☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
77-0695453
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
9540 South Maroon Circle, Suite 300 Englewood, CO
|
80112
|
(Address of principal executive offices)
|
(Zip Code)
|
Large accelerated filer
|
o
|
|
Accelerated filer
|
o
|
Non-accelerated filer
|
x
|
(Do not check if a smaller reporting company.)
|
Smaller reporting company
|
o
|
|
|
|
Emerging growth company
|
o
|
|
PAGE
|
|
|
||
|
March 31, 2017
|
|
December 31, 2016
|
||||
|
(In thousands)
|
||||||
Assets
|
|
||||||
Current assets:
|
|
|
|
||||
Cash
|
$
|
20,234
|
|
|
$
|
15,094
|
|
Receivables
|
30,427
|
|
|
37,587
|
|
||
Inventories
|
17,480
|
|
|
17,559
|
|
||
Assets held for sale
|
636
|
|
|
934
|
|
||
Other current assets
|
4,772
|
|
|
5,794
|
|
||
Total current assets
|
73,549
|
|
|
76,968
|
|
||
Property, plant and equipment:
|
|
|
|
||||
Land, mineral rights, property, plant and equipment
|
362,325
|
|
|
359,748
|
|
||
Less accumulated depreciation, depletion and amortization
|
(134,483
|
)
|
|
(124,130
|
)
|
||
Net property, plant and equipment
|
227,842
|
|
|
235,618
|
|
||
Advanced coal royalties
|
8,979
|
|
|
8,815
|
|
||
Restricted investments
|
38,111
|
|
|
37,741
|
|
||
Intangible assets, net of accumulated amortization of $4.6 million and $4.1 million at March 31, 2017 and December 31, 2016, respectively
|
26,632
|
|
|
27,148
|
|
||
Deposits and other assets
|
468
|
|
|
617
|
|
||
Total Assets
|
$
|
375,581
|
|
|
$
|
386,907
|
|
Liabilities and Partners’ Capital
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Current installments of long-term debt
|
$
|
4,179
|
|
|
$
|
3,819
|
|
Accounts payable and accrued expenses:
|
|
|
|
||||
Trade
|
14,355
|
|
|
19,397
|
|
||
Deferred revenue
|
5,993
|
|
|
3,547
|
|
||
Production taxes
|
18,279
|
|
|
16,319
|
|
||
Asset retirement obligations
|
10,395
|
|
|
10,775
|
|
||
Other current liabilities
|
2,402
|
|
|
3,284
|
|
||
Total current liabilities
|
55,603
|
|
|
57,141
|
|
||
Long-term debt, less current installments
|
315,374
|
|
|
313,827
|
|
||
Asset retirement obligations, less current portion
|
40,506
|
|
|
41,402
|
|
||
Other liabilities
|
2,551
|
|
|
2,647
|
|
||
Total liabilities
|
414,034
|
|
|
415,017
|
|
||
Partners’ capital (deficit):
|
|
|
|
||||
Limited partners (1,284,840 and 1,221,060 units outstanding as of March 31, 2017 and December 31, 2016, respectively)
|
27,614
|
|
|
28,261
|
|
||
Series A Convertible Units (16,215,029 and 15,656,551 units outstanding as of March 31, 2017 and December 31, 2016, respectively)
|
(52,574
|
)
|
|
(46,103
|
)
|
||
Series B Convertible Units (4,512,500 units outstanding as of March 31, 2017 and December 31, 2016)
|
(45,187
|
)
|
|
(43,360
|
)
|
||
General partner (35,291 units outstanding as of March 31, 2017 and December 31, 2016)
|
31,737
|
|
|
33,281
|
|
||
Accumulated other comprehensive loss
|
(43
|
)
|
|
(189
|
)
|
||
Total Westmoreland Resource Partners, LP deficit
|
(38,453
|
)
|
|
(28,110
|
)
|
||
Total Liabilities and Partners’ Capital
|
$
|
375,581
|
|
|
$
|
386,907
|
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In thousands, except per unit data)
|
||||||
Revenues:
|
|
|
|
||||
Coal revenues
|
$
|
73,107
|
|
|
$
|
91,560
|
|
Non-coal revenues
|
1,698
|
|
|
922
|
|
||
Total revenues
|
74,805
|
|
|
92,482
|
|
||
Costs and expenses:
|
|
|
|
||||
Cost of coal revenues
|
59,325
|
|
|
71,211
|
|
||
Cost of non-coal revenues
|
91
|
|
|
153
|
|
||
Depreciation, depletion and amortization
|
10,351
|
|
|
15,265
|
|
||
Selling and administrative
|
3,897
|
|
|
3,268
|
|
||
(Gain) loss on sales of assets
|
(142
|
)
|
|
1,229
|
|
||
Loss on impairment
|
—
|
|
|
538
|
|
||
Total cost and expenses
|
73,522
|
|
|
91,664
|
|
||
Operating income
|
1,283
|
|
|
818
|
|
||
Other (expense) income:
|
|
|
|
||||
Interest expense
|
(10,479
|
)
|
|
(9,848
|
)
|
||
Interest income
|
206
|
|
|
340
|
|
||
Other income
|
44
|
|
|
24
|
|
||
Change in fair value of warrants
|
131
|
|
|
(190
|
)
|
||
Total other expenses
|
(10,098
|
)
|
|
(9,674
|
)
|
||
Net loss
|
(8,815
|
)
|
|
(8,856
|
)
|
||
Less net loss allocated to general partner
|
(13
|
)
|
|
(14
|
)
|
||
Net loss allocated to limited partners
|
$
|
(8,802
|
)
|
|
$
|
(8,842
|
)
|
|
|
|
|
||||
Net loss
|
$
|
(8,815
|
)
|
|
$
|
(8,856
|
)
|
Unrealized and realized gain (loss) on available-for-sale securities
|
146
|
|
|
(28
|
)
|
||
Comprehensive loss attributable to the Partnership
|
$
|
(8,669
|
)
|
|
$
|
(8,884
|
)
|
|
|
|
|
||||
Net loss per common limited partner unit, basic and diluted:
|
$
|
(0.32
|
)
|
|
$
|
(0.41
|
)
|
|
|
|
|
||||
Weighted average number of common limited partner units outstanding, basic and diluted:
|
1,451
|
|
|
5,885
|
|
||
|
|
|
|
||||
Cash distribution paid per common limited partner unit
|
$
|
0.1333
|
|
|
$
|
0.2000
|
|
Cash distribution paid per general partner unit
|
0.1333
|
|
|
0.2000
|
|
|
Limited Partners
|
|
|
|
|
|
|
|
Total Partners' Deficit
|
||||||||||||||||||||||||||||||||||||||||
|
Common
|
|
Series A Convertible
|
|
Series B Convertible
|
|
Liquidation
|
|
Total
|
|
General Partner
|
|
Accumulated Other Comprehensive Loss
|
|
|||||||||||||||||||||||||||||||||||
|
Units
|
|
Capital (Deficit)
|
|
Units
|
|
Deficit
|
|
Units
|
|
Deficit
|
|
Units
|
|
Capital
|
|
Units
|
|
Deficit
|
|
Units
|
|
Capital
|
|
|
||||||||||||||||||||||||
|
(In thousands, except units data)
|
||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2016
|
1,221,060
|
|
|
$
|
28,261
|
|
|
15,656,551
|
|
|
$
|
(46,103
|
)
|
|
4,512,500
|
|
|
$
|
(43,360
|
)
|
|
856,698
|
|
|
$
|
—
|
|
|
22,246,809
|
|
|
$
|
(61,202
|
)
|
|
35,291
|
|
|
$
|
33,281
|
|
|
$
|
(189
|
)
|
|
$
|
(28,110
|
)
|
Net loss
|
—
|
|
|
(504
|
)
|
|
—
|
|
|
(6,471
|
)
|
|
—
|
|
|
(1,827
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,802
|
)
|
|
—
|
|
|
(13
|
)
|
|
—
|
|
|
(8,815
|
)
|
||||||||
Equity-based compensation
|
—
|
|
|
42
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
42
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
42
|
|
||||||||
Issuance of units to LTIP participants
|
63,780
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
63,780
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
146
|
|
|
146
|
|
||||||||
Distribution for acquisition of Johnson Run (Note 12)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,526
|
)
|
|
—
|
|
|
(1,526
|
)
|
||||||||
Paid-in-kind Series A convertible unit distribution
|
—
|
|
|
—
|
|
|
558,478
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
558,478
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Cash distribution to unitholders
|
—
|
|
|
(185
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(185
|
)
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(190
|
)
|
||||||||
Balance at March 31, 2017
|
1,284,840
|
|
|
$
|
27,614
|
|
|
16,215,029
|
|
|
$
|
(52,574
|
)
|
|
4,512,500
|
|
|
$
|
(45,187
|
)
|
|
856,698
|
|
|
$
|
—
|
|
|
22,869,067
|
|
|
$
|
(70,147
|
)
|
|
35,291
|
|
|
$
|
31,737
|
|
|
$
|
(43
|
)
|
|
$
|
(38,453
|
)
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(8,815
|
)
|
|
$
|
(8,856
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
||||
Depreciation, depletion and amortization
|
10,351
|
|
|
15,265
|
|
||
Accretion of asset retirement obligations
|
1,335
|
|
|
1,375
|
|
||
Impairment charges
|
—
|
|
|
538
|
|
||
Non-cash interest expense
|
2,296
|
|
|
2,269
|
|
||
Amortization of deferred financing costs
|
706
|
|
|
527
|
|
||
Other
|
(1,019
|
)
|
|
1,483
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Receivables, net
|
7,160
|
|
|
(3,124
|
)
|
||
Inventories
|
79
|
|
|
2,361
|
|
||
Accounts payable and accrued expenses
|
(2,686
|
)
|
|
(3,043
|
)
|
||
Accrued interest expense
|
49
|
|
|
(62
|
)
|
||
Deferred revenue
|
2,446
|
|
|
3,572
|
|
||
Other assets and liabilities
|
1,195
|
|
|
74
|
|
||
Asset retirement obligations
|
(1,877
|
)
|
|
(1,452
|
)
|
||
Net cash provided by operating activities
|
11,220
|
|
|
10,927
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Additions to property, plant, equipment and other
|
(3,221
|
)
|
|
(1,544
|
)
|
||
Advance royalties payments
|
(267
|
)
|
|
(8
|
)
|
||
Change in restricted investments
|
(224
|
)
|
|
(2,516
|
)
|
||
Net proceeds from sales of assets
|
407
|
|
|
214
|
|
||
Net cash used in investing activities
|
(3,305
|
)
|
|
(3,854
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Repayments of long-term debt
|
(1,059
|
)
|
|
(941
|
)
|
||
Cash distributions to unitholders
|
(190
|
)
|
|
(1,183
|
)
|
||
Acquisition under common control of Johnson Run
|
(1,526
|
)
|
|
—
|
|
||
Net cash used in financing activities
|
(2,775
|
)
|
|
(2,124
|
)
|
||
Net increase in cash
|
5,140
|
|
|
4,949
|
|
||
Cash, beginning of the period
|
15,094
|
|
|
3,710
|
|
||
Cash, end of the period
|
$
|
20,234
|
|
|
$
|
8,659
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
||||
Cash paid for interest
|
$
|
7,428
|
|
|
$
|
7,052
|
|
Non-cash transactions:
|
|
|
|
||||
Asset retirement obligations capitalized in mine development
|
$
|
—
|
|
|
$
|
794
|
|
Market value of common units vested in LTIP
|
327
|
|
|
86
|
|
||
Market value of Series A units at date of distribution
|
2,124
|
|
|
3,050
|
|
•
|
ASU 2016-08,
Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross versus Net)
.
|
•
|
ASU 2016-10,
Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing
.
|
•
|
ASU 2016-12,
Revenue from Contracts with Customers: Narrow-Scope Improvements and Practical Expedients
.
|
•
|
ASU 2016-19,
Technical Corrections and Improvements
.
|
|
March 31, 2017
|
|
December 31, 2016
|
||||
|
(In thousands)
|
||||||
Coal stockpiles
|
$
|
5,514
|
|
|
$
|
4,518
|
|
Materials and supplies
|
12,016
|
|
|
13,091
|
|
||
Reserve for obsolete inventory
|
(50
|
)
|
|
(50
|
)
|
||
Total
|
$
|
17,480
|
|
|
$
|
17,559
|
|
|
March 31, 2017
|
|
December 31, 2016
|
||||
|
(In thousands)
|
||||||
Cash and cash equivalents
|
$
|
7,011
|
|
|
$
|
8,581
|
|
Available-for-sale securities
|
31,100
|
|
|
29,160
|
|
||
|
$
|
38,111
|
|
|
$
|
37,741
|
|
|
March 31, 2017
|
|
December 31, 2016
|
||||
|
(In thousands)
|
||||||
Cost basis
|
$
|
31,143
|
|
|
$
|
29,349
|
|
Gross unrealized holding gains
|
221
|
|
|
167
|
|
||
Gross unrealized holding losses for less than one year
|
(109
|
)
|
|
(106
|
)
|
||
Gross unrealized holding losses for more than one year
|
(155
|
)
|
|
(250
|
)
|
||
Fair Value
|
$
|
31,100
|
|
|
$
|
29,160
|
|
|
March 31, 2017
|
|
December 31, 2016
|
||||
|
(In thousands)
|
||||||
Term loan facility
|
$
|
308,116
|
|
|
$
|
306,189
|
|
Capital lease obligations
|
15,713
|
|
|
16,351
|
|
||
Other
|
536
|
|
|
589
|
|
||
Total debt outstanding
|
324,365
|
|
|
323,129
|
|
||
Less debt issuance costs
|
(4,812
|
)
|
|
(5,483
|
)
|
||
Less current installments
|
(4,179
|
)
|
|
(3,819
|
)
|
||
Total debt outstanding, less current installments
|
$
|
315,374
|
|
|
$
|
313,827
|
|
|
March 31, 2017
|
||
|
(In thousands)
|
||
2017
|
$
|
3,072
|
|
2018
|
312,292
|
|
|
2019
|
4,105
|
|
|
2020
|
1,694
|
|
|
2021
|
1,586
|
|
|
Thereafter
|
1,616
|
|
|
Total debt
|
$
|
324,365
|
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
Limited Partner common units
|
$
|
163
|
|
|
$
|
1,142
|
|
General Partner units
|
5
|
|
|
8
|
|
||
Warrants
|
22
|
|
|
33
|
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Recognition of fair value of restricted common units over the vesting period
|
$
|
42
|
|
|
$
|
64
|
|
|
Units
|
|
Weighted Average Grant-Date Fair Value
|
|
Unamortized Compensation Expense
|
|||||
Unvested balance at December 31, 2016
|
63,780
|
|
|
$
|
3.92
|
|
|
|
||
Granted
|
—
|
|
|
—
|
|
|
|
|||
Vested
|
(63,780
|
)
|
|
3.92
|
|
|
|
|||
Unvested balance at March 31, 2017
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
March 31, 2017
|
|
December 31, 2016
|
||
Limited partner common units
|
1,284,840
|
|
|
1,221,060
|
|
Series A Units
|
16,215,029
|
|
|
15,656,551
|
|
Series B Units
|
4,512,500
|
|
|
4,512,500
|
|
Liquidation units
|
856,698
|
|
|
856,698
|
|
Warrants
|
166,557
|
|
|
166,557
|
|
General Partner units
|
35,291
|
|
|
35,291
|
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
Net loss attributable to the Partnership
|
$
|
(8,815
|
)
|
|
$
|
(8,856
|
)
|
Less:
|
|
|
|
||||
Paid and declared distributions on Series A convertible units
|
2,162
|
|
|
3,131
|
|
||
Series A convertible units share of undistributed loss
|
(8,229
|
)
|
|
(9,535
|
)
|
||
Paid and declared distributions on Series B convertible units
|
—
|
|
|
—
|
|
||
Series B convertible units share of undistributed loss
|
(2,292
|
)
|
|
—
|
|
||
Paid and declared distributions on General Partner units
|
5
|
|
|
7
|
|
||
General Partner units share of undistributed loss
|
(18
|
)
|
|
(22
|
)
|
||
Paid and declared distributions on Warrants
|
22
|
|
|
33
|
|
||
Net loss available to limited partners
|
$
|
(465
|
)
|
|
$
|
(2,470
|
)
|
|
|
|
|
||||
Weighted average number of common units used in computation of Limited Partners' net loss per common unit (basic and diluted)
1,2
|
1,451
|
|
|
5,885
|
|
||
Limited Partners' net loss per common unit (basic and diluted)
|
$
|
(0.32
|
)
|
|
$
|
(0.41
|
)
|
|
Accumulated Other Comprehensive Loss
|
||
|
(In thousands)
|
||
Balance at December 31, 2016
|
$
|
(189
|
)
|
Other comprehensive loss before reclassification
|
116
|
|
|
Amounts reclassified from accumulated other comprehensive loss
|
30
|
|
|
Balance at March 31, 2017
|
$
|
(43
|
)
|
|
|
Amount reclassified from accumulated other comprehensive loss
|
|
Affected line item in the statement where net loss is presented
|
|||
Details about accumulated other comprehensive loss components
|
|
Three Months Ended March 31, 2017
|
|||||
|
|
(In thousands)
|
|
||||
Realized gains and losses on available-for-sale securities
|
|
$
|
30
|
|
|
Other income
|
•
|
The effect of legal and administrative proceedings, settlements, investigations and claims, including any related to citations and orders issued by regulatory authorities, and the availability of related insurance coverage;
|
•
|
Existing and future legislation and regulation affecting both our coal mining operations and our customers’ coal usage, governmental policies and taxes, including those aimed at reducing emissions of elements such as mercury, sulfur dioxides, nitrogen oxides, particulate matter or greenhouse gases;
|
•
|
The effect of the Environmental Protection Agency’s inquiries and regulations on the operations of the power plants to which we provide coal;
|
•
|
Our substantial level of indebtedness and our ability to adhere to financial covenants related to our borrowing arrangements;
|
•
|
Inaccuracies in our estimates of our coal reserves;
|
•
|
Our potential inability to expand or continue current coal operations due to limitations in obtaining bonding capacity for new mining permits, and/or increases in our mining costs as a result of increased bonding expenses;
|
•
|
The effect of prolonged maintenance or unplanned outages at our operations or those of our major power generating customers;
|
•
|
The inability to control costs and/or recognize favorable tax credits
|
•
|
Competition within our industry and with producers of competing energy sources;
|
•
|
Our relationships with, and other conditions affecting, our customers, including how power prices affect our customers’ decision to run their plants;
|
•
|
Seasonal variations and inclement weather which may cause fluctuations in our operating results, profitability, cash flow and working capital needs related to our operating segments;
|
•
|
The availability and costs of key supplies or commodities, such as diesel fuel, steel and explosives;
|
•
|
Potential title defects or loss of leasehold interests in our properties, which could result in unanticipated costs or an inability to mine the properties;
|
•
|
The effect of consummating financing, acquisition and/or disposition transactions;
|
•
|
The inability to renew our mineral leases or material changes in lease royalties;
|
•
|
Our ability to pay our quarterly distributions which substantially depends upon our future operating performance (which may be affected by prevailing economic conditions in the coal industry), debt covenants, and financial, business and other factors, some of which are beyond our control. Additional information is found in our discussion below under
Cash Distributions
;
|
•
|
Our potential need to recognize additional impairment and/or restructuring expenses associated with our operations, as well as any changes to previously identified impairment or restructuring expense estimates; and
|
•
|
Other factors that are described under the heading “Risk Factors” found in our reports filed with the SEC, including our Annual Reports on Form 10-K and our Quarterly Reports on Form 10-Q.
|
|
Three Months Ended March 31,
|
|
Increase / (Decrease)
|
|||||||||||
|
2017
|
|
2016
|
|
$
|
|
%
|
|||||||
|
(In millions)
|
|||||||||||||
Total Revenues
|
$
|
74.8
|
|
|
$
|
92.5
|
|
|
$
|
(17.7
|
)
|
|
(19.1
|
)%
|
Net loss
|
(8.8
|
)
|
|
(8.9
|
)
|
|
0.1
|
|
|
1.1
|
%
|
|||
Adjusted EBITDA
1
|
12.9
|
|
|
19.3
|
|
|
(6.4
|
)
|
|
(33.2
|
)%
|
|
Three Months Ended March 31,
|
|
Increase / (Decrease)
|
|||||||||||
|
2017
|
|
2016
|
|
$
|
|
%
|
|||||||
|
(In millions)
|
|||||||||||||
Coal revenues
|
$
|
73.1
|
|
|
$
|
91.6
|
|
|
$
|
(18.5
|
)
|
|
(20.2
|
)%
|
Non-coal revenues
|
1.7
|
|
|
0.9
|
|
|
0.8
|
|
|
88.9
|
%
|
|||
Total Revenues
|
$
|
74.8
|
|
|
$
|
92.5
|
|
|
$
|
(17.7
|
)
|
|
(19.1
|
)%
|
|
Three Months Ended March 31,
|
|
Increase / (Decrease)
|
|||||||||||
|
2017
|
|
2016
|
|
$
|
|
%
|
|||||||
|
(In millions)
|
|||||||||||||
Cost of coal revenues
|
$
|
59.3
|
|
|
$
|
71.2
|
|
|
$
|
(11.9
|
)
|
|
(16.7
|
)%
|
Depreciation, depletion and amortization
|
10.4
|
|
|
15.3
|
|
|
(4.9
|
)
|
|
(32.0
|
)%
|
|||
Selling and administrative
|
3.9
|
|
|
3.3
|
|
|
0.6
|
|
|
18.2
|
%
|
|
Three Months Ended March 31,
|
|
Increase / (Decrease)
|
|||||||||||
|
2017
|
|
2016
|
|
$
|
|
%
|
|||||||
|
(In millions)
|
|||||||||||||
Interest expense
|
$
|
10.5
|
|
|
$
|
9.8
|
|
|
$
|
0.7
|
|
|
7.1
|
%
|
Interest income
|
0.2
|
|
|
0.3
|
|
|
(0.1
|
)
|
|
(33.3
|
)%
|
|||
Change in fair value of warrants
|
0.1
|
|
|
(0.2
|
)
|
|
0.3
|
|
|
*
|
|
•
|
are used widely by investors to measure a company’s operating performance without regard to items excluded from the calculation of such terms, which can vary substantially from company to company depending upon accounting methods and book value of assets, capital structure and the method by which assets were acquired, among other factors;
|
•
|
are used by rating agencies, lenders and other parties to evaluate our creditworthiness; and
|
•
|
help investors to more meaningfully evaluate and compare the results of our operations from period to period by removing the effect of our capital structure and asset base from our operating results.
|
•
|
do not reflect our cash expenditures or future requirements for capital and major maintenance expenditures or contractual commitments;
|
•
|
do not reflect changes in, or cash requirements for, our working capital needs; and
|
•
|
do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on certain of our debt obligations.
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Reconciliation of Adjusted EBITDA to Net Loss
|
|
|
|
||||
Net loss
|
$
|
(8,815
|
)
|
|
$
|
(8,856
|
)
|
Interest expense, net of interest income
|
10,273
|
|
|
9,508
|
|
||
Depreciation, depletion and amortization
|
10,351
|
|
|
15,265
|
|
||
Accretion of ARO
|
1,335
|
|
|
1,375
|
|
||
EBITDA
|
13,144
|
|
|
17,292
|
|
||
Impairment charges
|
—
|
|
|
538
|
|
||
Loss (gain) on sale of assets
|
(142
|
)
|
|
1,229
|
|
||
Share-based compensation
|
42
|
|
|
64
|
|
||
Other non-cash and non-recurring costs
1
|
(175
|
)
|
|
166
|
|
||
Adjusted EBITDA
|
12,869
|
|
|
19,289
|
|
||
Deferred revenue
|
2,446
|
|
|
3,572
|
|
||
Reclamation and mine closure costs
|
(1,873
|
)
|
|
(1,888
|
)
|
||
Maintenance capital expenditures and other capitalized items
|
(3,151
|
)
|
|
(1,545
|
)
|
||
Cash interest expense, net of interest income
|
(7,222
|
)
|
|
(6,712
|
)
|
||
Other
|
—
|
|
|
(1,020
|
)
|
||
Distributable Cash Flow
|
$
|
3,069
|
|
|
$
|
11,696
|
|
|
March 31, 2017
|
|
December 31, 2016
|
||||
|
(In millions)
|
||||||
Cash and cash equivalents
|
$
|
20.2
|
|
|
$
|
15.1
|
|
Availability under the Revolving Credit Facility
|
14.7
|
|
|
15.0
|
|
||
Total
|
$
|
34.9
|
|
|
$
|
30.1
|
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Net cash provided by (used in):
|
|
|
|
||||
Operating activities
|
$
|
11,220
|
|
|
$
|
10,927
|
|
Investing activities
|
(3,305
|
)
|
|
(3,854
|
)
|
||
Financing activities
|
(2,775
|
)
|
|
(2,124
|
)
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Coal reserves
|
$
|
—
|
|
|
$
|
—
|
|
Mine development
|
35
|
|
|
180
|
|
||
Equipment and components
|
2,725
|
|
|
1,364
|
|
||
Total
|
$
|
2,760
|
|
|
$
|
1,544
|
|
|
|
WESTMORELAND RESOURCE PARTNERS, LP
|
|
|
|
By:
|
WESTMORELAND RESOURCES GP, LLC, its general partner
|
|
|
|
|
Date:
|
May 15, 2017
|
By:
|
/s/ Nathan M. Troup
|
|
|
|
Nathan M. Troup
|
|
|
|
Interim Chief Financial Officer
|
|
|
|
(Principal Financial Officer and A Duly Authorized Officer)
|
|
|
|
|
Incorporated by Reference
|
|
|
||||||
Exhibit Number
|
|
Exhibit Description
|
|
Form
|
|
File Number
|
|
Exhibit
|
|
Filing Date
|
|
Filed Herewith
|
31.1
|
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(a)
|
|
|
|
|
|
|
|
|
|
X
|
31.2
|
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(a)
|
|
|
|
|
|
|
|
|
|
X
|
32
|
|
Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350
|
|
|
|
|
|
|
|
|
|
X
|
95.1
|
|
Mine Safety Disclosure
|
|
|
|
|
|
|
|
|
|
X
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
|
|
|
|
|
|
X
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
|
|
|
|
|
|
X
|
101.CAL
|
|
XBRL Taxonomy Calculation Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
101.LAB
|
|
XBRL Taxonomy Label Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
101.PRE
|
|
XBRL Taxonomy Presentation Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
101.DEF
|
|
XBRL Taxonomy Definition Document
|
|
|
|
|
|
|
|
|
|
X
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Westmoreland Resource Partners, LP;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
May 15, 2017
|
/s/ Kevin A. Paprzycki
|
|
|
|
Name:
|
Kevin A. Paprzycki
|
|
|
Title:
|
Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Westmoreland Resource Partners, LP;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
May 15, 2017
|
/s/ Nathan M. Troup
|
|
|
|
Name:
|
Nathan M. Troup
|
|
|
Title:
|
Interim Chief Financial Officer
|
|
|
|
(Principal Financial Officer and A Duly Authorized Officer)
|
Date:
|
May 15, 2017
|
/s/ Kevin A. Paprzycki
|
|
|
|
Name:
|
Kevin A. Paprzycki
|
|
|
Title:
|
Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
Date:
|
May 15, 2017
|
/s/ Nathan M. Troup
|
|
|
|
Name:
|
Nathan M. Troup
|
|
|
Title:
|
Interim Chief Financial Officer
|
|
|
|
(Principal Financial Officer and A Duly Authorized Officer)
|
Westmoreland Resources Partners, LP
|
|||||||||||||||||||||||
10-Q Safety Statistics
|
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Quarter Ended March 31, 2017
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Received
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Received
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Total
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Notice of
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Notice of
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Legal
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Section
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Total Dollar
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Number
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Pattern of
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Potential
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Actions
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Legal
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Legal
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Mine or
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104(d)
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Value of
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of
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Violations
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to Have
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Pending
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Actions
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Actions
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Operating
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Section
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Section
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Citations
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Section
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Section
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MSHA
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Mining
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Under
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Pattern
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as of
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Initiated
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Resolved
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Name/MSHA
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104 S&S
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104(b)
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and
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110(b)(2)
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107(a)
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Assessments
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Related
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Section
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Under
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Last Day
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During
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During
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Identification
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Citations
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Orders
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Orders
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Violations
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Orders
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Proposed
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Fatalities
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(yes/no)
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(yes/no)
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of Period
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Period
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Period
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Number
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(#)(1)
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(#)(2)
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(#)(3)
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(#)(4)
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(#)(5)
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($)(6)
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(#)(7)
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(8)
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(8)
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(#)(9)
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(#)(9)
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(#)(9)
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Kemmerer Mine
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48-00086
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3
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—
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—
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—
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—
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$
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13,485
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—
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No
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No
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9
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—
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1
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Oxford Mine
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33-03907
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1
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—
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—
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—
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—
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$
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1,480
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—
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No
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No
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—
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—
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—
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(1)
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Mine Act Section 104(a) citations are for alleged violations of mandatory health or safety standards that could significantly and substantially contribute to the cause and effect of a coal mine safety or health hazard.
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(2)
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Mine Act Section 104(b) orders are for alleged failures to totally abate a citation within the period of time specified in the citation.
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(3)
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Mine Act Section 104(d) citations and orders are for an alleged unwarrantable failure to comply with mandatory health or safety standards.
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(4)
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Total number of flagrant violations issued under Section 110(b)(2) of the Mine Act.
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(5)
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Mine Act Section 107(a) orders are for alleged conditions or practices that could reasonably be expected to cause death or serious physical harm before such condition or practice can be abated and result in orders of immediate withdrawal from the area of the mine affected by the condition.
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(6)
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Total dollar value of MSHA assessments proposed during the quarter ended
March 31, 2017
.
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(7)
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Total number of mining-related fatalities during the quarter ended
March 31, 2017
.
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(8)
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Mine Act Section 104(e) written notices are for an alleged pattern of violations of mandatory health or safety standards that are of such nature as could have significantly and substantially contributed to the cause and effect of a coal mine health or safety hazard, or the potential to have such a pattern.
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(9)
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Any pending legal action before the Federal Mine Safety and Health Review Commission (the “Commission”) involving a coal mine owned and operated by us. The number of legal actions pending as of
March 31, 2017
that fall into each of the following categories is as follows:
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