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Supplemental Guarantor/Non-Guarantor Financial Information
 9 Months Ended
Sep. 30, 2015
Supplemental Guarantor/Non-Guarantor Financial Information  
Supplemental Guarantor/Non-Guarantor Financial Information (CPE Resources only)

20. Supplemental Guarantor/Non-Guarantor Financial Information

In accordance with the indentures governing the senior notes, CPE Inc. and certain of our 100% owned U.S. subsidiaries (the “Guarantor Subsidiaries”) have fully and unconditionally guaranteed the senior notes on a joint and several basis. These guarantees of either series of senior notes are subject to release in the following customary circumstances:

  • a sale or other disposition (including by way of consolidation or merger or otherwise) of the Guarantor Subsidiary or the sale or disposition of all or substantially all the assets of the Guarantor Subsidiary (other than to CPE Inc. or a Restricted Subsidiary (as defined in the applicable indenture) of CPE Inc.) otherwise permitted by the applicable indenture,
  • a disposition of the majority of the capital stock of a Guarantor Subsidiary to a third person otherwise permitted by the applicable indenture, after which the applicable Guarantor Subsidiary is no longer a Restricted Subsidiary,
  • upon a liquidation or dissolution of a Guarantor Subsidiary so long as no default under the applicable indenture occurs as a result thereof,
  • the designation in accordance with the applicable indenture of the Guarantor Subsidiary as an Unrestricted Subsidiary or the Guarantor Subsidiary otherwise ceases to be a Restricted Subsidiary of CPE Inc. in accordance with the applicable indenture,
  • defeasance or discharge of such series of senior notes; or
  • the release, other than the discharge through payment by the Guarantor Subsidiary, of all other guarantees by such Restricted Subsidiary of Debt (as defined in the applicable indenture) of either issuer of the senior notes or (in the case of the indenture for the $200 million senior notes due March 15, 2024) the debt of another Guarantor Subsidiary under the Credit Agreement.

The following historical financial statement information is provided for CPE Inc. and the Guarantor/Non-Guarantor Subsidiaries:

Supplemental Condensed Consolidating Statement of Operations and Comprehensive Income
(in thousands)
Three Months Ended September 30, 2015
Parent Guarantor (CPE Inc.)Issuing Company (CPE Resources)Guarantor SubsidiariesNon-Guarantor SubsidiariesEliminationsConsolidated
Revenue$ 1,327 $ ― $ 301,673 $ ― $ (1,327) 301,673
Costs and expenses
Cost of product sold (exclusive of
depreciation, depletion, amortization,
and accretion, shown separately) ― (1) 248,500 ― ― 248,500
Depreciation and depletion ― 530 7,366 ― ― 7,896
Amortization of port access contract rights ― ― 928 ― ― 928
Accretion ― ― 3,070 ― ― 3,070
Derivative financial instruments ― ― 10,235 ― ― 10,235
Selling, general and administrative expenses 1,878 247 12,142 ― (1,327) 12,940
Other operating costs ― ― 646 ― ― 646
Total costs and expenses 1,878 776 282,887 ― (1,327) 284,215
Operating income (loss) (551) (776) 18,786 ― ― 17,458
Other income (expense)
Interest income ― 37 ― ― ― 37
Interest expense ― (10,785) (113) (87) ― (10,985)
Other, net ― (41) 252 41 ― 253
Total other income (expense) ― (10,789) 139 (46) ― (10,695)
Income (loss) before income tax provision and
earnings from unconsolidated affiliates (551) (11,565) 18,925 (46) ― 6,763
Income tax benefit (expense) 111 3,578 (1,495) 11 ― 2,205
Income (loss) from unconsolidated affiliates,
net of tax ― 8 (103) ― ― (95)
Income (loss) from consolidated
affiliates, net of tax 9,313 17,292 (35) ― (26,570) ―
Net income (loss) 8,873 9,313 17,292 (35) (26,570) 8,873
Other comprehensive income (loss)
Postretirement medical plan amortization
of prior service cost 313 313 313 ― (626) 313
Income tax on postretirement medical plan (116) (116) (116) ― 232 (116)
Other comprehensive income (loss) 197 197 197 ― (394) 197
Total comprehensive income (loss)$ 9,070 $ 9,510 $ 17,489 $ (35)$ (26,964)$ 9,070

Supplemental Condensed Consolidating Statement of Operations and Comprehensive Income
(in thousands)
Three Months Ended September 30, 2014
Parent Guarantor (CPE Inc.)Issuing Company (CPE Resources)Guarantor SubsidiariesNon-Guarantor SubsidiariesEliminationsConsolidated
Revenue$ 2,256 $ ― $ 336,242 $ 6,095 $ (2,256) 342,337
Costs and expenses
Cost of product sold (exclusive of
depreciation, depletion, amortization,
and accretion, shown separately) ― 12 282,402 5,932 ― 288,345
Depreciation and depletion ― 765 25,979 (929) ― 25,815
Accretion ― ― 3,077 771 ― 3,848
Derivative financial instruments ― ― (515) ― ― (515)
Selling, general and administrative expenses 2,257 189 11,973 ― (2,256) 12,163
Other operating costs ― ― 1,099 ― ― 1,099
Total costs and expenses 2,257 966 324,015 5,774 (2,256) 330,755
Gain on sale of Decker Mine interest ― ― (74,262) ― ― (74,262)
Operating income (loss) (1) (966) 86,489 321 ― 85,844
Other income (expense)
Interest income ― 37 ― ― ― 37
Interest expense ― (11,000) (1,602) (99) ― (12,701)
Tax agreement benefit 58,595 ― ― ― ― 58,595
Other, net ― (84) (30) 84 ― (31)
Total other income (expense) 58,595 (11,047) (1,632) (15) ― 45,900
Income (loss) before income tax provision and
earnings from unconsolidated affiliates 58,594 (12,013) 84,857 306 ― 131,744
Income tax benefit (expense) (21,522) 12,084 (31,499) 249 ― (40,688)
Income (loss) from unconsolidated affiliates,
net of tax ― 7 6 ― ― 13
Income (loss) from consolidated
affiliates, net of tax 53,997 53,919 555 ― (108,471) ―
Net income (loss) 91,069 53,997 53,919 555 (108,471) 91,069
Other comprehensive income (loss)
Postretirement medical plan amortization
of prior service cost 247 247 247 ― (494) 247
Write-off of prior service costs
of prior service costrelated to Decker Mine pension 3,183 3,183 3,183 3,183 (9,549) 3,183
Income tax on postretirement medical plan (1,235) (1,235) (1,235) (1,146) 3,616 (1,235)
Other comprehensive income (loss) 2,195 2,195 2,195 2,037 (6,427) 2,195
Total comprehensive income (loss)$ 93,264 $ 56,192 $ 56,114 $ 2,592 $ (114,898)$ 93,264

Supplemental Condensed Consolidating Statement of Operations and Comprehensive Income
(in thousands)
Nine Months Ended September 30, 2015
Parent Guarantor (CPE Inc.)Issuing Company (CPE Resources)Guarantor SubsidiariesNon-Guarantor SubsidiariesEliminationsConsolidated
Revenue$ 5,602 $ ― $ 863,374 $ ― $ (5,602) 863,374
Costs and expenses
Cost of product sold (exclusive of
depreciation, depletion, amortization and
accretion, shown separately) ― 17 735,242 ― ― 735,258
Depreciation and depletion ― 1,822 49,920 ― ― 51,742
Amortization of port access contract rights ― ― 2,783 ― ― 2,783
Accretion ― ― 9,960 ― ― 9,960
Derivative financial instruments ― ― 17,781 ― ― 17,781
Selling, general and administrative expenses 6,162 702 35,438 ― (5,602) 36,701
Goodwill impairment ― ― 33,355 ― ― 33,355
Other operating costs ― ― 1,163 ― ― 1,163
Total costs and expenses 6,162 2,541 885,642 ― (5,602) 888,743
Operating income (loss) (560) (2,541) (22,268) ― ― (25,369)
Other income (expense)
Interest income ― 137 ― ― ― 137
Interest expense ― (32,855) (3,162) (258) ― (36,274)
Other, net ― (172) 159 172 ― 158
Total other income (expense) ― (32,890) (3,003) (86) ― (35,979)
Income (loss) before income tax provision and
earnings from unconsolidated affiliates (560) (35,431) (25,271) (86) ― (61,348)
Income tax benefit (expense) 112 7,133 5,088 17 ― 12,350
Income (loss) from unconsolidated affiliates,
net of tax ― 7 287 ― ― 294
Income (loss) from consolidated
affiliates, net of tax (48,256) (19,965) (69) ― 68,290 ―
Net income (loss) (48,704) (48,256) (19,965) (69) 68,290 (48,704)
Other comprehensive income (loss)
Postretirement medical plan amortization
of prior service cost 939 939 939 ― (1,878) 939
Income tax on postretirement medical plan (347) (347) (347) ― 694 (347)
Other comprehensive income (loss) 592 592 592 ― (1,184) 592
Total comprehensive income (loss)$ (48,112)$ (47,664)$ (19,373)$ (69)$ 67,106 $ (48,112)

Supplemental Condensed Consolidating Statement of Operations and Comprehensive Income
(in thousands)
Nine Months Ended September 30, 2014
Parent Guarantor (CPE Inc.)Issuing Company (CPE Resources)Guarantor SubsidiariesNon-Guarantor SubsidiariesEliminationsConsolidated
Revenue$ 6,131 $ ― $ 966,601 $ 15,653 $ (6,132) 982,253
Costs and expenses
Cost of product sold (exclusive of
depreciation, depletion, amortization and
accretion, shown separately) ― 209 812,355 17,841 ― 830,405
Depreciation and depletion ― 2,300 80,812 (1,168) ― 81,944
Accretion ― ― 9,263 2,803 ― 12,066
Derivative financial instruments ― ― (16,052) ― ― (16,052)
Selling, general and administrative expenses 6,132 548 36,537 ― (6,131) 37,086
Other operating costs ― 46 1,627 ― ― 1,671
Total costs and expenses 6,132 3,103 924,542 19,475 (6,131) 947,120
Gain on sale of Decker Mine interest ― ― (74,262) ― ― (74,262)
Operating income (loss) (1) (3,103) 116,321 (3,823) (1) 109,395
Other income (expense)
Interest income ― 222 ― ― ― 222
Interest expense ― (57,053) (7,156) (299) ― (64,508)
Tax agreement benefit 58,595 ― ― ― ― 58,595
Other, net ― (865) 315 289 ― (262)
Total other income (expense) 58,595 (57,696) (6,841) (10) ― (5,953)
Income (loss) before income tax provision and
earnings from unconsolidated affiliates 58,594 (60,799) 109,480 (3,833) (1) 103,442
Income tax benefit (expense) (21,522) 24,866 (35,585) 1,531 ― (30,709)
Income (loss) from unconsolidated affiliates,
net of tax ― (8) 571 ― ― 562
Income (loss) from consolidated
affiliates, net of tax 36,223 72,164 (2,302) ― (106,085) ―
Net income (loss) 73,295 36,223 72,164 (2,302) (106,086) 73,295
Other comprehensive income (loss)
Postretirement medical plan amortization
of prior service cost 741 741 741 ― (1,482) 741
Write-off of prior service costs
of prior service costrelated to Decker Mine pension 3,183 3,183 3,183 3,183 (9,549) 3,183
Income tax on postretirement medical plan (1,413) (1,413) (1,413) (1,146) 3,972 (1,413)
Other comprehensive income (loss) 2,511 2,511 2,511 2,037 (7,059) 2,511
Total comprehensive income (loss)$ 75,806 $ 38,734 $ 74,675 $ (265)$ (113,145)$ 75,806

Supplemental Condensed Consolidating Balance Sheet
(in thousands)
September 30, 2015
Parent Guarantor (CPE Inc.)Issuing Company (CPE Resources)Guarantor SubsidiariesNon-Guarantor SubsidiariesEliminationsConsolidated
ASSETS
Current assets
Cash and cash equivalents$ — $ 121,055 $ 2,465 $ — $ — $ 123,519
Accounts receivable 1 — 705 61,323 — 62,029
Due from related parties — — 578,641 — (574,490) 4,152
Inventories, net — 7,184 68,319 — — 75,503
Deferred income taxes — — 21,715 — (45) 21,670
Derivative financial instruments — — 7,258 — — 7,258
Prepaid taxes 9,388 — — — — 9,388
Other assets 577 — 16,091 — — 16,668
Total current assets 9,966 128,239 695,194 61,323 (574,535) 320,187
Noncurrent assets
Property, plant and equipment, net — 5,280 1,509,482 — — 1,514,762
Port access contract rights, net — — 50,997 — — 50,997
Goodwill — — 2,280 — — 2,280
Deferred income taxes — 48,348 26,193 14 (8,637) 65,918
Other assets 1,060,437 1,890,055 41,015 — (2,946,967) 44,540
Total assets$ 1,070,403 $ 2,071,922 $ 2,325,161 $ 61,337 $ (3,530,139)$ 1,998,684
LIABILITIES AND MEMBER'S EQUITY
Current liabilities
Accounts payable$ 212 $ 8,309 $ 45,653 $ 16 $ — $ 54,189
Royalties and production taxes — — 126,139 — — 126,139
Accrued expenses 1,859 8,500 35,630 — — 45,989
Due to related parties 15,484 503,887 — 55,118 (574,490) —
Other liabilities — 45 1,803 — (45) 1,803
Total current liabilities 17,555 520,741 209,225 55,134 (574,535) 228,120
Noncurrent liabilities
Senior notes — 490,792 — — — 490,792
Asset retirement obligations, net of
current portion — — 167,790 — — 167,790
Deferred income taxes 8,637 — — — (8,637) —
Accumulated postretirement medical benefit
obligation, net of current portion — — 55,401 — — 55,401
Other liabilities — — 12,370 — — 12,370
Total liabilities 26,192 1,011,533 444,786 55,134 (583,172) 954,473
Commitments and Contingencies (Note 13) — — — — —
Total equity 1,044,211 1,060,389 1,880,375 6,203 (2,946,967) 1,044,211
Total liabilities and equity$ 1,070,403 $ 2,071,922 $ 2,325,161 $ 61,337 $ (3,530,139)$ 1,998,684

Supplemental Condensed Consolidating Statement of Cash Flows
(in thousands)
Nine Months Ended September 30, 2015
Parent Guarantor (CPE Inc.)Issuing Company (CPE Resources)Guarantor SubsidiariesNon-Guarantor SubsidiariesEliminationsConsolidated
Net cash provided by (used in) operating
activities$ — $ (43,653)$ 105,717 $ — $ — $ 62,064
Investing activities
Purchases of property, plant and equipment — (2,827) (25,298) — — (28,125)
Cash paid for capitalized interest — — (404) — — (404)
Investment in development projects — — (1,526) — — (1,526)
Investment in unconsolidated affiliates — — (5,383) — — (5,383)
Payment of restricted cash — — (6,500) — — (6,500)
Other — 5 180 — — 185
Net cash provided by (used in) investing
activities — (2,822) (38,931) — — (41,753)
Financing activities
Principal payments of federal coal leases — — (63,970) — — (63,970)
Payment of deferred financing costs — (2) (339) — — (342)
Other — — (1,225) — — (1,225)
Net cash provided by (used in) financing
activities — (2) (65,534) — — (65,537)
Net increase (decrease) in cash and cash equivalents — (46,477) 1,252 — — (45,226)
Cash and cash equivalents at beginning of period — 167,532 1,213 — — 168,745
Cash and cash equivalents at the end of period$ — $ 121,055 $ 2,465 $ — $ — $ 123,519

Supplemental Condensed Consolidating Statement of Cash Flows
(in thousands)
Nine Months Ended September 30, 2014
Parent Guarantor (CPE Inc.)Issuing Company (CPE Resources)Guarantor SubsidiariesNon-Guarantor SubsidiariesEliminationsConsolidated
Net cash provided by (used in) operating
activities$ (891)$ (71,744)$ 119,157 $ (4,408)$ — $ 42,115
Investing activities
Purchases of property, plant and equipment — (3,012) (11,667) — — (14,680)
Cash paid for capitalized interest — — (4,066) — — (4,066)
Investments in marketable securities — (8,159) — — — (8,159)
Maturity and redemption of investments — 88,845 — — — 88,845
Investment in port access contract rights — — (37,100) — — (37,100)
Investment in development projects — — (3,522) — — (3,522)
Contributions made to subsidiary — — (1,750) — 1,750 —
Distribution received from subsidiary — — 1,486 — (1,486) —
Other — — (1,830) — — (1,830)
Net cash provided by (used in) investing
activities — 77,674 (58,449) — 264 19,488
Financing activities
Principal payments of federal coal leases — — (58,958) — — (58,958)
Issuance of senior notes — 200,000 — — — 200,000
Repayment of senior notes — (300,000) — — — (300,000)
Payment of deferred financing costs — (14,683) — — — (14,683)
Contributions received from parent — — — 1,750 (1,750) —
Distributions made to parent — — — (1,486) 1,486 —
Other 891 — (1,196) — — (305)
Net cash provided by (used in) financing
activities 891 (114,683) (60,154) 264 (264) (173,946)
Net increase (decrease) in cash and cash equivalents — (108,753) 554 (4,144) — (112,343)
Cash and cash equivalents at beginning of period — 226,993 496 4,144 — 231,633
Cash and cash equivalents at the end of period$ — $ 118,240 $ 1,050 $ — $ — $ 119,290