2. RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS

On February 24, 2017, we determined that we would restate previously issued financial statements and related disclosures to correct errors related to our January 1, 2003 adoption of FASB Statement No. 143, Asset Retirement Obligations (currently Accounting Standards Codification 410-20, Asset Retirement Obligations). On adoption of this policy we incorrectly recorded reclamation receivables representing contractual reimbursements the Company will receive from certain customers during our completion of final reclamation for our asset retirement obligations. We concluded these reclamation receivables should have been recorded as mineral rights and depleted on a units-of-production basis, cash received on performance of final reclamation should have been recorded as revenue, and cost of sales should have been recognized to reflect accretion of the asset retirement obligation liability. We also corrected certain classification errors whereby costs incurred at the acquired Canadian mines were recorded as selling and administrative costs that under conformity with the parent company policy should have been reflected in cost of sales. We reclassified $17.4 million and $18.2 million from selling and administrative expenses to cost of sales for the year ended December 31, 2015, and 2014, respectively. Other immaterial prior period errors have also been corrected.

Accordingly, we are restating: (i) our consolidated balance sheet as of December 31, 2015 and our consolidated statements of operations and comprehensive loss and statements of cash flows for the years ended December 31, 2015 and December 31, 2014; and (ii) our unaudited quarterly financial information for 2016 and 2015. Restatement adjustments attributable to fiscal years 2003 through 2014 are reflected as a net adjustment to retained earnings as of January 1, 2014.

Financial statements pertaining to Schedule I - Parent Company Information have also been restated including our condensed balance sheet as of December 31, 2015 and our condensed statements of operations and comprehensive loss and condensed statements of cash flows for the years ended December 31, 2015 and December 31, 2014.

Restated Consolidated Balance Sheets

The following table summarizes the impact of the restatement on our previously reported consolidated balance sheet (in thousands, except share and per share data):



	December 31, 2015
Assets	As Reported		Adjustments			Restated
Current assets:
Cash and cash equivalents	$	22,936	$	—		$	22,936
Receivables:
Trade	134,141		—			134,141
Loan and lease receivables	6,157		—			6,157
Contractual third-party reclamation receivables	8,020		(8,020		)	—
Other	11,598		29			11,627
	159,916		(7,991		)	151,925
Inventories	121,858		298			122,156
Other current assets	16,103		—			16,103
Total current assets	320,813		(7,693		)	313,120
Property, plant and equipment:
Land and mineral rights	476,447		99,866			576,313
Plant and equipment	790,677		—			790,677
	1,267,124		99,866			1,366,990
Less accumulated depreciation, depletion and amortization	554,008		66,140			620,148
Net property, plant and equipment	713,116		33,726			746,842
Loan and lease receivables	49,313		—			49,313
Advanced coal royalties	19,781		—			19,781
Reclamation deposits	77,364		—			77,364
Restricted investments and bond collateral	140,807		—			140,807
Contractual third-party reclamation receivables, less current portion	86,915		(86,915		)	—
Investment in joint venture	27,374		—			27,374
Intangible assets, net of accumulated amortization of $15.9 million at December 31, 2015	29,190		—			29,190
Other assets	12,188		—			12,188
Total Assets	$	1,476,861	$	(60,882	)	$	1,415,979

Restated Consolidated Balance Sheets (Continued)



	December 31, 2015
Liabilities and Shareholders’ Deficit	As Reported			Adjustments			Restated
Current liabilities:
Current installments of long-term debt	$	38,852		$	—		$	38,852
Revolving lines of credit	1,970			—			1,970
Accounts payable and accrued expenses:
Trade and other accrued liabilities	109,850			135			109,985
Interest payable	15,527			—			15,527
Production taxes	46,895			—			46,895
Postretirement medical benefits	13,855			—			13,855
Deferred revenue	10,715			—			10,715
Asset retirement obligations	43,950			(3,379		)	40,571
Other current liabilities	31,056			—			31,056
Total current liabilities	312,670			(3,244		)	309,426
Long-term debt, less current installments	979,357			—			979,357
Workers’ compensation, less current portion	5,068			—			5,068
Excess of black lung benefit obligation over trust assets	17,220			—			17,220
Postretirement medical costs, less current portion	285,518			—			285,518
Pension and SERP obligations, less current portion	44,808			—			44,808
Deferred revenue, less current portion	24,613			—			24,613
Asset retirement obligations, less current portion	375,813			3,379			379,192
Intangible liabilities, net of accumulated amortization of $9.8 million at December 31, 2015	3,470			—			3,470
Other liabilities	30,208			—			30,208
Total liabilities	2,078,745			135			2,078,880
Shareholders’ deficit:
Common stock of $0.01 par value as of December 31, 2015
Authorized 30,000,000 shares; Issued and outstanding 18,162,148 shares at December 31, 2015	182			—			182
Other paid-in capital	240,721			—			240,721
Accumulated other comprehensive loss	(171,300		)	(2,970		)	(174,270		)
Accumulated deficit	(672,219		)	(58,047		)	(730,266		)
Total shareholders’ deficit	(602,616		)	(61,017		)	(663,633		)
Noncontrolling interests in consolidated subsidiaries	732			—			732
Total deficit	(601,884		)	(61,017		)	(662,901		)
Total Liabilities and Deficit	$	1,476,861		$	(60,882	)	$	1,415,979

Restated Consolidated Statements of Operations

The following tables summarize the impact of the restatement on our previously reported statements of consolidated operations (in thousands, except per share data):



	Years Ended December 31,
	2015									2014
	As Reported			Adjustments			Restated			As Reported			Adjustments			Restated
Revenues	$	1,411,048		$	8,470		$	1,419,518		$	1,115,992		$	15,008		$	1,131,000
Cost, expenses and other:
Cost of sales	1,145,443			30,406			1,175,849			899,930			30,338			930,268
Depreciation, depletion and amortization	131,491			8,837			140,328			100,778			8,583			109,361
Selling and administrative	112,972			(17,418		)	95,554			100,528			(18,224		)	82,304
Heritage health benefit expenses	14,573			—			14,573			13,388			—			13,388
Loss on sale/disposal of assets	4,866			—			4,866			1,232			—			1,232
Loss on impairment	136,210			—			136,210			—			—			—
Restructuring charges	656			—			656			14,989			—			14,989
Derivative loss	5,587			—			5,587			31,100			—			31,100
Income from equity affiliates	(5,409		)	—			(5,409		)	(3,159		)	—			(3,159		)
Other operating loss (income)	(3,000		)	—			(3,000		)	181			—			181
	1,543,389			21,825			1,565,214			1,158,967			20,697			1,179,664
Operating loss	(132,341		)	(13,355		)	(145,696		)	(42,975		)	(5,689		)	(48,664		)
Other income (expense):
Interest expense	(104,215		)	2,904			(101,311		)	(84,234		)	1,914			(82,320		)
Loss on extinguishment of debt	(5,385		)	—			(5,385		)	(49,154		)	—			(49,154		)
Interest income	7,993			—			7,993			6,400			—			6,400
Gain (loss) on foreign exchange	3,674			—			3,674			(4,016		)	—			(4,016		)
Other income	1,740			—			1,740			1,031			—			1,031
	(96,193		)	2,904			(93,289		)	(129,973		)	1,914			(128,059		)
Loss before income taxes	(228,534		)	(10,451		)	(238,985		)	(172,948		)	(3,775		)	(176,723		)
Income tax expense (benefit)	(19,767		)	(123		)	(19,890		)	232			(209		)	23
Net loss	(208,767		)	(10,328		)	(219,095		)	(173,180		)	(3,566		)	(176,746		)
Less net loss attributable to noncontrolling interest	(5,453		)	—			(5,453		)	(921		)	—			(921		)
Net loss attributable to the Parent company	(203,314		)	(10,328		)	(213,642		)	(172,259		)	(3,566		)	(175,825		)
Less preferred stock dividend requirements	3			—			3			859			—			859
Net loss applicable to common shareholders	$	(203,317	)	$	(10,328	)	$	(213,645	)	$	(173,118	)	$	(3,566	)	$	(176,684	)
Net loss per share applicable to common shareholders:
Basic and diluted	$	(11.36	)	$	(0.57	)	$	(11.93	)	$	(10.86	)	$	(0.22	)	$	(11.08	)
Weighted average number of common shares outstanding:
Basic and diluted	17,905						17,905			15,941						15,941

Restated Consolidated Statements of Comprehensive Loss

The following tables summarize the impact of the restatement on our previously reported consolidated statements of comprehensive loss (in thousands):



	Years Ended December 31,
	2015									2014
	As Reported			Adjustments			Restated			As Reported			Adjustments			Restated
Net loss	$	(208,767	)	$	(10,328	)	$	(219,095	)	$	(173,180	)	$	(3,566	)	$	(176,746	)
Other comprehensive income (loss)
Pension and other postretirement plans:
Amortization of accumulated actuarial gains, pension	1,347			539			1,886			983			525			1,508
Adjustments to accumulated actuarial gains (losses) and transition obligations, pension	160			—			160			(24,793		)	—			(24,793		)
Amortization of accumulated actuarial gains, transition obligations, and prior service costs, postretirement medical benefits	1,308			—			1,308			18			—			18
Adjustments to accumulated actuarial gains (losses), postretirement medical benefits	7,322			—			7,322			(19,442		)	—			(19,442		)
Tax effect of other comprehensive income gains	(3,382		)	47			(3,335		)	—			161			161
Change in foreign currency translation adjustment	(52,021		)	155			(51,866		)	(17,880		)	(310		)	(18,190		)
Unrealized and realized gains and losses on available-for-sale securities	(1,738		)	—			(1,738		)	413			—			413
Other comprehensive loss, net of income taxes	(47,004		)	741			(46,263		)	(60,701		)	376			(60,325		)
Comprehensive loss	(255,771		)	(9,587		)	(265,358		)	(233,881		)	(3,190		)	(237,071		)
Less: Comprehensive loss attributable to noncontrolling interest	(5,453		)	—			(5,453		)	(921		)	—			(921		)
Comprehensive loss attributable to common shareholders	$	(250,318	)	$	(9,587	)	$	(259,905	)	$	(232,960	)	$	(3,190	)	$	(236,150	)

Restated Consolidated Statements of Cash Flows

The following tables summarize the impact of the restatement on our previously reported consolidated statements of cash flows (in thousands):



	Years Ended December 31,
	2015									2014
	As Reported			Adjustments			Restated			As Reported			Adjustments			Restated
Cash flows from operating activities:
Net loss	$	(208,767	)	$	(10,328	)	$	(219,095	)	$	(173,180	)	$	(3,566	)	$	(176,746	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation, depletion and amortization	131,491			8,837			140,328			100,778			8,583			109,361
Accretion of asset retirement obligation	28,207			10,685			38,892			21,604			9,424			31,028
Share-based compensation	7,748			—			7,748			6,082			—			6,082
Non-cash interest expense	6,857			—			6,857			—			—			—
Amortization of deferred financing costs	10,601			—			10,601			3,481			—			3,481
Loss on extinguishment of debt	4,445			—			4,445			49,154			—			49,154
Loss on derivative instruments	5,587			—			5,587			31,100			—			31,100
Loss (gain) on foreign exchange	(3,674		)	—			(3,674		)	4,016			—			4,016
Loss on impairment	136,210			—			136,210			—			—			—
Income from equity affiliates	(5,409		)	—			(5,409		)	(3,159		)	—			(3,159		)
Distributions from equity affiliates	7,057			—			7,057			4,042			—			4,042
Deferred income taxes benefit	(17,457		)	(504		)	(17,961		)	(230		)	(412		)	(642		)
Other	(1,256		)	1,110			(146		)	4,867			730			5,597
Changes in operating assets and liabilities:
Receivables	1,987			—			1,987			(403		)	—			(403		)
Inventories	2,010			(210		)	1,800			45,335			—			45,335
Accounts payable and accrued expenses	(5,447		)				(5,447		)	(24,858		)	—			(24,858		)
Interest payable	(5,569		)				(5,569		)	(12,905		)	—			(12,905		)
Deferred revenue	(13,094		)	—			(13,094		)	(12,246		)	—			(12,246		)
Other assets and liabilities	(18,597		)	(1,016		)	(19,613		)	14,536			202			14,738
Asset retirement obligations	(17,368		)	(8,574		)	(25,942		)	(7,661		)	(14,961		)	(22,622		)
Net cash provided by operating activities	45,562			—			45,562			50,353			—			50,353
Cash flows from investing activities:
Net cash used in investing activities	(70,801		)	—			(70,801		)	(432,772		)	—			(432,772		)
Cash flows from financing activities:
Net cash provided by financing activities	36,723			—			36,723			338,706			—			338,706
Effect of exchange rate changes on cash	(2,806		)	—			(2,806		)	(3,139		)	—			(3,139		)
Net increase (decrease) in cash and cash equivalents	8,678			—			8,678			(46,852		)	—			(46,852		)
Cash and cash equivalents, beginning of year	14,258			—			14,258			61,110			—			61,110
Cash and cash equivalents, end of year	$	22,936		$	—		$	22,936		$	14,258		$	—		$	14,258
Supplemental disclosures of cash flow information:
Cash paid for interest	$	72,972		$	—		$	72,972		$	85,047		$	—		$	85,047
Cash paid for income taxes	434			—			434			117			—			117
Non-cash transactions:
Accrued purchases of property and equipment	3,766			—			3,766			11,740			—			11,740
Capital leases and other financing sources	15,232			—			15,232			15,599			—			15,599