Impairment Charges and Mine Closure Costs

The following table summarizes the amounts reflected on the line “Asset impairment and mine closure costs” in the consolidated statements of operations:



	Successor				Predecessor
Description	Year Ended December 31, 2017		October 2 through December 31, 2016		January 1 through October 1, 2016		Year Ended December 31, 2015
(In thousands)
Coal lands and mineral rights	$	—	$	—	$	74,144	$	2,210,488
Plant and equipment	—		—		—		199,107
Deferred development	—		—		—		159,474
Prepaid royalties	—		—		3,406		41,990
Equity investments	—		—		40,920		21,325
Inventories	—		—		—		66
Other	—		—		10,797		(4,147		)
Total	$	—	$	—	$	129,267	$	2,628,303

January 1 Through October 1, 2016 Impairment Charges

During the period January 1 through October 1, 2016, the Company recorded the following to “Asset impairment and mine closure costs” in the Consolidated Statements of Operations: $74.1 million recorded in the first quarter related to the impairment of coal reserves and surface land in Kentucky that are being leased to a mining company that idled its mining operations; $3.4 million recorded in the first quarter related to the impairment on the portion of an advance royalty balance on a reserve base mined at the Company’s Mountain Laurel operation that will not be recouped; $2.9 million recorded in the first quarter related to an other-than-temporary-impairment charge on an available-for-sale security; a $38.0 million impairment recorded in the second quarter related to the Company’s equity investment in a brownfield bulk commodity terminal on the Columbia River in Longview, Washington as the Company relinquished its ownership rights in exchange for future throughput rights; $7.2 million of severance expense related to headcount reductions during the first half of the year; a $3.6 million curtailment charge related to the Company’s pension, postretirement health and black lung actuarial liabilities due to headcount reductions in the first half of the year.

2015 Impairment Charges

In 2015, as a result of the continued deterioration in thermal and metallurgical coal markets and projections for a muted pricing recovery, certain of the Company’s mine complexes have incurred and are expected to continue to incur operating losses. The Company determined that the further weakening of the pricing environment in the last half of the year and the projected operating losses represented indicators of impairment with respect to certain of its long-lived assets or assets groups. Using current pricing expectations which reflected marketplace participant assumptions, life of mine cash flows were used to determine if the undiscounted cash flows exceeded the current asset values for certain operating complexes in the Company’s Appalachia segment. For multiple operating complexes, the undiscounted cash flows did not exceed the carrying value of the long-lived assets. Discounted cash flows were utilized to reduce the carrying value of those assets to fair value. The discount rate used reflected the then current financial difficulties present in the commodities sector in general and coal mining specifically; the perceived risk of financing coal mining in light of industry defaults; and the lack of an active market for buying or selling coal mining assets. Additionally, the Company determined that the then current market conditions represented an indicator of impairment for certain undeveloped coal properties that were acquired in times of significantly higher coal prices. The then current prices and the significant capital outlay that would have been required to develop these reserves indicated that the carrying value was not recoverable. As a result the Company recorded a $2.6 billion asset impairment charge in the last two quarters of 2015 of which $2.1 billion was recorded during the third quarter and the remaining $0.5 billion was recorded in the fourth quarter. Of the total charge. $2.2 billion was recorded to the Company’s Appalachia segment, with the remaining $0.4 billion recorded to the Company’s Other operating segment. There is no fair value remaining related to the impaired assets.

During the second quarter of 2015, the Company recorded $19.1 million to “Asset impairment and mine closure costs” in the Consolidated Statements of Operations. An impairment charge of $12.2 million related to the portion of an advance royalty balance on a reserve base mined at the Company’s Mountain Laurel, Spruce and Briar Branch operations that was determined would not be recouped based on estimates of sales volume and pricing through the March 2017 recoupment period. Additionally, the Company recorded a $5.6 million impairment charge related to the closure of a higher-cost mining complex serving the metallurgical coal markets.