Cloud Peak Energy Inc. Announces Results for Third Quarter and First Nine Months 2010

Category:

November 4, 2010

Dateline:

GILLETTE, Wyo.

Public Company Information:

NYSE:
CLD
"We continue to build our cash position which will enable us to fund additional coal leases, invest in our existing business and pursue new growth opportunities. Our proportionally low long-term liabilities, both reclamation and employee related, combined with availability under our revolving credit facility, further enhance our balance sheet strength."

GILLETTE, Wyo.--(BUSINESS WIRE)--Cloud Peak Energy Inc. (NYSE:CLD), the third-largest U.S. coal producer and the only pure-play Powder River Basin (PRB) coal company, today announced results for the third quarter 2010.

Highlights

  • Adjusted Earnings Per Share of $0.60 and Adjusted EBITDA of $94.5 million, driven by higher prices, efficient operations and tight cost control.
  • Reported net loss attributable to controlling interest of $6.6 million or $0.22 loss per share after non-cash charge of $25.1 million or $0.82 per share due to updated estimate of future liability under the Tax Receivable Agreement established at the time of the IPO.
  • Strong domestic demand for PRB coal, resulting in near record production.
  • Asian export shipments grew to 940,000 tons on strong Asian demand.
  • Improved full year 2010 guidance.

Adjusted EBITDA (defined later) was $94.5 million, compared to $90.3 million in the prior year. Third quarter 2010 income from continuing operations was $19.5 million, compared to $52.5 million in the third quarter of the prior year. Third quarter 2010 income was reduced by non-cash, non operational charges totaling $25.1 million related to the estimated future liability to Rio Tinto under the Tax Receivable Agreement (“TRA”) established at the time of the IPO. Adjusted Earnings Per Share (defined later) of $0.60 were reduced by $0.82 per share due to the impact of the TRA adjustments resulting in a reported earnings per share loss of $0.22.

“Operationally we had a strong third quarter with near record production to meet our customers’ increased coal demands. We continued our focus on safety, efficiency improvement programs and cost control, the benefits of which are shown by our strong Adjusted EBITDA. The business ran exceptionally well through the whole quarter,” said Colin Marshall, President and Chief Executive Officer of Cloud Peak Energy.

In the third quarter, the company recorded non-cash, non-operational charges totaling $25.1 million reflecting the increase in the estimated undiscounted future liability due to Cloud Peak Energy’s former parent Rio Tinto under the TRA and the corresponding change in the net value of the company’s deferred tax assets. The TRA was put in place as part of the IPO to allocate 85 percent of any future cash tax benefits arising from a step up in tax basis in conjunction with the IPO to Rio Tinto and 15 percent to Cloud Peak Energy Inc. The actual amounts to be paid under the TRA to Rio Tinto by Cloud Peak Energy Inc. are determined based on a calculation of cash income tax savings that the company actually realizes as a result of the tax basis increase that resulted from the IPO structuring transactions. Periodically adjustments are made to the estimated liability under the TRA to reflect updated forecasts of the company’s future taxable income and these adjustments are reflected in Cloud Peak Energy’s operating results. The third quarter 2010 increase in the estimated undiscounted future liability arose from the annual update of the life of mine plans which increased the estimate of future profitability over the lives of the company’s mines.

Operating Highlights
  Q3   Q3  

First
Nine
Months

 

First
Nine
Months

2010 2009 2010 2009
Tons Produced1 (in millions) 25.1 24.1 70.4 68.0
Tons Sold (in millions) 26.1 27.4 72.8 77.7
Average revenue per ton1 $ 12.36 $ 11.92 $ 12.31 $ 11.96
Average cost of product sold per ton1 $ 8.36 $ 7.69 $ 8.41 $ 7.94
 
1 Represents the three company-operated mines
 

Third quarter 2010 Adjusted EBITDA of $94.5 million was $4.2 million higher than the third quarter of the prior year driven by higher domestic and export volumes, increased realized sales prices, and tight cost controls.

Production from the three company-operated mines in the third quarter of 2010 was 25.1 million tons compared to 24.1 million tons for the third quarter 2009. The increase was due to stronger domestic demand for PRB coal following last year’s downturn and additional demand for exported coal from Asian utilities.

Third quarter 2010 revenues increased $15.2 million or 4.3 percent to $372.4 million from $357.2 million in the third quarter of 2009. Average revenue per ton of coal sold from the company-operated mines in the third quarter of 2010 increased to $12.36 from $11.92 in 2009.

Costs were $8.36 per ton, compared to $7.69 per ton in the same period of 2009 resulting in a margin for the third quarter 2010 of $4.00 per ton. The increase in unit costs was primarily due to higher royalties from the higher realized sales price, increased diesel prices and higher strip ratios.

Marshall said, “The operations ran well and productivity was high. We were able to deliver near record production based on strong customer demand. The efficiency gains we have made in recent years allowed us to deliver this extra tonnage at low incremental costs.”

Export volumes were 940,000 tons in the third quarter and 2.5 million tons for the first nine months of 2010 compared to 1.6 million tons for the full year 2009. Export volumes are anticipated to exceed 3 million tons this year but could be limited by congestion at the Westshore export terminal.

During the first nine months of 2010, Cloud Peak Energy reported $1,025 million in revenue, $253.1 million in Adjusted EBITDA, $87.4 million in income from continuing operations, and $0.68 basic and diluted earnings per share from continuing operations. In the first nine months of 2009 the company reported $1,061 million in revenue, $254.2 million in Adjusted EBITDA, and $147.3 million in income from continuing operations, and $2.45 basic and diluted earnings per share from continuing operations.

Health, Safety and Environment Record

According to Mine Safety and Health Administration (MSHA) data, during 2009 Cloud Peak Energy’s All Injury Frequency Rate (AIFR) of 0.66 was the lowest among the ten largest U.S. coal producers. The company’s MSHA AIFR for the first nine months of 2010 was 0.66. The three company operated mines have not received notice of any environmental violations under the Surface Mining Control and Reclamation Act (SMCRA) since October 2002.

In October 2010, the Antelope mine received a prestigious national reclamation award from the Office of Surface Mining and the National Mining Association. This Excellence in Surface Mining Reclamation Award was received for successful shrub establishment on reclaimed land at the Antelope mine. The mine was able to overcome the significant challenge in Wyoming terrain of establishing consistent diverse shrub growth, which will allow the land to be reclaimed to better than its pre-mining condition.

Balance Sheet and Cash Flow

Cash generated from operations through September 30, 2010, was $260.8 million. Capital expenditures, excluding capitalized interest, through September 30, 2010, were $37.1 million including the Lease By Modification (LBM) awarded at Spring Creek mine and the purchase of 11 million tons of privately held coal.

Unrestricted cash on hand as of September 30, 2010, was $287.7 million. Restricted cash, which secures a portion of the company’s future reclamation obligations, was $218.4 million. During October, $36.4 million was released from restricted cash, helping raise total available liquidity to over $725 million at October 31, 2010.

The company’s long-term debt as of September 30, 2010, net of original issue discount, was $595.6 million for the senior notes. Federal coal lease obligations were $121.8 million, as of September 30, 2010.

Marshall stated, “We continue to build our cash position which will enable us to fund additional coal leases, invest in our existing business and pursue new growth opportunities. Our proportionally low long-term liabilities, both reclamation and employee related, combined with availability under our revolving credit facility, further enhance our balance sheet strength.”

Outlook

For 2010, Cloud Peak Energy is completely sold out and expects to deliver approximately 94 million tons with an estimated realized price of around $12.33 per ton. For 2011, 92 million tons are currently contracted from the three company-operated mines. Of this committed 2011 production, 81 million tons are under fixed price contracts. Assuming a recent market price of $14.20 per ton for 8800 BTU coal and $11.60 per ton for 8400 BTU coal for unpriced tons, the estimated 2011 full-year weighted average realized price would be approximately $13.04 per ton. For 2012, we currently have contracted 65 million tons from the three company-operated mines, of which 51 million tons are under fixed price contracts.

“With coal producing almost 50 percent of America’s electricity, we believe it’s not a matter of if coal will continue to be a major source of energy in the future but perhaps which coal. PRB coal is among the lowest cost, lowest sulfur coals in the country. In this time of increased regulation, environmental challenges, and pressure on cost, we believe PRB coal will be viewed favorably by domestic utilities and has continuing opportunities in the export markets. Working with our customers, our sales strategy is to enter each year with our expected production essentially fully sold, which has consistently proven to be a prudent and profitable approach. We are comfortable with our current contracted position for 2011 and, we will seek to contract our few unsold coal tons for 2011, as well as our unsold 2012 and 2013 tonnages at higher prices,” said Marshall.

Exports from the Spring Creek mine are expected to exceed 3 million tons this year, driven by the strong demand from the company’s Asian utility customers. The Spring Creek mine is one of the most northern mines in the PRB and benefits from a shorter haul to the Westshore export terminal. Coal from the Spring Creek mine has favorable energy content compared to southern PRB mines. These two factors allow for the opportunity to incrementally grow Cloud Peak Energy’s export business, assuming terminal capacity.

Marshall continued, “Our good quarter was a result of increased demand from utilities, focused cost controls and a dedicated work force. We are confident that we will deliver a strong full year 2010 as reflected in our improved full year guidance.”

Updated Guidance - 2010 Financial and Operational Estimates

The following table provides the company’s current outlook and assumptions for selected 2010 financial and operational metrics:

     
Item   Estimate or Estimated Range
Coal production for our three operated mines   Approximately 94 million tons
Committed sales with fixed prices   100% of estimated 2010 production
Anticipated realized price of produced coal   Approximately $12.33 per ton
Average cost of produced coal 1   $8.40-$8.45 per ton
Additional operating income 2   $25 - $35 million
Selling, general and administrative expenses   Approximately $65 million
Interest expense   Approximately $50 million
Depreciation, depletion, amortization and accretion   $115 - $120 million
Effective income tax rate 3  

22% - 26%

Capital expenditures (excludes federal coal leases) 4   $60 - $90 million
Committed federal coal lease cash payments   $64 million

1 Represents average Cost of Product Sold for produced coal for our three operated mines.
2 Does not include $8.3 million contribution for first quarter 2010 from one significant broker sales contract which is now completed.
3 The company’s effective income tax rate is expected to be lower than the federal statutory rate of 35 percent primarily because Cloud Peak Energy Inc., the publicly traded parent company, provides for tax only on its controlling 51.7 percent share of income from Cloud Peak Energy Resources LLC.
4 Before capitalized interest.

Conference Call Details

A conference call with management is scheduled at 5:00 p.m. ET on November 4, 2010, to review the results and current business conditions. The call will be webcast live over the Internet from the company’s website at www.cloudpeakenergy.com under “Investor Relations.” Participants should follow the instructions provided on the website for downloading and installing the audio applications necessary to join the webcast. Interested individuals also can access the live conference call via telephone at 800-299-7089 (domestic) or 617-801-9714 (international) and entering pass code 68738521.

Following the live webcast, a replay will be available at the same URL on the company’s website 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 55595512. 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 the third-largest U.S. coal producer and the only pure-play Powder River Basin (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. With approximately 1,500 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 percent of the nation’s electricity.

Cautionary Note Regarding Forward-Looking Statements

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 or beliefs, as well as assumptions and estimates regarding our company, industry, economic conditions, government regulations and other factors. Forward-looking statements may include, for example, (1) our outlook for 2010 and future periods for our company, PRB coal and the coal industry in general, and our 2010 operational and financial guidance; (2) anticipated improvements in overall economic conditions and demand by utilities; (3) prices for 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) operational plans for our mines; (7) our cost management efforts; (8) industry estimates of the EIA and other third party sources; (9) our transition to a stand-alone public company and related costs; (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 from those expressed or implied in the forward-looking statements. Factors that could adversely affect our future results include, for example, (a) future economic conditions; (b) demand for our coal by the domestic electric generation industry, export demand and the price we receive for our coal; (c) reductions or deferrals of purchases by major customers and our ability to renew sales contracts; (d) environmental, health, safety, endangered species or other legislation, regulations, court decisions or government actions, or related third-party regulatory legal challenges, including any new requirements affecting the use, demand or price for coal or imposing additional costs, liabilities or restrictions on our mining operations; (e) public perceptions, third-party regulatory legal challenges or governmental actions relating to concerns about climate change, including emissions restrictions and governmental subsidies that make wind, solar or other alternative fuel sources more cost-effective and competitive with coal; (f) the impact of our IPO structuring and financing transactions and ability to successfully operate as a stand-alone public company; (g) operational, geological, equipment, permit, labor, weather-related and other risks inherent in surface coal mining; (h) our ability to efficiently conduct our mining operations, (i) transportation 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 in a timely and cost-effective manner and the impact of third-party regulatory legal challenges, (l) access to capital and credit markets and availability and costs of credit, surety bonds, letters of credit, and insurance; (m) the impact of direct and indirect competition from coal producers and competing sources of energy; (n) litigation and other contingent liabilities; 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 2009 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 Adjusted EBITDA to income from continuing operations and Adjusted EPS to EPS (as defined below) is found in the tables accompanying this release.

EBITDA represents income from continuing operations 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 to exclude specifically identified items that management believes do not directly reflect our core operations. For the periods presented in this release, the specifically identified items are the income statement impacts of: (1) the tax agreement and (2) our significant broker contract that expired in the first quarter of 2010.

Adjusted EPS represents diluted earnings (loss) per share from continuing operations attributable to controlling interest (“EPS”), adjusted to exclude the estimated per share impact of the same specifically identified items used to calculate Adjusted EBITDA and described above.

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 income from continuing operations. Adjusted EBITDA may also be 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 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 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. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(dollars in thousands, except share and per share data)

 
Three Months Ended
September 30,
Nine Months Ended
September 30,
2010   2009 2010   2009
Revenues $ 372,364   $ 357,241   $ 1,024,960   $ 1,061,286  
Costs and expenses
Cost of product sold (exclusive of depreciation, depletion, amortization and accretion, shown separately) 262,166 228,906 719,007 703,725
Depreciation and depletion 25,997 24,047 75,212 68,383
Amortization 8,519 3,197 24,770
Accretion 3,337 2,945 9,903 8,402
Selling, general and administrative expenses   16,514     19,564     47,159     49,075  
Total costs and expenses   308,014     283,981     854,478     854,355  
Operating income   64,350     73,260     170,482     206,931  
Other income (expense)
Interest income 184 86 411 228
Interest expense (11,404 ) (61 ) (36,186 ) (1,007 )

Tax agreement expense

(19,669 ) (19,669 )
Other, net   84     (50 )   123     15  
Total other expense   (30,805 )   (25 )   (55,321 )   (764 )
Income from continuing operations before income tax provision and earnings from unconsolidated affiliates 33,545 73,235 115,161 206,167
Income tax provision (14,712 ) (21,256 ) (30,212 ) (59,888 )
Earnings from unconsolidated affiliates, net of tax   683     511     2,499     989  
Income from continuing operations 19,516 52,490 87,448 147,268
Income from discontinued operations, net of tax       20,343         42,790  
Net income 19,516 72,833 87,448 190,058
Less: Net income attributable to noncontrolling interest   26,115         66,592      
Net income (loss) attributable to controlling interest $ (6,599 ) $ 72,833   $ 20,856   $ 190,058  
 
Amounts attributable to controlling interest common shareholders:
Income (loss) from continuing operations $ (6,599 ) $ 52,490 $ 20,856 $ 147,268
Income from discontinued operations       20,343         42,790  

Net income (loss)

$ (6,599 ) $ 72,833   $ 20,856   $ 190,058  
 
Earnings per common share attributable to controlling interest:
Basic and diluted
Income (loss) from continuing operations $ (0.22 ) $ 0.87 $ 0.68 $ 2.45
Income from discontinued operations       0.34         0.72  
Net income (loss) $ (0.22 ) $ 1.21   $ 0.68   $ 3.17  
Weighted-average shares outstanding   30,600,000     60,000,000     30,600,000     60,000,000  
 

CLOUD PEAK ENERGY INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except share and per share data)

 

   

September 30,
2010

December 31,
2009

ASSETS
Current assets
Cash and cash equivalents $ 287,713 $ 268,316
Restricted cash 218,397 80,180
Accounts receivable, net 87,542 82,809
Due from related parties 2,898 8,340
Inventories 66,705 64,199
Deferred income taxes 1,738 280
Other assets   15,096     7,321  
Total current assets 680,089 511,445
Property, plant and equipment, net 965,130 987,143
Intangible assets, net 3,197
Goodwill 35,634 35,634
Deferred income taxes 73,433 100,520
Other assets   38,858     39,657  
Total assets $ 1,793,144   $ 1,677,596  
LIABILITIES AND EQUITY
Current liabilities
Accounts payable $ 51,670 $ 57,304
Royalties and production taxes 134,302 102,912
Accrued expenses 66,014 47,763
Current portion of tax agreement liability 1,685 758
Current portion of federal coal lease obligations 54,394 50,768
Other liabilities   4,543     4,514  
Total current liabilities 312,608 264,019
Tax agreement liability, net of current portion 66,555 53,751
Senior notes 595,592 595,321
Federal coal lease obligations, net of current portion 67,387 118,289
Asset retirement obligations, net of current portion 181,437 175,940
Other liabilities   29,249     24,798  
Total liabilities   1,252,828     1,232,118  
 
Equity

Common stock ($0.01 par value; 200,000,000 shares authorized; 31,511,755 and 31,449,002 shares issued and outstanding at September 30, 2010 and December 31, 2009, respectively)

315 314
Additional paid-in capital 258,875 251,083
Retained earnings 29,420 8,459
Accumulated other comprehensive loss   (6,591 )   (6,951 )
Total Cloud Peak Energy Inc. shareholders’ equity 282,019 252,905
Noncontrolling interest   258,297     192,573  
Total equity   540,316     445,478  
Total liabilities and equity $ 1,793,144   $ 1,677,596  
 

CLOUD PEAK ENERGY INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in thousands)

 

Nine Months Ended
September 30,

2010   2009
Cash flows from continuing operations
Operating activities
Income from continuing operations $ 87,448 $ 147,268
Adjustments to reconcile income from continuing operations to net cash provided by operating activities from continuing operations:
Depreciation and depletion 75,212 68,383
Amortization 3,197 24,770
Accretion 9,903 8,402
Earnings from unconsolidated affiliates (2,499 ) (989 )
Distributions of income from equity investments 15 4,000
Deferred income taxes 21,330 (3,160 )
Stock compensation expense 5,379 548
Change in tax agreement liability 19,669
Other, net 2,850 226
Changes in operating assets and liabilities:
Accounts receivable, net (4,733 ) (1,939 )
Inventories (2,445 ) (7,473 )
Due to or from related parties 5,442 93,128
Other assets (7,762 ) (2,759 )
Accounts payable and accrued expenses 51,837 23,502
Asset retirement obligations   (4,005 )   (2,942 )
Net cash provided by operating activities from continuing operations   260,838     350,965  
Investing activities
Purchases of property, plant and equipment (56,129 ) (88,219 )
Return of restricted cash 80,180
Restricted cash deposit (218,397 )
Proceeds from sales of assets 1,469 143
Cash advances to affiliate       (259,660 )
Net cash used in investing activities from continuing operations   (192,877 )   (347,736 )
Financing activities
Repayments on other long-term debt (47,276 ) (65,313 )
Distributions to Rio Tinto   (1,288 )   (241 )
Net cash used in financing activities from continuing operations   (48,564 )   (65,554 )
Net cash used in continuing operations   19,397     (62,325 )
Cash flows from discontinued operations
Net cash from operating activities 69,799
Net cash from investing activities       (5,090 )
Net cash provided by discontinued operations       64,709  
Net increase (decrease) in cash and cash equivalents 19,397 2,384
Cash and cash equivalents at beginning of period   268,316     15,935  
Cash and cash equivalents at end of period $ 287,713   $ 18,319  
 

CLOUD PEAK ENERGY INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP MEASURES

(dollars in thousands)

 

Adjusted EBITDA

   

Three Months Ended
September 30,

Nine Months Ended
September 30,

2010   2009 2010   2009
Net income from continuing operations $ 19,516   $ 52,490   $ 87,448   $ 147,268  
Interest income (184 ) (86 ) (411 ) (228 )
Interest expense 11,404 61 36,186 1,007
Income tax provision 14,712 21,256 30,212 59,888
Depreciation and depletion 25,997 24,047 75,212 68,383
Amortization 1 8,519 3,197 24,770
Accretion   3,337     2,945     9,903     8,402  
EBITDA $ 74,782   $ 109,232   $ 241,747   $ 309,490  
Tax agreement expense 19,669 19,669
Expired significant broker contract 1       (18,931 )   (8,324 )   (55,285 )
Adjusted EBITDA $ 94,451   $ 90,301   $ 253,092   $ 254,205  

1 The impact of the expired significant broker contract on the Statement of Operations is a combination of net income and the amortization expense related to the contract. All amortization expense for the periods presented was attributable to the significant broker contract.

Adjusted EPS

  Three Months Ended
September 30,
  Nine Months Ended
September 30,
2010   2009 2010   2009
Diluted earnings (loss) per common share attributable to controlling interest $ (0.22 ) $ 0.87 $ 0.68 $ 2.45
Expired significant broker contract (0.17 ) (0.17 ) (0.51 )
Tax agreement expense 0.64 0.64
Change in net value of deferred tax assets 2 0.18 0.18
 
Adjusted EPS $ 0.60 $ 0.70 $ 1.33 $ 1.94
Weighted-average shares outstanding 30,600,000 60,000,000 30,600,000 60,000,000

2 Related adjustments to our deferred tax assets, net of valuation allowance, as a result of the increase in tax agreement liability are recorded through income tax expense.

Contact:

Cloud Peak Energy Inc.
Karla Kimrey, 720-566-2932
Vice President, Investor Relations

Investor Contacts

Primary IR Contact