are finalized. The Youngs Creek acquisition is very
exciting for us as it gives us many options to develop our mining
operations to meet future Asian export demand as terminal capacity is
increased.?
Updated Guidance ? 2012 Financial and Operational Estimates
The following table provides our current outlook and assumptions for
selected 2012 financial and operational metrics:
?
?
?
?
?
Item
?
?
?
Estimate or Estimated Range
Coal shipments for our three operated mines
?
?
?
90 - 93 million tons
Committed sales with fixed prices
?
?
?
Approximately 90.5 million tons
Anticipated realized price of produced coal with fixed prices
?
?
?
Approximately $13.34 per ton
Adjusted EBITDA
?
?
?
$300 - $330 million
Net interest expense
?
?
?
Approximately $30 million
Depreciation, depletion and accretion
?
?
?
$105 - $115 million
Effective income tax rate (1)
?
?
?
Approximately 36%
Capital expenditures (2)
?
?
?
$60 - $80 million
Committed federal coal lease payments
?
?
?
$129 million
(1)
?
?
?
Excluding impact of the Tax Receivable Agreement.
(2)
Excluding capitalized interest, federal coal lease payments, and the
acquisition of Youngs Creek.
Following the live webcast, a replay will be available at the same URL
on our Web site for seven days. A telephonic replay will also be
available approximately two hours after the call and can be accessed by
dialing 888.286.8010 (domestic) or 617.801.6888 (international) and
entering pass code 58093133. The telephonic replay will be available for
seven days.
About Cloud Peak Energy ?
Cloud Peak Energy Inc. (NYSE:CLD) is headquartered in Wyoming and
is one of the largest U.S. coal producers and the only pure-play PRB
coal company. As one of the safest coal producers in the nation, Cloud
Peak Energy specializes in the production of low sulfur, subbituminous
coal. The company owns and operates three surface coal mines in the PRB,
the lowest cost major coal producing region in the nation. The Antelope
and Cordero Rojo mines are located in Wyoming and the Spring Creek mine
is located near Decker, Montana. Cloud Peak Energy also owns rights to
substantial undeveloped coal and complimentary surface assets in the
Northern PRB, further building the company′s long-term position to serve
Asian export and domestic customers. With approximately 1,600 employees,
the company is widely recognized for its exemplary performance in its
safety and environmental programs. Cloud Peak Energy is a sustainable
fuel supplier for approximately 4% of the nation′s electricity.
This release and our related presentation contain 'forward-looking
statements? within the meaning of the safe harbor provisions of Section
27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Forward-looking statements are not statements of
historical facts and often contain words such as 'may,? 'will,?
'expect,? 'believe,? 'anticipate,? 'plan,? 'estimate,? 'seek,? 'could,?
'should,? 'intend,? 'potential,? or words of similar meaning.
Forward-looking statements are based on management′s current
expectations, beliefs, assumptions and estimates regarding our company,
industry, economic conditions, government regulations and energy
policies and other factors. Forward-looking statements may include, for
example, (1) our outlook for 2012 and future periods for our company,
the PRB and the industry in general, and our operational, financial and
export guidance, including any development of future terminal capacity
or increased access to existing capacity; (2) anticipated economic
conditions and demand by domestic and foreign utilities, including the
anticipated impact on demand driven by regulatory developments and
uncertainties; (3) the impact of competition from natural gas and other
alternative sources of energy used to generate electricity; (4) coal
stockpile levels and the impacts on future demand; (5) our plans to
replace and/or grow our coal tons; (6) business development and growth
initiatives, including estimates, plans and potential future development
and synergies of our recently acquired Youngs Creek assets and potential
transaction with the Crow Tribe of Indians; (7) operational plans for
our mines; (8) our cost management efforts; (9) industry estimates of
the EIA and other third party sources; (10) estimated Tax Receivable
Agreement liabilities; and (11) other statements regarding our plans,
strategies, prospects and expectations concerning our business,
operating results, financial condition and other matters that do not
relate strictly to historical facts. These statements are subject to
significant risks, uncertainties, and assumptions that are difficult to
predict and could cause actual results to differ materially and
adversely from those expressed or implied in the forward-looking
statements. Factors that could adversely affect our future results
include, for example, (a) future economic and weather conditions; (b)
coal-fired power plant capacity and utilization, demand for our coal by
the domestic electric generation industry, export demand and terminal
capacity and the prices we receive for our coal; (c) reductions or
deferrals of contracted tons or future purchases by major customers and
our ability to renew sales contracts; (d) competition from other coal
producers, natural gas producers and other sources of energy,
domestically and internationally, (e) environmental, health, safety,
endangered species or other legislation, regulations, treaties, court
decisions or government actions, or related third-party legal challenges
or changes in interpretations, including new requirements or
uncertainties affecting the use, demand or price for coal or imposing
additional costs, liabilities or restrictions on our mining operations
or the utility industry; (f) public perceptions, third-party legal
challenges or governmental actions and energy policies relating to
concerns about climate change, air quality or other environmental
considerations, including emissions restrictions and governmental
subsidies or mandates that make wind, solar or other alternative fuel
sources more cost-effective and competitive with coal; (g) operational,
geological, equipment, permit, labor, weather-related and other risks
inherent in surface coal mining; (h) our ability to efficiently and
safely conduct our mining operations, (i) transportation and export
terminal availability, performance and costs; (j) availability, timing
of delivery and costs of key supplies, capital equipment or commodities
such as diesel fuel, steel, explosives and tires; (k) our ability to
acquire future coal tons through the federal LBA process and necessary
surface rights and permits in a timely and cost-effective manner and the
impact of third-party legal challenges, (l) access to capital and credit
markets and availability and costs of credit, surety bonds, letters of
credit, and insurance; (m) litigation and other contingent liabilities;
(n) risks associated with acquisitions, including not achieving
anticipated synergies, increased development and operating costs,
failure to develop acquired assets, termination of the coal leases from
Chevron and CONSOL in the Youngs Creek transaction if we fail to meet
minimum future production requirements, and our failure to enter into
the potential transaction with the Crow Tribe of Indians, and (o) other
risk factors described from time to time in the reports and registration
statements we file with the Securities and Exchange Commission ('SEC?),
including those in Item 1A - Risk Factors in our most recent Form 10-K
and any updates thereto in our Forms 10-Q and current reports on Forms
8-K. There may be other risks and uncertainties that are not currently
known to us or that we currently believe are not material. We make
forward-looking statements based on currently available information, and
we assume no obligation to, and expressly disclaim any obligation to,
update or revise publicly any forward-looking statements made in this
release or our related presentation, whether as a result of new
information, future events or otherwise, except as required by law.
Non-GAAP Financial Measures
This release and our related presentation include the non-GAAP financial
measures of (1) Adjusted EBITDA and (2) Adjusted Earnings Per Share
('Adjusted EPS?). Adjusted EBITDA and Adjusted EPS are intended to
provide additional information only and do not have any standard meaning
prescribed by generally accepted accounting principles in the U.S., or
GAAP. A quantitative reconciliation of historical net income to Adjusted
EBITDA and EPS (as defined below) to Adjusted EPS is found in the tables
accompanying this release.
EBITDA represents net income, or income from continuing operations, as
applicable, before (1) interest income (expense) net, (2) income tax
provision, (3) depreciation and depletion, (4) amortization, and (5)
accretion. Adjusted EBITDA represents EBITDA as further adjusted for
specifically identified items that management believes do not directly
reflect our core operations. The specifically identified items are the
impacts, as applicable, of: (1) the Tax Receivable Agreement including
tax impacts of our 2009 initial public offering and 2010 secondary
offering, (2) adjustments for derivative financial instruments including
unrealized marked-to-market amounts and cash settlements realized, and
(3) our significant broker contract that expired in the first quarter of
2010. Because of the inherent uncertainty related to the items
identified above, management does not believe it is able to provide a
meaningful forecast of the comparable GAAP measures or a reconciliation
to any forecasted GAAP measures.
Adjusted EPS represents diluted earnings (loss) per common share
attributable to controlling interest, or diluted earnings (loss) per
common share attributable to controlling interest from continuing
operations, as applicable ('EPS?), adjusted to exclude the estimated per
share impact of the same specifically identified items used to calculate
Adjusted EBITDA and described above, adjusted at the statutory tax rate
of 36%.
Adjusted EBITDA is an additional tool intended to assist our management
in comparing our performance on a consistent basis for purposes of
business decision-making by removing the impact of certain items that
management believes do not directly reflect our core operations.
Adjusted EBITDA is a metric intended to assist management in evaluating
operating performance, comparing performance across periods, planning
and forecasting future business operations and helping determine levels
of operating and capital investments. Period-to-period comparisons of
Adjusted EBITDA are intended to help our management identify and assess
additional trends potentially impacting our company that may not be
shown solely by period-to-period comparisons of net income or income
from continuing operations. Adjusted EBITDA is also used as part of our
incentive compensation program for our executive officers and others.
We believe Adjusted EBITDA and Adjusted EPS are also useful to
investors, analysts and other external users of our consolidated
financial statements in evaluating our operating performance from period
to period and comparing our performance to similar operating results of
other relevant companies. Adjusted EBITDA allows investors to measure a
company′s operating performance without regard to items such as interest
expense, taxes, depreciation and depletion, amortization and accretion
and other specifically identified items that are not considered to
directly reflect our core operations. Similarly, we believe our use of
Adjusted EPS provides an appropriate measure to use in assessing our
performance across periods given that this measure provides an
adjustment for certain specifically identified significant items that
are not considered to directly reflect our core operations, the
magnitude of which may vary drastically from period to period and,
thereby, have a disproportionate effect on the earnings per share
reported for a given period.
Our management recognizes that using Adjusted EBITDA and Adjusted EPS as
performance measures has inherent limitations as compared to net income,
income from continuing operations, EPS or other GAAP financial measures,
as these non-GAAP measures exclude certain items, including items that
are recurring in nature, which may be meaningful to investors. Adjusted
EBITDA and Adjusted EPS should not be considered in isolation and do not
purport to be alternatives to net income, income from continuing
operations, EPS or other GAAP financial measures as a measure of our
operating performance. Because not all companies use identical
calculations, our presentations of Adjusted EBITDA and Adjusted EPS may
not be comparable to other similarly titled measures of other companies.
Moreover, our presentation of Adjusted EBITDA is different than EBITDA
as defined in our debt financing agreements.
CLOUD PEAK ENERGY ?INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE INCOME
(in thousands, except per share data)
?
?
?
?
?
?
Three Months Ended
Six Months Ended
June 30,
June 30,
2012
?
?
?
2011
2012
?
?
?
2011
Revenues
$
343,183
$
387,679
$
716,086
$
744,224
Costs and expenses
Cost of product sold (exclusive of depreciation, depletion,
amortization and accretion, shown separately)
266,073
287,837
549,018
549,018
Depreciation and depletion
22,285
9,133
45,675
34,248
Accretion
3,422
3,096
6,070
6,436
Derivative financial instruments
(20,183)
?
(18,127)
?
Selling, general and administrative expenses
?
12,864
?
12,907
?
27,699
?
25,934
Total costs and expenses
?
284,461
?
312,973
?
610,335
?
615,636
Operating income
?
58,722
?
74,706
?
105,751
?
128,588
Other income (expense)
Interest income
312
181
758
316
Interest expense
(7,936)
(8,454)
(13,786)
(20,672)
Tax agreement expense
?
(42,733)
?
(42,733)
Other, net
?
(111)
?
(93)
?
(53)
?
69
Total other expense
?
(7,735)
?
(51,099)
?
(13,081)
?
(63,020)
Income before income tax provision
and earnings from unconsolidated affiliates
?
50,987
?
23,607
?
92,670
?
65,568
Income tax (expense) benefit
(18,806)
69,480
(33,908)
54,187
Earnings from unconsolidated affiliates, net of tax
?
1,497
?
1,507
?
1,534
?
1,612
Net income
?
33,678
?
94,594
?
60,296
?
121,367
Other comprehensive income
Retiree medical plan amortization
of prior service cost, net of tax
?
252
?
209
?
562
?
418
Other comprehensive income
?
252
?
209
?
562
?
418
Total comprehensive income
$
33,930
$
94,803
$
60,858
$
121,785
?
Net income per common share:
Basic
$
0.56
$
1.58
$
1.00
$
2.02
Diluted
$
0.55
$
1.56
$
0.99
$
2.00
Weighted-average shares outstanding - basic
?
60,015
?
60,002
?
60,011
?
60,001
Weighted-average shares outstanding - diluted
?
60,870
?
60,598
?
60,826
?
60,605
?
CLOUD PEAK ENERGY INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
?
?
?
?
?
?
?
?
June 30,
December 31,
2012
2011
ASSETS
(unaudited)
(audited)
Current assets
Cash and cash equivalents
$
121,584
$
404,240
Investments in marketable securities
100,195
75,228
Restricted cash
?
71,245
Accounts receivable
91,441
95,247
Due from related parties
443
471
Inventories, net
78,058
71,648
Deferred income taxes
32,870
37,528
Derivative financial instruments
19,878
2,275
Other assets
?
25,756
?
13,019
Total current assets
?
470,225
?
770,901
Noncurrent assets
Property, plant and equipment, net
1,645,858
1,350,135
Goodwill
35,634
35,634
Deferred income taxes
112,627
132,828
Other assets
?
35,407
?
29,821
Total assets
$
2,299,751
$
2,319,319
?
LIABILITIES AND EQUITY
Current liabilities
Accounts payable
$
52,347
$
71,427
Royalties and production taxes
126,445
136,072
Accrued expenses
50,809
65,928
Current portion of tax agreement liability
19,113
19,113
Current portion of federal coal lease obligations
108,709
102,198
Other liabilities
?
4,975
?
4,971
Total current liabilities
?
362,398
?
399,709
Noncurrent liabilities
Tax agreement liability, net of current portion
151,523
151,523
Senior notes
596,287
596,077
Federal coal lease obligations, net of current portion
130,649
186,119
Asset retirement obligations, net of current portion
196,330
192,707
Other liabilities
?
44,945
?
42,795
Total liabilities
?
1,482,132
?
1,568,930
?
Equity
Common stock ($0.01 par value; 200,000 shares authorized; 61,042 and
60,923 shares
issued and outstanding at June 30, 2012 and December 31, 2011,
respectively)
610
609
Additional paid-in capital
542,671
536,301
Retained earnings
292,390
232,093
Accumulated other comprehensive loss
?
(18,052)
?
(18,614)
Total equity
?
817,619
?
750,389
Total liabilities and equity
$
2,299,751
$
2,319,319
?
CLOUD PEAK ENERGY ?INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
?
?
?
?
Six Months Ended
June 30,
2012
?
?
?
?
2011
Cash flows from operating activities
Net income
$
60,296
$
121,367
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and depletion
45,675
34,248
Accretion
6,070
6,436
Earnings from unconsolidated affiliates
(1,534
)
(1,612
)
Distributions of income from unconsolidated affiliates
?
2,000
Deferred income taxes
23,679
(59,577
)
Tax agreement expense
?
42,733
Stock compensation expense
6,371
4,835
Unrealized derivative income
(18,127
)
?
Other
5,812
6,353
Changes in operating assets and liabilities:
Accounts receivable
4,038
(8,486
)
Inventories
(6,171
)
(8,278
)
Due to or from related parties
28
(4,561
)
Other assets
(12,701
)
(10,909
)
Accounts payable and accrued expenses
(29,214
)
(2,491
)
Asset retirement obligations
?
(2,940
)
?
(3,255
)
Net cash provided by operating activities
?
81,282
?
?
118,803
?
?
Investing activities
Acquisition of Youngs Creek and CX Ranch coal and land assets
(300,259
)
?
Purchases of property, plant and equipment
(21,875
)
(59,001
)
Cash paid for capitalized interest
(36,477
)
(12,018
)
Investments in marketable securities
(53,854
)
?
Maturity and redemption of investments
28,887
?
Initial payments on federal coal leases
?
(69,407
)
Return of restricted cash
71,244
21,321
Partnership escrow deposit
(4,470
)
?
Other
?
1,825
?
?
(3,534
)
Net cash used in investing activities
?
(314,979
)
?
(122,639
)
Financing activities
Principal payments on federal coal leases
(48,959
)
(7,496
)
Other
?
?
?
?
(2,060
)
Net cash used in financing activities
?
(48,959
)
?
(9,556
)
?
Net decrease in cash and cash equivalents
(282,656
)
(13,392
)
Cash and cash equivalents at beginning of period
?
404,240
?
?
340,101
?
Cash and cash equivalents at end of period
$
121,584
?
$
326,709
?
?
Supplemental cash flow disclosures
Interest paid
$
46,616
$
28,901
Non-cash interest capitalized
$
9,635
$
4,868
Income taxes paid
$
20,788
$
95
?
CLOUD PEAK ENERGY INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
(in millions, except per share data)
Adjusted EBITDA
?
?
?
?
?
?
?
?
Three Months Ended
Six Months Ended
June 30,
June 30,
2012
?
?
?
?
?
2011
?
2012
?
?
?
?
?
2011
?
Net income
$
33.7
?
$
94.6
?
$
60.3
?
$
121.4
?
Interest income
(0.3
)
(0.2
)
(0.8
)
(0.3
)
Interest expense
7.9
8.5
13.8
20.7
Income tax expense (benefit)
18.8
(69.5
)
33.9
(54.2
)
Depreciation and depletion
22.3
9.1
45.7
34.2
Accretion
?
3.4
?
?
3.1
?
?
6.1
?
?
6.4
?
EBITDA
$
85.8
$
45.6
$
159.0
$
128.2
Tax agreement expense(1)
?
42.7
?
42.7
Derivative financial instruments(2)
(20.2
)
?
(17.6
)
?
Expired significant broker contract
?
?
?
?
?
?
?
?
?
?
?
?
Adjusted EBITDA
$
65.6
?
$
88.3
?
$
141.4
?
$
170.9
?
?
(1)
?
?
?
Changes to related deferred taxes are included in income tax expense.
(2)
Derivative financial instruments including unrealized
marked-to-market amounts and cash settlements realized.
?
Adjusted EPS
?
?
?
?
?
?
?
?
Three Months Ended
Six Months Ended
June 30,
June 30,
2012
?
?
?
?
2011
2012
?
?
?
?
2011
Diluted earnings per common share
$
0.55
?
$
1.56
?
$
0.99
?
$
2.00
?
Tax agreement expense including tax impacts of
IPO and Secondary Offering
?
(0.84
)
?
(0.84
)
Derivative financial instruments(1)
(0.21
)
?
(0.19
)
?
Expired significant broker contract
?
?
?
?
?
?
?
?
?
?
?
?
Adjusted EPS
$
0.34
?
$
0.72
?
$
0.81
?
$
1.16
?
Weighted-average dilutive shares
outstanding (in millions)
60.9
60.6
60.8
60.6
?
(1)
?
?
?
Derivative financial instruments including unrealized mark-to-market
amounts and cash settlements realized.
?
Tons Sold
?
?
?
?
?
?
?
?
?
?
?
?
?
?
?
?
?
?
?
?
?
?
?
?
?
?
?
(in thousands)
Q2
Q1
Q4
Q3
Q2
Q1
Year
2012
2012
2011
2011
2011
2011
2011
Mine
Antelope
7,424
8,752
9,948
8,901
9,059
9,166
37,075
Cordero Rojo
9,027
10,007
10,070
9,968
9,225
10,193
39,456
Spring Creek
3,625
3,788
5,161
5,502
4,729
3,714
19,106
Decker (50% interest)
384
245
473
432
426
218
1,549
Total
20,460
22,792
25,652
24,803
23,439
23,291
97,186
?
Cloud Peak Energy Inc. Karla Kimrey, 720-566-2932 Vice
President, Investor Relations
