10-Q

United States

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________________________________ 

FORM 10-Q

______________________________________  

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2019

or

¨ TRANSITION REPORT PURSUANT TO 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-37822

______________________________________  

Advanced Emissions Solutions, Inc.

(Exact name of registrant as specified in its charter)

______________________________________  

Delaware	27-5472457
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

640 Plaza Drive, Suite 270, Highlands Ranch, CO	80129
(Address of principal executive offices)	(Zip Code)

(720) 598-3500
(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

______________________________________ 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x   No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	o	Accelerated filer	x
Non-accelerated filer	o	Smaller reporting company	x
		Emerging growth company	¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes  ¨    No  x

Securities registered pursuant to Section 12(b) of the Act:

Class	Trading Symbol	Name of each exchange on which registered
Common stock, par value $0.001 per share	ADES	NASDAQ Global Market

As of August 1, 2019, there were 18,578,019 outstanding shares of Advanced Emissions Solutions, Inc. common stock, par value $0.001 per share.

INDEX

		PAGE
PART I. - FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited):
	Condensed Consolidated Balance Sheets as of June 30, 2019 and December 31, 2018	1
	Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2019 and June 30, 2018	2
	Condensed Consolidated Statements of Changes in Stockholders' Equity for the Three and Six Months Ended June 30, 2019 and June 30, 2018	3
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2019 and June 30, 2018	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	44
Item 4.	Controls and Procedures	45
PART II. - OTHER INFORMATION
Item 1.	Legal Proceedings	46
Item 1a.	Risk Factors	46
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	46
Item 3.	Defaults Upon Senior Securities	46
Item 4.	Mine Safety Disclosures	46
Item 5.	Other Information	46
Item 6.	Exhibits	47
	Signatures	48

Part I. – FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

Advanced Emissions Solutions, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(Unaudited)

	As of
(in thousands, except share data)	June 30, 2019			December 31, 2018
ASSETS
Current assets:
Cash, cash equivalents and restricted cash	$	15,420		$	18,577
Receivables, net	5,606			9,554
Receivables, related parties	4,189			4,284
Inventories, net	17,798			21,791
Prepaid expenses and other assets	5,598			5,570
Total current assets	48,611			59,776
Restricted cash, long-term	5,000			5,195
Property, plant and equipment, net of accumulated depreciation of $4,179 and $1,499, respectively	44,825			42,697
Intangible assets, net	4,501			4,830
Equity method investments	48,403			6,634
Deferred tax assets, net	19,179			32,539
Other long-term assets, net	16,553			7,993
Total Assets	$	187,072		$	159,664
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	6,631		$	6,235
Accrued payroll and related liabilities	3,450			8,279
Current portion of long-term debt	24,025			24,067
Other current liabilities	5,552			2,138
Total current liabilities	39,658			40,719
Long-term debt	34,204			50,058
Other long-term liabilities	5,449			940
Total Liabilities	79,311			91,717
Commitments and contingencies (Note 8)
Stockholders’ equity:
Preferred stock: par value of $.001 per share, 50,000,000 shares authorized, none outstanding	—			—
Common stock: par value of $.001 per share, 100,000,000 shares authorized, 22,867,405 and 22,640,677 shares issued, and 18,554,626 and 18,576,489 shares outstanding at June 30, 2019 and December 31, 2018, respectively	23			23
Treasury stock, at cost: 4,312,779 and 4,064,188 shares as of June 30, 2019 and December 31, 2018, respectively	(44,571		)	(41,740		)
Additional paid-in capital	97,354			96,750
Retained earnings	54,955			12,914
Total stockholders’ equity	107,761			67,947
Total Liabilities and Stockholders’ Equity	$	187,072		$	159,664

See Notes to the Condensed Consolidated Financial Statements.

1

Advanced Emissions Solutions, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands, except per share data)	2019			2018			2019			2018
Revenues:
Consumables	$	11,386		$	726		$	26,495		$	1,347
License royalties, related party	4,191			3,523			8,411			6,753
Other	—			24			—			72
Total revenues	15,577			4,273			34,906			8,172
Operating expenses:
Consumables cost of revenue, exclusive of depreciation and amortization	12,286			902			26,394			1,613
Other sales cost of revenue, exclusive of depreciation and amortization	6			(198		)	6			(346		)
Payroll and benefits	2,798			2,759			5,354			4,973
Legal and professional fees	1,569			1,213			3,545			2,761
General and administrative	2,421			1,094			4,563			2,264
Depreciation, amortization, depletion and accretion	757			72			2,859			188
Total operating expenses	19,837			5,842			42,721			11,453
Operating loss	(4,260		)	(1,569		)	(7,815		)	(3,281		)
Other income (expense):
Earnings from equity method investments	20,935			15,889			42,625			28,142
Interest expense	(1,987		)	(412		)	(4,091		)	(748		)
Other	60			34			130			60
Total other income	19,008			15,511			38,664			27,454
Income before income tax expense	14,748			13,942			30,849			24,173
Income tax expense (benefit)	6,634			(1,349		)	8,333			1,220
Net income	$	8,114		$	15,291		$	22,516		$	22,953
Earnings per common share (Note 1):
Basic	$	0.45		$	0.76		$	1.23		$	1.13
Diluted	$	0.44		$	0.75		$	1.22		$	1.12
Weighted-average number of common shares outstanding:
Basic	18,172			20,062			18,219			20,275
Diluted	18,377			20,195			18,412			20,386

See Notes to the Condensed Consolidated Financial Statements.

2

Advanced Emissions Solutions, Inc. and Subsidiaries

Condensed Consolidated Statements of Changes in Stockholders' Equity

(Unaudited)

	Common Stock				Treasury Stock
(Amounts in thousands, except share data)	Shares		Amount		Shares		Amount			Additional Paid-in Capital			Retained Earnings			Total Stockholders’ Equity
Balances, January 1, 2019	22,640,677		$	23	(4,064,188	)	$	(41,740	)	$	96,750		$	12,914		$	67,947
Cumulative effect of change in accounting principle (Note 1)	—		—		—		—			—			28,817			28,817
Stock-based compensation	218,465		—		—		—			317			—			317
Repurchase of common shares to satisfy minimum tax withholdings	(22,707	)	—		—		—			(245		)	—			(245		)
Cash dividends declared on common stock, $0.25 per share	—		—		—		—			—			(4,629		)	(4,629		)
Repurchase of common shares	—		—		(63,876	)	(693		)	—			—			(693		)
Net income	—		—		—		—			—			14,402			14,402
Balances, March 31, 2019	22,836,435		23		(4,128,064	)	(42,433		)	96,822			51,504			105,916
Stock-based compensation	31,715		—		—		—			541			—			541
Repurchase of common shares to satisfy minimum tax withholdings	(745	)	—		—		—			(9		)	—			(9		)
Cash dividends declared on common stock, $0.25 per share	—		—		—		—			—			(4,663		)	(4,663		)
Repurchase of common shares	—		—		(184,715	)	(2,138		)	—			—			(2,138		)
Net income	—		—		—		—			—			8,114			8,114
Balances, June 30, 2019	22,867,405		$	23	(4,312,779	)	$	(44,571	)	$	97,354		$	54,955		$	107,761

See Notes to the Condensed Consolidated Financial Statements.

3

Advanced Emissions Solutions, Inc. and Subsidiaries

Condensed Consolidated Statements of Changes in Stockholders' Equity

(Unaudited)

	Common Stock				Treasury Stock
(Amounts in thousands, except share data)	Shares		Amount		Shares		Amount			Additional Paid-in Capital			Retained Earnings (Deficit)			Total Stockholders’ Equity
Balances, January 1, 2018	22,465,821		$	22	(1,713,766	)	$	(16,397	)	$	105,308		$	(15,478	)	$	73,455
Cumulative effect from adoption of ASC 606	—		—		—		—			—			2,950			2,950
Stock-based compensation	193,583		1		—		—			335			—			336
Repurchase of common shares to satisfy minimum tax withholdings	(22,375	)	—		—		—			(267		)	—			(267		)
Cash dividends declared on common stock, $0.25 per share	—		—		—		—			(5,189		)	—			(5,189		)
Repurchase of common shares	—		—		(149,217	)	(1,642		)	—			—			(1,642		)
Net income	—		—		—		—			—			7,662			7,662
Balances, March 31, 2018	22,637,029		23		(1,862,983	)	(18,039		)	100,187			(4,866		)	77,305
Stock-based compensation	(1,135	)	—		—		—			675			—			675
Repurchase of common shares to satisfy minimum tax withholdings	(8,259	)	—		—		—			(92		)	—			(92		)
Cash dividends declared on common stock, $0.25 per share	—		—		—		—			(5,090		)	—			(5,090		)
Repurchase of common shares	—		—		(676,201	)	(7,469		)	—			—			(7,469		)
Net income	—		—		—		—			—			15,291			15,291
Balances, June 30, 2018	22,627,635		$	23	(2,539,184	)	$	(25,508	)	$	95,680		$	10,425		$	80,620

See Notes to the Condensed Consolidated Financial Statements.

4

Advanced Emissions Solutions, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Six Months Ended June 30,
(in thousands)	2019			2018
Cash flows from operating activities
Net income	$	22,516		$	22,953
Adjustments to reconcile net income to net cash provided by operating activities:
Increase (decrease) in valuation allowance on deferred tax assets	849			(498		)
Depreciation, amortization, depletion and accretion	2,859			188
Amortization of debt discount and debt issuance costs	851			—
Stock-based compensation expense	858			1,010
Earnings from equity method investments	(42,625		)	(28,142		)
Other non-cash items, net	474			192
Changes in operating assets and liabilities:
Receivables and related party receivables	4,044			(64		)
Prepaid expenses and other assets	47			(375		)
Costs incurred on uncompleted contracts	—			15,945
Inventories	3,794			—
Deferred tax assets, net	4,097			(246		)
Other long-term assets	1,470			—
Accounts payable	(758		)	323
Accrued payroll and related liabilities	(4,829		)	152
Other current liabilities	862			(1,505		)
Billings on uncompleted contracts	—			(15,945		)
Operating lease liabilities	(1,563		)	—
Other long-term liabilities	(462		)	(135		)
Distributions from equity method investees, return on investment	38,088			2,700
Net cash provided by (used in) operating activities	30,572			(3,447		)
Cash flows from investing activities
Distributions from equity method investees in excess of cumulative earnings	—			25,500
Acquisition of business	(661		)	—
Acquisition of property, plant, equipment, and intangible assets	(3,797		)	(131		)
Mine development costs	(521		)	—
Contributions to equity method investees	—			(750		)
Net cash (used in) provided by investing activities	(4,979		)	24,619
Cash flows from financing activities
Principal payments on term loan	(16,000		)	—
Principal payments on finance lease obligations	(681		)	—
Dividends paid	(9,179		)	(10,216		)
Repurchase of common shares	(2,831		)	(9,111		)
Repurchase of common shares to satisfy tax withholdings	(254		)	(359		)
Net cash used in financing activities	(28,945		)	(19,686		)
(Decrease) increase in Cash and Cash Equivalents and Restricted Cash	(3,352		)	1,486
Cash and Cash Equivalents and Restricted Cash, beginning of period	23,772			30,693
Cash and Cash Equivalents and Restricted Cash, end of period	$	20,420		$	32,179
Supplemental disclosure of non-cash investing and financing activities:
Acquisition of property, plant and equipment through accounts payable	$	1,561		$	—
Dividends declared, not paid	$	113		$	63

See Notes to the Condensed Consolidated Financial Statements.

5

Advanced Emissions Solutions, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 1 - Basis of Presentation

Nature of Operations

Advanced Emissions Solutions, Inc. ("ADES" or the "Company") is a Delaware corporation with its principal office located in Highlands Ranch, Colorado and operations located in Louisiana. The Company is principally engaged in consumable mercury control options including powdered activated carbon (“PAC”) and chemical technologies. The Company's proprietary environmental technologies in the power generation and industrial ("PGI") market enable customers to reduce emissions of mercury and other pollutants, maximize utilization levels and improve operating efficiencies to meet the challenges of existing and pending emission control regulations. The Company generates substantial earnings and tax credits under Section 45 ("Section 45 tax credits") of the Internal Revenue Code ("IRC") from its equity investments in certain entities and earns royalties for technologies that are licensed to Tinuum Group, LLC, a Colorado limited liability company ("Tinuum Group"). Such technologies allow Tinuum Group to provide their customers with various solutions to enhance combustion and reduced emissions of nitrogen oxide ("NOx") and mercury from coal burned to generate electrical power. The Company’s sales occur principally throughout the United States. See Note 13 for additional information regarding the Company's operating segments.

On December 7, 2018 (the "Acquisition Date"), the Company acquired (the "Carbon Solutions Acquisition") 100% of the equity interests of ADA Carbon Solutions, LLC (“Carbon Solutions”). Carbon Solutions is a manufacturer and seller of activated carbon ("AC") used in mercury capture for the coal-fired power plant, industrial and water treatment markets. Carbon Solutions also owns an associated lignite mine that supplies the primary raw material for manufacturing powdered activated carbon. Carbon Solutions was formed in 2008 as a 50/50 joint venture by the Company and Energy Capital Partners LLC. The Company relinquished its ownership in 2011 as part of a legal settlement agreement as described in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2017. The Company acquired Carbon Solutions primarily to expand the Company's product offerings within the mercury control industry and other complementary PAC markets.

Basis of Presentation

The accompanying Condensed Consolidated Financial Statements of ADES are unaudited and have been prepared in conformity with accounting principles generally accepted in the United States ("U.S. GAAP") and with Article 10 of Regulation S-X of the Securities and Exchange Commission. In compliance with those instructions, certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted.

The unaudited Condensed Consolidated Financial Statements of ADES in this quarterly report ("Quarterly Report") are presented on a consolidated basis and include ADES and its wholly-owned subsidiaries (collectively, the "Company"). Also included within the unaudited Condensed Consolidated Financial Statements are the Company's unconsolidated equity investments; Tinuum Group, Tinuum Services, LLC ("Tinuum Services"), and GWN Manager, LLC ("GWN Manager"), which are accounted for under the equity method of accounting, and Highview Enterprises Limited (the "Highview Investment"), which is accounted for in accordance with U.S. GAAP applicable to equity investments that do not qualify for the equity method of accounting.

Results of operations and cash flows for the interim periods are not necessarily indicative of the results that may be expected for the entire year. All significant intercompany transactions and accounts were eliminated for all periods presented in this Quarterly Report.

In the opinion of management, these Condensed Consolidated Financial Statements include all normal and recurring adjustments considered necessary for a fair presentation of the results of operations, financial position, stockholders' equity and cash flows for the interim periods presented. These Condensed Consolidated Financial Statements of ADES should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 (the "2018 Form 10-K"). Significant accounting policies disclosed therein have not changed, except as described later in Note 1.

Earnings Per Share

Basic earnings per share is computed using the two-class method, which is an earnings allocation formula that determines earnings per share for common stock and any participating securities according to dividend and participating rights in undistributed earnings. The Company's restricted stock awards ("RSA's") granted prior to December 31, 2016 contain non-forfeitable rights to dividends or dividend equivalents and are deemed to be participating securities. RSA's granted subsequent to December 31, 2016 do not contain non-forfeitable rights to dividends and are not deemed to be participating securities.

Under the two-class method, net income for the period is allocated between common stockholders and the holders of the participating securities based on the weighted-average number of common shares outstanding during the period, excluding participating, unvested RSA's ("common shares"), and the weighted-average number of participating unvested RSA's

6

Advanced Emissions Solutions, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

outstanding during the period, respectively. The allocated, undistributed income for the period is then divided by the weighted-average number of common shares and participating, unvested RSA's outstanding during the period to arrive at basic earnings per common share and participating security for the period, respectively. Pursuant to U.S. GAAP, the Company has elected not to separately present basic or diluted earnings per share attributable to participating securities in the Condensed Consolidated Statements of Operations.

Diluted earnings per share is computed in a manner consistent with that of basic earnings per share, while considering other potentially dilutive securities. Potentially dilutive securities consist of both unvested, participating and non-participating RSA's, as well as outstanding options to purchase common stock ("Stock Options") and contingent performance stock units ("PSU's") (collectively, "Potential dilutive shares"). The dilutive effect, if any, for non-participating RSA's, Stock Options and PSU's is determined using the greater of dilution as calculated under the treasury stock method or the two-class method. Potential dilutive shares are excluded from diluted earnings per share when their effect is anti-dilutive. When there is a net loss for a period, all Potential dilutive shares are anti-dilutive and are excluded from the calculation of diluted loss per share for that period.

The following table sets forth the calculations of basic and diluted earnings per share:

	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands, except per share amounts)	2019		2018		2019		2018
Net income	$	8,114	$	15,291	$	22,516	$	22,953
Less: Dividends and undistributed income allocated to participating securities	11		51		31		77
Income attributable to common stockholders	$	8,103	$	15,240	$	22,485	$	22,876
Basic weighted-average common shares outstanding	18,172		20,062		18,219		20,275
Add: dilutive effect of equity instruments	205		133		193		111
Diluted weighted-average shares outstanding	18,377		20,195		18,412		20,386
Earnings per share - basic	$	0.45	$	0.76	$	1.23	$	1.13
Earnings per share - diluted	$	0.44	$	0.75	$	1.22	$	1.12

For the three and six months endedJune 30, 2019 and 2018, RSA's and Stock Options convertible to 0.3 million and 0.3 million shares, respectively, and 0.3 million and 0.4 million shares, respectively, of common stock for each of the periods presented were outstanding but were not included in the computation of diluted net income per share because the effect would have been anti-dilutive. For the six months ended June 30, 2018, Stock Options to purchase 0.1 million shares, which vest based on the Company achieving specified performance targets, were outstanding, but were not included in the computation of diluted net income per share for a portion of this period because they were determined not to be contingently issuable.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. There have been no changes in the Company’s critical accounting estimates from those that were disclosed in the 2018 Form 10-K. Actual results could differ from these estimates.

Risks and Uncertainties

The Company’s earnings are significantly affected by equity earnings it receives from Tinuum Group. As of June 30, 2019, Tinuum Group has 21 invested RC facilities of which 11 are leased to a single customer. A majority of these leases are periodically renewed and the loss of this single customer or material modification to the lease terms of these facilities by this customer would have a significant adverse impact on Tinuum Group's financial position, results of operations and cash flows, which in turn would have material adverse impact on the Company’s financial position, results of operations and cash flows.

The Company's revenues, sales volumes, earnings and cash flows are significantly affected by prices of competing power generation sources such as natural gas and renewable energy. Low natural gas prices make it a competitive alternative to coal-fired power generation and therefore, coal consumption may be reduced, which reduces the demand for our products. In addition, coal consumption and demand for our products is also affected by the demand for electricity, which is higher in the warmer and colder months of the year. Abnormal temperatures during the summer and winter months may significantly reduce coal consumption and thus the demand for our products.

7

Advanced Emissions Solutions, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Reclassifications

Certain balances have been reclassified from the prior year to conform to the current year presentation. No reclassifications have any impact to income before income taxes or net income.

New Accounting Standards

Recently Adopted

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) ("ASU 2016-02"), which created ASC Topic 842 - Leases ("ASC 842"), requiring lessees to recognize a right of use asset and related lease liability for those leases classified as operating leases at the commencement date and have lease terms of more than 12 months. ASC 842 retains the distinction between finance leases (formerly defined as capital leases) and operating leases. On January 1, 2019, the Company adopted ASC 842 retrospectively beginning with the date of adoption. Under this adoption method, the application date is the beginning of the reporting period in which the Company first applies the provisions of ASC 842. Accordingly, the Company’s reporting for the comparative periods presented in the financial statements and related disclosures continues in accordance with legacy U.S. GAAP under ASC Topic 840 - Leases ("ASC 840"). The adoption of ASC 842 had no impact to the opening balance of retained earnings.

As of the adoption date, the Company recorded $7.0 million and $7.0 million of "right of use" ("ROU") assets and incremental lease liabilities, respectively. The cumulative effect of the change from the adoption of ASC 842 to the Consolidated Balance Sheet as of January 1, 2019 is shown in the table that follows:

	Balance as of		Impact of		Balance as of
(in thousands)	December 31, 2018		Adoption		January 1, 2019
Balance Sheet
Other long-term assets	$	7,993	$	6,956	$	14,949
Other liabilities	$	50,058	$	3,085	$	53,143
Other long-term liabilities	$	940	$	3,871	$	4,811

See Note 6 for additional disclosures required under ASC 842 in the year of adoption.

As of January 1, 2019, Tinuum Group adopted ASU 2016-02 and ASU 2014-09 (Topic 606), Revenue from Contracts with Customers ("ASU 2014-09"). As a result of Tinuum Group’s adoption of these pronouncements, the Company recorded a cumulative effect increase of $28.8 million to Retained earnings as of January 1, 2019, based on the Company's ownership percentage of Tinuum Group's cumulative effect adjustment, and increased its investment balance in Tinuum Group in the amount of $37.2 million and established a deferred tax liability of $8.4 million. As a result of the increase in the investment balance in Tinuum Group, for the six months ended June 30, 2019, the Company began recognizing equity earnings in Tinuum Group based on its pro-rata share of Tinuum Group’s net income rather than based on cash distributions received as had been required in prior periods as a result of the cumulative cash distributions exceeding the cumulative pro-rata share of Tinuum Group's net income.

Not Yet Adopted

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). The main objective of ASU 2016-13 is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in ASU 2016-13 replace the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those years, and must be adopted under a modified retrospective method approach. Entities may adopt ASU 2016-13 earlier as of the fiscal years beginning after December 15, 2018, including interim periods within those years. The Company is currently evaluating the provisions of this guidance and assessing its impact on the Company's financial statements and disclosures. The Company does not believe this standard will have a material impact on the Company's financial statements and disclosures.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement ("ASU 2018-13"). The amendments in ASU 2018-13 improve the effectiveness of fair value measurement disclosures and modify the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement ("Topic 820"), based on the concepts in FASB Concepts Statement, Conceptual Framework for Financial Reporting - Chapter 8: Notes to Financial Statements, including the consideration of costs and benefits. ASU

8

Advanced Emissions Solutions, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

2018-13 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted-average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. Early adoption is permitted upon issuance of this update. An entity is permitted to early adopt any removed or modified disclosures upon issuance of this update and delay adoption of the additional disclosures until their effective date. The Company is currently evaluating the provisions of ASU 2018-13 and assessing its impact on the Company's financial statement disclosures. The Company does not believe this standard will have a material impact on the Company's financial statement disclosures.

Note 2 - Acquisition

As described in Note 1, on the Acquisition Date, the Company completed the Carbon Solutions Acquisition for a total purchase price of $75.0 million (the "Purchase Price"). The results of Carbon Solutions have been included in the Company’s consolidated financial statements since the Acquisition Date. The fair value of the purchase consideration totaled $66.5 million and consisted of cash of $65.8 million and an additional purchase adjustment amount payable to Carbon Solutions' secured lender of $0.7 million, which was paid in March 2019. The Purchase Price was adjusted by assumed debt and contractual commitments of $11.8 million, less cash acquired of $3.3 million. The Company also paid $4.5 million in acquisition-related costs (or transaction costs) during the year ended December 31, 2018. The Company funded the cash consideration from cash on hand and the proceeds from the Term Loan and Security Agreement (the "Senior Term Loan") in the principal amount of $70.0 million, as more fully described in Note 5.

The following table summarizes the final purchase price allocation. Subsequent to December 31, 2018, the Company completed additional analysis and adjustments were made to the preliminary purchase price allocations as noted in the table below:

Fair value of assets acquired:	As Originally Reported		Adjustments			As Adjusted
Cash	$	3,284	$	—		$	3,284
Receivables	6,409		—			6,409
Inventories	22,100		(356		)	21,744
Prepaid expenses and other current assets	2,992		61			3,053
Spare parts	3,359		—			3,359
Property, plant and equipment	43,033		(377		)	42,656
Mine leases and development	2,500		200			2,700
Mine reclamation asset	—		2,402			2,402
Intangible assets	4,000		100			4,100
Other assets	168		—			168
Amount attributable to assets acquired	87,845		2,030			89,875
Fair value of liabilities assumed:
Accounts payable	4,771		—			4,771
Accrued liabilities	7,354		254			7,608
Equipment lease liabilities	8,211		—			8,211
Mine reclamation liability	626		1,776			2,402
Other liabilities	437		—			437
Amount attributable to liabilities assumed	21,399		2,030			23,429
Net assets acquired	$	66,446	$	—		$	66,446

9

Advanced Emissions Solutions, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Adjustments to the preliminary purchase price allocation primarily relate to changes in fair values assigned to property, plant and equipment, intangible assets, mine reclamation liability and the related mine reclamation asset as a result of the final valuation report from the Company's third-party valuation firm issued in May 2019. In addition, during the six months ended June 30, 2019 and based on new information of facts and circumstances that existed as of the Acquisition Date, the Company revised its estimate used as of the Acquisition Date related to the net realizable value of certain finished goods inventory items as well as values assigned to certain prepaid and accrued expense items.

The adjustments have been recorded as ofJune 30, 2019and are included in the Consolidated Balance Sheet as ofJune 30, 2019 and the resultant impact to the Statement of Operations for the three and six months endedJune 30, 2019.

The following table represents the intangible assets, as adjusted for purchase price adjustments noted above, identified as part of the Carbon Solutions Acquisition:

(in thousands)	Amount		Weighted Average Useful Life (years)
Customer relationships	$	2,200	5
Developed technology	1,600		5
Trade name	300		2
Total intangibles acquired	$	4,100

Unaudited Pro Forma Financial Information

The following represents the pro forma effects of the Carbon Solutions Acquisition as if it had occurred on January 1, 2017. The pro forma pre-tax income for the period presented has been calculated after applying the Company’s accounting policies in effect for 2017 and 2018. In addition, pro forma net income for the three and six months ended June 30, 2018 includes: (1) the impact on Carbon Solutions of the adoption of ASC 606 effective January 1, 2018, which resulted in a reclassification of $1.8 million and $3.8 million, respectively, from Revenues to Cost of Revenue for freight costs billed to customers, with no impact to income from operations; (2) the reduction in depletion, depreciation and amortization resulting from the purchase price adjustments to Property, plant and equipment and Mine development costs; (3) the adjustment to interest expense from the combination of the Senior Term Loan that was used to fund the Carbon Solutions Acquisition and the elimination of certain debt of Carbon Solutions as a result of pay-offs by the Company as of the Acquisition Date; and (4) the removal of $2.1 million and $3.2 million in transaction costs incurred for the three and six months ended June 30, 2018, respectively, together with the income tax effect on (1) through (4). The pro forma results do not include any anticipated synergies or other expected benefits of the Carbon Solutions Acquisition. The unaudited pro forma financial information below is not necessarily indicative of either future results of operations or results that might have been achieved had the Carbon Solutions Acquisition been consummated as of January 1, 2017.

As of June 30, 2019, the Company identified a difference in depreciation as originally calculated and included in the pro forma net income disclosure for the three months ended March 31, 2018. The following table presents the effect of the change in calculated depreciation to pro forma net income for the three months ended March 31, 2018:

	For the three months ended March 31, 2018
(in thousands)	As reported		Adjustment		As adjusted
Net income	$	3,727	$	3,350	$	7,077

The following table presents the pro forma effects of the Carbon Solutions Acquisition for the three and six months ended June 30, 2018:

	Three Months Ended		Six Months Ended
(in thousands)	June 30, 2018		June 30, 2018
Revenues	$	16,655	$	35,150
Net income	$	8,985	$	16,062

10

Advanced Emissions Solutions, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 3 - Inventories

The following table summarizes the Company's inventories recorded at the lower of average cost or net realizable value as of June 30, 2019 and December 31, 2018:

	As of
(in thousands)	June 30, 2019		December 31, 2018
Product inventory (1)	$	16,466	$	19,403
Raw material inventory	1,332		2,388
	$	17,798	$	21,791

(1) As of June 30, 2019 and December 31, 2018, this amount includes zero and $5.0 million, respectively, attributed to the increase in fair value of inventory acquired from the Carbon Solutions Acquisition.

Note 4 - Equity Method Investments

Tinuum Group, LLC

The Company's ownership interest in Tinuum Group was 42.5% as of June 30, 2019 and December 31, 2018. Tinuum Group supplies technology equipment and technical services at select coal-fired generators, but its primary purpose is to put into operation facilities that produce and sell refined coal ("RC") that lower emissions and therefore qualify for Section 45 tax credits. Tinuum Group has been determined to be a variable interest entity ("VIE"); however, the Company does not have the power to direct the activities that most significantly impact Tinuum Group's economic performance and has therefore accounted for the investment under the equity method of accounting. The Company determined that the voting partners of Tinuum Group have identical voting rights, equity control interests and board control interests, and therefore, concluded that the power to direct the activities that most significantly impact Tinuum Group's economic performance was shared.

The following table summarizes the results of operations of Tinuum Group:

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2019			2018			2019		2018
Gross profit	$	38,180		$	28,683		$	79,380	$	55,096
Operating, selling, general and administrative expenses	5,763			5,491			12,345		11,498
Income from operations	32,417			23,192			67,035		43,598
Other (expenses) income	(28		)	(355		)	23		(2,224		)
Class B preferred return	—			—			—		(12		)
Loss attributable to noncontrolling interest	12,891			10,244			28,667		21,019
Net income available to members	$	45,280		$	33,081		$	95,725	$	62,381
ADES equity earnings from Tinuum Group	$	19,244		$	14,450		$	39,011	$	25,500

For the three and six months endedJune 30, 2018 periods presented in the table below, the difference between the Company's proportionate share of Tinuum Group's net income available to members (at its equity interest of 42.5%) and the Company's earnings from its Tinuum Group equity method investment as reported in the Condensed Consolidated Statements of Operations relates to the Company receiving distributions in excess of the carrying value of the equity investment, and therefore recognizing such excess distributions as equity method earnings in the period the distributions occur, as discussed below.

For the three and six months endedJune 30, 2018 periods presented in the table below, the Company recognized equity earnings from Tinuum Group to the extent that cash distributions were received from Tinuum Group during the period. For the three months ended June 30, 2019, the Company recognized its pro-rata share of Tinuum Group's net income available to its members for the respective period. For the six months ended June 30, 2019, the Company recognized its pro-rata share of Tinuum Group's net income available to its members for the period, less the amount necessary to recover the cumulative earnings short-fall balance as of the end of the immediately preceding period, which was December 31, 2018. For the three and six months endedJune 30, 2019, the Company recognized equity earnings from Tinuum Group of $19.2 million and $39.0 million, respectively. For the three and six months endedJune 30, 2018, the Company recognized equity earnings from Tinuum Group of $14.5 million and $25.5 million, respectively. As of June 30, 2019 and December 31, 2018, the Company's carrying value in Tinuum Group was $42.5 million and zero, respectively.

11

Advanced Emissions Solutions, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

The following tables present the Company's investment balance, equity earnings and cash distributions in excess of the investment balance, if any, for the three and six months endedJune 30, 2019 and 2018 (in thousands):

Description	Date(s)	Investment balance			ADES equity earnings (loss)			Cash distributions		Memorandum Account: Cash distributions and equity earnings in (excess) of investment balance
Beginning balance	12/31/2018	$	—		$	—		$	—	$	(1,672	)
Impact of adoption of accounting standards (1)	First Quarter	37,232			—			—		—
ADES proportionate share of income from Tinuum Group	First Quarter	21,439			21,439			—		—
Recovery of prior cash distributions in excess of investment balance (prior to cash distributions)	First Quarter	(1,672		)	(1,672		)	—		1,672
Cash distributions from Tinuum Group	First Quarter	(16,788		)	—			16,788		—
Total investment balance, equity earnings (loss) and cash distributions	03/31/19	$	40,211		$	19,767		$	16,788	$	—
ADES proportionate share of income from Tinuum Group	Second Quarter	$	19,244		$	19,244		$	—	$	—
Cash distributions from Tinuum Group	Second Quarter	(17,000		)	—			17,000		—
Total investment balance, equity earnings (loss) and cash distributions	6/30/2019	$	42,455		$	19,244		$	17,000	$	—

Description	Date(s)	Investment balance			ADES equity earnings (loss)			Cash distributions		Memorandum Account: Cash distributions and equity earnings in (excess) of investment balance
Beginning balance	12/31/2017	$	—		$	—		$	—	$	(12,218	)
ADES proportionate share of income from Tinuum Group (2)	First Quarter	12,458			12,458			—		—
Recovery of prior cash distributions in excess of investment balance (prior to cash distributions)	First Quarter	(12,218		)	(12,218		)	—		12,218
Cash distributions from Tinuum Group	First Quarter	(11,050		)	—			11,050		—
Adjustment for current year cash distributions in excess of investment balance	First Quarter	10,810			10,810			—		(10,810		)
Total investment balance, equity earnings (loss) and cash distributions	3/31/2018	$	—		$	11,050		$	11,050	$	(10,810	)
ADES proportionate share of income from Tinuum Group (2)	Second Quarter	$	14,059		$	14,059		$	—	$	—
Recovery of prior cash distributions in excess of investment balance (prior to cash distributions)	Second Quarter	(10,810		)	(10,810		)	—		10,810
Cash distributions from Tinuum Group	Second Quarter	(14,450		)	—			14,450		—
Adjustment for current year cash distributions in excess of investment balance	Second Quarter	11,201			11,201			—		(11,201		)
Total investment balance, equity earnings (loss) and cash distributions	6/30/2018	$	—		$	14,450		$	14,450	$	(11,201	)

(1) As discussed in Note 1, Tinuum Group adopted ASC 606 and ASC 842 as of January 1, 2019. As a result of Tinuum Group’s adoption of these standards, the Company recorded a cumulative adjustment of $28.8 million, net of the impact of income taxes, related to the Company's percentage of Tinuum Group's cumulative effect adjustment that increased the Company's Retained earnings as of January 1, 2019.

(2) For the three and six months endedJune 30, 2018, the amount of the Company's 42.5% proportionate share of net income available to members as shown in the table above may differ from mathematical calculations of the Company’s 42.5% equity interest in Tinuum Group multiplied by the amounts of net income available to members as shown in the table above of Tinuum Group results of operations due to adjustments related to the Class B preferred return.

12

Advanced Emissions Solutions, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Tinuum Services, LLC

The Company has a 50% voting and economic interest in Tinuum Services, which is equivalent to the voting and economic interest of NexGen Refined Coal, LLC ("NexGen"). The Company has determined that Tinuum Services is not a VIE and has evaluated its consolidation analysis under the voting interest model. Because the Company does not own greater than 50% of the outstanding voting shares, either directly or indirectly, it has accounted for its investment in Tinuum Services under the equity method of accounting. The Company’s investment in Tinuum Services as of June 30, 2019 and December 31, 2018 was $5.9 million and $6.6 million, respectively.

The following table summarizes the results of operations of Tinuum Services:

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2019			2018			2019			2018
Gross loss	$	(25,192	)	$	(21,701	)	$	(49,927	)	$	(42,707	)
Operating, selling, general and administrative expenses	50,412			43,133			99,862			83,837
Loss from operations	(75,604		)	(64,834		)	(149,789		)	(126,544		)
Other (expenses) income	(316		)	423			(558		)	365
Loss attributable to noncontrolling interest	79,307			67,287			157,577			131,463
Net income	$	3,387		$	2,876		$	7,230		$	5,284
ADES equity earnings from Tinuum Services	$	1,693		$	1,438		$	3,615		$	2,642

Included within the Consolidated Statements of Operations of Tinuum Services for the three and six months endedJune 30, 2019 and 2018, respectively, were losses related to VIE's of Tinuum Services. These losses do not impact the Company's equity earnings from Tinuum Services as 100% of those losses are attributable to a noncontrolling interest and eliminated in the calculations of Tinuum Services' net income attributable to the Company's interest.

The following table details the components of the Company's respective equity method investments included within the Earnings from equity method investments line item on the Condensed Consolidated Statements of Operations:

	Three Months Ended June 30,					Six Months Ended June 30,
(in thousands)	2019			2018		2019			2018
Earnings from Tinuum Group	$	19,244		$	14,450	$	39,011		$	25,500
Earnings from Tinuum Services	1,693			1,438		3,615			2,642
(Losses) earnings from other	(2		)	1		(1		)	—
Earnings from equity method investments	$	20,935		$	15,889	$	42,625		$	28,142

The following table details the components of the cash distributions from the Company's respective equity method investments included in the Condensed Consolidated Statements of Cash Flows. Distributions from equity method investees are reported in the Condensed Consolidated Statements of Cash Flows as "Distributions from equity method investees, return on investment" within Operating cash flows until such time as the carrying value in an equity method investee company is reduced to zero; thereafter, such distributions are reported as "Distributions from equity method investees in excess of cumulative earnings" within Investing cash flows.

	Six Months Ended June 30,
(in thousands)	2019		2018
Distributions from equity method investees, return on investment
Tinuum Group	$	33,788	$	—
Tinuum Services	4,300		2,700
	$	38,088	$	2,700
Distributions from equity method investees in excess of investment basis
Tinuum Group	$	—	$	25,500
	$	—	$	25,500

13

Advanced Emissions Solutions, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 5 - Debt Obligations

	As of
(in thousands)	June 30, 2019			December 31, 2018
Senior Term Loan due December 2021, related party	$	54,000		$	70,000
Less: net unamortized debt issuance costs	(1,620		)	(1,990		)
Less: net unamortized debt discount	(1,571		)	(2,052		)
Senior Term Loan due December 2021, net	50,809			65,958
Finance lease obligations (1)	7,420			8,167
	58,229			74,125
Less: Current maturities	(24,025		)	(24,067		)
Total long-term debt	$	34,204		$	50,058

(1) As of December 31, 2018, amounts related to capital lease obligations.

Senior Term Loan

On December 7, 2018, the Company, and ADA-ES, Inc. ("ADA"), a wholly-owned subsidiary, and certain other subsidiaries of the Company as guarantors, The Bank of New York Mellon as administrative agent, and Apollo Credit Strategies Master Fund Ltd and Apollo A-N Credit Fund (Delaware) L.P. (collectively "Apollo”), affiliates of a beneficial owner of greater than five percent of the Company's common stock and a related party, entered into the Senior Term Loan in the amount of $70.0 million less original issue discount of $2.1 million. Proceeds from the Senior Term Loan were used to fund the Carbon Solutions Acquisition as disclosed in Note 2. The Company also paid debt issuance costs of $2.0 million related to the Senior Term Loan. The Senior Term Loan has a term of 36 months and bears interest at a rate equal to 3-month LIBOR (subject to a 1.5% floor) + 4.75% per annum, which is adjusted quarterly to the current 3-month LIBOR rate, and interest is payable quarterly in arrears. Quarterly principal payments of $6.0 million were required beginning in March 2019, and the Company may prepay the Senior Term Loan at any time without penalty. The Senior Term Loan is secured by substantially all of the assets of the Company, including the cash flows from Tinuum Group and Tinuum Services (collectively, the "Tinuum Entities"), but excluding the Company's equity interests in the Tinuum entities.

The Senior Term Loan includes, among others, the following covenants: (1) Beginning December 31, 2018 and as of the end of each fiscal quarter thereafter, the Company must maintain a minimum cash balance of $5.0 million and shall not permit "expected future net cash flows from the refined coal business" (as defined in the Senior Term Loan) to be less than 1.75 times the outstanding principal amount of the Senior Term Loan; (2) Beginning in January 2019, annual collective dividends and buybacks of Company shares in an aggregate amount, not to exceed $30.0 million, is permitted so long as (a) no default or event of default exists under the Senior Term Loan and (b) expected future net cash flows from the refined coal business as of the end of the most recent fiscal quarter exceed $100.0 million.

Line of Credit

On September 30, 2018, ADA, as borrower, the Company, as guarantor, and a bank (the "Lender") entered into an amendment (the "Twelfth Amendment") to the 2013 Loan and Security Agreement (the "Line of Credit"). The Twelfth Amendment decreased the borrowing availability of the Line of Credit to $5.0 million due to decreased collateral requirements, extended the maturity date of the Line of Credit to September 30, 2020 and permitted the Line of Credit to be used as collateral (in place of restricted cash) for letters of credit ("LC's") up to $5.0 million related to equipment projects and certain other agreements. Under the Twelfth Amendment, there was no minimum balance requirement based on the Company meeting certain conditions and maintaining minimum trailing twelve-month EBITDA (earnings before interest, taxes, depreciation and amortization), as previously defined in the "Eleventh Amendment" to the Line of Credit, of $24.0 million.

On December 7, 2018, ADA, as borrower, the Company, as guarantor, and the Lender entered into an amendment to the Line of

Credit, which provided, among other things, for ADA to be able to enter into the Senior Term Loan as a guarantor so long as

the principal amount of the Senior Term Loan does not exceed $70.0 million. Additionally, the financial covenants in the Line

of Credit were amended and restated to be consistent with the aforementioned Senior Term Loan covenants, including

maintaining a minimum cash balance of $5.0 million.

As of June 30, 2019, there were no outstanding borrowings under the Line of Credit.

14

Advanced Emissions Solutions, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 6 - Leases

The financial statement impact from the adoption of ASC 842 as of January 1, 2019 is due to recording ROU assets and related lease liabilities for operating lease commitments that were outstanding as of December 31, 2018. The Company has elected the transitional practical expedients allowed under ASC 842, which include among other things that the Company need not reassess: (1) whether any existing contracts are or contain leases, inclusive of land easements; (2) the lease classification or lease term for existing leases; and (3) initial direct costs for any existing leases.

ASC 842 defines a lease as a contract, or part of a contract, that conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Control over the use of an identified asset means that an entity has both the right to obtain substantially all of the economic benefits from the use of an identified asset and the right to direct the use of that identified asset. The determination of whether a contract contains a lease may require significant assumptions and judgments.

Historically, Carbon Solutions has used leasing to fund the majority of its capital needs for mining and manufacturing equipment. As of June 30, 2019, the Company has obligations under finance and operating leases in the amounts of $7.4 million and $5.5 million, respectively. ROU assets under finance leases are mining equipment used at the Company’s lignite mine, which provides the key raw materials for manufacturing the Company’s products. ROU assets under operating leases are primarily plant equipment used at the Company’s manufacturing facility, but also include other office equipment, vehicles and office facilities. As of June 30, 2019, the Company has ROU assets, net of accumulated amortization, under finance leases and operating leases of $7.0 million and $5.5 million, respectively.

Certain of the finance and operating leases have options permitting renewals for additional periods and buy-out options. Renewal and buy-out options for applicable leases have not been included in the measurement of the respective lease liabilities as the Company is not reasonably certain that it will exercise the respective option or the lessor does not have an exclusive right to exercise the option.

Variable lease payments represent payments made by a lessee for the right to use an underlying asset that vary because of changes in facts or circumstances occurring after the commence date of a lease other than the passage of time. Variable lease payments that are based on an index or rate, calculated by using the index or rate that exists on the lease commencement date, are included in the measurement of a lease liability. Certain of the Company’s operating leases for office facilities contain variable lease components that are not based on an index or rate, and the Company recognizes these payments as lease expense in the period in which the obligation for those payments is incurred.

The Company calculates lease liabilities based on the present value of lease payments discounted by the rate implicit in the lease or, if not readily determinable, the Company’s incremental borrowing rate.

The Company records lease liabilities and related ROU assets for all leases that have a term of greater than one year. For short-term leases (leases with terms of less than one year), the Company expenses lease payments on a straight-line basis over the lease term.

Finance leases

Leases classified as capital leases under ASC 840 and the related assets and liabilities were carried forward at their carrying values of $8.1 million and $8.2 million, respectively, as of December 31, 2018, and were classified as finance leases as of January 1, 2019. ROU assets under finance leases and finance lease liabilities are included in Property, plant and equipment and Current portion and Long-term portion of borrowings, respectively, in the Condensed Consolidated Balance Sheet as of June 30, 2019.

Finance lease liabilities are subsequently measured by increasing the carrying amount to reflect interest expense on the finance lease liability and reducing the carrying amount of the lease liability to reflect lease payments made during the period. Interest on finance lease liabilities is determined in each period during the lease term as the amount that produces a constant periodic discount rate on the remaining balance of the lease liability. ROU assets under finance leases are amortized over the remaining lease term on a straight-line basis. Interest expense related to finance lease liabilities and amortization of ROU assets under finance leases are included in Interest expense and Depreciation, amortization, depletion and accretion, respectively, in the Condensed Consolidated Statement of Operations for the three and six months endedJune 30, 2019.

Operating leases

Operating lease liabilities as of January 1, 2019 were calculated at the present value, using a discount rate of the lease, of the remaining minimum rental payments (as defined under ASC 840). As the rate implicit in all of the operating leases was not readily determinable, the Company determined its discount rate as of January 1, 2019 based on an estimate of its incremental borrowing rate. This rate was based on the Company’s effective borrowing rate on the Senior Term Loan, considering the collateral requirements contained therein, in effect as of January 1, 2019. ROU assets under operating leases as of January 1,

15

Advanced Emissions Solutions, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

2019 were determined as the calculated value of the operating lease liabilities less accrued lease payments and accrued lease incentives. As of December 31, 2018, the total amount of accrued lease payments and accrued lease incentives was approximately $0.1 million. ROU assets under operating leases and operating lease liabilities are included in Other long-term assets and Other liabilities and Other long-term liabilities, respectively, in the Condensed Consolidated Balance Sheet as of June 30, 2019.

Operating lease liabilities are subsequently measured at the present value of the lease payments not yet paid discounted using the discount rate for the lease established at the inception date of the lease (or January 1, 2019 for operating leases in effect as of December 31, 2018). ROU assets under operating leases are subsequently measured at the amounts of the related operating lease liability, adjusted for, as applicable, prepaid or accrued lease payments, the remaining balance of any lease incentives received, unamortized initial direct costs and impairment. Lease expense from operating leases is recognized as a single lease cost over the remaining lease term on a straight-line basis. Variable lease payments not included in operating lease liabilities are recognized as expense in the period in which the obligation for those payments is incurred. Lease expense for operating leases for the three and six months endedJune 30, 2019 was $1.0 million and $2.2 million, respectively, of which $1.0 million and $2.1 million, respectively is included in Consumables - cost of revenue, exclusive of depreciation and amortization, and zero and $0.1 million, respectively, is included in General and administrative in the Condensed Consolidated Statement of Operations for the three and six months endedJune 30, 2019.

Lease financial information as of and for the three and six months endedJune 30, 2019 is provided in the following table:

(in thousands)	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
Finance lease cost:
Amortization of right-of-use assets	$	558	$	1,094
Interest on lease liabilities	57		188
Operating lease cost	927		1,856
Short-term lease cost	189		360
Variable lease cost (1)	93		175
Total lease cost	$	1,824	$	3,673
Other Information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases			$	1,901
Finance cash flows from finance leases			$	681
Right-of-use assets obtained in exchange for new operating lease liabilities			$	49
Weighted-average remaining lease term - finance leases			4.7 years
Weighted-average remaining lease term - operating leases			2.4 years
Weighted-average discount rate - finance leases			6.1		%
Weighted-average discount rate - operating leases			8.6		%

(1) Primarily includes common area maintenance, property taxes and insurance payable to lessors.

16

Advanced Emissions Solutions, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

The following table summarizes the Company’s future lease payments under finance and operating leases as of June 30, 2019:

(in thousands)	Operating Lease Commitments			Finance Lease Commitments			Total Lease Commitments
2019 (remaining six months)	$	1,845		$	867		$	2,712
2020	2,328			1,707			4,035
2021	1,632			1,802			3,434
2022	310			951			1,261
2023	221			951			1,172
Thereafter	—			2,482			2,482
Total lease payments	6,336			8,760			15,096
Less: Imputed interest	(787		)	(1,340		)	(2,127		)
Present value of lease payments	$	5,549		$	7,420		$	12,969

Disclosures under ASC 840

Rent expense for the three and six months endedJune 30, 2018 was $0.1 million and $0.1 million, respectively, and was included in General and administrative expense in the Condensed Consolidated Statement of Operations.

As of December 31, 2018, mining equipment financed under capital leases in the amount of $8.1 million, net of accumulated amortization of $0.1 million, was included in Property, plant and equipment in the Condensed Consolidated Balance Sheet.

The following table summarizes the Company’s future minimum non-cancellable lease payments due under capital and operating leases as of December 31, 2018:

(in thousands)	Operating Lease Commitments		Capital Lease Commitments
2019	$	3,619	$	1,749
2020	2,273		1,707
2021	1,632		1,802
2022	310		951
2023	221		951
Thereafter	—		2,482
Total minimum lease payments	$	8,055	9,642
Less: Imputed interest			(1,475		)
Present value of minimum lease payments			$	8,167

Note 7 - Revenues

Contract Assets and Liabilities

Contract assets are comprised of unbilled receivables and are included in Receivables, net in the Condensed Consolidated Balance Sheet. Unbilled receivables represent a conditional right to consideration in exchange for goods or services transferred to a customer.

Trade receivables represent an unconditional right to consideration in exchange for goods or services transferred to a customer. The Company invoices its customers in accordance with the terms of the contract. Credit terms are generally net 30 from the date of invoice. The timing between the satisfaction of performance obligations and when payment is due from the customer is generally not significant. The Company records allowances for doubtful trade receivables when it is probable that the balances will not be collected.

Contract liabilities are comprised of deferred revenue, which represents an obligation to transfer goods or services to a customer for which the Company has received consideration from the customer and, if deliverable within one year or less, is included in

17

Advanced Emissions Solutions, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Other current liabilities in the Condensed Consolidated Balance Sheet and, if deliverable outside of one year, is included in Other long-term liabilities in the Condensed Consolidated Balance Sheet.

Trade receivables, net

The following table shows the components of Trade receivables, net:

	As of
(in thousands)	June 30, 2019			December 31, 2018
Trade receivables	$	6,173		$	10,121
Less: Allowance for doubtful accounts	(567		)	(567		)
Trade receivables, net	$	5,606		$	9,554

For the three and six months endedJune 30, 2019, the Company recognized zero provision for bad debt expense, respectively, related to specific accounts whose ultimate collection was in doubt. During the three and six months endedJune 30, 2018, the Company settled a previously recorded commitment for additional work related to a contract with a customer, which resulted in a reduction to Equipment sales cost of revenue, exclusive of depreciation and amortization of $0.3 million and bad debt expense of $0.2 million. Bad debt expense is included within the General and administrative line item in the Consolidated Statements of Operations.

Disaggregation of Revenue

During the three and six months endedJune 30, 2019 and 2018, all performance obligations related to revenues recognized were satisfied at a point in time. The Company disaggregates its revenues by its major components as well as between its two operating segments, which are further discussed in Note 13 to the condensed consolidated financial statements. The following tables disaggregate revenues by major source for the three and six months endedJune 30, 2019 and 2018 (in thousands):

	Three Months Ended June 30, 2019								Six Months Ended June 30, 2019
	Segment								Segment
	PGI		RC		Other		Total		PGI		RC		Other		Total
Revenue component
Consumables	$	11,049	$	—	$	337	$	11,386	$	25,602	$	—	$	893	$	26,495
License royalties, related party	—		4,191		—		4,191		—		8,411		—		8,411
Revenues from customers	11,049		4,191		337		15,577		25,602		8,411		893		34,906
Earnings from equity method investments	—		20,935		—		20,935		—		42,625		—		42,625
Total revenues and earnings from equity method investments	$	11,049	$	25,126	$	337	$	36,512	$	25,602	$	51,036	$	893	$	77,531

	Three Months Ended June 30, 2018								Six Months Ended June 30, 2018
	Segment								Segment
	PGI		RC		Other		Total		PGI		RC		Other		Total
Revenue component
Consumables	$	726	$	—	$	—	$	726	$	1,347	$	—	$	—	$	1,347
License royalties, related party	—		3,523		—		3,523		—		6,753		—		6,753
Other	24		—		—		24		72		—		—		72
Revenues from customers	750		3,523		—		4,273		1,419		6,753		—		8,172
Earnings from equity method investments	—		15,889		—		15,889		—		28,142		—		28,142
Total revenues and earnings from equity method investments	$	750	$	19,412	$	—	$	20,162	$	1,419	$	34,895	$	—	$	36,314

18

Advanced Emissions Solutions, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 8 - Commitments and Contingencies

Legal Proceedings

The Company is from time to time subject to, and is presently involved in, various pending or threatened legal actions and proceedings, including those that arise in the ordinary course of its business. Such matters are subject to many uncertainties and to outcomes, the financial impacts of which are not predictable with assurance and that may not be known for extended periods of time. The Company records a liability in its consolidated financial statements for costs related to claims, settlements, and judgments where management has assessed that a loss is probable and an amount can be reasonably estimated. There were no significant legal proceedings as of June 30, 2019.

Restricted Cash

As of June 30, 2019 and December 31, 2018, the Company had long-term restricted cash of $5.0 million and $5.2 million, respectively, which primarily consisted of minimum cash balance requirements under the Senior Term Loan. As of June 30, 2019 and December 31, 2018, the Company had short-term restricted cash of zero and $0.1 million, respectively, related to other commitments.

Tinuum Group

The Company also has certain limited obligations contingent upon future events in connection with the activities of Tinuum Group. The Company, NexGen and two entities affiliated with NexGen have provided an affiliate of the Goldman Sachs Group, Inc. with limited guaranties (the "Tinuum Group Party Guaranties") related to certain losses it may suffer as a result of inaccuracies or breach of representations and covenants. The Company also is a party to a contribution agreement with NexGen under which any party called upon to pay on a Tinuum Group Party Guaranty is entitled to receive contributions from the other party equal to 50% of the amount paid. No liability or expense provision has been recorded by the Company related to this contingent obligation as the Company believes that it is not probable that a loss will occur with respect to Tinuum Group Party Guaranties.

Note 9 - Stockholders' Equity

Stock Repurchase Programs

In November 2018, the Company's Board of Directors (the "Board") authorized the Company to purchase up to $20.0 million of its outstanding common stock. This stock repurchase program will remain in effect until December 31, 2019 unless otherwise modified by the Board. Previously, the Board had authorized the Company to purchase up to $20.0 million of its outstanding common stock under a separate repurchase program that was in effect until July 31, 2018.

For the three and six months endedJune 30, 2019, under the respective stock repurchase program authorized by the Board,

the Company purchased 184,715 and 248,591 shares of its common stock for cash of $2.1 million and $2.8 million, respectively, inclusive of commissions and fees. For the three and six months endedJune 30, 2018, under the respective stock repurchase program authorized by the Board, the Company purchased 676,201 and 825,418 shares of its common stock for cash of $7.5 million and $9.1 million, respectively, inclusive of commissions and fees.

Quarterly Cash Dividend

Dividends per share declared by the Board, and paid quarterly on all outstanding shares of common stock during the three and six months endedJune 30, 2019 and 2018 were as follows:

	2019			2018
	Per share		Date paid	Per share		Date paid
Dividends declared during quarter ended:
March 31	$	0.25	March 7, 2019	$	0.25	March 8, 2018
June 30	$	0.25	June 7, 2019	$	0.25	June 8, 2018

A portion of the dividends declared remains accrued subsequent to the payment dates and represents dividends accumulated on nonvested shares of common stock held by employees and directors of the Company that contain forfeitable dividend rights that are not payable until the underlying shares of common stock vest. These amounts are included in both Other current liabilities and Other long-term liabilities on the Condensed Consolidated Balance Sheet as of June 30, 2019.

19

Advanced Emissions Solutions, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Tax Asset Protection Plan

U.S. federal income tax rules, and Section 382 of the Internal Revenue Code in particular, could substantially limit the use of net operating losses and other tax assets if the Company experiences an "ownership change" (as defined in the Internal Revenue Code). In general, an ownership change occurs if there is a cumulative change in the ownership of the Company by "5 percent stockholders" that exceeds 50 percentage points over a rolling three-year period.

On May 5, 2017, the Board approved the declaration of a dividend of rights to purchase Series B Junior Participating Preferred Stock for each outstanding share of common stock as part of a tax asset protection plan (the "Tax Asset Protection Plan") designed to protect the Company’s ability to utilize its net operating losses and tax credits. The Tax Asset Protection Plan is intended to act as a deterrent to any person acquiring beneficial ownership of 4.99% or more of the Company’s outstanding common stock.

On April 6, 2018, the Board approved the First Amendment to the Tax Asset Protection Plan (the "First Amendment") that amends the Tax Asset Protection Plan dated May 5, 2017. The First Amendment amended the definition of "Final Expiration Date" under the Tax Asset Protection Plan to extend the duration of the TAPP and makes associated changes in connection therewith. At the Company's 2018 annual meeting of stockholders, the Company's stockholders approved the First Amendment, thus the Final Expiration Date will be the close of business on December 31, 2019, which was subsequently extended, as described below.

On April 5, 2019, the Board approved the Second Amendment to the Tax Asset Protection Plan (the "Second Amendment") that amends the Tax Asset Protection Plan dated May 5, 2017, as amended by the First Amendment to Tax Asset Protection Plan, dated April 6, 2018 (the “TAPP”) between the Company and the Rights Agent. The Second Amendment amends the definition of the “Final Expiration Date” under the TAPP to extend the duration of the TAPP and makes associated changes in connection therewith. At the Company's 2019 annual meeting of stockholders, the Company's stockholders approved the Second Amendment, thus the Final Expiration Date will be the close of business on December 31, 2020.

Note 10 - Stock-Based Compensation

The Company grants equity-based awards to employees, non-employee directors, and consultants that may include, but are not limited to RSA's, restricted stock units ("RSU's") and stock options. Stock-based compensation expense related to manufacturing employees and administrative employees is included within the Cost of goods sold and Payroll and benefits line items, respectively, in the Condensed Consolidated Statements of Operations. Stock-based compensation expense related to non-employee directors and consultants is included within the General and administrative line item in the Condensed Consolidated Statements of Operations.

Total stock-based compensation expense for the three and six months endedJune 30, 2019 and 2018 was as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2019		2018		2019		2018
RSA expense	$	541	$	675	$	858	$	952
Stock option expense	—		—		—		58
Total stock-based compensation expense	$	541	$	675	$	858	$	1,010

The amount of unrecognized compensation cost as of June 30, 2019, and the expected weighted-average period over which the cost will be recognized is as follows:

	As of June 30, 2019
(in thousands)	Unrecognized Compensation Cost		Expected Weighted- Average Period of Recognition (in years)
RSA expense	$	3,632	1.97
Total unrecognized stock-based compensation expense	$	3,632	1.97

Restricted Stock

Restricted stock is typically granted with vesting terms of three years. The fair value of RSA's and RSU's is determined based on the closing price of the Company’s common stock on the authorization date of the grant multiplied by the number of shares subject to the stock award. Compensation expense for RSA's is generally recognized on a straight-line basis over the entire

20

Advanced Emissions Solutions, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

vesting period. Compensation expense for RSU's is generally recognized on a straight-line basis over the service period of the award.

A summary of RSA and RSU activity under the Company's various stock compensation plans for the six months ended June 30, 2019 is presented below:

	Restricted Stock			Weighted-Average Grant Date Fair Value
(in thousands, except for share and per share amounts)	Awards		Units	RSA's		RSU's
Non-vested at January 1, 2019	280,852		20,000	$	9.92	$	10.52
Granted	252,590		—	$	10.91	$	—
Vested	(77,992	)	—	$	9.51	$	—
Forfeited	(2,412	)	—	$	10.92	$	—
Non-vested at June 30, 2019	453,038		20,000	$	10.54	$	10.52

Stock Options

Stock options generally vest over three years or upon satisfaction of performance-based conditions and have a contractual limit of five years from the date of grant to exercise. The fair value of stock options granted is determined on the date of grant using the Black-Scholes option pricing model and the related expense is recognized on a straight-line basis over the entire vesting period.

A summary of stock option activity for the six months ended June 30, 2019 is presented below:

	Number of Options Outstanding and Exercisable		Weighted-Average Exercise Price		Aggregate Intrinsic Value (in thousands)		Weighted-Average Remaining Contractual Term (in years)
Options outstanding, January 1, 2019	529,780		$	12.23
Options granted	—		—
Options exercised	—		—
Options expired / forfeited	(10,000	)	19.28
Options outstanding, June 30, 2019	519,780		$	12.09	$	734	0.98
Options exercisable, June 30, 2019	519,780		$	12.09	$	734	0.98

21

Advanced Emissions Solutions, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 11 - Supplemental Financial Information

Supplemental Balance Sheet Information

The following table summarizes the components of Prepaid expenses and other assets and Other long-term assets, net as presented in the Condensed Consolidated Balance Sheets:

	As of
(in thousands)	June 30, 2019		December 31, 2018
Prepaid expenses and other assets:
Prepaid expenses	$	1,904	$	1,233
Prepaid income taxes	1,970		2,940
Other	1,724		1,397
	$	5,598	$	5,570
Other long-term assets:
Highview Investment	$	552	$	552
Spare parts	3,222		3,278
Mine development costs, net	3,167		2,531
Mine reclamation asset, net	2,390		—
Prepaid royalty expense, long-term	955		955
Right of use assets, operating leases, net	5,488		—
Other long-term assets	779		677
	$	16,553	$	7,993

Spare parts include critical spares required to support plant operations. Parts and supply costs are determined using the lower of cost or estimated replacement cost. Parts are recorded as maintenance expenses in the period in which they are consumed.

Mine development costs include acquisition costs, the cost of other development work and mitigation costs related to the Company's mining operations which are depleted over the estimated life of the related mine reserves, which is 18 years. The Company performs an evaluation of the recoverability of the carrying value of mine development costs to determine if facts and circumstances indicate that their carrying value may be impaired and if any adjustment is warranted. There were no indicators of impairment as of June 30, 2019. Mine reclamation asset represents an asset retirement obligation asset and is depreciated over the estimated life of the mine, which is 18 years.

The Company holds a long-term investment (the "Highview Investment") in Highview Enterprises Limited ("Highview"), a London, England based developmental stage company specializing in power storage. In November 2014, the Company acquired an 8% ownership interest in the common stock of Highview for $2.8 million in cash. The Company accounts for the Highview Investment as an investment recorded at cost, less impairment, plus or minus observable changes in price for identical or similar investments of the same issuer.

The Highview Investment is evaluated for indicators of impairment such as an event or change in circumstances that may have a significant adverse effect on the fair value of the investment. There were no changes to the carrying value of the Highview Investment for the three and six months endedJune 30, 2019 as there were no indicators of impairment or observable price changes for equity issued by Highview.

22

Advanced Emissions Solutions, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

The following table details the components of Other current liabilities and Other long-term liabilities as presented in the Condensed Consolidated Balance Sheets:

	As of
(in thousands)	June 30, 2019		December 31, 2018
Other current liabilities:
Current portion of operating lease obligations	$	2,725	$	—
Accrued interest	996		407
Income and other taxes payable	909		479
Other	922		1,252
	$	5,552	$	2,138
Other long-term liabilities:
Operating lease obligations, long-term	$	2,824	$	—
Mine reclamation liability	2,490		624
Other long-term liabilities	135		316
	$	5,449	$	940

Supplemental Condensed Consolidated Statements of Operations Information

The following table details the components of Interest expense in the Condensed Consolidated Statements of Operations:

	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2019		2018		2019		2018
Interest on Senior Term Loan	$	1,134	$	—	$	2,404	$	—
Debt discount and debt issuance costs	470		—		851		—
453A interest	326		404		648		740
Other	57		8		188		8
	$	1,987	$	412	$	4,091	$	748

Note 12 - Income Taxes

For the three and six months endedJune 30, 2019 and 2018, the Company's income tax expense and effective tax rates based on forecasted pre-tax income were:

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands, except for rate)	2019			2018			2019			2018
Income tax expense (benefit)	$	6,634		$	(1,349	)	$	8,333		$	1,220
Effective tax rate	45		%	(10		)%	27		%	5		%

The effective tax rate for the three and six months endedJune 30, 2019 was different from the federal statutory rate primarily due to net increases of $4.8 million and $0.8 million during those periods, respectively, in the valuation allowance against deferred tax assets, and these changes were primarily a result of a change in forecasts of future taxable income as of June 30, 2019 in both the PGI and RC segments. In addition, the effective rate for both the three and six months endedJune 30, 2019 was increased by state income tax expense, net of federal benefit.

The Company assesses the valuation allowance recorded against deferred tax assets at each reporting date. The determination of whether a valuation allowance for deferred tax assets is appropriate requires the evaluation of positive and negative evidence that can be objectively verified. Consideration must be given to all sources of taxable income available to realize the deferred tax asset, including, as applicable, the future reversal of existing temporary differences, future taxable income forecasts exclusive of the reversal of temporary differences and carryforwards, taxable income in carryback years and tax planning strategies. In estimating income taxes, the Company assesses the relative merits and risks of the appropriate income tax treatment of transactions taking into account statutory, judicial, and regulatory guidance.

23

Advanced Emissions Solutions, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 13 - Business Segment Information

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by a company's chief operating decision maker ("CODM"), or a decision-making group, in deciding how to allocate resources and in assessing financial performance. As of June 30, 2019, the Company's CODM was the Company's CEO. The Company's operating and reportable segments are identified by products and services provided.

As of June 30, 2019, the Company has two reportable segments: (1) Refined Coal ("RC"); and (2) Power Generation and Industrials ("PGI").

The business segment measurements provided to and evaluated by the CODM are computed in accordance with the principles listed below:

• The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies in the 2018 Form 10-K.

• Segment revenues include equity method earnings and losses from the Company's equity method investments.

• Segment operating income (loss) includes segment revenues and allocation of certain "Corporate general and administrative expenses," which include Payroll and benefits, Legal and professional fees and General and administrative.

• RC segment operating income includes interest expense directly attributable to the RC segment.

As of June 30, 2019 and December 31, 2018, substantially all of the Company's material assets are located in the U.S. and all significant customers are U.S. companies. The following table presents the Company's operating segment results for the three and six months endedJune 30, 2019 and 2018:

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2019			2018			2019			2018
Revenues:
Refined Coal:
Earnings in equity method investments	$	20,935		$	15,889		$	42,625		$	28,142
Royalties, related party	4,191			3,523			8,411			6,753
	25,126			19,412			51,036			34,895
Power Generation and Industrials:
Consumables	11,049			726			25,602			1,347
Other	—			24			—			72
	11,049			750			25,602			1,419
Total segment reporting revenues	36,175			20,162			76,638			36,314
Adjustments to reconcile to reported revenues:
Earnings in equity method investments	(20,935		)	(15,889		)	(42,625		)	(28,142		)
Corporate and other	337			—			893			—
Total reported revenues	$	15,577		$	4,273		$	34,906		$	8,172
Segment operating income (loss):
Refined Coal (1)	$	24,596		$	18,275		$	49,979		$	32,977
Power Generation and Industrials (2)	(3,862		)	(1,387		)	(7,324		)	(2,325		)
Total segment operating income	$	20,734		$	16,888		$	42,655		$	30,652

(1) Included in RC segment operating income for the three and six months endedJune 30, 2019 and 2018 is 453A interest expense of $0.3 million and $0.6 million and $0.4 million and $0.7 million, respectively.

(2) Included in PGI segment operating loss for the three and six months endedJune 30, 2019 was $1.3 million and $4.7 million, respectively, of costs recognized as a result of the step-up in inventory fair value recorded from the Carbon Solutions Acquisition. Also included in PGI segment operating loss for the three and six months endedJune 30, 2019 was $0.7 million and $2.6 million, respectively, of depreciation, amortization, and depletion expense on mine and plant long-lived assets.

24

Advanced Emissions Solutions, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

A reconciliation of reportable segment operating income to the Company's consolidated income before income tax expense is as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2019			2018			2019			2018
Total reported segment operating income	$	20,734		$	16,888		42,655			30,652
Other operating loss	(353		)	—			(751		)	—
	20,381			16,888			41,904			30,652
Adjustments to reconcile to income before income tax expense attributable to the Company:
Corporate payroll and benefits	(804		)	(950		)	(1,236		)	(2,097		)
Corporate legal and professional fees	(1,556		)	(1,140		)	(3,517		)	(2,588		)
Corporate general and administrative	(1,715		)	(884		)	(3,149		)	(1,825		)
Corporate depreciation and amortization	(7		)	(22		)	(20		)	(74		)
Corporate interest (expense) income, net	(1,604		)	(8		)	(3,255		)	(8		)
Other income (expense), net	53			58			122			113
Income before income tax expense	$	14,748		$	13,942		$	30,849		$	24,173

Corporate general and administrative expenses include certain costs that benefit the business as a whole but are not directly related to one of the Company's segments. Such costs include, but are not limited to, accounting and human resources staff, information systems costs, legal fees, facility costs, audit fees and corporate governance expenses. 

A reconciliation of reportable segment assets to the Company's consolidated assets is as follows:

	As of
(in thousands)	June 30, 2019		December 31, 2018
Assets:
Refined Coal (1)	$	53,131	$	11,468
Power Generation and Industrials	82,611		85,786
Total segment assets	135,742		97,254
All Other and Corporate (2)	51,330		62,410
Consolidated	$	187,072	$	159,664

(1) Includes $48.4 million and $6.6 million of investments in equity method investees, respectively.

(2) Includes the Company's deferred tax assets.

Note 14 - Fair Value Measurements

Fair value of financial instruments

The carrying amounts of financial instruments, including cash, cash equivalents and restricted cash, accounts receivable, accounts payable and accrued expenses, approximate fair value due to the short maturity of these instruments. Accordingly, these instruments are not presented in the table below. The following table provides the estimated fair values of the remaining financial instruments:

	As of June 30, 2019				As of December 31, 2018
(in thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value
Financial Instruments:
Highview Investment	$	552	$	552	$	552	$	552
Highview Obligation	$	213	$	213	$	213	$	213

Concentration of credit risk

The Company's financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents. The Company holds cash and cash equivalents at three financial institutions as of June 30, 2019. If an institution

25

Advanced Emissions Solutions, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

was unable to perform its obligations, the Company would be at risk regarding the amount of cash and investments in excess of the Federal Deposit Insurance Corporation limits (currently $250 thousand) that would be returned to the Company.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

As of June 30, 2019 and December 31, 2018, the Company had no financial instruments carried and measured at fair value on a recurring basis.

Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

The Company completed the Carbon Solutions Acquisition, in which the fair value of the purchase consideration totaled $66.5 million. The Company's allocation of purchase consideration to the estimated fair values of the assets acquired and liabilities assumed is disclosed in Note 2.

The fair value measurements represent Level 3 measurements as they are based on significant inputs not observable in the market.

Note 15 - Restructuring

In December 2018, the Company recorded restructuring charges in connection with the departures of certain executives of Carbon Solutions in conjunction with the Carbon Solutions Acquisition. As part of the Carbon Solutions Acquisition, the Company also assumed a salary severance liability for an additional executive of Carbon Solutions in the amount of $0.6 million. Additionally, the Company recorded restructuring charges in 2018 in connection with a reduction in force that commenced in May 2018 as part of the Company's further alignment of the business with strategic objectives, which included the departure of certain executive officers. These charges related to cash severance arrangements with departing employees and executives, as well as stock-based compensation charges related to the acceleration of vesting of certain stock awards.

A summary of the net pretax charges, incurred by segment, is as follows:

		Pretax Charge
(in thousands, except employee data)	Approximate Number of Employees	Refined Coal (1)		Power Generation and Industrials (1)		All Other and Corporate (1)			Total
Three Months Ended June 30, 2019
Restructuring charges	—	$	—	$	—	$	—		$	—
Changes in estimates		—		—		—			—
Total pretax charge, net of reversals		$	—	$	—	$	—		$	—
Six Months Ended June 30, 2019
Restructuring charges	1	$	—	$	—	$	172		$	172
Changes in estimates		—		—		(104		)	(104		)
Total pretax charge, net of reversals		$	—	$	—	$	68		$	68
Three Months Ended June 30, 2018
Restructuring charges	6	$	280	$	496	$	123		$	899
Changes in estimates		—		—		—			—
Total pretax charge, net of reversals		$	280	$	496	$	123		$	899
Six Months Ended June 30, 2018
Restructuring charges	6	$	280	$	496	$	123		$	899
Changes in estimates		—		—		—			—
Total pretax charge, net of reversals		$	280	$	496	$	123		$	899

(1) Restructuring charges were allocated consistent with the allocations made in Note 13 - Business Segment Information

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Advanced Emissions Solutions, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

The following table summarizes the Company's change in restructuring accruals for the six months ended June 30, 2019:

(in thousands)	Employee Severance
Remaining accrual as of December 31, 2018	$	2,208
Expense provision	172
Cash payments and other	(1,293		)
Change in estimates	(104		)
Remaining accrual as of June 30, 2019	$	983

Restructuring accruals are included within the Accrued payroll and related liabilities line item in the Condensed Consolidated Balance Sheets. Restructuring expenses are included within the Payroll and benefits line item in the Condensed Consolidated Statements of Operations.

Note 16 - Subsequent Events

Unless disclosed elsewhere within the notes to the Condensed Consolidated Financial Statements, the following are the significant matters that occurred subsequent to June 30, 2019.

Dividends

On August 5, 2019, the Company's Board declared a quarterly dividend of $0.25 per share of common stock, which is payable on September 6, 2019 to stockholders of record as of the close of business on August 19, 2019. 

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of the financial condition and results of our operations should be read together with the unaudited Condensed Consolidated Financial Statements and notes of Advanced Emissions Solutions, Inc. ("ADES" or the "Company") included elsewhere in Item 1 of Part I of this Quarterly Report and with the audited consolidated financial statements and the related notes of ADES included in the 2018 Form 10-K.

Overview

We provide environmental solutions to customers in coal-fired power generation, municipal water and other industries primarily through emissions and water purification control technologies of our subsidiaries and joint ventures. Our proprietary technologies and associated product offerings provide pollutant control solutions to enable coal-fired power generators, industrials and municipal water to reduce emissions of mercury and other air pollutants and to assist in the purification of water.

We operate two segments: Refined Coal ("RC") and Power Generation and Industrials ("PGI") (f/k/a "Emissions Control" or "EC"). Our RC segment is comprised of our equity ownership in Tinuum Group, LLC ("Tinuum Group"), an unconsolidated entity that provides reduction of mercury and nitrogen oxide ("NO_X")emissions at select coal-fired power generators through the production and sale of RC that qualifies for tax credits under the Internal Revenue Code ("IRC") Section 45 - Production Tax Credit ("Section 45 tax credits"). We benefit from Tinuum Group's production and sale of RC, which generates tax credits, as well as the revenue from selling or leasing RC facilities to tax equity investors.

Our PGI segment includes the sale of products that provide mercury control and other air and water contaminants control to coal-fired power generators and other industrial companies. Our primary products are produced from lignite coal, which creates activated carbon ("AC"). From AC, we manufacture various forms of AC that include powdered activated carbon ("PAC") and granular activated carbon ("GAC"). There are three primary consumable products that work in conjunction with the installed equipment at coal-fired utilities to control mercury: PAC, coal additives and scrubber additives. In many cases these three consumable products can be used together or in many circumstances substituted for each other. However, activated carbon is typically the most efficient and effective way to capture mercury and currently accounts for over 50% of the mercury control consumables North American market.

On December 7, 2018 (the "Acquisition Date"), we acquired (the "Carbon Solutions Acquisition") 100% of the equity interests of ADA Carbon Solutions, LLC (“Carbon Solutions”). Carbon Solutions is a manufacturer and seller of AC and a leader in mercury capture using PAC for the coal-fired power plant, industrial and water treatment markets. Carbon Solutions also owns an associated lignite mine that supplies the primary raw material for manufacturing powdered activated carbon. Carbon Solutions was formed in 2008 as a 50/50 joint venture by the Company and Energy Capital Partners LLC. The Company relinquished its ownership in 2011 as part of a legal settlement agreement as described in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2017. The Company acquired Carbon Solutions primarily to expand the Company's product offerings within the mercury control industry and other complimentary PAC markets.

Results of Operations

For the three and six months endedJune 30, 2019, we recognized net income of $8.1 million and $22.5 million compared to net income of $15.3 million and $23.0 million for the three and six months endedJune 30, 2018.

The operating results for the three and six months endedJune 30, 2019 are primarily attributable to a combination of factors, including:

• Continued performance in our RC business segment, principally related to equity earnings and royalties from our Tinuum Group and Tinuum Services, LLC ("Tinuum Services") equity investments; and

• Performance in our PGI business segment, principally related to the Carbon Solutions Acquisition.

The following sections provide additional information regarding these comparative periods. For comparability purposes, the following tables set forth our results of operations for the periods presented in the Condensed Consolidated Financial Statements included in Item 1 of this Quarterly Report. The period-to-period comparison of financial results may not be indicative of financial results to be achieved in future periods.

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Comparison of the Three Months Ended June 30, 2019 and 2018

Total Revenue and Cost of Revenue

A summary of the components of our revenues and cost of revenue for the three months ended June 30, 2019 and 2018 is as follows:

	Three Months Ended June 30,					Change
(in thousands, except percentages)	2019		2018			($)			(%)
Revenues:
Consumables	$	11,386	$	726		$	10,660		1,468	%
License royalties, related party	4,191		3,523			668			19	%
Other	—		24			(24		)	*
Total revenues	$	15,577	$	4,273		$	11,304		265	%
Operating expenses:
Consumables cost of revenue, exclusive of depreciation and amortization	$	12,286	$	902		$	11,384		1,262	%
Other sales cost of revenue, exclusive of depreciation and amortization	$	6	$	(198	)	$	204		(103	)%

* Calculation not meaningful

Consumables and consumables cost of revenue

For the three months ended June 30, 2019 and 2018, consumables revenues increased quarter over quarter primarily due to Carbon Solutions' operations. These operations also increased the total pounds of our consumables sold quarter over quarter.

Consumables cost of revenue was negatively impacted during the three months ended June 30, 2019 due to $1.4 million of costs recognized as a result of a step-up in inventory fair value recorded from the Carbon Solutions Acquisition. As of June 30, 2019, the step-up in inventory was fully recognized in cost of revenue for the three months ended June 30, 2019, and consumables gross margin will not be impacted for the remainder of 2019.

Consumables revenue is affected by electricity demand driven by seasonal weather and related power generation needs as well as competitor prices related to alternative power generation sources such as natural gas. During the three months ended June 30, 2019, Consumables revenue and margins were negatively impacted by low coal-fired power dispatch driven by mild weather conditions as well as power generation from sources other than coal. In a recently updated forecast, the U.S. Energy Information Administration ("EIA") revised downward by 7% its December 2018 forecast for 2019 coal-fired electricity-generating units.

License royalties, related party

For the three months ended June 30, 2019 and 2018, there were 9.6 million tons and 8.2 million tons, respectively, of RC produced using M-45^TM and M-45-PC^TM technologies ("M-45 Technology"), which Tinuum Group licenses from us ("M-45 License"). The increase in license royalties was primarily due to Tinuum Group obtaining additional third-party investors for two new RC facilities, one each during the second and fourth quarters of 2018, as well as two additional RC facilities, one each during the first and second quarters of 2019, all of which use our M-45 License. The addition of these new invested RC facilities resulted in an increase in both payments to Tinuum Group and the related tons subject to the M-45 License.

Additional information related to revenue concentrations and contributions by class and reportable segment can be found within the Business Segments discussion and in Note 13 to the Condensed Consolidated Financial Statements.

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Other Operating Expenses

A summary of the components of our operating expenses, exclusive of cost of revenue items (presented above), for the three months ended June 30, 2019 and 2018 is as follows:

	Three Months Ended June 30,				Change
(in thousands, except percentages)	2019		2018		($)		(%)
Operating expenses:
Payroll and benefits	$	2,798	$	2,759	$	39	1	%
Legal and professional fees	1,569		1,213		356		29	%
General and administrative	2,421		1,094		1,327		121	%
Depreciation, amortization, depletion and accretion	757		72		685		951	%
	$	7,545	$	5,138	$	2,407	47	%

Payroll and benefits

Payroll and benefits expenses, which represent costs related to selling, general and administrative personnel, increased during the three months ended June 30, 2019 compared to the same quarter in 2018 due to an increase in headcount of personnel resulting from the Carbon Solutions Acquisition. The quarter over quarter increase was partially offset due to restructuring expenses incurred in the three months ended June 30, 2018 of $0.9 million.

Legal and professional fees

Legal and professional fees increased during the three months ended June 30, 2019 compared to the same quarter in 2018 due to legal and professional services costs associated with the integration of Carbon Solutions as well as expenses incurred related to on-going matters in the normal course of business.

General and administrative

General and administrative expenses increased during the three months ended June 30, 2019 compared to the same quarter in 2018 due to an increase in general operating expenses, including increases in outsourced IT costs, travel, insurance and recruiting expenses. Further increases were for rent and occupancy expense due to additional leased office and warehouse space resulting from the Carbon Solutions Acquisition.

Depreciation, amortization, depletion and accretion

Depreciation and amortization expense increased during the three months ended June 30, 2019 compared to the same quarter in 2018 due to the addition of long-lived assets and intangible assets acquired as part of the Carbon Solutions Acquisition, which contributed approximately $0.5 million and $0.2 million of depreciation and amortization expense, respectively, for the three months ended June 30, 2019.

Other Income (Expense), net

A summary of the components of other income (expense), net for the three months ended June 30, 2019 and 2018 is as follows:

	Three Months Ended June 30,						Change
(in thousands, except percentages)	2019			2018			($)			(%)
Other income (expense):
Earnings from equity method investments	$	20,935		$	15,889		$	5,046		32	%
Interest expense	(1,987		)	(412		)	(1,575		)	382	%
Other	60			34			26			76	%
Total other income	$	19,008		$	15,511		$	3,497		23	%

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Earnings from equity method investments

The following table details the components of our respective equity method investments included within the Earnings from equity method investments line item in the Condensed Consolidated Statements of Operations:

	Three Months Ended June 30,
(in thousands)	2019			2018
Earnings from Tinuum Group	$	19,244		$	14,450
Earnings from Tinuum Services	1,693			1,438
(Losses) earnings from other	(2		)	1
Earnings from equity method investments	$	20,935		$	15,889

Earnings from equity method investments, and changes related thereto, are impacted by our most significant equity method investees: Tinuum Group and Tinuum Services. Earnings from equity method investments increased during the three months ended June 30, 2019 compared to the same quarter in 2018 primarily due to Tinuum Group completing a sale of an RC facility to a third-party investor during the three months ended June 30, 2019. Under Tinuum Group's revenue recognition policy pursuant to its adoption of ASU 2014-09 (Topic 606), Revenue from Contracts with Customers (“ASU 2014-09”) and ASU 2016-02, Leases (Topic 842), this sale was recognized at a point in time as opposed to over time under Tinuum's legacy revenue recognition policy.

During the three months ended June 30, 2019, we recognized $19.2 million in equity earnings from Tinuum Group, which was equal to our proportionate share of Tinuum Group's net income of $19.2 million for the quarter. During the three months ended June 30, 2018, we recognized $14.5 million in equity earnings from Tinuum Group compared to our proportionate share of Tinuum Group's net income of $14.1 million for the quarter. The difference between our pro-rata share of Tinuum Group's net income and our earnings from our Tinuum Group equity method investment as reported on the Condensed Consolidated Statements of Operations for the three months ended June 30, 2018 is the result of cumulative distributions received from Tinuum Group being in excess of the carrying value of the investment, and therefore we recognized such excess distributions as equity method earnings in the period the distributions occurred.

As of June 30, 2019 and 2018, Tinuum Group had 21 and 18 invested RC facilities, respectively, that were generating revenues. There were no 100% retained RC facilities as of June 30, 2019 or June 30, 2018, except for temporary operations of a retained RC facility prior to its lease or sale. Equity earnings from our interest in Tinuum Services increased by $0.3 million during the three months ended June 30, 2019 compared to the three months ended June 30, 2018, and for those quarters, Tinuum Services provided operating and maintenance services to 20 and 17 operating RC facilities, respectively. Tinuum Services derives earnings under fixed-fee arrangements as well as fee arrangements that are based on actual RC production, depending upon the specific RC facility operating and maintenance agreement.

We earned the following Section 45 tax credits related to the production of RC that may be available for future benefit:

	Three Months Ended June 30,
(in thousands)	2019		2018
Section 45 tax credits earned	$	969	$	1,888

The decrease in Section 45 tax credits earned during the three months ended June 30, 2019 compared to the three months ended June 30, 2018 was due to a decrease in production of RC related to our membership interest in GWN Manager, LLC ("GWN Manager") and Tinuum Group's partial ownership in a single RC facility that is generating tax credits.

Interest expense

For the three months ended June 30, 2019, interest expense increased$1.6 million compared to the three months ended June 30, 2018 primarily due to interest expense incurred in the three months ended June 30, 2019 of $1.6 million related to the Senior Term Loan entered into on December 7, 2018 to fund the Carbon Solutions Acquisition This increase was comprised of accrued interest on the Senior Term Loan principal in the amount of $1.1 million and interest expense related to debt discount and debt issuance costs associated with the Senior Term Loan of $0.5 million.

Income tax expense

For the three months ended June 30, 2019, we recorded income tax expense of $6.6 million compared to income tax benefit of $1.3 million for the three months ended June 30, 2018. The income tax expense recorded for the three months ended June 30, 2019 was comprised of estimated federal income tax expense of $6.2 million and estimated state income tax expense of $0.4 million. The income tax expense recorded for the three months ended June 30, 2018 was comprised of estimated federal income

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tax benefit of $1.7 million and estimated state income tax expense of $0.4 million. The net increase in income tax expense quarter over quarter was primarily due to an increase in forecasted pre-tax income quarter over quarter as a result of the Carbon Solutions Acquisition and an increase in the valuation allowance on our deferred tax assets of $4.8 million for the three months ended June 30, 2019 compared to a decrease in the valuation allowance of $2.2 million for the three months ended June 30, 2018 based on changes in forecasts of future taxable income for both quarters in both the PGI and RC segments.

Comparison of the Six Months Ended June 30, 2019 and 2018

Total Revenue and Cost of Revenue

A summary of the components of our revenues and cost of revenue for the six months ended June 30, 2019 and 2018 is as follows:

	Six Months Ended June 30, 2019					Change
(in thousands, except percentages)	2019		2018			($)			(%)
Revenues:
Consumables	$	26,495	$	1,347		$	25,148		1,867	%
License royalties, related party	8,411		6,753			1,658			25	%
Other	—		72			(72		)	(100	)%
Total revenues	$	34,906	$	8,172		$	26,734		327	%
Operating expenses:
Consumables cost of revenue, exclusive of depreciation and amortization	$	26,394	$	1,613		$	24,781		1,536	%
Other sales cost of revenue, exclusive of depreciation and amortization	$	6	$	(346	)	$	352		(102	)%

Consumables and consumables cost of revenue

During the six months ended June 30, 2019 and 2018, consumables revenues increased period over period primarily due to Carbon Solutions' operations. These operations also increased the total pounds of our consumables sold period over period.

Consumables cost of revenue was negatively impacted during the six months ended June 30, 2019 due to $5.0 million of costs recognized as a result of the step-up in inventory fair value recorded from the Carbon Solutions Acquisition. As of June 30, 2019, a step-up in inventory was fully recognized in cost of revenue for the six months ended June 30, 2019, and consumables gross margin will not be impacted for the remainder of 2019.

During the six months ended June 30, 2019, Consumables revenue and margins were negatively impacted by low coal-fired power dispatch driven by mild weather conditions as well as power generation from sources other than coal. In a recently updated forecast, the EIA revised downward by 7% its December 2018 forecast for 2019 coal-fired electricity-generating units.

License royalties, related party

During the six months ended June 30, 2019 and 2018, there were 20.5 million tons and 15.9 million tons, respectively, of RC produced using the M-45 Technology under the M-45 License. The increase in license royalties was primarily due to obtaining additional third-party investors for two new RC facilities during 2018 and two new RC facilities during the first half of 2019, all of which use our M-45 License. The addition of these new invested RC facilities resulted in an increase in both cash payments to Tinuum Group and the related tons subject to the M-45 License.

Additional information related to revenue concentrations and contributions by class and reportable segment can be found within the segment discussion below and in Note 13 to the Condensed Consolidated Financial Statements.

Other Operating Expenses

A summary of the components of our operating expenses, exclusive of cost of revenue items (presented above), for the six months ended June 30, 2019 and 2018 is as follows:

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	Six Months Ended June 30, 2019				Change
(in thousands, except percentages)	2019		2018		($)		(%)
Operating expenses:
Payroll and benefits	$	5,354	$	4,973	$	381	8	%
Legal and professional fees	3,545		2,761		784		28	%
General and administrative	4,563		2,264		2,299		102	%
Depreciation, amortization, depletion and accretion	2,859		188		2,671		1,421	%
	$	16,321	$	10,186	$	6,135	60	%

Payroll and benefits

Payroll and benefits expenses increased during the six months ended June 30, 2019 compared to the same period in 2018 primarily due to an increase in headcount of personnel resulting from the Carbon Solutions Acquisition. The period over period increase was partially offset due to restructuring expenses incurred in the six months ended June 30, 2018 of $0.9 million.

Legal and professional fees

Legal and professional fees expenses increased during the six months ended June 30, 2019 compared to the same period in 2018 primarily due to legal and professional fees associated with the integration of Carbon Solutions as well as expenses incurred related to on-going matters in the normal course of business.

General and administrative

General and administrative expenses increased during the six months ended June 30, 2019 compared to the same period in 2018 due to an increase in general operating expenses, including increases in outsourced IT costs, travel, insurance and recruiting expenses. Further increases were for rent and occupancy expense due to additional leased office and warehouse space from the Carbon Solutions Acquisition.

Depreciation and amortization

Depreciation and amortization expense increased during the six months ended June 30, 2019 compared to the same period in 2018 due to the addition of long-lived assets and intangible assets acquired as part of the Carbon Solutions Acquisition, which contributed approximately $2.3 million and $0.5 million of depreciation and amortization, respectively, for the six months ended June 30, 2019.

Other Income (Expense), net

A summary of the components of our other income (expense), net for the six months ended June 30, 2019 and 2018 is as follows:

	Six Months Ended June 30,						Change
(in thousands, except percentages)	2019			2018			($)			(%)
Other income (expense):
Earnings from equity method investments	$	42,625		$	28,142		$	14,483		51	%
Interest expense	(4,091		)	(748		)	(3,343		)	447	%
Other	130			60			70			117	%
Total other income	$	38,664		$	27,454		$	11,210		41	%

Earnings from equity method investments

The following table details the components of our respective equity method investments included within the Earnings from equity method investments line item on the Condensed Consolidated Statements of Operations:

	Six Months Ended June 30,
(in thousands)	2019			2018
Earnings from Tinuum Group	$	39,011		$	25,500
Earnings from Tinuum Services	3,615			2,642
(Losses) earnings from other	(1		)	—
Earnings from equity method investments	$	42,625		$	28,142

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Earnings from equity method investments, and changes related thereto, are impacted by our most significant equity method investees: Tinuum Group and Tinuum Services. Earnings from equity method investments increased during the six months ended June 30, 2019 compared to the same period in 2018 primarily due to Tinuum Group completing the sale of two RC facilities to a third-party investor during the six months ended June 30, 2019.

The carrying value of our investment in Tinuum Group was $42.5 million as of June 30, 2019, as our cumulative pro-rata share of Tinuum Group's income for the six months ended June 30, 2019 exceeded the amount of the cumulative cash distributions as a result of Tinuum Group's adoption of ASU 2014-09 and ASU 2016-02 as of January 1, 2019, in which we recorded a cumulative adjustment of $28.8 million related to our percentage of Tinuum Group's cumulative effect adjustment that increased our retained earnings as of January 1, 2019. As part of this adjustment, we increased the carrying value of our investment in Tinuum Group by $37.2 million. Throughout 2018, we recognized equity earnings from Tinuum Group to the extent that cash distributions were received from Tinuum Group during the period. See additional information related to our investment balance, equity earnings (losses) and cash distributions in Note 4 of the Condensed Consolidated Financial Statements.

For the six months ended June 30, 2019, we recognized $39.0 million in equity earnings from Tinuum Group compared to our proportionate share of Tinuum Group's net income of $40.7 million for the period. The difference represents the cumulative earnings short-fall balance as of the end of the immediately preceding period, which was December 31, 2018. For the six months ended June 30, 2018, we recognized $25.5 million in equity earnings from Tinuum Group compared to our proportionate share of Tinuum Group's net income of $26.5 million for the period. This difference is the result of cumulative distributions received from Tinuum Group being in excess of the carrying value of the investment, and therefore we recognized such excess distributions as equity method earnings in the period the distributions occurred.

Equity earnings from our interest in Tinuum Services increased during the six months ended June 30, 2019 compared to the six months ended June 30, 2018.During the six months ended June 30, 2019 and 2018, Tinuum Services provided operating and maintenance services to 20 and 17 operating RC facilities, respectively, which was the driver in the increase in equity earnings. Tinuum Services derives earnings under fixed-fee arrangements as well as fee arrangements that are based on actual RC production, depending upon the specific RC facility operating and maintenance agreement.

We earned the following Section 45 tax credits related to the production of RC that may be available for future benefit:

	Six Months Ended June 30,
(in thousands)	2019		2018
Section 45 tax credits earned	$	1,957	$	3,618

The decrease in Section 45 tax credits earned during the six months ended June 30, 2019 compared to the six months ended June 30, 2018 was due to a decrease in production of RC related to our membership interest in GWN Manager and Tinuum Group's ownership in a single RC facility that is generating tax credits.

Interest expense

For the six months ended June 30, 2019, interest expense increased$3.3 million compared to the six months ended June 30, 2018 primarily due to interest expense incurred in the six months ended June 30, 2019 related to the Senior Term Loan entered into on December 7, 2018 to fund the Carbon Solutions Acquisition. The increase was comprised of accrued interest on the Senior Term Loan principal in the amount of $2.4 million and interest expense related to debt discount and debt issuance costs associated with the Senior Term Loan of $0.9 million.

Income tax expense

For the six months ended June 30, 2019, we recorded income tax expense of $8.3 million compared to income tax expense of $1.2 million for the six months ended June 30, 2018. The income tax expense recorded for the six months ended June 30, 2019 was comprised of estimated federal income tax expense of $7.0 million and estimated state income tax expense of $1.3 million. The net increase in income tax expense period over period was primarily due to an increase in forecasted pre-tax income period over period as a result of the Carbon Solutions Acquisition and an increase in the valuation allowance on our deferred tax assets of $0.8 million for the six months ended June 30, 2019 compared to a decrease in the valuation allowance of $0.5 million for the six months ended June 30, 2018 based on changes in forecasts of future taxable income for both periods in both the PGI and RC segments.

Non-GAAP Financial Measures

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To supplement the Company's financial information presented in accordance with U.S. generally accepted accounting principles, or GAAP, we are providing non-GAAP measures of certain financial performance. These non-GAAP measures include Consolidated EBITDA and Segment EBITDA. The Company included non-GAAP measures because management believes that they help to facilitate comparison of operating results between periods. The Company believes the non-GAAP measures provide useful information to both management and users of the financial statements by excluding certain expenses, gains and losses that may not be indicative of core operating results and business outlook. These non-GAAP measures are not in accordance with, or an alternative to, measures prepared in accordance with GAAP and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. These measures should only be used to evaluate the Company's results of operations in conjunction with the corresponding GAAP measures.

The Company has defined Consolidated EBITDA as net income, adjusted for the impact of the following items that are either non-cash or that the Company does not consider representative of its ongoing operating performance: depreciation, amortization, depletion and accretion, interest expense, net and income tax expense. Because Consolidated EBITDA omits certain non-cash items, the Company believes that the measure is less susceptible to variances that affect the Company's operating performance.

Segment EBITDA is calculated as Segment operating income (loss) adjusted for the impact of the following items that are either non-cash or that the Company does not consider representative of its ongoing operating performance: depreciation, amortization, depletion and accretion and interest expense, net. When used in conjunction with GAAP financial measures, Segment EBITDA is a supplemental measure of operating performance that management believes is a useful measure related the Company's PGI segment performance relative to the performance of its competitors as well as performance period over period. Additionally, the Company believes the measure is less susceptible to variances that affect its operating performance results.

The Company presents Consolidated EBITDA and Segment EBITDA because the Company believes they are useful as supplemental measures in evaluating the performance of the Company's operating performance and provide greater transparency into the results of operations. The Company's management uses Consolidated EBITDA and Segment EBITDA as factors in evaluating the performance of its business.

The adjustments to Consolidated EBITDA and Segment EBITDA in future periods are generally expected to be similar. Consolidated EBITDA and Segment EBITDA have limitations as analytical tools, and these measures should not be considered in isolation or as a substitute for analyzing the Company's results as reported under GAAP.

Consolidated EBITDA

	Three Months Ended June 30,					Six Months Ended June 30,
(in thousands)	2019		2018			2019		2018
Net income	$	8,114	$	15,291		$	22,516	$	22,953
Depreciation, amortization, depletion and accretion	757		72			2,859		188
Interest expense, net	1,921		383			3,956		686
Income tax expense (benefit)	6,634		(1,349		)	8,333		1,220
Consolidated EBITDA	$	17,426	$	14,397		$	37,664	$	25,047

During the three months ended June 30, 2019, Consolidated EBITDA was $17.4 million, an increase of $3.0 million over the second quarter of 2018, driven by higher expenses related to interest expense, net, depreciation, amortization, depletion and accretion, and income tax expense.

During the six months ended June 30, 2019, Consolidated EBITDA was $37.7 million, an increase of $12.6 million over the comparable period during 2018, driven by higher expenses related to interest expense, net, depreciation, amortization, depletion and accretion, and income tax expense.

Business Segments

As of June 30, 2019, we have two reportable segments: (1) RC and (2) PGI. The business segment measurements provided to and evaluated by our chief operating decision maker are computed in accordance with the principles listed below:

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• The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies in the 2018 Form 10-K.

• Segment revenues include equity method earnings and losses from our equity method investments.

• Segment operating income (loss) includes segment revenues and allocation of certain "Corporate general and administrative expenses," which include Payroll and benefits, Rent and occupancy, Legal and professional fees, and General and administrative.

• RC segment operating income includes interest expense directly attributable to the RC segment.

The principal products and services of our segments are:

1. RC - Our RC segment derives its earnings from equity method investments as well as royalty payment streams and other revenues related to enhanced combustion of and reduced emissions of both NO_X and mercury from the burning of coal. Our equity method investments related to the RC segment include Tinuum Group, Tinuum Services and other immaterial equity method investments. Segment revenues include our equity method earnings (losses) from our equity method investments and royalty earnings from Tinuum Group. These earnings are included within the Earnings from equity method investments and License royalties, related party line items in the Condensed Consolidated Statements of Operations. Key drivers to the RC segment performance are the produced and sold RC from both operating and retained RC facilities, royalty-bearing tonnage and the number of operating (leased or sold) and retained RC facilities. These key drivers impact our earnings and cash distributions from equity method investments.

2. PGI - Our PGI segment primarily includes revenues and related expenses from the sale of consumable products that utilize PAC chemical technologies. These options provide coal-powered utilities and industrial boilers with mercury control solutions working in conjunction with activated carbon injection ("ACI") and dry sorbent injection ("DSI") systems and other pollution control equipment, generally without the requirement for significant ongoing capital outlays. These amounts are included within the respective revenues and cost of revenue line items in the Condensed Consolidated Statements of Operations.

Management uses segment operating income (loss) to measure profitability and performance at the segment level. Management believes segment operating income (loss) provides investors with a useful measure of our operating performance and underlying trends of the businesses. Segment operating income (loss) may not be indicative of our overall consolidated performance and therefore, should be read in conjunction with our Condensed Consolidated Statements of Operations.

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The following table presents our operating segment results for the three and six months endedJune 30, 2019 and 2018:

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2019			2018			2019			2018
Revenues:
Refined Coal:
Earnings in equity method investments	$	20,935		$	15,889		$	42,625		$	28,142
Royalties, related party	4,191			3,523			8,411			6,753
	25,126			19,412			51,036			34,895
Power Generation and Industrials:
Consumables	11,049			726			25,602			1,347
Other	—			24			—			72
	11,049			750			25,602			1,419
Total segment reporting revenues	36,175			20,162			76,638			36,314
Adjustments to reconcile to reported revenues:
Earnings in equity method investments	(20,935		)	(15,889		)	(42,625		)	(28,142		)
Corporate and other	337			—			893			—
Total reported revenues	$	15,577		$	4,273		$	34,906		$	8,172
Segment operating income (loss):
Refined Coal (1)	$	24,596		$	18,275		$	49,979		$	32,977
Power Generation and Industrials (2)	(3,862		)	(1,387		)	(7,324		)	(2,325		)
Total segment operating income	$	20,734		$	16,888		$	42,655		$	30,652

(1) Included in RC segment operating income for the three and six months endedJune 30, 2019 and 2018 is 453A interest expense of $0.3 million and $0.6 million and $0.4 million and $0.7 million, respectively.

(2) Included in PGI segment operating loss for the three and six months endedJune 30, 2019 was approximately $1.3 million and $4.7 million, respectively, of costs recognized as a result of the step-up in inventory fair value recorded from the Carbon Solutions Acquisition. Also included within the PGI segment operating loss for the three and six months endedJune 30, 2019 was $0.7 million and $2.6 million, respectively, of depreciation, amortization, and depletion expense on mine- and plant-related long-lived assets.

RC

The following table details the segment revenues of our respective equity method investments:

	Three Months Ended June 30,					Six Months Ended June 30,
(in thousands)	2019			2018		2019			2018
Earnings from Tinuum Group	$	19,244		$	14,450	$	39,011		$	25,500
Earnings from Tinuum Services	1,693			1,438		3,615			2,642
(Losses) earnings from other	(2		)	1		(1		)	—
Earnings from equity method investments	$	20,935		$	15,889	$	42,625		$	28,142

For thethree months ended June 30, 2019andJune 30, 2018

RC earnings increased primarily due to an increase in equity earnings in Tinuum Group during the three months ended June 30, 2019 compared to the same quarter in 2018, as presented above. Our equity earnings increased primarily due to completing a sale of an RC facility to a third-party investor during three months ended June 30, 2019, which was recognized in Tinuum earnings during the period. As a result of accounting standards adopted by Tinuum Group on January 1, 2019, which resulted in an increase in our investment in Tinuum Group, we recognized our proportionate share of earnings as reported by Tinuum Group beginning on January 1, 2019, as we had earnings in excess of cumulative distributions.

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Earnings from Tinuum Services for the three months ended June 30, 2019 increased compared to the same quarter in 2018 primarily due to an increase in the number of operating RC facilities from 17 to 20 in which Tinuum Services provides operating and maintenance services.

RC earnings were positively impacted during the three months ended June 30, 2019 by an increase in royalties related to Tinuum Group's use of our M-45 License. During the three months ended June 30, 2019 and 2018, there were 9.6 million tons and 8.2 million tons, respectively, of RC produced using the M-45 Technology. The increase in Royalty revenue was driven by both an increase in payments to Tinuum Group and the related tons subject to the M-45 License.

Future earnings and growth in the RC segment will continue to be impacted by coal-fired electricity generation dispatch and invested facilities with leases subject to periodic renewals being terminated, repriced, or otherwise subject to renegotiated terms.

Additional discussion of our equity method investments is included above within our consolidated results and in Note 4 of the Condensed Consolidated Financial Statements.

PGI

Discussion of revenues derived from our PGI segment and costs related thereto are included above within our consolidated results.

For the three months ended June 30, 2019 and June 30, 2018

PGI segment operating loss increased during the three months ended June 30, 2019 compared to the three months ended June 30, 2018 primarily due to an additional $1.3 million of cost of revenue expense related to a step-up in basis of acquired finished goods inventory and $0.6 million of depreciation, amortization and depletion expense related to the Carbon Solutions Acquisition. During the three months ended June 30, 2019, Consumables revenue and margins were negatively impacted by low coal-fired power dispatch driven by milder weather conditions as well as power generation from sources other than coal. In a recently updated forecast, the EIA revised downward by 7% its December 2018 forecast for 2019 coal-fired electricity-generating units.

PGI Segment EBITDA

	Three Months Ended June 30,
(in thousands)	2019			2018
Segment operating loss	$	(3,862	)	$	(1,387	)
Depreciation, amortization, depletion and accretion	685			41
Interest expense, net	57			—
Segment EBITDA loss	$	(3,120	)	$	(1,346	)

PGI Segment EBITDA loss was $3.1 million, inclusive of a $1.3 million adjustment to cost of revenue due to the step-up in basis of inventory acquired related to the Carbon Solutions Acquisition. PGI Segment EBITDA loss increased by $1.8 million over the first quarter of 2018, mostly driven by an increase in segment operating loss of $2.5 million, which was offset by additional depreciation, amortization, depletion and accretion expense of $0.6 million related to assets acquired from the Carbon Solutions Acquisition.

RC

For thesix months ended June 30, 2019andJune 30, 2018

RC earnings increased primarily due to an increase in equity earnings in Tinuum Group during the six months ended June 30, 2019 compared to the same period in 2018, as presented above. Our equity earnings increased primarily due to an increase in cash distributions from Tinuum Group due to the addition of four invested facilities, two who were invested in 2018 and two invested in during the six months ended June 30, 2019. For the six months ended June 30, 2019, our share of equity earnings from Tinuum Group increased $13.5 million from the comparable period in 2018 due to an increase in lease revenues driven by significant sales of facilities to third-party investors. Distributions received from Tinuum Group for the six months ended June 30, 2018 were recorded directly to earnings, as our investment was in a memorandum account as discussed in Note 4. 

Earnings from Tinuum Services for the six months ended June 30, 2019 increased compared to the same period in 2018 primarily due to an increase in the number of operating RC facilities from 17 to 20 in which Tinuum Services provides operating and maintenance services.

RC earnings were positively impacted during the six months ended June 30, 2019 by an increase in royalties related to Tinuum Group's use of our M-45 License. During the six months ended June 30, 2019 and 2018, there were 20.5 million tons and 15.9

38

million tons, respectively, of RC produced using the M-45 Technology. The increase in Royalty revenue was driven by an increase in both payments to Tinuum Group and the related tons subject to the M-45 License.

Future earnings and growth within the RC segment will continue to be impacted by coal-fired dispatch, and invested facilities with leases subject to periodic renewals being terminated, repriced, or otherwise subject to renegotiated terms.

Additional discussion of our equity method investments is included above within our consolidated results and in Note 4 of the Condensed Consolidated Financial Statements.

PGI

Discussion of revenues derived from our PGI segment and costs related thereto are included above within our consolidated results.

For the six months ended June 30, 2019 and June 30, 2018

PGI segment operating income decreased during the six months ended June 30, 2019 compared to the six months ended June 30, 2018 primarily due to the increase in operating income due to the operations of Carbon Solutions. This increase is offset with an additional $4.7 million of cost of revenue expense related to a step-up in basis of acquired finished goods inventory and $2.6 million of depreciation, amortization, and depletion expense related to Carbon Solutions Acquisition. In a recently updated forecast, the EIA revised downward by 7% its December 2018 forecast of 2019 coal-fired electricity-generating units.

PGI Segment EBITDA

	Six Months Ended June 30,
(in thousands)	2019			2018
Segment operating loss	$	(7,324	)	$	(2,325	)
Depreciation, amortization, depletion and accretion	2,645			71
Interest expense, net	188			—
Segment EBITDA loss	$	(4,491	)	$	(2,254	)

PGI Segment EBITDA loss was $4.5 million, inclusive of a $4.7 million adjustment to cost of revenue due to a step-up in basis of inventory acquired related to the Carbon Solutions Acquisition. PGI Segment EBITDA loss increased by $2.2 million over the six months ended June 30, 2018, mostly driven by an increase in segment operating loss of $5.0 million, which was offset by additional depreciation, amortization, depletion and accretion expense of $2.6 million related to assets acquired from the Carbon Solutions Acquisition.

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Liquidity and Capital Resources

Overview of Factors Affecting Our Liquidity

During the six months ended June 30, 2019, our liquidity position was positively affected primarily due to distributions from Tinuum Group and Tinuum Services, royalty payments from Tinuum Group and borrowing availability under our bank ("Lender") line of credit ("Line of Credit").

Our principal sources of cash include:

• cash on hand;

• distributions from Tinuum Group and Tinuum Services;

• royalty payments from Tinuum Group; and

• operations of the PGI segment.

Our principal uses of cash during the six months ended June 30, 2019 included:

• repurchases of shares of common stock;

• payment of dividends;

• payment of debt principal and interest;

• our business operating expenses, including federal and state tax payments and cash severance payments; and

• delivering on our existing contracts and customer commitments.

Our ability to continue to generate sufficient cash flow required to meet ongoing operational needs and obligations, as well as

future expected dividend payments and potential future share repurchases, depends upon several factors, including executing on

our contracts and initiatives, receiving royalty payments from Tinuum Group and distributions from Tinuum Group and Tinuum

Services, and increasing our share of the market for PGI consumables, as well as expanding our overall PAC business into

additional adjacent markets. Increased distributions from Tinuum Group will likely be dependent upon both preserving existing

contractual relationships and the securing of additional tax equity investors for those Tinuum Group facilities that are currently not operating.

Due to the Carbon Solutions Acquisition, we expect our use of liquidity for capital expenditures will increase in future periods. Carbon Solutions has historically incurred costs for capital expenditures related to its PAC manufacturing facility, under normal operations and planned outages, and for mine development at its lignite mine. Going forward, we anticipate additional material capital resources will be needed to maintain or improve capital assets. We incurred expenditures related to planned maintenance on our manufacturing facility during the three months ended June 30, 2019.

Tinuum Group and Tinuum Services Distributions

The following table summarizes the cash distributions from our equity method investments that most significantly affected

our consolidated cash flow results, for the six months ended June 30, 2019 and 2018:

	Six Months Ended June 30, 2019
(in thousands)	2019		2018
Tinuum Group	$	33,788	$	25,500
Tinuum Services	4,300		2,700
Distributions from equity method investees	$	38,088	$	28,200

Future cash flows from Tinuum through 2021 are expected to range from $175 to $200 million, and key drivers in achieving

these future cash flows are based on the following:

• 21 invested facilities as of June 30, 2019 and inclusive of all net Tinuum cash flows (distributions and license

royalties), offset by estimated federal and state income tax payments and 453A interest payments.

Expected future cash flows from Tinuum Group are based on the following key assumptions:

• Tinuum Group continues to not operate retained facilities;

• Tinuum Group does not have material unexpected capital expenditures or unusual operating expenses;

• Tax equity lease renewals on invested facilities are not terminated or repriced; and

• Coal-fired power generation remains consistent.

Future incremental invested RC facilities would positively impact our expectation of future cash flows.

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Senior Term Loan

On December 7, 2018, we and ADA-ES, Inc. ("ADA"), a wholly-owned subsidiary, and certain other subsidiaries of the Company as guarantors, The Bank of New York Mellon as administrative agent, and Apollo Credit Strategies Master Fund Ltd and Apollo A-N Credit Fund (Delaware) L.P. (collectively "Apollo”), affiliates of a beneficial owner of greater than five percent of our common stock and a related party, entered into the Term Loan and Security Agreement (the "Senior Term Loan") in the amount of $70.0 million, less original issue discount of $2.1 million. Proceeds from the Senior Term Loan were used to fund the Carbon Solutions Acquisition as disclosed in Note 2. We also paid debt issuance costs of $2.0 million related to the Senior Term Loan. The Senior Term Loan has a term of 36 months and bears interest at a rate equal to 3-month LIBOR (subject to a 1.5% floor) + 4.75% per annum, which is adjusted quarterly to the current 3-month LIBOR rate, and interest is payable quarterly in arrears. Quarterly principal payments of $6.0 million are required and commenced in March 2019, and we may prepay the Senior Term Loan at any time without penalty. The Senior Term Loan is secured by substantially all of our assets, including the cash flows from Tinuum Group and Tinuum Services (collectively, the "Tinuum Entities"), but excluding our equity interests in those Tinuum entities. During the six months ended June 30, 2019, we made principal loan payments of $16.0 million.

The Senior Term Loan includes, among others, the following covenants: (1) Beginning December 31, 2018 and as of the end of each fiscal quarter thereafter, we must maintain a minimum cash balance of $5.0 million and shall not permit "expected future net cash flows from the refined coal business" (as defined in the Senior Term Loan) to be less than 1.75 times the outstanding principal amount of the Senior Term Loan; (2) Beginning in January 2019, annual collective dividends and buybacks of shares of our common stock in an aggregate amount, not to exceed $30.0 million, is permitted so long as (a) no default or event of default exists under the Senior Term Loan and (b) expected future net cash flows from the refined coal business as of the end of the most recent fiscal quarter exceed $100.0 million.

Stock Repurchases and Dividends

In November 2018, the Board of Directors (the "Board") authorized us to purchase up to $20.0 million of our outstanding common stock. This stock repurchase program will remain in effect until December 31, 2019 unless otherwise modified by the Board. Previously, in December 2017, the Board had authorized us to purchase up to $20.0 million of our outstanding common stock under a separate repurchase program that was in effect until July 31, 2018. During the year ended December 31, 2018, under these two stock repurchase programs, we purchased 2,350,422 shares of our common stock for cash of $25.3 million, inclusive of commissions and fees. During the six months ended June 30, 2019, under the applicable stock repurchase program, we purchased 248,591 shares of our common stock for cash of $2.8 million, inclusive of commissions and fees.

During the six months ended June 30, 2019 and 2018, we declared and paid quarterly cash dividends to stockholders of $9.2 million and $10.2 million, respectively, as follows:

	2019			2018
	Per share		Date paid	Per share		Date paid
Dividends declared during quarter ended:
March 31	$	0.25	March 7, 2019	$	0.25	March 8, 2018
June 30	0.25		June 7, 2019	0.25		June 8, 2018
	$	0.50		$	0.50

Line of Credit

As of June 30, 2019, there were no outstanding borrowings under the Line of Credit.

On September 30, 2018, ADA, as borrower, we, as guarantor, and the Lender entered into an amendment (the "Twelfth Amendment") to the Line of Credit. The Twelfth Amendment decreased the borrowing availability of the Line of Credit to $5.0 million due to decreased collateral requirements, extended the maturity date of the Line of Credit to September 30, 2020 and permitted the Line of Credit to be used as collateral (in place of restricted cash) for letters of credit ("LC's") up to $5.0 million related to equipment projects and certain other agreements. Under the Twelfth Amendment, there was no minimum balance requirement based on us meeting certain conditions and maintaining minimum trailing twelve-month EBITDA (earnings before interest, taxes, depreciation and amortization), as previously defined in the "Eleventh Amendment" to the Line of Credit, of $24.0 million.

On December 7, 2018, ADA, as borrower, we, as guarantor, and the Lender entered into an amendment to the Line of

Credit, which provided, among other things, for ADA to be able to enter into the Senior Term Loan as a guarantor so long as

the principal amount of the Senior Term Loan does not exceed $70.0 million. Additionally, the financial covenants in the Line

41

of Credit were amended and restated to be consistent with the aforementioned Senior Term Loan covenants, including

maintaining a minimum cash balance of $5.0 million.

Sources and Uses of Cash

Six Months Ended June 30, 2019 vs. Six Months Ended June 30, 2018

Cash, cash equivalents and restricted cash decreased from $23.8 million as of December 31, 2018 to $20.4 million as of June 30, 2019. The following table summarizes our cash flows for the six months ended June 30, 2019 and 2018, respectively:

	Six Months Ended June 30,
(in thousands)	2019			2018			Change
Cash and cash equivalents and restricted cash provided by (used in):
Operating activities	$	30,572		$	(3,447	)	$	34,019
Investing activities	(4,979		)	24,619			(29,598		)
Financing activities	(28,945		)	(19,686		)	(9,259		)
Net change in cash and cash equivalents and restricted cash	$	(3,352	)	$	1,486		$	(4,838	)

Additionally, the following table summarizes the cash flows of Tinuum Group, whose cash distributions most significantly impact our consolidated cash flow results, for the six months ended June 30, 2019 and 2018, respectively:

	Six Months Ended June 30,
(in thousands)	2019			2018
Tinuum Group cash, beginning of year	$	26,211		$	13,309
Cash provided by (used in):
Operating activities	49,003			30,960
Investing activities (1)	(9,199		)	(5,075		)
Financing activities	(48,100		)	(21,017		)
Net change in cash	(8,296		)	4,868
Tinuum Group cash, end of period	$	17,915		$	18,177

(1) During the six months ended June 30, 2019 and 2018, Tinuum Group's use of cash related to RC facilities in the engineering and installation phase.

Cash flow from operating activities

Cash flows provided by operating activities for the six months ended June 30, 2019 were $30.6 million and changed by $34.0 million compared to the six months ended June 30, 2018. Cash flows from operating activities were positively impacted primarily by the following: (1) net income of $22.5 million, which was primarily due to earnings from equity method investees of $42.6 million and license royalties earned from Tinuum Group of $8.4 million; (2) distributions from equity method investees, return on investment of $38.1 million; (3) a decrease in deferred tax assets, exclusive of valuation allowance changes, of $4.1 million; (4) depreciation, amortization, depletion, and accretion of $2.9 million; and a net decrease in working capital of $3.2 million. Included in distributions from equity method investees, return on investments is $33.8 million of distributions received from Tinuum Group. During the six months ended June 30, 2018, the carrying value of our investment in Tinuum Group was zero and all cash distributions were reported as distributions in excess of cumulative earnings, which is reported as cash flows from investing activities. Due to the increase in the balance of our investment in Tinuum Group during the six months ended June 30, 2019, all distributions during the period were reported as return on investment. Offsetting these increases to operating cash flows were earnings from equity method investees of $42.6 million.

Cash flows used in operating activities for the six months ended June 30, 2018 were $3.4 million and were positively impacted primarily by the following: (1) net income of $23.0 million, which was primarily due to earnings from equity method investees of $28.1 million and license royalties earned from Tinuum Group of $6.8 million; (2) distributions from equity method investees, return on investment of $2.7 million; and (3) stock-based compensation of $1.0 million. Offsetting these increases to operating cash flows were primarily earnings from equity method investees of $28.1 million and a net increase in working capital of $1.5 million.

42

Cash flow from investing activities

Distributions from equity method investees

Distributions received from our equity method investees reported as return in excess of investment basis within investing cash flows decreased by $25.5 million for the six months ended June 30, 2019 compared to the six months ended June 30, 2018. The decrease was driven primarily by the effect of an increase in our equity investment in Tinuum Group, which resulted in all cash distributions reported as return on investment during the six months ended June 30, 2019. In total, cash distributions from Tinuum Group increased quarter over quarter due to additional invested RC facilities in the second half of 2018 and first half of 2019.

Acquisition of business

During the six months ended June 30, 2019, we funded the remaining consideration payable of $0.7 million for the Carbon Solutions Acquisition.

Acquisition of property, equipment, and intangible assets

For the six months ended June 30, 2019, expenditures for property, equipment, and intangible assets primarily relate to capital expenditures at our AC manufacturing facility in anticipation of the planned outages that had been delayed prior to the Carbon Solutions Acquisition. These expenditures approximated $3.8 million during the six months ended June 30, 2019.

Mine development costs

During the six months ended June 30, 2019, we incurred costs related to development work and mitigation costs for our mining operations.

Contributions to equity method investees

During the six months ended June 30, 2018, we made a contribution to Tinuum Services of $0.8 million due to a capital call.

Cash flow from financing activities

Principal payments on term loan

During the six months ended June 30, 2019, we made required principal payments of $12.0 million and an additional principal payment of $4.0 million related to the Senior Term Loan.

Cash dividends paid

During the six months ended June 30, 2019 and 2018, we made payments of $9.2 million and $10.2 million, respectively, related to dividends declared on our common stock.

Repurchase of common stock

As described in Note 9 of the Condensed Consolidated Financial Statements, during the six months ended June 30, 2019 and under a stock repurchase program authorized by the Board, we purchased 248,591 shares of our common stock for cash of $2.8 million, inclusive of commissions and fees. During the six months ended June 30, 2018, we repurchased 825,418 shares of our common stock for cash of $9.1 million.

Equity award activity

During the six months ended June 30, 2019 and 2018, we used $0.3 million and $0.4 million, respectively, for the repurchase of shares to satisfy tax withholdings upon the vesting of equity-based awards.

Contractual Obligations

During the six months ended June 30, 2019, there were no material changes to our contractual obligations outside of the ordinary course of business from those reported as of December 31, 2018.

Off-Balance Sheet Arrangements

During the six months ended June 30, 2019, we did not engage in any off-balance sheet arrangements except those discussed in Item 7 - "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the 2018 10-K.

Critical Accounting Policies and Estimates

Except for the adoption of ASC 842 related to leases, our significant accounting policies and estimates have not changed from those reported in Item 7 - "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the 2018 10-K.

43

Recently Issued Accounting Standards

Refer to Note 1 of the Condensed Consolidated Financial Statements included in Item 1 of this Quarterly Report for new accounting standards applicable to us that were issued during the six months ended June 30, 2019 and subsequent thereto through the date of this Quarterly Report.

Forward-Looking Statements Found in this Report

This Quarterly Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, that involve risks and uncertainties. In particular, such forward-looking statements are found in this Part I, Item 2 above. Words or phrases such as "anticipates," "believes," "expects," "intends," "plans," "estimates," "predicts," the negative expressions of such words, or similar expressions are used in this Quarterly Report to identify forward-looking statements, and such forward-looking statements include, but are not limited to, statements or expectations regarding:

(a) the scope and impact of mercury and other regulations or pollution control requirements, including the impact of the final MATS;

(b) the production and sale of RC by RC facilities that will qualify for Section 45 tax credits;

(c) expected growth or contraction in and potential size of our target markets;

(d) expected supply and demand for our products and services;

(e) increasing competition in the PGI market;

(f) future level of research and development activities;

(g) the effectiveness of our technologies and the benefits they provide;

(h) Tinuum Group’s ability to profitably sell and/or lease additional RC facilities and/or RC facilities that may be returned to Tinuum Group, or to recognize the tax benefits from production and sale of RC on retained RC facilities;

(i) probability of any loss occurring with respect to certain guarantees made by Tinuum Group ("Party Guarantees");

(j) the timing of awards of, and work and related testing under, our contracts and agreements and their value;

(k) the timing and amounts of or changes in future revenues, royalties earned, backlog, funding for our business and projects, margins, expenses, earnings, tax rates, cash flows, royalty payment obligations, working capital, liquidity and other financial and accounting measures;

(l) the outcome of current and pending legal proceedings;

(m) awards of patents designed to protect our proprietary technologies both in the U.S. and other countries; and

(n) whether any legal challenges or EPA actions will have a material impact on the implementation of the MATS or other regulations and on our ongoing business.

The forward-looking statements included in this Quarterly Report involve risks and uncertainties. Actual events or results could differ materially from those discussed in the forward-looking statements as a result of various factors including, but not limited to, timing of new and pending regulations and any legal challenges to or extensions of compliance dates of them; the U.S. government’s failure to promulgate regulations or appropriate funds that benefit our business; changes in laws and regulations, accounting rules, prices, economic conditions and market demand; impact of competition; availability, cost of and demand for alternative energy sources and other technologies; technical, start up and operational difficulties; failure of the RC facilities to produce RC; termination of or amendments to the contracts for sale or lease of RC facilities or such facilities to qualify for Section 45 tax credits; decreases in the production of RC; our inability to commercialize our technologies on favorable terms; our inability to ramp up our operations to effectively address recent and expected growth in our business; loss of key personnel; potential claims from any terminated employees, customers or vendors; availability of materials and equipment for our businesses; intellectual property infringement claims from third parties; pending litigation; as well as other factors relating to our business, as described in our filings with the SEC, with particular emphasis on the risk factor disclosures contained in those filings. You are cautioned not to place undue reliance on the forward-looking statements made in this Quarterly Report and to consult filings we have made and will make with the SEC for additional discussion concerning risks and uncertainties that may apply to our business and the ownership of our securities. The forward-looking statements contained in this Quarterly Report are presented as of the date hereof, and we disclaim any duty to update such statements unless required by law to do so.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

The information under this Item is not required to be provided by smaller reporting companies.

44

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a‑15(b) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), we have evaluated, under the supervision of and with the participation of our management, including our principal executive officer and principal financial officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a‑15(e) and 15d‑15(e) under the Exchange Act) as of the end of the period covered by this report. Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Based upon this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of June 30, 2019.

Changes in Internal Control Over Financial Reporting

On December 7, 2018, we acquired Carbon Solutions and excluded their business from our assessment of internal control over financial reporting as of December 31, 2018, as allowed under general guidance issued by the Staff of the Securities and Exchange Commission. Except for the acquisition of Carbon Solutions, there have been no changes in our internal control over financial reporting (as defined in Rules 13a‑15(f) and 15d‑15(f) under the Exchange Act) during the fiscal quarter ended June 30, 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

45

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we are involved in litigation, claims and other proceedings related to the conduct of our business. Litigation and other disputes are inherently unpredictable and subject to substantial uncertainties and unfavorable resolutions could occur. None of these matters, either individually or in the aggregate, currently is material to us.

Item 1A. Risk Factors

There are no material updates to our risk factors as disclosed in the 2018 Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

Period	(a) Total number of shares purchased	(b) Average price paid per share		(c) Total number of shares purchased as part of publicly announced programs	(d) Maximum number (or approximate dollar value) of shares that may yet be purchased under the plans or programs (in thousands)
April 1 to April 30, 2019	46,687	$	11.84	46,687	$	—
May 1 to May 31, 2019	138,028	11.48		138,028	—
June 1 to June 30, 2019	—	—		—	2,995
Total	184,715	$	—	184,715	$	2,995

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

The statement concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in Exhibit 95.1 to this Quarterly Report.

Item 5. Other Information

None.

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Item 6. Exhibits

Exhibit No.	Description	Form	File No.	Incorporated by Reference Exhibit	Filing Date
4.1	Second Amendment to Tax Asset Protection Plan dated as of April 5, 2019, by and between the Company and Computershare Trust Company, N.A., as rights agent	8-K	001-37822	4.3	April 11, 2019
31.1	Certification of Principal Executive Officer of Advanced Emissions Solutions, Inc. Pursuant to 17 CFR 240.13a-14(a) or 17 CFR 240.15d-14(a)*
31.2	Certification of Principal Financial Officer of Advanced Emissions Solutions, Inc. Pursuant to 17 CFR 240.13a-14(a) or 17 CFR 240.15d-14(a)*
32.1	Certification of Principal Executive Officer and Principal Financial Officer of Advanced Emissions Solutions, Inc. Pursuant to 18 U.S.C Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
95.1	Mine Safety Disclosure Exhibit*
101. INS	XBRL Instance Document
101.SCH	XBRL Schema Document
101.CAL	XBRL Calculation Linkbase Document
101.LAB	XBRL Label Linkbase Document
101.PRE	XBRL Presentation Linkbase Document
101.DEF	Taxonomy Extension Definition Linkbase Document

Notes:

* – Filed herewith.

47

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Advanced Emissions Solutions, Inc.
	(Registrant)
August 5, 2019	By:	/s/ L. Heath Sampson
		L. Heath Sampson
		Chief Executive Officer
		(Principal Executive Officer)
August 5, 2019	By:	/s/ Greg P. Marken
		Greg P. Marken
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

48

EX-31.1

Exhibit 31.1

Pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as Amended

I, L. Heath Sampson, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Advanced Emissions Solutions, Inc.;

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; and

(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: August 5, 2019

/s/ L. Heath Sampson

L. Heath Sampson

Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

Pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as Amended

I, Greg P. Marken, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Advanced Emissions Solutions, Inc.;

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; and

(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: August 5, 2019

/s/ Greg P. Marken

Greg P. Marken

Chief Financial Officer

(Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

Certification

Pursuant to

18 U.S.C. Section 1350,

as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report on Form 10-Q of Advanced Emissions Solutions, Inc. (the “Company”) for the quarterly period ended June 30, 2019, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), L. Heath Sampson, as the Principal Executive Officer of the Company, and Greg P. Marken, as the Principal Financial Officer of the Company, each hereby certifies, pursuant to and solely for the purpose of 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, to the best of his knowledge and belief, that:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ L. Heath Sampson

L. Heath Sampson

Chief Executive Officer

August 5, 2019

/s/ Greg P. Marken

Greg P. Marken

Chief Financial Officer

August 5, 2019

EX-95.1

EXHIBIT 95.1

Mine Safety and Health Administration Safety Data

We are committed to maintaining a safe work environment and working to ensure environmental compliance across all of our operations. The health and safety of our employees and limiting the impact to communities in which we operate are critical to our long-term success. We employ practices and conduct training to help ensure that our employees work safely. Furthermore, we utilize processes for managing, monitoring and improving safety and environmental performance.

The following disclosures are provided pursuant to Securities and Exchange Commission (SEC) regulations, which require certain disclosures by companies required to file periodic reports under the Securities Exchange Act of 1934, as amended, that operate coal mines regulated under the Federal Mine Safety and Health Act of 1977 (the "Mine Act"). The disclosures reflect United States (U.S.) mining operations only.

Mine Safety Information. Whenever the Mine Safety and Health Administration (MSHA) believes that a violation of the Mine Act, any health or safety standard, or any regulation has occurred, it may issue a violation which describes the associated condition or practice and designates a time frame within which the operator must abate the violation. In some situations, such as when MSHA believes that conditions pose a hazard to miners, MSHA may issue an order removing miners from the area of the mine affected by the condition until hazards are corrected. Whenever MSHA issues a citation or order, it generally proposes a civil penalty, or fine, as a result of the violation that the operator is ordered to pay. Citations and orders can be contested and appealed and, as part of that process, are often reduced in severity and amount, and are sometimes vacated. The number of citations, orders and proposed assessments vary depending on the size and type (underground or surface) of the company and mine.

We are required to report citations and orders issued to us by MSHA during the three months ended June 30, 2019, as reflected in our systems. Our required disclosure covers only those mines that were issued orders or citations during the period presented and, commensurate with SEC regulations, does not reflect orders or citations issued to independent contractors working at our mines. Due to timing and other factors, our data may not agree with the mine data retrieval system maintained by MSHA. The proposed assessments for the three months ended June 30, 2019 were taken from the MSHA system as of August 1, 2019.

Additional information about MSHA references we are required to report is as follows:

• Section 104 S&S Violations: The total number of violations received from MSHA under section 104(a) of the Mine Act that could significantly and substantially contribute to a serious injury if left unabated.

• Section 104(b)Orders: The total number of orders issued by MSHA under section 104(b) of the Mine Act, which represents a failure to abate a citation under section 104(a) within the period of time prescribed by MSHA. This results in an order of immediate withdrawal from the area of the mine affected by the condition until MSHA determines that the violation has been abated.

• Section 104(d) Citations and Orders: The total number of citations and orders issued by MSHA under section 104(d) of the Mine Act for unwarrantable failure to comply with mandatory health or safety standards.

• Section 104(e) Notices: The total number of notices issued by MSHA under section 104(e) of the Mine Act for a pattern of violations that could contribute to mine health or safety hazards.

• Section 110(b)(2)Violations: The total number of flagrant violations issued by MSHA under section 110(b)(2) of the Mine Act.

• Section 107(a) Orders: The total number of orders issued by MSHA under section 107(a) of the Mine Act for situations in which MSHA determined an imminent danger existed.

• Proposed MSHA Assessments: The total dollar value of proposed assessments from MSHA.

• Fatalities: The total number of mining-related fatalities.

Our mine is located in the Gulf Coast Lignite Region, in Natchitoches Parish, Louisiana ("Five Forks"). For the three months ended June 30, 2019, there were no citations or orders issued.

Pending Legal Actions. The Federal Mine Safety and Health Review Commission (the Commission) is an independent adjudicative agency that provides administrative trial and appellate review of legal disputes arising under the Mine Act. These cases may involve, among other questions, challenges by operators to citations, orders and penalties they have received from MSHA, or complaints of discrimination by miners under section 105 of the Mine Act. The following is a brief description of the types of legal actions that may be brought before the Commission.

• Contests of Citations and Orders: A contest proceeding may be filed with the Commission by operators, miners or miners’ representatives to challenge the issuance of a citation or order issued by MSHA, including citations related to disputed provisions of operators' emergency response plans.

• Contests of Proposed Penalties (Petitions for Assessment of Penalties): A contest of a proposed penalty is an administrative proceeding before the Commission challenging a civil penalty that MSHA has proposed for the violation. Such proceedings may also involve appeals of judges' decisions or orders to the Commission on proposed penalties, including petitions for discretionary review and review by the Commission on its own motion.

• Complaints for Compensation: A complaint for compensation may be filed with the Commission by miners entitled to compensation when a mine is closed by certain withdrawal orders issued by MSHA. The purpose of the proceeding is to determine the amount of compensation, if any, due miners idled by the orders.

• Complaints of Discharge, Discrimination or Interference: A discrimination proceeding is a case that involves a miner’s allegation that he or she has suffered a wrong by the operator because he or she engaged in some type of activity protected under the Mine Act, such as making a safety complaint. This category includes temporary reinstatement proceedings, which involve cases in which a miner has filed a complaint with MSHA stating he or she has suffered discrimination and the miner has lost his or her position.

• Applications for Temporary Relief: An application for temporary relief from any modification or termination of any order or from any order issued under certain subparts of section 104 of the Mine Act may be filed with the Commission at any time before such order becomes final.

• Appeals of Judges' Decisions or Orders.

For the three months ended June 30, 2019, there were no pending or legal actions before the Commission at our mine, Five Forks.

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2019	Aug. 01, 2019
Document and Entity Information [Abstract]
Entity Registrant Name	Advanced Emissions Solutions, Inc.
Entity Central Index Key	0001515156
Document Type	10-Q
Document Period End Date	Jun. 30, 2019
Amendment Flag	false
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Shell Company	false
Entity Current Reporting Status	Yes
Entity Common Stock, Shares Outstanding		18,578,019

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Current assets:
Cash, cash equivalents and restricted cash	$ 15,420	$ 18,577
Receivables, net	5,606	9,554
Receivables, related parties	4,189	4,284
Inventories, net	17,798	21,791
Prepaid expenses and other assets	5,598	5,570
Total current assets	48,611	59,776
Restricted cash, long-term	5,000	5,195
Property, plant and equipment, net of accumulated depreciation of $4,179 and $1,499, respectively	44,825	42,697
Intangible assets, net	4,501	4,830
Equity method investments	48,403	6,634
Deferred tax assets, net	19,179	32,539
Other long-term assets, net	16,553	7,993
Total Assets	187,072	159,664
Current liabilities:
Accounts payable	6,631	6,235
Accrued payroll and related liabilities	3,450	8,279
Current portion of long-term debt	24,025	24,067
Other current liabilities	5,552	2,138
Total current liabilities	39,658	40,719
Long-term debt	34,204	50,058
Other long-term liabilities	5,449	940
Total Liabilities	79,311	91,717
Commitments and contingencies (Note 8)
Stockholders’ equity:
Preferred stock: par value of $.001 per share, 50,000,000 shares authorized, none outstanding	0	0
Common stock: par value of $.001 per share, 100,000,000 shares authorized, 22,867,405 and 22,640,677 shares issued, and 18,554,626 and 18,576,489 shares outstanding at June 30, 2019 and December 31, 2018, respectively	23	23
Treasury stock, at cost: 4,312,779 and 4,064,188 shares as of June 30, 2019 and December 31, 2018, respectively	(44,571)	(41,740)
Additional paid-in capital	97,354	96,750
Retained earnings	54,955	12,914
Total stockholders’ equity	107,761	67,947
Total Liabilities and Stockholders’ Equity	$ 187,072	$ 159,664

XML

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Accumulated depreciation and amortization	$ 4,179	$ 1,499
Preferred stock par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	50,000,000	50,000,000
Preferred stock, shares outstanding (in shares)	0	0
Common stock par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	22,867,405	22,640,677
Common stock, shares outstanding (in shares)	18,554,626	18,576,489
Treasury stock (in shares)	4,312,779	4,064,188

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Revenues:
Total revenues	$ 15,577	$ 4,273	$ 34,906	$ 8,172
Operating expenses:
Payroll and benefits	2,798	2,759	5,354	4,973
Legal and professional fees	1,569	1,213	3,545	2,761
General and administrative	2,421	1,094	4,563	2,264
Depreciation, amortization, depletion and accretion	757	72	2,859	188
Total operating expenses	19,837	5,842	42,721	11,453
Operating loss	(4,260)	(1,569)	(7,815)	(3,281)
Other income (expense):
Earnings from equity method investments	20,935	15,889	42,625	28,142
Interest expense	(1,987)	(412)	(4,091)	(748)
Other	60	34	130	60
Total other income	19,008	15,511	38,664	27,454
Income before income tax expense	14,748	13,942	30,849	24,173
Income tax expense (benefit)	6,634	(1,349)	8,333	1,220
Net income	$ 8,114	$ 15,291	$ 22,516	$ 22,953
Earnings per common share (Note 1):
Basic (in dollars per share)	$ 0.45	$ 0.76	$ 1.23	$ 1.13
Diluted (in dollars per share)	$ 0.44	$ 0.75	$ 1.22	$ 1.12
Weighted-average number of common shares outstanding:
Basic (in shares)	18,172	20,062	18,219	20,275
Diluted (in shares)	18,377	20,195	18,412	20,386
Consumables
Revenues:
Total revenues	$ 11,386	$ 726	$ 26,495	$ 1,347
Operating expenses:
Cost of revenue	12,286	902	26,394	1,613
License royalties, related party
Revenues:
Total revenues	4,191	3,523	8,411	6,753
Other
Revenues:
Total revenues	0	24	0	72
Operating expenses:
Cost of revenue	$ 6	$ (198)	$ 6	$ (346)

XML

Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Total	Common Stock	Treasury Stock	Additional Paid-in Capital	Retained Earnings (Deficit)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative effect of change in accounting principle	$ 2,950				$ 2,950
Beginning Balance (in shares) at Dec. 31, 2017		22,465,821	(1,713,766)
Beginning Balance at Dec. 31, 2017	73,455	$ 22	$ (16,397)	$ 105,308	(15,478)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation (in shares)		193,583
Stock-based compensation	336	$ 1		335
Repurchase of common shares to satisfy minimum tax withholdings (in shares)		(22,375)
Repurchase of common shares to satisfy minimum tax withholdings	(267)			(267)
Cash dividends declared on common stock, $0.25 per share	(5,189)			(5,189)
Repurchase of common shares (in shares)			(149,217)
Repurchase of common shares	(1,642)		$ (1,642)
Net income	7,662				7,662
Ending Balance (in shares) at Mar. 31, 2018		22,637,029	(1,862,983)
Ending Balance at Mar. 31, 2018	77,305	$ 23	$ (18,039)	100,187	(4,866)
Beginning Balance (in shares) at Dec. 31, 2017		22,465,821	(1,713,766)
Beginning Balance at Dec. 31, 2017	73,455	$ 22	$ (16,397)	105,308	(15,478)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Repurchase of common shares to satisfy minimum tax withholdings		$ (9,100)
Net income	22,953
Ending Balance (in shares) at Jun. 30, 2018		22,627,635	(2,539,184)
Ending Balance at Jun. 30, 2018	80,620	$ 23	$ (25,508)	95,680	10,425
Beginning Balance (in shares) at Mar. 31, 2018		22,637,029	(1,862,983)
Beginning Balance at Mar. 31, 2018	77,305	$ 23	$ (18,039)	100,187	(4,866)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation (in shares)		1,135
Stock-based compensation	675			675
Repurchase of common shares to satisfy minimum tax withholdings (in shares)		(8,259)
Repurchase of common shares to satisfy minimum tax withholdings	(92)	$ (7,500)		(92)
Cash dividends declared on common stock, $0.25 per share	(5,090)			(5,090)
Repurchase of common shares (in shares)			676,201
Repurchase of common shares	(7,469)		$ (7,469)
Net income	15,291				15,291
Ending Balance (in shares) at Jun. 30, 2018		22,627,635	(2,539,184)
Ending Balance at Jun. 30, 2018	80,620	$ 23	$ (25,508)	95,680	10,425
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative effect of change in accounting principle	28,817				28,817
Beginning Balance (in shares) at Dec. 31, 2018		22,640,677	(4,064,188)
Beginning Balance at Dec. 31, 2018	67,947	$ 23	$ (41,740)	96,750	12,914
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation (in shares)		218,465
Stock-based compensation	317			317
Repurchase of common shares to satisfy minimum tax withholdings (in shares)		(22,707)
Repurchase of common shares to satisfy minimum tax withholdings	(245)			(245)
Cash dividends declared on common stock, $0.25 per share	(4,629)				(4,629)
Repurchase of common shares (in shares)			(63,876)
Repurchase of common shares	(693)		$ (693)
Net income	14,402				14,402
Ending Balance (in shares) at Mar. 31, 2019		22,836,435	(4,128,064)
Ending Balance at Mar. 31, 2019	105,916	$ 23	$ (42,433)	96,822	51,504
Beginning Balance (in shares) at Dec. 31, 2018		22,640,677	(4,064,188)
Beginning Balance at Dec. 31, 2018	67,947	$ 23	$ (41,740)	96,750	12,914
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Repurchase of common shares to satisfy minimum tax withholdings		$ (2,800)
Net income	22,516
Ending Balance (in shares) at Jun. 30, 2019		22,867,405	(4,312,779)
Ending Balance at Jun. 30, 2019	107,761	$ 23	$ (44,571)	97,354	54,955
Beginning Balance (in shares) at Mar. 31, 2019		22,836,435	(4,128,064)
Beginning Balance at Mar. 31, 2019	105,916	$ 23	$ (42,433)	96,822	51,504
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation (in shares)		31,715
Stock-based compensation	541			541
Repurchase of common shares to satisfy minimum tax withholdings (in shares)		(745)
Repurchase of common shares to satisfy minimum tax withholdings	(9)	$ (2,100)		(9)
Cash dividends declared on common stock, $0.25 per share	(4,663)				(4,663)
Repurchase of common shares (in shares)			(184,715)
Repurchase of common shares	(2,138)		$ (2,138)
Net income	8,114				8,114
Ending Balance (in shares) at Jun. 30, 2019		22,867,405	(4,312,779)
Ending Balance at Jun. 30, 2019	$ 107,761	$ 23	$ (44,571)	$ 97,354	$ 54,955

XML

Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) (Parenthetical) - $ / shares	3 Months Ended
	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2018	Mar. 31, 2018
Statement of Stockholders' Equity [Abstract]
Cash dividends declared per common share outstanding (in dollars per share)	$ 0.25	$ 0.25	$ 0.25	$ 0.25

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Cash flows from operating activities
Net income	$ 22,516	$ 22,953
Adjustments to reconcile net income to net cash provided by operating activities:
Increase (decrease) in valuation allowance on deferred tax assets	849	(498)
Depreciation, amortization, depletion and accretion	2,859	188
Amortization of debt discount and debt issuance costs	851	0
Stock-based compensation expense	858	1,010
Earnings from equity method investments	(42,625)	(28,142)
Other non-cash items, net	474	192
Changes in operating assets and liabilities:
Receivables and related party receivables	4,044	(64)
Prepaid expenses and other assets	47	(375)
Costs incurred on uncompleted contracts	0	15,945
Inventories	3,794	0
Deferred tax assets, net	4,097	(246)
Other long-term assets	1,470	0
Accounts payable	(758)	323
Accrued payroll and related liabilities	(4,829)	152
Other current liabilities	862	(1,505)
Billings on uncompleted contracts	0	(15,945)
Operating lease liabilities	(1,563)	0
Other long-term liabilities	(462)	(135)
Distributions from equity method investees, return on investment	38,088	2,700
Net cash provided by (used in) operating activities	30,572	(3,447)
Cash flows from investing activities
Distributions from equity method investees in excess of cumulative earnings	0	25,500
Acquisition of business	(661)	0
Acquisition of property, plant, equipment, and intangible assets	(3,797)	(131)
Mine development costs	(521)	0
Contributions to equity method investees	0	750
Net cash (used in) provided by investing activities	(4,979)	24,619
Cash flows from financing activities
Principal payments on term loan	(16,000)	0
Principal payments on finance lease obligations	(681)	0
Dividends paid	(9,179)	(10,216)
Repurchase of common shares	(2,831)	(9,111)
Repurchase of common shares to satisfy tax withholdings	(254)	(359)
Net cash used in financing activities	(28,945)	(19,686)
(Decrease) increase in Cash and Cash Equivalents and Restricted Cash	(3,352)	1,486
Cash and Cash Equivalents and Restricted Cash, beginning of period	23,772	30,693
Cash and Cash Equivalents and Restricted Cash, end of period	20,420	32,179
Supplemental disclosure of non-cash investing and financing activities:
Acquisition of property, plant and equipment through accounts payable	1,561	0
Dividends declared, not paid	$ 113	$ 63

XML

Basis of Presentation

6 Months Ended

Jun. 30, 2019

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

Nature of Operations

Advanced Emissions Solutions, Inc. ("ADES" or the "Company") is a Delaware corporation with its principal office located in Highlands Ranch, Colorado and operations located in Louisiana. The Company is principally engaged in consumable mercury control options including powdered activated carbon (“PAC”) and chemical technologies. The Company's proprietary environmental technologies in the power generation and industrial ("PGI") market enable customers to reduce emissions of mercury and other pollutants, maximize utilization levels and improve operating efficiencies to meet the challenges of existing and pending emission control regulations. The Company generates substantial earnings and tax credits under Section 45 ("Section 45 tax credits") of the Internal Revenue Code ("IRC") from its equity investments in certain entities and earns royalties for technologies that are licensed to Tinuum Group, LLC, a Colorado limited liability company ("Tinuum Group"). Such technologies allow Tinuum Group to provide their customers with various solutions to enhance combustion and reduced emissions of nitrogen oxide ("NOx") and mercury from coal burned to generate electrical power. The Company’s sales occur principally throughout the United States. See Note 13 for additional information regarding the Company's operating segments.

On December 7, 2018 (the "Acquisition Date"), the Company acquired (the "Carbon Solutions Acquisition") 100% of the equity interests of ADA Carbon Solutions, LLC (“Carbon Solutions”). Carbon Solutions is a manufacturer and seller of activated carbon ("AC") used in mercury capture for the coal-fired power plant, industrial and water treatment markets. Carbon Solutions also owns an associated lignite mine that supplies the primary raw material for manufacturing powdered activated carbon. Carbon Solutions was formed in 2008 as a 50/50 joint venture by the Company and Energy Capital Partners LLC. The Company relinquished its ownership in 2011 as part of a legal settlement agreement as described in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2017. The Company acquired Carbon Solutions primarily to expand the Company's product offerings within the mercury control industry and other complementary PAC markets.

Basis of Presentation

The accompanying Condensed Consolidated Financial Statements of ADES are unaudited and have been prepared in conformity with accounting principles generally accepted in the United States ("U.S. GAAP") and with Article 10 of Regulation S-X of the Securities and Exchange Commission. In compliance with those instructions, certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted.

The unaudited Condensed Consolidated Financial Statements of ADES in this quarterly report ("Quarterly Report") are presented on a consolidated basis and include ADES and its wholly-owned subsidiaries (collectively, the "Company"). Also included within the unaudited Condensed Consolidated Financial Statements are the Company's unconsolidated equity investments; Tinuum Group, Tinuum Services, LLC ("Tinuum Services"), and GWN Manager, LLC ("GWN Manager"), which are accounted for under the equity method of accounting, and Highview Enterprises Limited (the "Highview Investment"), which is accounted for in accordance with U.S. GAAP applicable to equity investments that do not qualify for the equity method of accounting.

Results of operations and cash flows for the interim periods are not necessarily indicative of the results that may be expected for the entire year. All significant intercompany transactions and accounts were eliminated for all periods presented in this Quarterly Report.

In the opinion of management, these Condensed Consolidated Financial Statements include all normal and recurring adjustments considered necessary for a fair presentation of the results of operations, financial position, stockholders' equity and cash flows for the interim periods presented. These Condensed Consolidated Financial Statements of ADES should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 (the "2018 Form 10-K"). Significant accounting policies disclosed therein have not changed, except as described later in Note 1.

Earnings Per Share

Basic earnings per share is computed using the two-class method, which is an earnings allocation formula that determines earnings per share for common stock and any participating securities according to dividend and participating rights in undistributed earnings. The Company's restricted stock awards ("RSA's") granted prior to December 31, 2016 contain non-forfeitable rights to dividends or dividend equivalents and are deemed to be participating securities. RSA's granted subsequent to December 31, 2016 do not contain non-forfeitable rights to dividends and are not deemed to be participating securities.

Under the two-class method, net income for the period is allocated between common stockholders and the holders of the participating securities based on the weighted-average number of common shares outstanding during the period, excluding participating, unvested RSA's ("common shares"), and the weighted-average number of participating unvested RSA's outstanding during the period, respectively. The allocated, undistributed income for the period is then divided by the weighted-average number of common shares and participating, unvested RSA's outstanding during the period to arrive at basic earnings per common share and participating security for the period, respectively. Pursuant to U.S. GAAP, the Company has elected not to separately present basic or diluted earnings per share attributable to participating securities in the Condensed Consolidated Statements of Operations.

Diluted earnings per share is computed in a manner consistent with that of basic earnings per share, while considering other potentially dilutive securities. Potentially dilutive securities consist of both unvested, participating and non-participating RSA's, as well as outstanding options to purchase common stock ("Stock Options") and contingent performance stock units ("PSU's") (collectively, "Potential dilutive shares"). The dilutive effect, if any, for non-participating RSA's, Stock Options and PSU's is determined using the greater of dilution as calculated under the treasury stock method or the two-class method. Potential dilutive shares are excluded from diluted earnings per share when their effect is anti-dilutive. When there is a net loss for a period, all Potential dilutive shares are anti-dilutive and are excluded from the calculation of diluted loss per share for that period.

The following table sets forth the calculations of basic and diluted earnings per share:

	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands, except per share amounts)	2019		2018		2019		2018
Net income	$	8,114	$	15,291	$	22,516	$	22,953
Less: Dividends and undistributed income allocated to participating securities	11		51		31		77
Income attributable to common stockholders	$	8,103	$	15,240	$	22,485	$	22,876
Basic weighted-average common shares outstanding	18,172		20,062		18,219		20,275
Add: dilutive effect of equity instruments	205		133		193		111
Diluted weighted-average shares outstanding	18,377		20,195		18,412		20,386
Earnings per share - basic	$	0.45	$	0.76	$	1.23	$	1.13
Earnings per share - diluted	$	0.44	$	0.75	$	1.22	$	1.12

For the three and six months endedJune 30, 2019 and 2018, RSA's and Stock Options convertible to 0.3 million and 0.3 million shares, respectively, and 0.3 million and 0.4 million shares, respectively, of common stock for each of the periods presented were outstanding but were not included in the computation of diluted net income per share because the effect would have been anti-dilutive. For the six months ended June 30, 2018, Stock Options to purchase 0.1 million shares, which vest based on the Company achieving specified performance targets, were outstanding, but were not included in the computation of diluted net income per share for a portion of this period because they were determined not to be contingently issuable.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. There have been no changes in the Company’s critical accounting estimates from those that were disclosed in the 2018 Form 10-K. Actual results could differ from these estimates.

Risks and Uncertainties

The Company’s earnings are significantly affected by equity earnings it receives from Tinuum Group. As of June 30, 2019, Tinuum Group has 21 invested RC facilities of which 11 are leased to a single customer. A majority of these leases are periodically renewed and the loss of this single customer or material modification to the lease terms of these facilities by this customer would have a significant adverse impact on Tinuum Group's financial position, results of operations and cash flows, which in turn would have material adverse impact on the Company’s financial position, results of operations and cash flows.

The Company's revenues, sales volumes, earnings and cash flows are significantly affected by prices of competing power generation sources such as natural gas and renewable energy. Low natural gas prices make it a competitive alternative to coal-fired power generation and therefore, coal consumption may be reduced, which reduces the demand for our products. In addition, coal consumption and demand for our products is also affected by the demand for electricity, which is higher in the warmer and colder months of the year. Abnormal temperatures during the summer and winter months may significantly reduce coal consumption and thus the demand for our products.

Reclassifications

Certain balances have been reclassified from the prior year to conform to the current year presentation. No reclassifications have any impact to income before income taxes or net income.

New Accounting Standards

Recently Adopted

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) ("ASU 2016-02"), which created ASC Topic 842 - Leases ("ASC 842"), requiring lessees to recognize a right of use asset and related lease liability for those leases classified as operating leases at the commencement date and have lease terms of more than 12 months. ASC 842 retains the distinction between finance leases (formerly defined as capital leases) and operating leases. On January 1, 2019, the Company adopted ASC 842 retrospectively beginning with the date of adoption. Under this adoption method, the application date is the beginning of the reporting period in which the Company first applies the provisions of ASC 842. Accordingly, the Company’s reporting for the comparative periods presented in the financial statements and related disclosures continues in accordance with legacy U.S. GAAP under ASC Topic 840 - Leases ("ASC 840"). The adoption of ASC 842 had no impact to the opening balance of retained earnings.

As of the adoption date, the Company recorded $7.0 million and $7.0 million of "right of use" ("ROU") assets and incremental lease liabilities, respectively. The cumulative effect of the change from the adoption of ASC 842 to the Consolidated Balance Sheet as of January 1, 2019 is shown in the table that follows:

	Balance as of		Impact of		Balance as of
(in thousands)	December 31, 2018		Adoption		January 1, 2019
Balance Sheet
Other long-term assets	$	7,993	$	6,956	$	14,949
Other liabilities	$	50,058	$	3,085	$	53,143
Other long-term liabilities	$	940	$	3,871	$	4,811

See Note 6 for additional disclosures required under ASC 842 in the year of adoption.

As of January 1, 2019, Tinuum Group adopted ASU 2016-02 and ASU 2014-09 (Topic 606), Revenue from Contracts with Customers ("ASU 2014-09"). As a result of Tinuum Group’s adoption of these pronouncements, the Company recorded a cumulative effect increase of $28.8 million to Retained earnings as of January 1, 2019, based on the Company's ownership percentage of Tinuum Group's cumulative effect adjustment, and increased its investment balance in Tinuum Group in the amount of $37.2 million and established a deferred tax liability of $8.4 million. As a result of the increase in the investment balance in Tinuum Group, for the six months ended June 30, 2019, the Company began recognizing equity earnings in Tinuum Group based on its pro-rata share of Tinuum Group’s net income rather than based on cash distributions received as had been required in prior periods as a result of the cumulative cash distributions exceeding the cumulative pro-rata share of Tinuum Group's net income.

Not Yet Adopted

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). The main objective of ASU 2016-13 is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in ASU 2016-13 replace the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those years, and must be adopted under a modified retrospective method approach. Entities may adopt ASU 2016-13 earlier as of the fiscal years beginning after December 15, 2018, including interim periods within those years. The Company is currently evaluating the provisions of this guidance and assessing its impact on the Company's financial statements and disclosures. The Company does not believe this standard will have a material impact on the Company's financial statements and disclosures.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement ("ASU 2018-13"). The amendments in ASU 2018-13 improve the effectiveness of fair value measurement disclosures and modify the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement ("Topic 820"), based on the concepts in FASB Concepts Statement, Conceptual Framework for Financial Reporting - Chapter 8: Notes to Financial Statements, including the consideration of costs and benefits. ASU 2018-13 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted-average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. Early adoption is permitted upon issuance of this update. An entity is permitted to early adopt any removed or modified disclosures upon issuance of this update and delay adoption of the additional disclosures until their effective date. The Company is currently evaluating the provisions of ASU 2018-13 and assessing its impact on the Company's financial statement disclosures. The Company does not believe this standard will have a material impact on the Company's financial statement disclosures.

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Acquisition

6 Months Ended

Jun. 30, 2019

Business Combinations [Abstract]

Acquisition

Acquisition

As described in Note 1, on the Acquisition Date, the Company completed the Carbon Solutions Acquisition for a total purchase price of $75.0 million (the "Purchase Price"). The results of Carbon Solutions have been included in the Company’s consolidated financial statements since the Acquisition Date. The fair value of the purchase consideration totaled $66.5 million and consisted of cash of $65.8 million and an additional purchase adjustment amount payable to Carbon Solutions' secured lender of $0.7 million, which was paid in March 2019. The Purchase Price was adjusted by assumed debt and contractual commitments of $11.8 million, less cash acquired of $3.3 million. The Company also paid $4.5 million in acquisition-related costs (or transaction costs) during the year ended December 31, 2018. The Company funded the cash consideration from cash on hand and the proceeds from the Term Loan and Security Agreement (the "Senior Term Loan") in the principal amount of $70.0 million, as more fully described in Note 5.

The following table summarizes the final purchase price allocation. Subsequent to December 31, 2018, the Company completed additional analysis and adjustments were made to the preliminary purchase price allocations as noted in the table below:

Fair value of assets acquired:	As Originally Reported		Adjustments			As Adjusted
Cash	$	3,284	$	—		$	3,284
Receivables	6,409		—			6,409
Inventories	22,100		(356		)	21,744
Prepaid expenses and other current assets	2,992		61			3,053
Spare parts	3,359		—			3,359
Property, plant and equipment	43,033		(377		)	42,656
Mine leases and development	2,500		200			2,700
Mine reclamation asset	—		2,402			2,402
Intangible assets	4,000		100			4,100
Other assets	168		—			168
Amount attributable to assets acquired	87,845		2,030			89,875
Fair value of liabilities assumed:
Accounts payable	4,771		—			4,771
Accrued liabilities	7,354		254			7,608
Equipment lease liabilities	8,211		—			8,211
Mine reclamation liability	626		1,776			2,402
Other liabilities	437		—			437
Amount attributable to liabilities assumed	21,399		2,030			23,429
Net assets acquired	$	66,446	$	—		$	66,446

Adjustments to the preliminary purchase price allocation primarily relate to changes in fair values assigned to property, plant and equipment, intangible assets, mine reclamation liability and the related mine reclamation asset as a result of the final valuation report from the Company's third-party valuation firm issued in May 2019. In addition, during the six months ended June 30, 2019 and based on new information of facts and circumstances that existed as of the Acquisition Date, the Company revised its estimate used as of the Acquisition Date related to the net realizable value of certain finished goods inventory items as well as values assigned to certain prepaid and accrued expense items.

The adjustments have been recorded as ofJune 30, 2019and are included in the Consolidated Balance Sheet as ofJune 30, 2019 and the resultant impact to the Statement of Operations for the three and six months endedJune 30, 2019.

The following table represents the intangible assets, as adjusted for purchase price adjustments noted above, identified as part of the Carbon Solutions Acquisition:

(in thousands)	Amount		Weighted Average Useful Life (years)
Customer relationships	$	2,200	5
Developed technology	1,600		5
Trade name	300		2
Total intangibles acquired	$	4,100

Unaudited Pro Forma Financial Information

The following represents the pro forma effects of the Carbon Solutions Acquisition as if it had occurred on January 1, 2017. The pro forma pre-tax income for the period presented has been calculated after applying the Company’s accounting policies in effect for 2017 and 2018. In addition, pro forma net income for the three and six months ended June 30, 2018 includes: (1) the impact on Carbon Solutions of the adoption of ASC 606 effective January 1, 2018, which resulted in a reclassification of $1.8 million and $3.8 million, respectively, from Revenues to Cost of Revenue for freight costs billed to customers, with no impact to income from operations; (2) the reduction in depletion, depreciation and amortization resulting from the purchase price adjustments to Property, plant and equipment and Mine development costs; (3) the adjustment to interest expense from the combination of the Senior Term Loan that was used to fund the Carbon Solutions Acquisition and the elimination of certain debt of Carbon Solutions as a result of pay-offs by the Company as of the Acquisition Date; and (4) the removal of $2.1 million and $3.2 million in transaction costs incurred for the three and six months ended June 30, 2018, respectively, together with the income tax effect on (1) through (4). The pro forma results do not include any anticipated synergies or other expected benefits of the Carbon Solutions Acquisition. The unaudited pro forma financial information below is not necessarily indicative of either future results of operations or results that might have been achieved had the Carbon Solutions Acquisition been consummated as of January 1, 2017.

As of June 30, 2019, the Company identified a difference in depreciation as originally calculated and included in the pro forma net income disclosure for the three months ended March 31, 2018. The following table presents the effect of the change in calculated depreciation to pro forma net income for the three months ended March 31, 2018:

	For the three months ended March 31, 2018
(in thousands)	As reported		Adjustment		As adjusted
Net income	$	3,727	$	3,350	$	7,077

The following table presents the pro forma effects of the Carbon Solutions Acquisition for the three and six months ended June 30, 2018:

	Three Months Ended		Six Months Ended
(in thousands)	June 30, 2018		June 30, 2018
Revenues	$	16,655	$	35,150
Net income	$	8,985	$	16,062

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Inventories

6 Months Ended

Jun. 30, 2019

Inventory Disclosure [Abstract]

Inventories

Inventories

The following table summarizes the Company's inventories recorded at the lower of average cost or net realizable value as of June 30, 2019 and December 31, 2018:

	As of
(in thousands)	June 30, 2019		December 31, 2018
Product inventory (1)	$	16,466	$	19,403
Raw material inventory	1,332		2,388
	$	17,798	$	21,791

(1) As of June 30, 2019 and December 31, 2018, this amount includes zero and $5.0 million, respectively, attributed to the increase in fair value of inventory acquired from the Carbon Solutions Acquisition.

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Equity Method Investments

6 Months Ended

Jun. 30, 2019

Equity Method Investments and Joint Ventures [Abstract]

Equity Method Investments

Equity Method Investments

Tinuum Group, LLC

The Company's ownership interest in Tinuum Group was 42.5% as of June 30, 2019 and December 31, 2018. Tinuum Group supplies technology equipment and technical services at select coal-fired generators, but its primary purpose is to put into operation facilities that produce and sell refined coal ("RC") that lower emissions and therefore qualify for Section 45 tax credits. Tinuum Group has been determined to be a variable interest entity ("VIE"); however, the Company does not have the power to direct the activities that most significantly impact Tinuum Group's economic performance and has therefore accounted for the investment under the equity method of accounting. The Company determined that the voting partners of Tinuum Group have identical voting rights, equity control interests and board control interests, and therefore, concluded that the power to direct the activities that most significantly impact Tinuum Group's economic performance was shared.

The following table summarizes the results of operations of Tinuum Group:

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2019			2018			2019		2018
Gross profit	$	38,180		$	28,683		$	79,380	$	55,096
Operating, selling, general and administrative expenses	5,763			5,491			12,345		11,498
Income from operations	32,417			23,192			67,035		43,598
Other (expenses) income	(28		)	(355		)	23		(2,224		)
Class B preferred return	—			—			—		(12		)
Loss attributable to noncontrolling interest	12,891			10,244			28,667		21,019
Net income available to members	$	45,280		$	33,081		$	95,725	$	62,381
ADES equity earnings from Tinuum Group	$	19,244		$	14,450		$	39,011	$	25,500

For the three and six months endedJune 30, 2018 periods presented in the table below, the difference between the Company's proportionate share of Tinuum Group's net income available to members (at its equity interest of 42.5%) and the Company's earnings from its Tinuum Group equity method investment as reported in the Condensed Consolidated Statements of Operations relates to the Company receiving distributions in excess of the carrying value of the equity investment, and therefore recognizing such excess distributions as equity method earnings in the period the distributions occur, as discussed below.

For the three and six months endedJune 30, 2018 periods presented in the table below, the Company recognized equity earnings from Tinuum Group to the extent that cash distributions were received from Tinuum Group during the period. For the three months ended June 30, 2019, the Company recognized its pro-rata share of Tinuum Group's net income available to its members for the respective period. For the six months ended June 30, 2019, the Company recognized its pro-rata share of Tinuum Group's net income available to its members for the period, less the amount necessary to recover the cumulative earnings short-fall balance as of the end of the immediately preceding period, which was December 31, 2018. For the three and six months endedJune 30, 2019, the Company recognized equity earnings from Tinuum Group of $19.2 million and $39.0 million, respectively. For the three and six months endedJune 30, 2018, the Company recognized equity earnings from Tinuum Group of $14.5 million and $25.5 million, respectively. As of June 30, 2019 and December 31, 2018, the Company's carrying value in Tinuum Group was $42.5 million and zero, respectively.

The following tables present the Company's investment balance, equity earnings and cash distributions in excess of the investment balance, if any, for the three and six months endedJune 30, 2019 and 2018 (in thousands):

Description	Date(s)	Investment balance			ADES equity earnings (loss)			Cash distributions		Memorandum Account: Cash distributions and equity earnings in (excess) of investment balance
Beginning balance	12/31/2018	$	—		$	—		$	—	$	(1,672	)
Impact of adoption of accounting standards (1)	First Quarter	37,232			—			—		—
ADES proportionate share of income from Tinuum Group	First Quarter	21,439			21,439			—		—
Recovery of prior cash distributions in excess of investment balance (prior to cash distributions)	First Quarter	(1,672		)	(1,672		)	—		1,672
Cash distributions from Tinuum Group	First Quarter	(16,788		)	—			16,788		—
Total investment balance, equity earnings (loss) and cash distributions	03/31/19	$	40,211		$	19,767		$	16,788	$	—
ADES proportionate share of income from Tinuum Group	Second Quarter	$	19,244		$	19,244		$	—	$	—
Cash distributions from Tinuum Group	Second Quarter	(17,000		)	—			17,000		—
Total investment balance, equity earnings (loss) and cash distributions	6/30/2019	$	42,455		$	19,244		$	17,000	$	—

Description	Date(s)	Investment balance			ADES equity earnings (loss)			Cash distributions		Memorandum Account: Cash distributions and equity earnings in (excess) of investment balance
Beginning balance	12/31/2017	$	—		$	—		$	—	$	(12,218	)
ADES proportionate share of income from Tinuum Group (2)	First Quarter	12,458			12,458			—		—
Recovery of prior cash distributions in excess of investment balance (prior to cash distributions)	First Quarter	(12,218		)	(12,218		)	—		12,218
Cash distributions from Tinuum Group	First Quarter	(11,050		)	—			11,050		—
Adjustment for current year cash distributions in excess of investment balance	First Quarter	10,810			10,810			—		(10,810		)
Total investment balance, equity earnings (loss) and cash distributions	3/31/2018	$	—		$	11,050		$	11,050	$	(10,810	)
ADES proportionate share of income from Tinuum Group (2)	Second Quarter	$	14,059		$	14,059		$	—	$	—
Recovery of prior cash distributions in excess of investment balance (prior to cash distributions)	Second Quarter	(10,810		)	(10,810		)	—		10,810
Cash distributions from Tinuum Group	Second Quarter	(14,450		)	—			14,450		—
Adjustment for current year cash distributions in excess of investment balance	Second Quarter	11,201			11,201			—		(11,201		)
Total investment balance, equity earnings (loss) and cash distributions	6/30/2018	$	—		$	14,450		$	14,450	$	(11,201	)

(1) As discussed in Note 1, Tinuum Group adopted ASC 606 and ASC 842 as of January 1, 2019. As a result of Tinuum Group’s adoption of these standards, the Company recorded a cumulative adjustment of $28.8 million, net of the impact of income taxes, related to the Company's percentage of Tinuum Group's cumulative effect adjustment that increased the Company's Retained earnings as of January 1, 2019.

(2) For the three and six months endedJune 30, 2018, the amount of the Company's 42.5% proportionate share of net income available to members as shown in the table above may differ from mathematical calculations of the Company’s 42.5% equity interest in Tinuum Group multiplied by the amounts of net income available to members as shown in the table above of Tinuum Group results of operations due to adjustments related to the Class B preferred return.

Tinuum Services, LLC

The Company has a 50% voting and economic interest in Tinuum Services, which is equivalent to the voting and economic interest of NexGen Refined Coal, LLC ("NexGen"). The Company has determined that Tinuum Services is not a VIE and has evaluated its consolidation analysis under the voting interest model. Because the Company does not own greater than 50% of the outstanding voting shares, either directly or indirectly, it has accounted for its investment in Tinuum Services under the equity method of accounting. The Company’s investment in Tinuum Services as of June 30, 2019 and December 31, 2018 was $5.9 million and $6.6 million, respectively.

The following table summarizes the results of operations of Tinuum Services:

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2019			2018			2019			2018
Gross loss	$	(25,192	)	$	(21,701	)	$	(49,927	)	$	(42,707	)
Operating, selling, general and administrative expenses	50,412			43,133			99,862			83,837
Loss from operations	(75,604		)	(64,834		)	(149,789		)	(126,544		)
Other (expenses) income	(316		)	423			(558		)	365
Loss attributable to noncontrolling interest	79,307			67,287			157,577			131,463
Net income	$	3,387		$	2,876		$	7,230		$	5,284
ADES equity earnings from Tinuum Services	$	1,693		$	1,438		$	3,615		$	2,642

Included within the Consolidated Statements of Operations of Tinuum Services for the three and six months endedJune 30, 2019 and 2018, respectively, were losses related to VIE's of Tinuum Services. These losses do not impact the Company's equity earnings from Tinuum Services as 100% of those losses are attributable to a noncontrolling interest and eliminated in the calculations of Tinuum Services' net income attributable to the Company's interest.

The following table details the components of the Company's respective equity method investments included within the Earnings from equity method investments line item on the Condensed Consolidated Statements of Operations:

	Three Months Ended June 30,					Six Months Ended June 30,
(in thousands)	2019			2018		2019			2018
Earnings from Tinuum Group	$	19,244		$	14,450	$	39,011		$	25,500
Earnings from Tinuum Services	1,693			1,438		3,615			2,642
(Losses) earnings from other	(2		)	1		(1		)	—
Earnings from equity method investments	$	20,935		$	15,889	$	42,625		$	28,142

The following table details the components of the cash distributions from the Company's respective equity method investments included in the Condensed Consolidated Statements of Cash Flows. Distributions from equity method investees are reported in the Condensed Consolidated Statements of Cash Flows as "Distributions from equity method investees, return on investment" within Operating cash flows until such time as the carrying value in an equity method investee company is reduced to zero; thereafter, such distributions are reported as "Distributions from equity method investees in excess of cumulative earnings" within Investing cash flows.

	Six Months Ended June 30,
(in thousands)	2019		2018
Distributions from equity method investees, return on investment
Tinuum Group	$	33,788	$	—
Tinuum Services	4,300		2,700
	$	38,088	$	2,700
Distributions from equity method investees in excess of investment basis
Tinuum Group	$	—	$	25,500
	$	—	$	25,500

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Debt Obligations

6 Months Ended

Jun. 30, 2019

Debt Disclosure [Abstract]

Debt Obligations

Debt Obligations

	As of
(in thousands)	June 30, 2019			December 31, 2018
Senior Term Loan due December 2021, related party	$	54,000		$	70,000
Less: net unamortized debt issuance costs	(1,620		)	(1,990		)
Less: net unamortized debt discount	(1,571		)	(2,052		)
Senior Term Loan due December 2021, net	50,809			65,958
Finance lease obligations (1)	7,420			8,167
	58,229			74,125
Less: Current maturities	(24,025		)	(24,067		)
Total long-term debt	$	34,204		$	50,058

(1) As of December 31, 2018, amounts related to capital lease obligations.

Senior Term Loan

On December 7, 2018, the Company, and ADA-ES, Inc. ("ADA"), a wholly-owned subsidiary, and certain other subsidiaries of the Company as guarantors, The Bank of New York Mellon as administrative agent, and Apollo Credit Strategies Master Fund Ltd and Apollo A-N Credit Fund (Delaware) L.P. (collectively "Apollo”), affiliates of a beneficial owner of greater than five percent of the Company's common stock and a related party, entered into the Senior Term Loan in the amount of $70.0 million less original issue discount of $2.1 million. Proceeds from the Senior Term Loan were used to fund the Carbon Solutions Acquisition as disclosed in Note 2. The Company also paid debt issuance costs of $2.0 million related to the Senior Term Loan. The Senior Term Loan has a term of 36 months and bears interest at a rate equal to 3-month LIBOR (subject to a 1.5% floor) + 4.75% per annum, which is adjusted quarterly to the current 3-month LIBOR rate, and interest is payable quarterly in arrears. Quarterly principal payments of $6.0 million were required beginning in March 2019, and the Company may prepay the Senior Term Loan at any time without penalty. The Senior Term Loan is secured by substantially all of the assets of the Company, including the cash flows from Tinuum Group and Tinuum Services (collectively, the "Tinuum Entities"), but excluding the Company's equity interests in the Tinuum entities.

The Senior Term Loan includes, among others, the following covenants: (1) Beginning December 31, 2018 and as of the end of each fiscal quarter thereafter, the Company must maintain a minimum cash balance of $5.0 million and shall not permit "expected future net cash flows from the refined coal business" (as defined in the Senior Term Loan) to be less than 1.75 times the outstanding principal amount of the Senior Term Loan; (2) Beginning in January 2019, annual collective dividends and buybacks of Company shares in an aggregate amount, not to exceed $30.0 million, is permitted so long as (a) no default or event of default exists under the Senior Term Loan and (b) expected future net cash flows from the refined coal business as of the end of the most recent fiscal quarter exceed $100.0 million.

Line of Credit

On September 30, 2018, ADA, as borrower, the Company, as guarantor, and a bank (the "Lender") entered into an amendment (the "Twelfth Amendment") to the 2013 Loan and Security Agreement (the "Line of Credit"). The Twelfth Amendment decreased the borrowing availability of the Line of Credit to $5.0 million due to decreased collateral requirements, extended the maturity date of the Line of Credit to September 30, 2020 and permitted the Line of Credit to be used as collateral (in place of restricted cash) for letters of credit ("LC's") up to $5.0 million related to equipment projects and certain other agreements. Under the Twelfth Amendment, there was no minimum balance requirement based on the Company meeting certain conditions and maintaining minimum trailing twelve-month EBITDA (earnings before interest, taxes, depreciation and amortization), as previously defined in the "Eleventh Amendment" to the Line of Credit, of $24.0 million.

On December 7, 2018, ADA, as borrower, the Company, as guarantor, and the Lender entered into an amendment to the Line of

Credit, which provided, among other things, for ADA to be able to enter into the Senior Term Loan as a guarantor so long as

the principal amount of the Senior Term Loan does not exceed $70.0 million. Additionally, the financial covenants in the Line

of Credit were amended and restated to be consistent with the aforementioned Senior Term Loan covenants, including

maintaining a minimum cash balance of $5.0 million.

As of June 30, 2019, there were no outstanding borrowings under the Line of Credit.

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Leases

6 Months Ended

Jun. 30, 2019

Leases [Abstract]

Leases

Leases

The financial statement impact from the adoption of ASC 842 as of January 1, 2019 is due to recording ROU assets and related lease liabilities for operating lease commitments that were outstanding as of December 31, 2018. The Company has elected the transitional practical expedients allowed under ASC 842, which include among other things that the Company need not reassess: (1) whether any existing contracts are or contain leases, inclusive of land easements; (2) the lease classification or lease term for existing leases; and (3) initial direct costs for any existing leases.

ASC 842 defines a lease as a contract, or part of a contract, that conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Control over the use of an identified asset means that an entity has both the right to obtain substantially all of the economic benefits from the use of an identified asset and the right to direct the use of that identified asset. The determination of whether a contract contains a lease may require significant assumptions and judgments.

Historically, Carbon Solutions has used leasing to fund the majority of its capital needs for mining and manufacturing equipment. As of June 30, 2019, the Company has obligations under finance and operating leases in the amounts of $7.4 million and $5.5 million, respectively. ROU assets under finance leases are mining equipment used at the Company’s lignite mine, which provides the key raw materials for manufacturing the Company’s products. ROU assets under operating leases are primarily plant equipment used at the Company’s manufacturing facility, but also include other office equipment, vehicles and office facilities. As of June 30, 2019, the Company has ROU assets, net of accumulated amortization, under finance leases and operating leases of $7.0 million and $5.5 million, respectively.

Certain of the finance and operating leases have options permitting renewals for additional periods and buy-out options. Renewal and buy-out options for applicable leases have not been included in the measurement of the respective lease liabilities as the Company is not reasonably certain that it will exercise the respective option or the lessor does not have an exclusive right to exercise the option.

Variable lease payments represent payments made by a lessee for the right to use an underlying asset that vary because of changes in facts or circumstances occurring after the commence date of a lease other than the passage of time. Variable lease payments that are based on an index or rate, calculated by using the index or rate that exists on the lease commencement date, are included in the measurement of a lease liability. Certain of the Company’s operating leases for office facilities contain variable lease components that are not based on an index or rate, and the Company recognizes these payments as lease expense in the period in which the obligation for those payments is incurred.

The Company calculates lease liabilities based on the present value of lease payments discounted by the rate implicit in the lease or, if not readily determinable, the Company’s incremental borrowing rate.

The Company records lease liabilities and related ROU assets for all leases that have a term of greater than one year. For short-term leases (leases with terms of less than one year), the Company expenses lease payments on a straight-line basis over the lease term.

Finance leases

Leases classified as capital leases under ASC 840 and the related assets and liabilities were carried forward at their carrying values of $8.1 million and $8.2 million, respectively, as of December 31, 2018, and were classified as finance leases as of January 1, 2019. ROU assets under finance leases and finance lease liabilities are included in Property, plant and equipment and Current portion and Long-term portion of borrowings, respectively, in the Condensed Consolidated Balance Sheet as of June 30, 2019.

Finance lease liabilities are subsequently measured by increasing the carrying amount to reflect interest expense on the finance lease liability and reducing the carrying amount of the lease liability to reflect lease payments made during the period. Interest on finance lease liabilities is determined in each period during the lease term as the amount that produces a constant periodic discount rate on the remaining balance of the lease liability. ROU assets under finance leases are amortized over the remaining lease term on a straight-line basis. Interest expense related to finance lease liabilities and amortization of ROU assets under finance leases are included in Interest expense and Depreciation, amortization, depletion and accretion, respectively, in the Condensed Consolidated Statement of Operations for the three and six months endedJune 30, 2019.

Operating leases

Operating lease liabilities as of January 1, 2019 were calculated at the present value, using a discount rate of the lease, of the remaining minimum rental payments (as defined under ASC 840). As the rate implicit in all of the operating leases was not readily determinable, the Company determined its discount rate as of January 1, 2019 based on an estimate of its incremental borrowing rate. This rate was based on the Company’s effective borrowing rate on the Senior Term Loan, considering the collateral requirements contained therein, in effect as of January 1, 2019. ROU assets under operating leases as of January 1, 2019 were determined as the calculated value of the operating lease liabilities less accrued lease payments and accrued lease incentives. As of December 31, 2018, the total amount of accrued lease payments and accrued lease incentives was approximately $0.1 million. ROU assets under operating leases and operating lease liabilities are included in Other long-term assets and Other liabilities and Other long-term liabilities, respectively, in the Condensed Consolidated Balance Sheet as of June 30, 2019.

Operating lease liabilities are subsequently measured at the present value of the lease payments not yet paid discounted using the discount rate for the lease established at the inception date of the lease (or January 1, 2019 for operating leases in effect as of December 31, 2018). ROU assets under operating leases are subsequently measured at the amounts of the related operating lease liability, adjusted for, as applicable, prepaid or accrued lease payments, the remaining balance of any lease incentives received, unamortized initial direct costs and impairment. Lease expense from operating leases is recognized as a single lease cost over the remaining lease term on a straight-line basis. Variable lease payments not included in operating lease liabilities are recognized as expense in the period in which the obligation for those payments is incurred. Lease expense for operating leases for the three and six months endedJune 30, 2019 was $1.0 million and $2.2 million, respectively, of which $1.0 million and $2.1 million, respectively is included in Consumables - cost of revenue, exclusive of depreciation and amortization, and zero and $0.1 million, respectively, is included in General and administrative in the Condensed Consolidated Statement of Operations for the three and six months endedJune 30, 2019.

Lease financial information as of and for the three and six months endedJune 30, 2019 is provided in the following table:

(in thousands)	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
Finance lease cost:
Amortization of right-of-use assets	$	558	$	1,094
Interest on lease liabilities	57		188
Operating lease cost	927		1,856
Short-term lease cost	189		360
Variable lease cost (1)	93		175
Total lease cost	$	1,824	$	3,673
Other Information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases			$	1,901
Finance cash flows from finance leases			$	681
Right-of-use assets obtained in exchange for new operating lease liabilities			$	49
Weighted-average remaining lease term - finance leases			4.7 years
Weighted-average remaining lease term - operating leases			2.4 years
Weighted-average discount rate - finance leases			6.1		%
Weighted-average discount rate - operating leases			8.6		%

(1) Primarily includes common area maintenance, property taxes and insurance payable to lessors.

The following table summarizes the Company’s future lease payments under finance and operating leases as of June 30, 2019:

(in thousands)	Operating Lease Commitments			Finance Lease Commitments			Total Lease Commitments
2019 (remaining six months)	$	1,845		$	867		$	2,712
2020	2,328			1,707			4,035
2021	1,632			1,802			3,434
2022	310			951			1,261
2023	221			951			1,172
Thereafter	—			2,482			2,482
Total lease payments	6,336			8,760			15,096
Less: Imputed interest	(787		)	(1,340		)	(2,127		)
Present value of lease payments	$	5,549		$	7,420		$	12,969

Disclosures under ASC 840

Rent expense for the three and six months endedJune 30, 2018 was $0.1 million and $0.1 million, respectively, and was included in General and administrative expense in the Condensed Consolidated Statement of Operations.

As of December 31, 2018, mining equipment financed under capital leases in the amount of $8.1 million, net of accumulated amortization of $0.1 million, was included in Property, plant and equipment in the Condensed Consolidated Balance Sheet.

The following table summarizes the Company’s future minimum non-cancellable lease payments due under capital and operating leases as of December 31, 2018:

(in thousands)	Operating Lease Commitments		Capital Lease Commitments
2019	$	3,619	$	1,749
2020	2,273		1,707
2021	1,632		1,802
2022	310		951
2023	221		951
Thereafter	—		2,482
Total minimum lease payments	$	8,055	9,642
Less: Imputed interest			(1,475		)
Present value of minimum lease payments			$	8,167

Leases

Leases

The financial statement impact from the adoption of ASC 842 as of January 1, 2019 is due to recording ROU assets and related lease liabilities for operating lease commitments that were outstanding as of December 31, 2018. The Company has elected the transitional practical expedients allowed under ASC 842, which include among other things that the Company need not reassess: (1) whether any existing contracts are or contain leases, inclusive of land easements; (2) the lease classification or lease term for existing leases; and (3) initial direct costs for any existing leases.

ASC 842 defines a lease as a contract, or part of a contract, that conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Control over the use of an identified asset means that an entity has both the right to obtain substantially all of the economic benefits from the use of an identified asset and the right to direct the use of that identified asset. The determination of whether a contract contains a lease may require significant assumptions and judgments.

Historically, Carbon Solutions has used leasing to fund the majority of its capital needs for mining and manufacturing equipment. As of June 30, 2019, the Company has obligations under finance and operating leases in the amounts of $7.4 million and $5.5 million, respectively. ROU assets under finance leases are mining equipment used at the Company’s lignite mine, which provides the key raw materials for manufacturing the Company’s products. ROU assets under operating leases are primarily plant equipment used at the Company’s manufacturing facility, but also include other office equipment, vehicles and office facilities. As of June 30, 2019, the Company has ROU assets, net of accumulated amortization, under finance leases and operating leases of $7.0 million and $5.5 million, respectively.

Certain of the finance and operating leases have options permitting renewals for additional periods and buy-out options. Renewal and buy-out options for applicable leases have not been included in the measurement of the respective lease liabilities as the Company is not reasonably certain that it will exercise the respective option or the lessor does not have an exclusive right to exercise the option.

Variable lease payments represent payments made by a lessee for the right to use an underlying asset that vary because of changes in facts or circumstances occurring after the commence date of a lease other than the passage of time. Variable lease payments that are based on an index or rate, calculated by using the index or rate that exists on the lease commencement date, are included in the measurement of a lease liability. Certain of the Company’s operating leases for office facilities contain variable lease components that are not based on an index or rate, and the Company recognizes these payments as lease expense in the period in which the obligation for those payments is incurred.

The Company calculates lease liabilities based on the present value of lease payments discounted by the rate implicit in the lease or, if not readily determinable, the Company’s incremental borrowing rate.

The Company records lease liabilities and related ROU assets for all leases that have a term of greater than one year. For short-term leases (leases with terms of less than one year), the Company expenses lease payments on a straight-line basis over the lease term.

Finance leases

Leases classified as capital leases under ASC 840 and the related assets and liabilities were carried forward at their carrying values of $8.1 million and $8.2 million, respectively, as of December 31, 2018, and were classified as finance leases as of January 1, 2019. ROU assets under finance leases and finance lease liabilities are included in Property, plant and equipment and Current portion and Long-term portion of borrowings, respectively, in the Condensed Consolidated Balance Sheet as of June 30, 2019.

Finance lease liabilities are subsequently measured by increasing the carrying amount to reflect interest expense on the finance lease liability and reducing the carrying amount of the lease liability to reflect lease payments made during the period. Interest on finance lease liabilities is determined in each period during the lease term as the amount that produces a constant periodic discount rate on the remaining balance of the lease liability. ROU assets under finance leases are amortized over the remaining lease term on a straight-line basis. Interest expense related to finance lease liabilities and amortization of ROU assets under finance leases are included in Interest expense and Depreciation, amortization, depletion and accretion, respectively, in the Condensed Consolidated Statement of Operations for the three and six months endedJune 30, 2019.

Operating leases

Operating lease liabilities as of January 1, 2019 were calculated at the present value, using a discount rate of the lease, of the remaining minimum rental payments (as defined under ASC 840). As the rate implicit in all of the operating leases was not readily determinable, the Company determined its discount rate as of January 1, 2019 based on an estimate of its incremental borrowing rate. This rate was based on the Company’s effective borrowing rate on the Senior Term Loan, considering the collateral requirements contained therein, in effect as of January 1, 2019. ROU assets under operating leases as of January 1, 2019 were determined as the calculated value of the operating lease liabilities less accrued lease payments and accrued lease incentives. As of December 31, 2018, the total amount of accrued lease payments and accrued lease incentives was approximately $0.1 million. ROU assets under operating leases and operating lease liabilities are included in Other long-term assets and Other liabilities and Other long-term liabilities, respectively, in the Condensed Consolidated Balance Sheet as of June 30, 2019.

Operating lease liabilities are subsequently measured at the present value of the lease payments not yet paid discounted using the discount rate for the lease established at the inception date of the lease (or January 1, 2019 for operating leases in effect as of December 31, 2018). ROU assets under operating leases are subsequently measured at the amounts of the related operating lease liability, adjusted for, as applicable, prepaid or accrued lease payments, the remaining balance of any lease incentives received, unamortized initial direct costs and impairment. Lease expense from operating leases is recognized as a single lease cost over the remaining lease term on a straight-line basis. Variable lease payments not included in operating lease liabilities are recognized as expense in the period in which the obligation for those payments is incurred. Lease expense for operating leases for the three and six months endedJune 30, 2019 was $1.0 million and $2.2 million, respectively, of which $1.0 million and $2.1 million, respectively is included in Consumables - cost of revenue, exclusive of depreciation and amortization, and zero and $0.1 million, respectively, is included in General and administrative in the Condensed Consolidated Statement of Operations for the three and six months endedJune 30, 2019.

Lease financial information as of and for the three and six months endedJune 30, 2019 is provided in the following table:

(in thousands)	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
Finance lease cost:
Amortization of right-of-use assets	$	558	$	1,094
Interest on lease liabilities	57		188
Operating lease cost	927		1,856
Short-term lease cost	189		360
Variable lease cost (1)	93		175
Total lease cost	$	1,824	$	3,673
Other Information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases			$	1,901
Finance cash flows from finance leases			$	681
Right-of-use assets obtained in exchange for new operating lease liabilities			$	49
Weighted-average remaining lease term - finance leases			4.7 years
Weighted-average remaining lease term - operating leases			2.4 years
Weighted-average discount rate - finance leases			6.1		%
Weighted-average discount rate - operating leases			8.6		%

(1) Primarily includes common area maintenance, property taxes and insurance payable to lessors.

The following table summarizes the Company’s future lease payments under finance and operating leases as of June 30, 2019:

(in thousands)	Operating Lease Commitments			Finance Lease Commitments			Total Lease Commitments
2019 (remaining six months)	$	1,845		$	867		$	2,712
2020	2,328			1,707			4,035
2021	1,632			1,802			3,434
2022	310			951			1,261
2023	221			951			1,172
Thereafter	—			2,482			2,482
Total lease payments	6,336			8,760			15,096
Less: Imputed interest	(787		)	(1,340		)	(2,127		)
Present value of lease payments	$	5,549		$	7,420		$	12,969

Disclosures under ASC 840

Rent expense for the three and six months endedJune 30, 2018 was $0.1 million and $0.1 million, respectively, and was included in General and administrative expense in the Condensed Consolidated Statement of Operations.

As of December 31, 2018, mining equipment financed under capital leases in the amount of $8.1 million, net of accumulated amortization of $0.1 million, was included in Property, plant and equipment in the Condensed Consolidated Balance Sheet.

The following table summarizes the Company’s future minimum non-cancellable lease payments due under capital and operating leases as of December 31, 2018:

(in thousands)	Operating Lease Commitments		Capital Lease Commitments
2019	$	3,619	$	1,749
2020	2,273		1,707
2021	1,632		1,802
2022	310		951
2023	221		951
Thereafter	—		2,482
Total minimum lease payments	$	8,055	9,642
Less: Imputed interest			(1,475		)
Present value of minimum lease payments			$	8,167

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Revenues

6 Months Ended

Jun. 30, 2019

Revenue from Contract with Customer [Abstract]

Revenues

Revenues

Contract Assets and Liabilities

Contract assets are comprised of unbilled receivables and are included in Receivables, net in the Condensed Consolidated Balance Sheet. Unbilled receivables represent a conditional right to consideration in exchange for goods or services transferred to a customer.

Trade receivables represent an unconditional right to consideration in exchange for goods or services transferred to a customer. The Company invoices its customers in accordance with the terms of the contract. Credit terms are generally net 30 from the date of invoice. The timing between the satisfaction of performance obligations and when payment is due from the customer is generally not significant. The Company records allowances for doubtful trade receivables when it is probable that the balances will not be collected.

Contract liabilities are comprised of deferred revenue, which represents an obligation to transfer goods or services to a customer for which the Company has received consideration from the customer and, if deliverable within one year or less, is included in Other current liabilities in the Condensed Consolidated Balance Sheet and, if deliverable outside of one year, is included in Other long-term liabilities in the Condensed Consolidated Balance Sheet.

Trade receivables, net

The following table shows the components of Trade receivables, net:

	As of
(in thousands)	June 30, 2019			December 31, 2018
Trade receivables	$	6,173		$	10,121
Less: Allowance for doubtful accounts	(567		)	(567		)
Trade receivables, net	$	5,606		$	9,554

For the three and six months endedJune 30, 2019, the Company recognized zero provision for bad debt expense, respectively, related to specific accounts whose ultimate collection was in doubt. During the three and six months endedJune 30, 2018, the Company settled a previously recorded commitment for additional work related to a contract with a customer, which resulted in a reduction to Equipment sales cost of revenue, exclusive of depreciation and amortization of $0.3 million and bad debt expense of $0.2 million. Bad debt expense is included within the General and administrative line item in the Consolidated Statements of Operations.

Disaggregation of Revenue

During the three and six months endedJune 30, 2019 and 2018, all performance obligations related to revenues recognized were satisfied at a point in time. The Company disaggregates its revenues by its major components as well as between its two operating segments, which are further discussed in Note 13 to the condensed consolidated financial statements. The following tables disaggregate revenues by major source for the three and six months endedJune 30, 2019 and 2018 (in thousands):

	Three Months Ended June 30, 2019								Six Months Ended June 30, 2019
	Segment								Segment
	PGI		RC		Other		Total		PGI		RC		Other		Total
Revenue component
Consumables	$	11,049	$	—	$	337	$	11,386	$	25,602	$	—	$	893	$	26,495
License royalties, related party	—		4,191		—		4,191		—		8,411		—		8,411
Revenues from customers	11,049		4,191		337		15,577		25,602		8,411		893		34,906
Earnings from equity method investments	—		20,935		—		20,935		—		42,625		—		42,625
Total revenues and earnings from equity method investments	$	11,049	$	25,126	$	337	$	36,512	$	25,602	$	51,036	$	893	$	77,531

	Three Months Ended June 30, 2018								Six Months Ended June 30, 2018
	Segment								Segment
	PGI		RC		Other		Total		PGI		RC		Other		Total
Revenue component
Consumables	$	726	$	—	$	—	$	726	$	1,347	$	—	$	—	$	1,347
License royalties, related party	—		3,523		—		3,523		—		6,753		—		6,753
Other	24		—		—		24		72		—		—		72
Revenues from customers	750		3,523		—		4,273		1,419		6,753		—		8,172
Earnings from equity method investments	—		15,889		—		15,889		—		28,142		—		28,142
Total revenues and earnings from equity method investments	$	750	$	19,412	$	—	$	20,162	$	1,419	$	34,895	$	—	$	36,314

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Legal Proceedings

The Company is from time to time subject to, and is presently involved in, various pending or threatened legal actions and proceedings, including those that arise in the ordinary course of its business. Such matters are subject to many uncertainties and to outcomes, the financial impacts of which are not predictable with assurance and that may not be known for extended periods of time. The Company records a liability in its consolidated financial statements for costs related to claims, settlements, and judgments where management has assessed that a loss is probable and an amount can be reasonably estimated. There were no significant legal proceedings as of June 30, 2019.

Restricted Cash

As of June 30, 2019 and December 31, 2018, the Company had long-term restricted cash of $5.0 million and $5.2 million, respectively, which primarily consisted of minimum cash balance requirements under the Senior Term Loan. As of June 30, 2019 and December 31, 2018, the Company had short-term restricted cash of zero and $0.1 million, respectively, related to other commitments.

Tinuum Group

The Company also has certain limited obligations contingent upon future events in connection with the activities of Tinuum Group. The Company, NexGen and two entities affiliated with NexGen have provided an affiliate of the Goldman Sachs Group, Inc. with limited guaranties (the "Tinuum Group Party Guaranties") related to certain losses it may suffer as a result of inaccuracies or breach of representations and covenants. The Company also is a party to a contribution agreement with NexGen under which any party called upon to pay on a Tinuum Group Party Guaranty is entitled to receive contributions from the other party equal to 50% of the amount paid. No liability or expense provision has been recorded by the Company related to this contingent obligation as the Company believes that it is not probable that a loss will occur with respect to Tinuum Group Party Guaranties.

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Stockholders' Equity

6 Months Ended

Jun. 30, 2019

Equity [Abstract]

Stockholders' Equity

Stockholders' Equity

Stock Repurchase Programs

In November 2018, the Company's Board of Directors (the "Board") authorized the Company to purchase up to $20.0 million of its outstanding common stock. This stock repurchase program will remain in effect until December 31, 2019 unless otherwise modified by the Board. Previously, the Board had authorized the Company to purchase up to $20.0 million of its outstanding common stock under a separate repurchase program that was in effect until July 31, 2018.

For the three and six months endedJune 30, 2019, under the respective stock repurchase program authorized by the Board,

the Company purchased 184,715 and 248,591 shares of its common stock for cash of $2.1 million and $2.8 million, respectively, inclusive of commissions and fees. For the three and six months endedJune 30, 2018, under the respective stock repurchase program authorized by the Board, the Company purchased 676,201 and 825,418 shares of its common stock for cash of $7.5 million and $9.1 million, respectively, inclusive of commissions and fees.

Quarterly Cash Dividend

Dividends per share declared by the Board, and paid quarterly on all outstanding shares of common stock during the three and six months endedJune 30, 2019 and 2018 were as follows:

	2019			2018
	Per share		Date paid	Per share		Date paid
Dividends declared during quarter ended:
March 31	$	0.25	March 7, 2019	$	0.25	March 8, 2018
June 30	$	0.25	June 7, 2019	$	0.25	June 8, 2018

A portion of the dividends declared remains accrued subsequent to the payment dates and represents dividends accumulated on nonvested shares of common stock held by employees and directors of the Company that contain forfeitable dividend rights that are not payable until the underlying shares of common stock vest. These amounts are included in both Other current liabilities and Other long-term liabilities on the Condensed Consolidated Balance Sheet as of June 30, 2019.

Tax Asset Protection Plan

U.S. federal income tax rules, and Section 382 of the Internal Revenue Code in particular, could substantially limit the use of net operating losses and other tax assets if the Company experiences an "ownership change" (as defined in the Internal Revenue Code). In general, an ownership change occurs if there is a cumulative change in the ownership of the Company by "5 percent stockholders" that exceeds 50 percentage points over a rolling three-year period.

On May 5, 2017, the Board approved the declaration of a dividend of rights to purchase Series B Junior Participating Preferred Stock for each outstanding share of common stock as part of a tax asset protection plan (the "Tax Asset Protection Plan") designed to protect the Company’s ability to utilize its net operating losses and tax credits. The Tax Asset Protection Plan is intended to act as a deterrent to any person acquiring beneficial ownership of 4.99% or more of the Company’s outstanding common stock.

On April 6, 2018, the Board approved the First Amendment to the Tax Asset Protection Plan (the "First Amendment") that amends the Tax Asset Protection Plan dated May 5, 2017. The First Amendment amended the definition of "Final Expiration Date" under the Tax Asset Protection Plan to extend the duration of the TAPP and makes associated changes in connection therewith. At the Company's 2018 annual meeting of stockholders, the Company's stockholders approved the First Amendment, thus the Final Expiration Date will be the close of business on December 31, 2019, which was subsequently extended, as described below.

On April 5, 2019, the Board approved the Second Amendment to the Tax Asset Protection Plan (the "Second Amendment") that amends the Tax Asset Protection Plan dated May 5, 2017, as amended by the First Amendment to Tax Asset Protection Plan, dated April 6, 2018 (the “TAPP”) between the Company and the Rights Agent. The Second Amendment amends the definition of the “Final Expiration Date” under the TAPP to extend the duration of the TAPP and makes associated changes in connection therewith. At the Company's 2019 annual meeting of stockholders, the Company's stockholders approved the Second Amendment, thus the Final Expiration Date will be the close of business on December 31, 2020.

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Stock-Based Compensation

6 Months Ended

Jun. 30, 2019

Share-based Payment Arrangement [Abstract]

Stock-Based Compensation

Stock-Based Compensation

The Company grants equity-based awards to employees, non-employee directors, and consultants that may include, but are not limited to RSA's, restricted stock units ("RSU's") and stock options. Stock-based compensation expense related to manufacturing employees and administrative employees is included within the Cost of goods sold and Payroll and benefits line items, respectively, in the Condensed Consolidated Statements of Operations. Stock-based compensation expense related to non-employee directors and consultants is included within the General and administrative line item in the Condensed Consolidated Statements of Operations.

Total stock-based compensation expense for the three and six months endedJune 30, 2019 and 2018 was as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2019		2018		2019		2018
RSA expense	$	541	$	675	$	858	$	952
Stock option expense	—		—		—		58
Total stock-based compensation expense	$	541	$	675	$	858	$	1,010

The amount of unrecognized compensation cost as of June 30, 2019, and the expected weighted-average period over which the cost will be recognized is as follows:

	As of June 30, 2019
(in thousands)	Unrecognized Compensation Cost		Expected Weighted- Average Period of Recognition (in years)
RSA expense	$	3,632	1.97
Total unrecognized stock-based compensation expense	$	3,632	1.97

Restricted Stock

Restricted stock is typically granted with vesting terms of three years. The fair value of RSA's and RSU's is determined based on the closing price of the Company’s common stock on the authorization date of the grant multiplied by the number of shares subject to the stock award. Compensation expense for RSA's is generally recognized on a straight-line basis over the entire vesting period. Compensation expense for RSU's is generally recognized on a straight-line basis over the service period of the award.

A summary of RSA and RSU activity under the Company's various stock compensation plans for the six months ended June 30, 2019 is presented below:

	Restricted Stock			Weighted-Average Grant Date Fair Value
(in thousands, except for share and per share amounts)	Awards		Units	RSA's		RSU's
Non-vested at January 1, 2019	280,852		20,000	$	9.92	$	10.52
Granted	252,590		—	$	10.91	$	—
Vested	(77,992	)	—	$	9.51	$	—
Forfeited	(2,412	)	—	$	10.92	$	—
Non-vested at June 30, 2019	453,038		20,000	$	10.54	$	10.52

Stock Options

Stock options generally vest over three years or upon satisfaction of performance-based conditions and have a contractual limit of five years from the date of grant to exercise. The fair value of stock options granted is determined on the date of grant using the Black-Scholes option pricing model and the related expense is recognized on a straight-line basis over the entire vesting period.

A summary of stock option activity for the six months ended June 30, 2019 is presented below:

	Number of Options Outstanding and Exercisable		Weighted-Average Exercise Price		Aggregate Intrinsic Value (in thousands)		Weighted-Average Remaining Contractual Term (in years)
Options outstanding, January 1, 2019	529,780		$	12.23
Options granted	—		—
Options exercised	—		—
Options expired / forfeited	(10,000	)	19.28
Options outstanding, June 30, 2019	519,780		$	12.09	$	734	0.98
Options exercisable, June 30, 2019	519,780		$	12.09	$	734	0.98

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Supplemental Financial Information

6 Months Ended

Jun. 30, 2019

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Supplemental Financial Information

Supplemental Financial Information

Supplemental Balance Sheet Information

The following table summarizes the components of Prepaid expenses and other assets and Other long-term assets, net as presented in the Condensed Consolidated Balance Sheets:

	As of
(in thousands)	June 30, 2019		December 31, 2018
Prepaid expenses and other assets:
Prepaid expenses	$	1,904	$	1,233
Prepaid income taxes	1,970		2,940
Other	1,724		1,397
	$	5,598	$	5,570
Other long-term assets:
Highview Investment	$	552	$	552
Spare parts	3,222		3,278
Mine development costs, net	3,167		2,531
Mine reclamation asset, net	2,390		—
Prepaid royalty expense, long-term	955		955
Right of use assets, operating leases, net	5,488		—
Other long-term assets	779		677
	$	16,553	$	7,993

Spare parts include critical spares required to support plant operations. Parts and supply costs are determined using the lower of cost or estimated replacement cost. Parts are recorded as maintenance expenses in the period in which they are consumed.

Mine development costs include acquisition costs, the cost of other development work and mitigation costs related to the Company's mining operations which are depleted over the estimated life of the related mine reserves, which is 18 years. The Company performs an evaluation of the recoverability of the carrying value of mine development costs to determine if facts and circumstances indicate that their carrying value may be impaired and if any adjustment is warranted. There were no indicators of impairment as of June 30, 2019. Mine reclamation asset represents an asset retirement obligation asset and is depreciated over the estimated life of the mine, which is 18 years.

The Company holds a long-term investment (the "Highview Investment") in Highview Enterprises Limited ("Highview"), a London, England based developmental stage company specializing in power storage. In November 2014, the Company acquired an 8% ownership interest in the common stock of Highview for $2.8 million in cash. The Company accounts for the Highview Investment as an investment recorded at cost, less impairment, plus or minus observable changes in price for identical or similar investments of the same issuer.

The Highview Investment is evaluated for indicators of impairment such as an event or change in circumstances that may have a significant adverse effect on the fair value of the investment. There were no changes to the carrying value of the Highview Investment for the three and six months endedJune 30, 2019 as there were no indicators of impairment or observable price changes for equity issued by Highview.

The following table details the components of Other current liabilities and Other long-term liabilities as presented in the Condensed Consolidated Balance Sheets:

	As of
(in thousands)	June 30, 2019		December 31, 2018
Other current liabilities:
Current portion of operating lease obligations	$	2,725	$	—
Accrued interest	996		407
Income and other taxes payable	909		479
Other	922		1,252
	$	5,552	$	2,138
Other long-term liabilities:
Operating lease obligations, long-term	$	2,824	$	—
Mine reclamation liability	2,490		624
Other long-term liabilities	135		316
	$	5,449	$	940

Supplemental Condensed Consolidated Statements of Operations Information

The following table details the components of Interest expense in the Condensed Consolidated Statements of Operations:

	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2019		2018		2019		2018
Interest on Senior Term Loan	$	1,134	$	—	$	2,404	$	—
Debt discount and debt issuance costs	470		—		851		—
453A interest	326		404		648		740
Other	57		8		188		8
	$	1,987	$	412	$	4,091	$	748

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Income Taxes

6 Months Ended

Jun. 30, 2019

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

For the three and six months endedJune 30, 2019 and 2018, the Company's income tax expense and effective tax rates based on forecasted pre-tax income were:

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands, except for rate)	2019			2018			2019			2018
Income tax expense (benefit)	$	6,634		$	(1,349	)	$	8,333		$	1,220
Effective tax rate	45		%	(10		)%	27		%	5		%

The effective tax rate for the three and six months endedJune 30, 2019 was different from the federal statutory rate primarily due to net increases of $4.8 million and $0.8 million during those periods, respectively, in the valuation allowance against deferred tax assets, and these changes were primarily a result of a change in forecasts of future taxable income as of June 30, 2019 in both the PGI and RC segments. In addition, the effective rate for both the three and six months endedJune 30, 2019 was increased by state income tax expense, net of federal benefit.

The Company assesses the valuation allowance recorded against deferred tax assets at each reporting date. The determination of whether a valuation allowance for deferred tax assets is appropriate requires the evaluation of positive and negative evidence that can be objectively verified. Consideration must be given to all sources of taxable income available to realize the deferred tax asset, including, as applicable, the future reversal of existing temporary differences, future taxable income forecasts exclusive of the reversal of temporary differences and carryforwards, taxable income in carryback years and tax planning strategies. In estimating income taxes, the Company assesses the relative merits and risks of the appropriate income tax treatment of transactions taking into account statutory, judicial, and regulatory guidance.

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Business Segment Information

6 Months Ended

Jun. 30, 2019

Segment Reporting [Abstract]

Business Segment Information

Business Segment Information

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by a company's chief operating decision maker ("CODM"), or a decision-making group, in deciding how to allocate resources and in assessing financial performance. As of June 30, 2019, the Company's CODM was the Company's CEO. The Company's operating and reportable segments are identified by products and services provided.

As of June 30, 2019, the Company has two reportable segments: (1) Refined Coal ("RC"); and (2) Power Generation and Industrials ("PGI").

The business segment measurements provided to and evaluated by the CODM are computed in accordance with the principles listed below:

• The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies in the 2018 Form 10-K.

• Segment revenues include equity method earnings and losses from the Company's equity method investments.

• Segment operating income (loss) includes segment revenues and allocation of certain "Corporate general and administrative expenses," which include Payroll and benefits, Legal and professional fees and General and administrative.

• RC segment operating income includes interest expense directly attributable to the RC segment.

As of June 30, 2019 and December 31, 2018, substantially all of the Company's material assets are located in the U.S. and all significant customers are U.S. companies. The following table presents the Company's operating segment results for the three and six months endedJune 30, 2019 and 2018:

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2019			2018			2019			2018
Revenues:
Refined Coal:
Earnings in equity method investments	$	20,935		$	15,889		$	42,625		$	28,142
Royalties, related party	4,191			3,523			8,411			6,753
	25,126			19,412			51,036			34,895
Power Generation and Industrials:
Consumables	11,049			726			25,602			1,347
Other	—			24			—			72
	11,049			750			25,602			1,419
Total segment reporting revenues	36,175			20,162			76,638			36,314
Adjustments to reconcile to reported revenues:
Earnings in equity method investments	(20,935		)	(15,889		)	(42,625		)	(28,142		)
Corporate and other	337			—			893			—
Total reported revenues	$	15,577		$	4,273		$	34,906		$	8,172
Segment operating income (loss):
Refined Coal (1)	$	24,596		$	18,275		$	49,979		$	32,977
Power Generation and Industrials (2)	(3,862		)	(1,387		)	(7,324		)	(2,325		)
Total segment operating income	$	20,734		$	16,888		$	42,655		$	30,652

(1) Included in RC segment operating income for the three and six months endedJune 30, 2019 and 2018 is 453A interest expense of $0.3 million and $0.6 million and $0.4 million and $0.7 million, respectively.

(2) Included in PGI segment operating loss for the three and six months endedJune 30, 2019 was $1.3 million and $4.7 million, respectively, of costs recognized as a result of the step-up in inventory fair value recorded from the Carbon Solutions Acquisition. Also included in PGI segment operating loss for the three and six months endedJune 30, 2019 was $0.7 million and $2.6 million, respectively, of depreciation, amortization, and depletion expense on mine and plant long-lived assets.

A reconciliation of reportable segment operating income to the Company's consolidated income before income tax expense is as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2019			2018			2019			2018
Total reported segment operating income	$	20,734		$	16,888		42,655			30,652
Other operating loss	(353		)	—			(751		)	—
	20,381			16,888			41,904			30,652
Adjustments to reconcile to income before income tax expense attributable to the Company:
Corporate payroll and benefits	(804		)	(950		)	(1,236		)	(2,097		)
Corporate legal and professional fees	(1,556		)	(1,140		)	(3,517		)	(2,588		)
Corporate general and administrative	(1,715		)	(884		)	(3,149		)	(1,825		)
Corporate depreciation and amortization	(7		)	(22		)	(20		)	(74		)
Corporate interest (expense) income, net	(1,604		)	(8		)	(3,255		)	(8		)
Other income (expense), net	53			58			122			113
Income before income tax expense	$	14,748		$	13,942		$	30,849		$	24,173

Corporate general and administrative expenses include certain costs that benefit the business as a whole but are not directly related to one of the Company's segments. Such costs include, but are not limited to, accounting and human resources staff, information systems costs, legal fees, facility costs, audit fees and corporate governance expenses. 

A reconciliation of reportable segment assets to the Company's consolidated assets is as follows:

	As of
(in thousands)	June 30, 2019		December 31, 2018
Assets:
Refined Coal (1)	$	53,131	$	11,468
Power Generation and Industrials	82,611		85,786
Total segment assets	135,742		97,254
All Other and Corporate (2)	51,330		62,410
Consolidated	$	187,072	$	159,664

(1) Includes $48.4 million and $6.6 million of investments in equity method investees, respectively.

(2) Includes the Company's deferred tax assets.

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Fair Value Measurements

6 Months Ended

Jun. 30, 2019

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

Fair value of financial instruments

The carrying amounts of financial instruments, including cash, cash equivalents and restricted cash, accounts receivable, accounts payable and accrued expenses, approximate fair value due to the short maturity of these instruments. Accordingly, these instruments are not presented in the table below. The following table provides the estimated fair values of the remaining financial instruments:

	As of June 30, 2019				As of December 31, 2018
(in thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value
Financial Instruments:
Highview Investment	$	552	$	552	$	552	$	552
Highview Obligation	$	213	$	213	$	213	$	213

Concentration of credit risk

The Company's financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents. The Company holds cash and cash equivalents at three financial institutions as of June 30, 2019. If an institution was unable to perform its obligations, the Company would be at risk regarding the amount of cash and investments in excess of the Federal Deposit Insurance Corporation limits (currently $250 thousand) that would be returned to the Company.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

As of June 30, 2019 and December 31, 2018, the Company had no financial instruments carried and measured at fair value on a recurring basis.

Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

The Company completed the Carbon Solutions Acquisition, in which the fair value of the purchase consideration totaled $66.5 million. The Company's allocation of purchase consideration to the estimated fair values of the assets acquired and liabilities assumed is disclosed in Note 2.

The fair value measurements represent Level 3 measurements as they are based on significant inputs not observable in the market.

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Restructuring

6 Months Ended

Jun. 30, 2019

Restructuring and Related Activities [Abstract]

Restructuring

Restructuring

In December 2018, the Company recorded restructuring charges in connection with the departures of certain executives of Carbon Solutions in conjunction with the Carbon Solutions Acquisition. As part of the Carbon Solutions Acquisition, the Company also assumed a salary severance liability for an additional executive of Carbon Solutions in the amount of $0.6 million. Additionally, the Company recorded restructuring charges in 2018 in connection with a reduction in force that commenced in May 2018 as part of the Company's further alignment of the business with strategic objectives, which included the departure of certain executive officers. These charges related to cash severance arrangements with departing employees and executives, as well as stock-based compensation charges related to the acceleration of vesting of certain stock awards.

A summary of the net pretax charges, incurred by segment, is as follows:

		Pretax Charge
(in thousands, except employee data)	Approximate Number of Employees	Refined Coal (1)		Power Generation and Industrials (1)		All Other and Corporate (1)			Total
Three Months Ended June 30, 2019
Restructuring charges	—	$	—	$	—	$	—		$	—
Changes in estimates		—		—		—			—
Total pretax charge, net of reversals		$	—	$	—	$	—		$	—
Six Months Ended June 30, 2019
Restructuring charges	1	$	—	$	—	$	172		$	172
Changes in estimates		—		—		(104		)	(104		)
Total pretax charge, net of reversals		$	—	$	—	$	68		$	68
Three Months Ended June 30, 2018
Restructuring charges	6	$	280	$	496	$	123		$	899
Changes in estimates		—		—		—			—
Total pretax charge, net of reversals		$	280	$	496	$	123		$	899
Six Months Ended June 30, 2018
Restructuring charges	6	$	280	$	496	$	123		$	899
Changes in estimates		—		—		—			—
Total pretax charge, net of reversals		$	280	$	496	$	123		$	899

(1) Restructuring charges were allocated consistent with the allocations made in Note 13 - Business Segment Information

The following table summarizes the Company's change in restructuring accruals for the six months ended June 30, 2019:

(in thousands)	Employee Severance
Remaining accrual as of December 31, 2018	$	2,208
Expense provision	172
Cash payments and other	(1,293		)
Change in estimates	(104		)
Remaining accrual as of June 30, 2019	$	983

Restructuring accruals are included within the Accrued payroll and related liabilities line item in the Condensed Consolidated Balance Sheets. Restructuring expenses are included within the Payroll and benefits line item in the Condensed Consolidated Statements of Operations.

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Subsequent Events

6 Months Ended

Jun. 30, 2019

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

Unless disclosed elsewhere within the notes to the Condensed Consolidated Financial Statements, the following are the significant matters that occurred subsequent to June 30, 2019.

Dividends

On August 5, 2019, the Company's Board declared a quarterly dividend of $0.25 per share of common stock, which is payable on September 6, 2019 to stockholders of record as of the close of business on August 19, 2019. 

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Basis of Presentation (Policies)

6 Months Ended

Jun. 30, 2019

Accounting Policies [Abstract]

Basis of Presentation

The accompanying Condensed Consolidated Financial Statements of ADES are unaudited and have been prepared in conformity with accounting principles generally accepted in the United States ("U.S. GAAP") and with Article 10 of Regulation S-X of the Securities and Exchange Commission. In compliance with those instructions, certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted.

The unaudited Condensed Consolidated Financial Statements of ADES in this quarterly report ("Quarterly Report") are presented on a consolidated basis and include ADES and its wholly-owned subsidiaries (collectively, the "Company"). Also included within the unaudited Condensed Consolidated Financial Statements are the Company's unconsolidated equity investments; Tinuum Group, Tinuum Services, LLC ("Tinuum Services"), and GWN Manager, LLC ("GWN Manager"), which are accounted for under the equity method of accounting, and Highview Enterprises Limited (the "Highview Investment"), which is accounted for in accordance with U.S. GAAP applicable to equity investments that do not qualify for the equity method of accounting.

Results of operations and cash flows for the interim periods are not necessarily indicative of the results that may be expected for the entire year. All significant intercompany transactions and accounts were eliminated for all periods presented in this Quarterly Report.

In the opinion of management, these Condensed Consolidated Financial Statements include all normal and recurring adjustments considered necessary for a fair presentation of the results of operations, financial position, stockholders' equity and cash flows for the interim periods presented. These Condensed Consolidated Financial Statements of ADES should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 (the "2018 Form 10-K").

Earnings Per Share

Basic earnings per share is computed using the two-class method, which is an earnings allocation formula that determines earnings per share for common stock and any participating securities according to dividend and participating rights in undistributed earnings. The Company's restricted stock awards ("RSA's") granted prior to December 31, 2016 contain non-forfeitable rights to dividends or dividend equivalents and are deemed to be participating securities. RSA's granted subsequent to December 31, 2016 do not contain non-forfeitable rights to dividends and are not deemed to be participating securities.

Under the two-class method, net income for the period is allocated between common stockholders and the holders of the participating securities based on the weighted-average number of common shares outstanding during the period, excluding participating, unvested RSA's ("common shares"), and the weighted-average number of participating unvested RSA's outstanding during the period, respectively. The allocated, undistributed income for the period is then divided by the weighted-average number of common shares and participating, unvested RSA's outstanding during the period to arrive at basic earnings per common share and participating security for the period, respectively. Pursuant to U.S. GAAP, the Company has elected not to separately present basic or diluted earnings per share attributable to participating securities in the Condensed Consolidated Statements of Operations.

Diluted earnings per share is computed in a manner consistent with that of basic earnings per share, while considering other potentially dilutive securities. Potentially dilutive securities consist of both unvested, participating and non-participating RSA's, as well as outstanding options to purchase common stock ("Stock Options") and contingent performance stock units ("PSU's") (collectively, "Potential dilutive shares"). The dilutive effect, if any, for non-participating RSA's, Stock Options and PSU's is determined using the greater of dilution as calculated under the treasury stock method or the two-class method. Potential dilutive shares are excluded from diluted earnings per share when their effect is anti-dilutive. When there is a net loss for a period, all Potential dilutive shares are anti-dilutive and are excluded from the calculation of diluted loss per share for that period.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. There have been no changes in the Company’s critical accounting estimates from those that were disclosed in the 2018 Form 10-K. Actual results could differ from these estimates.

Risks and Uncertainties

The Company’s earnings are significantly affected by equity earnings it receives from Tinuum Group. As of June 30, 2019, Tinuum Group has 21 invested RC facilities of which 11 are leased to a single customer. A majority of these leases are periodically renewed and the loss of this single customer or material modification to the lease terms of these facilities by this customer would have a significant adverse impact on Tinuum Group's financial position, results of operations and cash flows, which in turn would have material adverse impact on the Company’s financial position, results of operations and cash flows.

The Company's revenues, sales volumes, earnings and cash flows are significantly affected by prices of competing power generation sources such as natural gas and renewable energy. Low natural gas prices make it a competitive alternative to coal-fired power generation and therefore, coal consumption may be reduced, which reduces the demand for our products. In addition, coal consumption and demand for our products is also affected by the demand for electricity, which is higher in the warmer and colder months of the year. Abnormal temperatures during the summer and winter months may significantly reduce coal consumption and thus the demand for our products.

The Company's financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents. The Company holds cash and cash equivalents at three financial institutions as of June 30, 2019. If an institution was unable to perform its obligations, the Company would be at risk regarding the amount of cash and investments in excess of the Federal Deposit Insurance Corporation limits (currently $250 thousand) that would be returned to the Company.

Reclassifications

Certain balances have been reclassified from the prior year to conform to the current year presentation. No reclassifications have any impact to income before income taxes or net income.

New Accounting Guidance

Recently Adopted

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) ("ASU 2016-02"), which created ASC Topic 842 - Leases ("ASC 842"), requiring lessees to recognize a right of use asset and related lease liability for those leases classified as operating leases at the commencement date and have lease terms of more than 12 months. ASC 842 retains the distinction between finance leases (formerly defined as capital leases) and operating leases. On January 1, 2019, the Company adopted ASC 842 retrospectively beginning with the date of adoption. Under this adoption method, the application date is the beginning of the reporting period in which the Company first applies the provisions of ASC 842. Accordingly, the Company’s reporting for the comparative periods presented in the financial statements and related disclosures continues in accordance with legacy U.S. GAAP under ASC Topic 840 - Leases ("ASC 840"). The adoption of ASC 842 had no impact to the opening balance of retained earnings.

As of the adoption date, the Company recorded $7.0 million and $7.0 million of "right of use" ("ROU") assets and incremental lease liabilities, respectively. The cumulative effect of the change from the adoption of ASC 842 to the Consolidated Balance Sheet as of January 1, 2019 is shown in the table that follows:

	Balance as of		Impact of		Balance as of
(in thousands)	December 31, 2018		Adoption		January 1, 2019
Balance Sheet
Other long-term assets	$	7,993	$	6,956	$	14,949
Other liabilities	$	50,058	$	3,085	$	53,143
Other long-term liabilities	$	940	$	3,871	$	4,811

See Note 6 for additional disclosures required under ASC 842 in the year of adoption.

As of January 1, 2019, Tinuum Group adopted ASU 2016-02 and ASU 2014-09 (Topic 606), Revenue from Contracts with Customers ("ASU 2014-09"). As a result of Tinuum Group’s adoption of these pronouncements, the Company recorded a cumulative effect increase of $28.8 million to Retained earnings as of January 1, 2019, based on the Company's ownership percentage of Tinuum Group's cumulative effect adjustment, and increased its investment balance in Tinuum Group in the amount of $37.2 million and established a deferred tax liability of $8.4 million. As a result of the increase in the investment balance in Tinuum Group, for the six months ended June 30, 2019, the Company began recognizing equity earnings in Tinuum Group based on its pro-rata share of Tinuum Group’s net income rather than based on cash distributions received as had been required in prior periods as a result of the cumulative cash distributions exceeding the cumulative pro-rata share of Tinuum Group's net income.

Not Yet Adopted

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). The main objective of ASU 2016-13 is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in ASU 2016-13 replace the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those years, and must be adopted under a modified retrospective method approach. Entities may adopt ASU 2016-13 earlier as of the fiscal years beginning after December 15, 2018, including interim periods within those years. The Company is currently evaluating the provisions of this guidance and assessing its impact on the Company's financial statements and disclosures. The Company does not believe this standard will have a material impact on the Company's financial statements and disclosures.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement ("ASU 2018-13"). The amendments in ASU 2018-13 improve the effectiveness of fair value measurement disclosures and modify the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement ("Topic 820"), based on the concepts in FASB Concepts Statement, Conceptual Framework for Financial Reporting - Chapter 8: Notes to Financial Statements, including the consideration of costs and benefits. ASU 2018-13 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted-average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. Early adoption is permitted upon issuance of this update. An entity is permitted to early adopt any removed or modified disclosures upon issuance of this update and delay adoption of the additional disclosures until their effective date. The Company is currently evaluating the provisions of ASU 2018-13 and assessing its impact on the Company's financial statement disclosures. The Company does not believe this standard will have a material impact on the Company's financial statement disclosures.

Fair Value of Financial Instruments

The carrying amounts of financial instruments, including cash, cash equivalents and restricted cash, accounts receivable, accounts payable and accrued expenses, approximate fair value due to the short maturity of these instruments.

Segment Reporting

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by a company's chief operating decision maker ("CODM"), or a decision-making group, in deciding how to allocate resources and in assessing financial performance. As of June 30, 2019, the Company's CODM was the Company's CEO. The Company's operating and reportable segments are identified by products and services provided.

As of June 30, 2019, the Company has two reportable segments: (1) Refined Coal ("RC"); and (2) Power Generation and Industrials ("PGI").

The business segment measurements provided to and evaluated by the CODM are computed in accordance with the principles listed below:

• The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies in the 2018 Form 10-K.

• Segment revenues include equity method earnings and losses from the Company's equity method investments.

• Segment operating income (loss) includes segment revenues and allocation of certain "Corporate general and administrative expenses," which include Payroll and benefits, Legal and professional fees and General and administrative.

• RC segment operating income includes interest expense directly attributable to the RC segment.

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Basis of Presentation (Tables)

6 Months Ended

Jun. 30, 2019

Accounting Policies [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The following table sets forth the calculations of basic and diluted earnings per share:

	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands, except per share amounts)	2019		2018		2019		2018
Net income	$	8,114	$	15,291	$	22,516	$	22,953
Less: Dividends and undistributed income allocated to participating securities	11		51		31		77
Income attributable to common stockholders	$	8,103	$	15,240	$	22,485	$	22,876
Basic weighted-average common shares outstanding	18,172		20,062		18,219		20,275
Add: dilutive effect of equity instruments	205		133		193		111
Diluted weighted-average shares outstanding	18,377		20,195		18,412		20,386
Earnings per share - basic	$	0.45	$	0.76	$	1.23	$	1.13
Earnings per share - diluted	$	0.44	$	0.75	$	1.22	$	1.12

Schedule of New Accounting Pronouncements and Changes in Accounting Principles

As of the adoption date, the Company recorded $7.0 million and $7.0 million of "right of use" ("ROU") assets and incremental lease liabilities, respectively. The cumulative effect of the change from the adoption of ASC 842 to the Consolidated Balance Sheet as of January 1, 2019 is shown in the table that follows:

	Balance as of		Impact of		Balance as of
(in thousands)	December 31, 2018		Adoption		January 1, 2019
Balance Sheet
Other long-term assets	$	7,993	$	6,956	$	14,949
Other liabilities	$	50,058	$	3,085	$	53,143
Other long-term liabilities	$	940	$	3,871	$	4,811

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Acquisition (Tables)

6 Months Ended

Jun. 30, 2019

Business Combinations [Abstract]

Summary of Purchase Consideration and Allocation

The following table summarizes the final purchase price allocation. Subsequent to December 31, 2018, the Company completed additional analysis and adjustments were made to the preliminary purchase price allocations as noted in the table below:

Fair value of assets acquired:	As Originally Reported		Adjustments			As Adjusted
Cash	$	3,284	$	—		$	3,284
Receivables	6,409		—			6,409
Inventories	22,100		(356		)	21,744
Prepaid expenses and other current assets	2,992		61			3,053
Spare parts	3,359		—			3,359
Property, plant and equipment	43,033		(377		)	42,656
Mine leases and development	2,500		200			2,700
Mine reclamation asset	—		2,402			2,402
Intangible assets	4,000		100			4,100
Other assets	168		—			168
Amount attributable to assets acquired	87,845		2,030			89,875
Fair value of liabilities assumed:
Accounts payable	4,771		—			4,771
Accrued liabilities	7,354		254			7,608
Equipment lease liabilities	8,211		—			8,211
Mine reclamation liability	626		1,776			2,402
Other liabilities	437		—			437
Amount attributable to liabilities assumed	21,399		2,030			23,429
Net assets acquired	$	66,446	$	—		$	66,446

Summary of Finite-Lived Intangible Assets Acquired

The following table represents the intangible assets, as adjusted for purchase price adjustments noted above, identified as part of the Carbon Solutions Acquisition:

(in thousands)	Amount		Weighted Average Useful Life (years)
Customer relationships	$	2,200	5
Developed technology	1,600		5
Trade name	300		2
Total intangibles acquired	$	4,100

Business Acquisition, Pro Forma Information

The unaudited pro forma financial information below is not necessarily indicative of either future results of operations or results that might have been achieved had the Carbon Solutions Acquisition been consummated as of January 1, 2017.

As of June 30, 2019, the Company identified a difference in depreciation as originally calculated and included in the pro forma net income disclosure for the three months ended March 31, 2018. The following table presents the effect of the change in calculated depreciation to pro forma net income for the three months ended March 31, 2018:

	For the three months ended March 31, 2018
(in thousands)	As reported		Adjustment		As adjusted
Net income	$	3,727	$	3,350	$	7,077

The following table presents the pro forma effects of the Carbon Solutions Acquisition for the three and six months ended June 30, 2018:

	Three Months Ended		Six Months Ended
(in thousands)	June 30, 2018		June 30, 2018
Revenues	$	16,655	$	35,150
Net income	$	8,985	$	16,062

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Inventories (Tables)

6 Months Ended

Jun. 30, 2019

Inventory Disclosure [Abstract]

Schedule of Inventory

The following table summarizes the Company's inventories recorded at the lower of average cost or net realizable value as of June 30, 2019 and December 31, 2018:

	As of
(in thousands)	June 30, 2019		December 31, 2018
Product inventory (1)	$	16,466	$	19,403
Raw material inventory	1,332		2,388
	$	17,798	$	21,791

(1) As of June 30, 2019 and December 31, 2018, this amount includes zero and $5.0 million, respectively, attributed to the increase in fair value of inventory acquired from the Carbon Solutions Acquisition.

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Equity Method Investments (Tables)

6 Months Ended

Jun. 30, 2019

Equity Method Investments and Joint Ventures [Abstract]

Schedule of Equity Method Investments

The following table details the components of the Company's respective equity method investments included within the Earnings from equity method investments line item on the Condensed Consolidated Statements of Operations:

	Three Months Ended June 30,					Six Months Ended June 30,
(in thousands)	2019			2018		2019			2018
Earnings from Tinuum Group	$	19,244		$	14,450	$	39,011		$	25,500
Earnings from Tinuum Services	1,693			1,438		3,615			2,642
(Losses) earnings from other	(2		)	1		(1		)	—
Earnings from equity method investments	$	20,935		$	15,889	$	42,625		$	28,142

The following table details the components of the cash distributions from the Company's respective equity method investments included in the Condensed Consolidated Statements of Cash Flows. Distributions from equity method investees are reported in the Condensed Consolidated Statements of Cash Flows as "Distributions from equity method investees, return on investment" within Operating cash flows until such time as the carrying value in an equity method investee company is reduced to zero; thereafter, such distributions are reported as "Distributions from equity method investees in excess of cumulative earnings" within Investing cash flows.

	Six Months Ended June 30,
(in thousands)	2019		2018
Distributions from equity method investees, return on investment
Tinuum Group	$	33,788	$	—
Tinuum Services	4,300		2,700
	$	38,088	$	2,700
Distributions from equity method investees in excess of investment basis
Tinuum Group	$	—	$	25,500
	$	—	$	25,500

The following table summarizes the results of operations of Tinuum Group:

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2019			2018			2019		2018
Gross profit	$	38,180		$	28,683		$	79,380	$	55,096
Operating, selling, general and administrative expenses	5,763			5,491			12,345		11,498
Income from operations	32,417			23,192			67,035		43,598
Other (expenses) income	(28		)	(355		)	23		(2,224		)
Class B preferred return	—			—			—		(12		)
Loss attributable to noncontrolling interest	12,891			10,244			28,667		21,019
Net income available to members	$	45,280		$	33,081		$	95,725	$	62,381
ADES equity earnings from Tinuum Group	$	19,244		$	14,450		$	39,011	$	25,500

The following tables present the Company's investment balance, equity earnings and cash distributions in excess of the investment balance, if any, for the three and six months endedJune 30, 2019 and 2018 (in thousands):

Description	Date(s)	Investment balance			ADES equity earnings (loss)			Cash distributions		Memorandum Account: Cash distributions and equity earnings in (excess) of investment balance
Beginning balance	12/31/2018	$	—		$	—		$	—	$	(1,672	)
Impact of adoption of accounting standards (1)	First Quarter	37,232			—			—		—
ADES proportionate share of income from Tinuum Group	First Quarter	21,439			21,439			—		—
Recovery of prior cash distributions in excess of investment balance (prior to cash distributions)	First Quarter	(1,672		)	(1,672		)	—		1,672
Cash distributions from Tinuum Group	First Quarter	(16,788		)	—			16,788		—
Total investment balance, equity earnings (loss) and cash distributions	03/31/19	$	40,211		$	19,767		$	16,788	$	—
ADES proportionate share of income from Tinuum Group	Second Quarter	$	19,244		$	19,244		$	—	$	—
Cash distributions from Tinuum Group	Second Quarter	(17,000		)	—			17,000		—
Total investment balance, equity earnings (loss) and cash distributions	6/30/2019	$	42,455		$	19,244		$	17,000	$	—

Description	Date(s)	Investment balance			ADES equity earnings (loss)			Cash distributions		Memorandum Account: Cash distributions and equity earnings in (excess) of investment balance
Beginning balance	12/31/2017	$	—		$	—		$	—	$	(12,218	)
ADES proportionate share of income from Tinuum Group (2)	First Quarter	12,458			12,458			—		—
Recovery of prior cash distributions in excess of investment balance (prior to cash distributions)	First Quarter	(12,218		)	(12,218		)	—		12,218
Cash distributions from Tinuum Group	First Quarter	(11,050		)	—			11,050		—
Adjustment for current year cash distributions in excess of investment balance	First Quarter	10,810			10,810			—		(10,810		)
Total investment balance, equity earnings (loss) and cash distributions	3/31/2018	$	—		$	11,050		$	11,050	$	(10,810	)
ADES proportionate share of income from Tinuum Group (2)	Second Quarter	$	14,059		$	14,059		$	—	$	—
Recovery of prior cash distributions in excess of investment balance (prior to cash distributions)	Second Quarter	(10,810		)	(10,810		)	—		10,810
Cash distributions from Tinuum Group	Second Quarter	(14,450		)	—			14,450		—
Adjustment for current year cash distributions in excess of investment balance	Second Quarter	11,201			11,201			—		(11,201		)
Total investment balance, equity earnings (loss) and cash distributions	6/30/2018	$	—		$	14,450		$	14,450	$	(11,201	)

(1) As discussed in Note 1, Tinuum Group adopted ASC 606 and ASC 842 as of January 1, 2019. As a result of Tinuum Group’s adoption of these standards, the Company recorded a cumulative adjustment of $28.8 million, net of the impact of income taxes, related to the Company's percentage of Tinuum Group's cumulative effect adjustment that increased the Company's Retained earnings as of January 1, 2019.

(2) For the three and six months endedJune 30, 2018, the amount of the Company's 42.5% proportionate share of net income available to members as shown in the table above may differ from mathematical calculations of the Company’s 42.5% equity interest in Tinuum Group multiplied by the amounts of net income available to members as shown in the table above of Tinuum Group results of operations due to adjustments related to the Class B preferred return.

The following table summarizes the results of operations of Tinuum Services:

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2019			2018			2019			2018
Gross loss	$	(25,192	)	$	(21,701	)	$	(49,927	)	$	(42,707	)
Operating, selling, general and administrative expenses	50,412			43,133			99,862			83,837
Loss from operations	(75,604		)	(64,834		)	(149,789		)	(126,544		)
Other (expenses) income	(316		)	423			(558		)	365
Loss attributable to noncontrolling interest	79,307			67,287			157,577			131,463
Net income	$	3,387		$	2,876		$	7,230		$	5,284
ADES equity earnings from Tinuum Services	$	1,693		$	1,438		$	3,615		$	2,642

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Debt Obligations (Tables)

6 Months Ended

Jun. 30, 2019

Debt Disclosure [Abstract]

Schedule of Borrowings

	As of
(in thousands)	June 30, 2019			December 31, 2018
Senior Term Loan due December 2021, related party	$	54,000		$	70,000
Less: net unamortized debt issuance costs	(1,620		)	(1,990		)
Less: net unamortized debt discount	(1,571		)	(2,052		)
Senior Term Loan due December 2021, net	50,809			65,958
Finance lease obligations (1)	7,420			8,167
	58,229			74,125
Less: Current maturities	(24,025		)	(24,067		)
Total long-term debt	$	34,204		$	50,058

(1) As of December 31, 2018, amounts related to capital lease obligations.

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Leases (Tables)

6 Months Ended

Jun. 30, 2019

Leases [Abstract]

Lease, Cost

Lease financial information as of and for the three and six months endedJune 30, 2019 is provided in the following table:

(in thousands)	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
Finance lease cost:
Amortization of right-of-use assets	$	558	$	1,094
Interest on lease liabilities	57		188
Operating lease cost	927		1,856
Short-term lease cost	189		360
Variable lease cost (1)	93		175
Total lease cost	$	1,824	$	3,673
Other Information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases			$	1,901
Finance cash flows from finance leases			$	681
Right-of-use assets obtained in exchange for new operating lease liabilities			$	49
Weighted-average remaining lease term - finance leases			4.7 years
Weighted-average remaining lease term - operating leases			2.4 years
Weighted-average discount rate - finance leases			6.1		%
Weighted-average discount rate - operating leases			8.6		%

(1) Primarily includes common area maintenance, property taxes and insurance payable to lessors.

Operating Lease Maturity

The following table summarizes the Company’s future lease payments under finance and operating leases as of June 30, 2019:

(in thousands)	Operating Lease Commitments			Finance Lease Commitments			Total Lease Commitments
2019 (remaining six months)	$	1,845		$	867		$	2,712
2020	2,328			1,707			4,035
2021	1,632			1,802			3,434
2022	310			951			1,261
2023	221			951			1,172
Thereafter	—			2,482			2,482
Total lease payments	6,336			8,760			15,096
Less: Imputed interest	(787		)	(1,340		)	(2,127		)
Present value of lease payments	$	5,549		$	7,420		$	12,969

Finance Leases Maturity

The following table summarizes the Company’s future lease payments under finance and operating leases as of June 30, 2019:

(in thousands)	Operating Lease Commitments			Finance Lease Commitments			Total Lease Commitments
2019 (remaining six months)	$	1,845		$	867		$	2,712
2020	2,328			1,707			4,035
2021	1,632			1,802			3,434
2022	310			951			1,261
2023	221			951			1,172
Thereafter	—			2,482			2,482
Total lease payments	6,336			8,760			15,096
Less: Imputed interest	(787		)	(1,340		)	(2,127		)
Present value of lease payments	$	5,549		$	7,420		$	12,969

Future Minimum Rental Payments for Operating Leases

The following table summarizes the Company’s future minimum non-cancellable lease payments due under capital and operating leases as of December 31, 2018:

(in thousands)	Operating Lease Commitments		Capital Lease Commitments
2019	$	3,619	$	1,749
2020	2,273		1,707
2021	1,632		1,802
2022	310		951
2023	221		951
Thereafter	—		2,482
Total minimum lease payments	$	8,055	9,642
Less: Imputed interest			(1,475		)
Present value of minimum lease payments			$	8,167

Future Minimum Lease Payments for Capital Leases

The following table summarizes the Company’s future minimum non-cancellable lease payments due under capital and operating leases as of December 31, 2018:

(in thousands)	Operating Lease Commitments		Capital Lease Commitments
2019	$	3,619	$	1,749
2020	2,273		1,707
2021	1,632		1,802
2022	310		951
2023	221		951
Thereafter	—		2,482
Total minimum lease payments	$	8,055	9,642
Less: Imputed interest			(1,475		)
Present value of minimum lease payments			$	8,167

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Revenues (Tables)

6 Months Ended

Jun. 30, 2019

Revenue from Contract with Customer [Abstract]

Schedule of Accounts Receivable

The following table shows the components of Trade receivables, net:

	As of
(in thousands)	June 30, 2019			December 31, 2018
Trade receivables	$	6,173		$	10,121
Less: Allowance for doubtful accounts	(567		)	(567		)
Trade receivables, net	$	5,606		$	9,554

Schedule of Disaggregation of Revenue

The following tables disaggregate revenues by major source for the three and six months endedJune 30, 2019 and 2018 (in thousands):

	Three Months Ended June 30, 2019								Six Months Ended June 30, 2019
	Segment								Segment
	PGI		RC		Other		Total		PGI		RC		Other		Total
Revenue component
Consumables	$	11,049	$	—	$	337	$	11,386	$	25,602	$	—	$	893	$	26,495
License royalties, related party	—		4,191		—		4,191		—		8,411		—		8,411
Revenues from customers	11,049		4,191		337		15,577		25,602		8,411		893		34,906
Earnings from equity method investments	—		20,935		—		20,935		—		42,625		—		42,625
Total revenues and earnings from equity method investments	$	11,049	$	25,126	$	337	$	36,512	$	25,602	$	51,036	$	893	$	77,531

	Three Months Ended June 30, 2018								Six Months Ended June 30, 2018
	Segment								Segment
	PGI		RC		Other		Total		PGI		RC		Other		Total
Revenue component
Consumables	$	726	$	—	$	—	$	726	$	1,347	$	—	$	—	$	1,347
License royalties, related party	—		3,523		—		3,523		—		6,753		—		6,753
Other	24		—		—		24		72		—		—		72
Revenues from customers	750		3,523		—		4,273		1,419		6,753		—		8,172
Earnings from equity method investments	—		15,889		—		15,889		—		28,142		—		28,142
Total revenues and earnings from equity method investments	$	750	$	19,412	$	—	$	20,162	$	1,419	$	34,895	$	—	$	36,314

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Stockholders' Equity (Tables)

6 Months Ended

Jun. 30, 2019

Equity [Abstract]

Schedule of Dividends Declared

Dividends per share declared by the Board, and paid quarterly on all outstanding shares of common stock during the three and six months endedJune 30, 2019 and 2018 were as follows:

	2019			2018
	Per share		Date paid	Per share		Date paid
Dividends declared during quarter ended:
March 31	$	0.25	March 7, 2019	$	0.25	March 8, 2018
June 30	$	0.25	June 7, 2019	$	0.25	June 8, 2018

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Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2019

Share-based Payment Arrangement [Abstract]

Allocation of Compensation Expense

Total stock-based compensation expense for the three and six months endedJune 30, 2019 and 2018 was as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2019		2018		2019		2018
RSA expense	$	541	$	675	$	858	$	952
Stock option expense	—		—		—		58
Total stock-based compensation expense	$	541	$	675	$	858	$	1,010

Schedule of Unrecognized Compensation Cost

The amount of unrecognized compensation cost as of June 30, 2019, and the expected weighted-average period over which the cost will be recognized is as follows:

	As of June 30, 2019
(in thousands)	Unrecognized Compensation Cost		Expected Weighted- Average Period of Recognition (in years)
RSA expense	$	3,632	1.97
Total unrecognized stock-based compensation expense	$	3,632	1.97

Summary of Restricted Stock Activity

A summary of RSA and RSU activity under the Company's various stock compensation plans for the six months ended June 30, 2019 is presented below:

	Restricted Stock			Weighted-Average Grant Date Fair Value
(in thousands, except for share and per share amounts)	Awards		Units	RSA's		RSU's
Non-vested at January 1, 2019	280,852		20,000	$	9.92	$	10.52
Granted	252,590		—	$	10.91	$	—
Vested	(77,992	)	—	$	9.51	$	—
Forfeited	(2,412	)	—	$	10.92	$	—
Non-vested at June 30, 2019	453,038		20,000	$	10.54	$	10.52

Summary of Option Activity

A summary of stock option activity for the six months ended June 30, 2019 is presented below:

	Number of Options Outstanding and Exercisable		Weighted-Average Exercise Price		Aggregate Intrinsic Value (in thousands)		Weighted-Average Remaining Contractual Term (in years)
Options outstanding, January 1, 2019	529,780		$	12.23
Options granted	—		—
Options exercised	—		—
Options expired / forfeited	(10,000	)	19.28
Options outstanding, June 30, 2019	519,780		$	12.09	$	734	0.98
Options exercisable, June 30, 2019	519,780		$	12.09	$	734	0.98

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Supplemental Financial Information (Tables)

6 Months Ended

Jun. 30, 2019

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Schedule of Prepaid Expenses and Other Assets and Other assets

The following table summarizes the components of Prepaid expenses and other assets and Other long-term assets, net as presented in the Condensed Consolidated Balance Sheets:

	As of
(in thousands)	June 30, 2019		December 31, 2018
Prepaid expenses and other assets:
Prepaid expenses	$	1,904	$	1,233
Prepaid income taxes	1,970		2,940
Other	1,724		1,397
	$	5,598	$	5,570
Other long-term assets:
Highview Investment	$	552	$	552
Spare parts	3,222		3,278
Mine development costs, net	3,167		2,531
Mine reclamation asset, net	2,390		—
Prepaid royalty expense, long-term	955		955
Right of use assets, operating leases, net	5,488		—
Other long-term assets	779		677
	$	16,553	$	7,993

Schedule of Other Liabilities

The following table details the components of Other current liabilities and Other long-term liabilities as presented in the Condensed Consolidated Balance Sheets:

	As of
(in thousands)	June 30, 2019		December 31, 2018
Other current liabilities:
Current portion of operating lease obligations	$	2,725	$	—
Accrued interest	996		407
Income and other taxes payable	909		479
Other	922		1,252
	$	5,552	$	2,138
Other long-term liabilities:
Operating lease obligations, long-term	$	2,824	$	—
Mine reclamation liability	2,490		624
Other long-term liabilities	135		316
	$	5,449	$	940

Schedule of Statement of Operations, Supplemental Disclosures

The following table details the components of Interest expense in the Condensed Consolidated Statements of Operations:

	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2019		2018		2019		2018
Interest on Senior Term Loan	$	1,134	$	—	$	2,404	$	—
Debt discount and debt issuance costs	470		—		851		—
453A interest	326		404		648		740
Other	57		8		188		8
	$	1,987	$	412	$	4,091	$	748

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Income Taxes (Tables)

6 Months Ended

Jun. 30, 2019

Income Tax Disclosure [Abstract]

Schedule of Income Tax Expense and Effective Tax Rates

For the three and six months endedJune 30, 2019 and 2018, the Company's income tax expense and effective tax rates based on forecasted pre-tax income were:

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands, except for rate)	2019			2018			2019			2018
Income tax expense (benefit)	$	6,634		$	(1,349	)	$	8,333		$	1,220
Effective tax rate	45		%	(10		)%	27		%	5		%

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Business Segment Information (Tables)

6 Months Ended

Jun. 30, 2019

Segment Reporting [Abstract]

Segment Operating Results

The following table presents the Company's operating segment results for the three and six months endedJune 30, 2019 and 2018:

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2019			2018			2019			2018
Revenues:
Refined Coal:
Earnings in equity method investments	$	20,935		$	15,889		$	42,625		$	28,142
Royalties, related party	4,191			3,523			8,411			6,753
	25,126			19,412			51,036			34,895
Power Generation and Industrials:
Consumables	11,049			726			25,602			1,347
Other	—			24			—			72
	11,049			750			25,602			1,419
Total segment reporting revenues	36,175			20,162			76,638			36,314
Adjustments to reconcile to reported revenues:
Earnings in equity method investments	(20,935		)	(15,889		)	(42,625		)	(28,142		)
Corporate and other	337			—			893			—
Total reported revenues	$	15,577		$	4,273		$	34,906		$	8,172
Segment operating income (loss):
Refined Coal (1)	$	24,596		$	18,275		$	49,979		$	32,977
Power Generation and Industrials (2)	(3,862		)	(1,387		)	(7,324		)	(2,325		)
Total segment operating income	$	20,734		$	16,888		$	42,655		$	30,652

(1) Included in RC segment operating income for the three and six months endedJune 30, 2019 and 2018 is 453A interest expense of $0.3 million and $0.6 million and $0.4 million and $0.7 million, respectively.

(2) Included in PGI segment operating loss for the three and six months endedJune 30, 2019 was $1.3 million and $4.7 million, respectively, of costs recognized as a result of the step-up in inventory fair value recorded from the Carbon Solutions Acquisition. Also included in PGI segment operating loss for the three and six months endedJune 30, 2019 was $0.7 million and $2.6 million, respectively, of depreciation, amortization, and depletion expense on mine and plant long-lived assets.

Reconciliation of Reportable Segment Amounts to Consolidated Balances

A reconciliation of reportable segment operating income to the Company's consolidated income before income tax expense is as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2019			2018			2019			2018
Total reported segment operating income	$	20,734		$	16,888		42,655			30,652
Other operating loss	(353		)	—			(751		)	—
	20,381			16,888			41,904			30,652
Adjustments to reconcile to income before income tax expense attributable to the Company:
Corporate payroll and benefits	(804		)	(950		)	(1,236		)	(2,097		)
Corporate legal and professional fees	(1,556		)	(1,140		)	(3,517		)	(2,588		)
Corporate general and administrative	(1,715		)	(884		)	(3,149		)	(1,825		)
Corporate depreciation and amortization	(7		)	(22		)	(20		)	(74		)
Corporate interest (expense) income, net	(1,604		)	(8		)	(3,255		)	(8		)
Other income (expense), net	53			58			122			113
Income before income tax expense	$	14,748		$	13,942		$	30,849		$	24,173

Reconciliation of Assets from Segment to Consolidated

A reconciliation of reportable segment assets to the Company's consolidated assets is as follows:

	As of
(in thousands)	June 30, 2019		December 31, 2018
Assets:
Refined Coal (1)	$	53,131	$	11,468
Power Generation and Industrials	82,611		85,786
Total segment assets	135,742		97,254
All Other and Corporate (2)	51,330		62,410
Consolidated	$	187,072	$	159,664

(1) Includes $48.4 million and $6.6 million of investments in equity method investees, respectively.

(2) Includes the Company's deferred tax assets.

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2019

Fair Value Disclosures [Abstract]

Schedule of Estimated Fair Values of Remaining Financial Instruments

The following table provides the estimated fair values of the remaining financial instruments:

	As of June 30, 2019				As of December 31, 2018
(in thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value
Financial Instruments:
Highview Investment	$	552	$	552	$	552	$	552
Highview Obligation	$	213	$	213	$	213	$	213

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Restructuring (Tables)

6 Months Ended

Jun. 30, 2019

Restructuring and Related Activities [Abstract]

Restructuring and Related Costs

A summary of the net pretax charges, incurred by segment, is as follows:

		Pretax Charge
(in thousands, except employee data)	Approximate Number of Employees	Refined Coal (1)		Power Generation and Industrials (1)		All Other and Corporate (1)			Total
Three Months Ended June 30, 2019
Restructuring charges	—	$	—	$	—	$	—		$	—
Changes in estimates		—		—		—			—
Total pretax charge, net of reversals		$	—	$	—	$	—		$	—
Six Months Ended June 30, 2019
Restructuring charges	1	$	—	$	—	$	172		$	172
Changes in estimates		—		—		(104		)	(104		)
Total pretax charge, net of reversals		$	—	$	—	$	68		$	68
Three Months Ended June 30, 2018
Restructuring charges	6	$	280	$	496	$	123		$	899
Changes in estimates		—		—		—			—
Total pretax charge, net of reversals		$	280	$	496	$	123		$	899
Six Months Ended June 30, 2018
Restructuring charges	6	$	280	$	496	$	123		$	899
Changes in estimates		—		—		—			—
Total pretax charge, net of reversals		$	280	$	496	$	123		$	899

(1) Restructuring charges were allocated consistent with the allocations made in Note 13 - Business Segment Information

Schedule of Restructuring Reserve by Type of Cost

The following table summarizes the Company's change in restructuring accruals for the six months ended June 30, 2019:

(in thousands)	Employee Severance
Remaining accrual as of December 31, 2018	$	2,208
Expense provision	172
Cash payments and other	(1,293		)
Change in estimates	(104		)
Remaining accrual as of June 30, 2019	$	983

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Basis of Presentation - Nature of Operations and Risks (Details) - debt_instrument	Jun. 30, 2019	Dec. 07, 2018
Tinuum Group, LLC
Concentration Risk [Line Items]
Number of instruments held	21
Tinuum Group, LLC | Customer Concentration Risk
Concentration Risk [Line Items]
Number of instruments held	11
ADA Carbon Solutions, LLC
Concentration Risk [Line Items]
Ownership interest		100.00%

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Basis of Presentation - Calculations of Basic and Diluted Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2018	Mar. 31, 2018	Jun. 30, 2019	Jun. 30, 2018
Accounting Policies [Abstract]
Net income	$ 8,114	$ 14,402	$ 15,291	$ 7,662	$ 22,516	$ 22,953
Less: Dividends and undistributed income allocated to participating securities	11		51		31	77
Income attributable to common stockholders	$ 8,103		$ 15,240		$ 22,485	$ 22,876
Basic weighted-average common shares outstanding (in shares)	18,172		20,062		18,219	20,275
Add: dilutive effect of equity instruments (in shares)	205		133		193	111
Diluted weighted-average shares outstanding (in shares)	18,377		20,195		18,412	20,386
Earnings per share - basic (in dollars per share)	$ 0.45		$ 0.76		$ 1.23	$ 1.13
Earnings per share - diluted (in dollars per share)	$ 0.44		$ 0.75		$ 1.22	$ 1.12
Restricted Sock and Employee Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total shares excluded from diluted shares outstanding (in shares)	300		300		300	400
Performance share units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total shares excluded from diluted shares outstanding (in shares)						100

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Basis of Presentation - Adjustments for Adoption (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Jan. 01, 2019	Dec. 31, 2018
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease, right of use asset	$ 5,488		$ 0
Operating lease, liability	5,549
Other long-term assets	16,553	$ 14,949	7,993
Other liabilities		53,143	50,058
Other long-term liabilities	$ 5,449	4,811	$ 940
Accounting Standards Update 2016-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease, right of use asset		7,000
Operating lease, liability		7,000
Other long-term assets		6,956
Other liabilities		3,085
Other long-term liabilities		$ 3,871

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Basis of Presentation - Recently Adopted (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Jan. 01, 2019	Dec. 31, 2018
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Retained earnings	$ 54,955		$ 12,914
Tinuum Group, LLC
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Investments		$ 37,200
Deferred tax liabilities		8,400
Difference between Revenue Guidance in Effect before and after Topic 606 | ASU No. 2014-09 | Tinuum Group, LLC
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Retained earnings		$ 28,800

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Acquisition - Additional Information (Details) - USD ($) $ in Thousands			3 Months Ended		6 Months Ended	12 Months Ended
	Dec. 07, 2018	Jan. 01, 2018	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Dec. 31, 2018
Business Acquisition [Line Items]
Revenues			$ (15,577)	$ (4,273)
PGI | ASU No. 2014-09 | Calculated under Revenue Guidance in Effect before Topic 606
Business Acquisition [Line Items]
Revenues		$ 1,800
Cost of revenue		$ 3,800
ADA Carbon Solutions, LLC
Business Acquisition [Line Items]
Purchase price	$ 75,000
Consideration transferred	66,500
Cash paid	65,800
Purchase adjustments payable	700
Assumed debt and contractual commitments	11,800
Cash acquired	(3,300)
Acquisition related costs						$ 4,500
Removal of transaction costs			$ 2,100		$ 3,200
ADA Carbon Solutions, LLC | Senior Term Loan due December 2021, net | Term Loan
Business Acquisition [Line Items]
Proceeds from issuance of debt	$ 70,000

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Acquisition - Allocation (Details) - ADA Carbon Solutions, LLC - USD ($) $ in Thousands	6 Months Ended	7 Months Ended
	Jun. 30, 2019	Jun. 30, 2019	Dec. 07, 2018
Fair value of assets acquired:
Cash	$ 3,284	$ 3,284	$ 3,284
Receivables	6,409	6,409	6,409
Inventories	21,744	21,744	22,100
Prepaid expenses and other current assets	3,053	3,053	2,992
Spare parts	3,359	3,359	3,359
Property, plant and equipment	42,656	42,656	43,033
Mine leases and development	2,700	2,700	2,500
Mine reclamation asset	2,402	2,402	0
Intangible assets	4,100	4,100	4,000
Other assets	168	168	168
Amount attributable to assets acquired	89,875	89,875	87,845
Fair value of liabilities assumed:
Accounts payable	4,771	4,771	4,771
Accrued liabilities	7,608	7,608	7,354
Equipment lease liabilities	8,211	8,211	8,211
Mine reclamation liability	2,402	2,402	626
Other liabilities	437	437	437
Amount attributable to liabilities assumed	23,429	23,429	21,399
Adjustments
Cash		0
Receivables		0
Inventories		(356)
Prepaid expenses and other current assets		61
Spare parts		0
Property, plant and equipment		(377)
Mine leases and development		200
Mine reclamation asset		2,402
Intangible assets		100
Other assets		0
Amount attributable to assets acquired		2,030
Accounts payable		0
Accrued liabilities		254
Equipment lease liabilities		0
Mine reclamation liability		1,776
Other liabilities		0
Amount attributable to liabilities assumed		2,030
Net assets acquired	66,446	66,446	$ 66,446
Net assets acquired		0
Customer relationships
Fair value of assets acquired:
Intangible assets	$ 2,200	2,200
Adjustments
Weighted Average Useful Life (years)	5 years
Developed technology
Fair value of assets acquired:
Intangible assets	$ 1,600	1,600
Adjustments
Weighted Average Useful Life (years)	5 years
Trade name
Fair value of assets acquired:
Intangible assets	$ 300	$ 300
Adjustments
Weighted Average Useful Life (years)	2 years

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Acquisition - Pro Forma (Details) - ADA Carbon Solutions, LLC - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
	Jan. 01, 2018	Jun. 30, 2018	Mar. 31, 2018	Jun. 30, 2018
Business Acquisition [Line Items]
Net income	$ 3,727	$ 8,985	$ 7,077	$ 16,062
Business Acquisition, Adjustment, Pro Forma Net Income (Loss)			$ 3,350
Revenues		$ 16,655		$ 35,150

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Inventories (Details) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Inventory Disclosure [Abstract]
Product inventory	$ 16,466,000	$ 19,403,000
Raw material inventory	1,332,000	2,388,000
Inventories	17,798,000	21,791,000
Inventory acquired	$ 0	$ 5,000,000

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Equity Method Investments - Narrative (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018	Dec. 31, 2017	Jan. 20, 2010
Schedule of Equity Method Investments [Line Items]
Equity method investments	$ 48,403,000		$ 48,403,000			$ 6,634,000
Earnings from equity method investments	$ 20,935,000	$ 15,889,000	$ 42,625,000	$ 28,142,000
Tinuum Group, LLC
Schedule of Equity Method Investments [Line Items]
Ownership interest, percent	42.50%	42.50%	42.50%	42.50%
Equity method investments	$ 42,455,000	$ 0	$ 42,455,000	$ 0	$ 40,211,000	0	$ 0	$ 0
Earnings from equity method investments	19,244,000	14,450,000	39,011,000	25,500,000
Tinuum Services, LLC
Schedule of Equity Method Investments [Line Items]
Ownership interest, percent									50.00%
Equity method investments	5,900,000		5,900,000			$ 6,600,000
Earnings from equity method investments	$ 1,693,000	$ 1,438,000	$ 3,615,000	$ 2,642,000
Percent of losses removed from net income, attributable to noncontrolling interest	100.00%		100.00%

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Equity Method Investments - Results of Operations and Summary of Distributions (Details) - USD ($) $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2018	Mar. 31, 2018	Jun. 30, 2019	Jun. 30, 2018
Equity Method Investment, Summarized Financial Information, Income Statement [Abstract]
ADES equity earnings	$ 20,935		$ 15,889		$ 42,625	$ 28,142
Equity Method Investment, Financial Statement, Reported Amounts [Abstract]
Distributions from equity method investees, return on investment					38,088	2,700
Included in investing cash flows					0	25,500
Tinuum Group, LLC
Equity Method Investment, Summarized Financial Information, Income Statement [Abstract]
Gross profit (loss)	38,180		28,683		79,380	55,096
Operating, selling, general and administrative expenses	5,763		5,491		12,345	11,498
Income (loss) from operations	32,417		23,192		67,035	43,598
Other (expenses) income	(28)		(355)		23	(2,224)
Class B preferred return	0		0		0	(12)
Loss attributable to noncontrolling interest	12,891		10,244		28,667	21,019
Net income available to members	45,280		33,081		95,725	62,381
ADES equity earnings	19,244		14,450		39,011	25,500
Equity Method Investment, Financial Statement, Reported Amounts [Abstract]
Distributions from equity method investees, return on investment					33,788	0
Distributions from equity method investees in excess of investment basis					0	25,500
Included in investing cash flows	17,000	$ 16,788	14,450	$ 11,050
Tinuum Services, LLC
Equity Method Investment, Summarized Financial Information, Income Statement [Abstract]
Gross profit (loss)	(25,192)		(21,701)		(49,927)	(42,707)
Operating, selling, general and administrative expenses	50,412		43,133		99,862	83,837
Income (loss) from operations	(75,604)		(64,834)		(149,789)	(126,544)
Other (expenses) income	(316)		423		(558)	365
Loss attributable to noncontrolling interest	79,307		67,287		157,577	131,463
Net income available to members	3,387		2,876		7,230	5,284
ADES equity earnings	1,693		1,438		3,615	2,642
Equity Method Investment, Financial Statement, Reported Amounts [Abstract]
Distributions from equity method investees, return on investment					4,300	2,700
(Losses) earnings from other
Equity Method Investment, Summarized Financial Information, Income Statement [Abstract]
ADES equity earnings	$ (2)		$ 1		$ (1)	$ 0

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Equity Method Investments - Rollforward of CCS Investment (Details) - USD ($)	3 Months Ended				6 Months Ended
	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2018	Mar. 31, 2018	Jun. 30, 2019	Jun. 30, 2018	Jan. 01, 2019	Dec. 31, 2018
Equity Method Investments [Roll Forward]
Beginning balance		$ 6,634,000			$ 6,634,000
Cash distributions from Tinuum Group					0	$ 25,500,000
Total investment balance, equity earnings (loss) and cash distributions	$ 48,403,000				48,403,000
Retained earnings	54,955,000				54,955,000			$ 12,914,000
Tinuum Group, LLC
Equity Method Investments [Roll Forward]
Beginning balance	40,211,000	0	$ 0	$ 0	0	0
Impact of adoption of accounting standards								$ 37,232,000
ADES proportionate share of income from Tinuum Group	19,244,000	21,439,000	14,059,000	12,458,000
Recovery of prior cash distributions in excess of investment balance (prior to cash distributions)		1,672,000	10,810,000	12,218,000
Cash distributions from Tinuum Group	17,000,000	16,788,000	14,450,000	11,050,000
Adjustment for current year cash distributions in excess of investment balance			11,201,000	10,810,000
Total investment balance, equity earnings (loss) and cash distributions	$ 42,455,000	40,211,000	$ 0	0	$ 42,455,000	$ 0
Ownership interest, percent	42.50%		42.50%		42.50%	42.50%
Ownership interest multiplied by net income available to members, percent			42.50%			42.50%
Tinuum Group, LLC | Difference between Revenue Guidance in Effect before and after Topic 606 | ASU No. 2014-09
Equity Method Investments [Roll Forward]
Retained earnings							$ 28,800,000
Tinuum Group, LLC | ADES equity earnings (loss)
Equity Method Investments [Roll Forward]
Beginning balance	$ 19,767,000	0	$ 11,050,000	0	$ 0	$ 0
ADES proportionate share of income from Tinuum Group	19,244,000	21,439,000	14,059,000	12,458,000
Recovery of prior cash distributions in excess of investment balance (prior to cash distributions)		1,672,000	10,810,000	12,218,000
Adjustment for current year cash distributions in excess of investment balance	0		11,201,000	10,810,000
Total investment balance, equity earnings (loss) and cash distributions	19,244,000	19,767,000	14,450,000	11,050,000	19,244,000	14,450,000
Tinuum Group, LLC | Cash distributions
Equity Method Investments [Roll Forward]
Beginning balance	16,788,000	0	11,050,000	0	0	0
Cash distributions from Tinuum Group	17,000,000	16,788,000	14,450,000	11,050,000
Total investment balance, equity earnings (loss) and cash distributions	17,000,000	16,788,000	14,450,000	11,050,000	17,000,000	14,450,000
Tinuum Group, LLC | Memorandum Account: Cash distributions and equity loss in (excess) of investment balance
Equity Method Investments [Roll Forward]
Beginning balance	0	1,672,000	10,810,000	12,218,000	1,672,000	12,218,000
Recovery of prior cash distributions in excess of investment balance (prior to cash distributions)	0	1,672,000	10,810,000	12,218,000
Adjustment for current year cash distributions in excess of investment balance	0		11,201,000	10,810,000
Total investment balance, equity earnings (loss) and cash distributions	$ 0	$ 0	$ 11,201,000	$ 10,810,000	$ 0	$ 11,201,000

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Debt Obligations - Schedule of Debt (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018	Dec. 07, 2018
Debt Instrument [Line Items]
Finance lease obligations	$ 7,420
Finance lease obligations		$ 8,167
Long-term Debt	58,229	74,125
Less: Current maturities	(24,025)	(24,067)
Total long-term debt	34,204	50,058
Senior Term Loan due December 2021, net
Debt Instrument [Line Items]
Less: net unamortized debt issuance costs	(1,620)	(1,990)	$ (2,000)
Less: net unamortized debt discount	(1,571)	(2,052)	$ (2,100)
Senior Term Loan due December 2021, net	50,809	65,958
Senior Term Loan due December 2021, net | Senior Term Loan due December 2021, related party
Debt Instrument [Line Items]
Senior Term Loan due December 2021, related party	$ 54,000	$ 70,000

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Debt Obligations - Senior Term Loan (Details)		6 Months Ended
	Dec. 07, 2018 USD ($)	Jun. 30, 2019 USD ($)	Dec. 31, 2018 USD ($)
Senior Term Loan
Debt Instrument [Line Items]
Less: net unamortized debt discount	$ (2,100,000)	$ (1,571,000)	$ (2,052,000)
Debt issuance costs	$ 2,000,000	1,620,000	$ 1,990,000
Term	36 months
Interest rate, stated percentage	4.75%
Minimum cash balance required		$ 5,000,000.0
Expected future net cash flows from refined coal business		1.75
Maximum annual collective dividends and buybacks		$ 30,000,000.0
Minimum requirement from future net cash flows from refined coal business		$ 100,000,000
Senior Term Loan | Beginning on March 1, 2019
Debt Instrument [Line Items]
Periodic payment, principal	$ 6,000,000
Senior Term Loan | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate	1.50%
ADA Carbon Solutions, LLC | Term Loan | Senior Term Loan
Debt Instrument [Line Items]
Proceeds from issuance of debt	$ 70,000,000
Senior Term Loan due December 2021, related party | Minimum
Debt Instrument [Line Items]
Percent of common stock owned	5.00%

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Debt Obligations - Line of Credit (Details) - USD ($)	Jun. 30, 2019	Dec. 07, 2018	Sep. 30, 2018
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity			$ 5,000,000
Line of credit	$ 0
Line of Credit
Debt Instrument [Line Items]
Minimum cash balance required		$ 5,000,000.0
Senior Term Loan
Debt Instrument [Line Items]
Face amount		$ 70,000,000.0
Minimum cash balance required	$ 5,000,000.0
Maximum
Debt Instrument [Line Items]
Line of credit facility, used as collateral			5,000,000.0
Minimum
Debt Instrument [Line Items]
Requirements for EBITDA			$ 24,000,000.0

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Leases - Narrative (Details) - USD ($)	3 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2019	Dec. 31, 2018
Lessee, Lease, Description [Line Items]
Long-term lease liabilities	$ 7,420,000	$ 7,420,000
Operating lease, liability	5,549,000	5,549,000
Finance lease, right of use asset	7,000,000	7,000,000
Operating lease, right of use asset	5,488,000	5,488,000	$ 0
Operating lease, expense	1,000,000	2,200,000
Amortization of right-of-use assets	558,000	1,094,000
Capital leased assets			8,100,000
Capital lease obligations			8,167,000
Accrued lease payments and accrued lease incentives			100,000
Property and equipment	44,825,000	44,825,000	42,697,000
Accumulated depreciation and amortization	4,179,000	4,179,000	1,499,000
Assets Held under Capital Leases
Lessee, Lease, Description [Line Items]
Property and equipment			8,100,000
Accumulated depreciation and amortization			$ 100,000
General and Administrative Expense
Lessee, Lease, Description [Line Items]
Amortization of right-of-use assets	19,000	100,000
Rent expense	100,000	100,000
Consumables
Lessee, Lease, Description [Line Items]
Operating lease, expense	$ 1,000,000	$ 2,100,000

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Leases - Lease Liabilities (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2019	Jun. 30, 2018
Lease, cost
Amortization of right-of-use assets	$ 558	$ 1,094
Interest on lease liabilities	57	188
Operating lease cost	927	1,856
Short-term lease cost	189	360
Variable lease cost	93	175
Total lease cost	$ 1,824	3,673
Operating cash flows from operating leases		1,901
Finance cash flows from finance leases		681	$ 0
Right-of-use assets obtained in exchange for new operating lease liabilities		$ 49
Weighted-average remaining lease term - finance leases	4 years 8 months 3 days	4 years 8 months 3 days
Weighted-average remaining lease term - operating leases	2 years 4 months 13 days	2 years 4 months 13 days
Weighted-average discount rate - finance leases	6.10%	6.10%
Weighted-average discount rate - operating leases	8.60%	8.60%

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Leases - Disclosures under ASC 840 (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Operating Leases ASC 842
2019 (remaining six months)	$ 1,845
2020	2,328
2021	1,632
2022	310
2023	221
Thereafter	0
Total minimum lease payments	6,336
Less: Imputed interest	(787)
Present value of minimum lease payments	5,549
Finance Leases ASC 842
2019 (remaining six months)	867
2020	1,707
2021	1,802
2022	951
2023	951
Thereafter	2,482
Total minimum lease payments	8,760
Less: Imputed interest	(1,340)
Present value of minimum lease payments	7,420
Leases ASC 842
2019 (remaining six months)	2,712
2020	4,035
2021	3,434
2022	1,261
2023	1,172
Thereafter	2,482
Total lease payments	15,096
Less: Imputed interest	(2,127)
Present value of lease payments	$ 12,969
Operating Leases, Future Minimum Payments
2019		$ 3,619
2020		2,273
2021		1,632
2022		310
2023		221
Thereafter		0
Total minimum lease payments		8,055
Capital Leases, Future Minimum Payments
2019		1,749
2020		1,707
2021		1,802
2022		951
2023		951
Thereafter		2,482
Total minimum lease payments		9,642
Less: Imputed interest		(1,475)
Present value of minimum lease payments		$ 8,167

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Revenues - Narrative (Details)	3 Months Ended	6 Months Ended
	Jun. 30, 2019 USD ($)	Jun. 30, 2019 USD ($) segment
Revenue from Contract with Customer [Abstract]
Collection terms		Credit terms are generally net 30 from the date of invoice.
Provision for debt expense	$ 0	$ 0
Reduction of sales, settlement of previous commitment		300,000
Allowance for doubtful accounts receivable, write-offs		$ 200,000
Number of operating segments | segment		2

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Revenues - Trade Receivables (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Revenue from Contract with Customer [Abstract]
Trade receivables	$ 6,173	$ 10,121
Less: Allowance for doubtful accounts	(567)	(567)
Total	$ 5,606	$ 9,554

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Revenues - Disaggregation of Revenue (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Disaggregation of Revenue [Line Items]
Revenue component	$ 15,577,000	$ 4,273,000	$ 34,906,000	$ 8,172,000
Earnings from equity method investments	20,935,000	15,889,000	42,625,000	28,142,000
Total revenues and earnings from equity method investments	15,577,000	4,273,000
Total revenues and earnings from equity method investments	36,512,000		77,531,000
Operating Segments
Disaggregation of Revenue [Line Items]
Total revenues and earnings from equity method investments	36,175,000	20,162,000	76,638,000	36,314,000
Consumables
Disaggregation of Revenue [Line Items]
Revenue component	11,386,000	726,000	26,495,000	1,347,000
License royalties, related party
Disaggregation of Revenue [Line Items]
Revenue component	4,191,000	3,523,000	8,411,000	6,753,000
Other
Disaggregation of Revenue [Line Items]
Revenue component	0	24,000	0	72,000
Power Generation and Industrials
Disaggregation of Revenue [Line Items]
Revenue component	11,049,000	750,000	25,602,000	1,419,000
Earnings from equity method investments	0	0	0	0
Power Generation and Industrials | Operating Segments
Disaggregation of Revenue [Line Items]
Total revenues and earnings from equity method investments	11,049,000	750,000	25,602,000	1,419,000
Power Generation and Industrials | Consumables
Disaggregation of Revenue [Line Items]
Revenue component	11,049,000	726,000	25,602,000	1,347,000
Power Generation and Industrials | Consumables | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue component	11,049,000	726,000	25,602,000	1,347,000
Power Generation and Industrials | License royalties, related party
Disaggregation of Revenue [Line Items]
Revenue component	0	0	0	0
Power Generation and Industrials | Other
Disaggregation of Revenue [Line Items]
Revenue component		24,000		72,000
Power Generation and Industrials | Other | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue component	0	24,000	0	72,000
Refined Coal
Disaggregation of Revenue [Line Items]
Revenue component	4,191,000	3,523,000	8,411,000	6,753,000
Earnings from equity method investments	20,935,000	15,889,000	42,625,000	28,142,000
Refined Coal | Operating Segments
Disaggregation of Revenue [Line Items]
Earnings from equity method investments	20,935,000	15,889,000	42,625,000	28,142,000
Total revenues and earnings from equity method investments	25,126,000	19,412,000	51,036,000	34,895,000
Refined Coal | Consumables
Disaggregation of Revenue [Line Items]
Revenue component	0	0	0	0
Refined Coal | License royalties, related party
Disaggregation of Revenue [Line Items]
Revenue component	4,191,000	3,523,000	8,411,000	6,753,000
Refined Coal | Other
Disaggregation of Revenue [Line Items]
Revenue component		0		0
Other
Disaggregation of Revenue [Line Items]
Revenue component	337,000	0	893,000	0
Earnings from equity method investments	0	0	0	0
Other | Operating Segments
Disaggregation of Revenue [Line Items]
Total revenues and earnings from equity method investments	337,000	0	893,000	0
Other | Consumables
Disaggregation of Revenue [Line Items]
Revenue component	337,000	0	893,000	0
Other | License royalties, related party
Disaggregation of Revenue [Line Items]
Revenue component	$ 0	0	$ 0	0
Other | Other
Disaggregation of Revenue [Line Items]
Revenue component		$ 0		$ 0

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Commitments and Contingencies (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Commitments and Contingencies Disclosure [Abstract]
Restricted cash, long-term	$ 5,000,000	$ 5,195,000
Restricted cash, short term	$ 0	$ 100,000
Tinuum Group, LLC
Related Party Transaction [Line Items]
Limited guarantees. percent	50.00%

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Stockholders' Equity - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2018	Mar. 31, 2018	Jun. 30, 2019	Jun. 30, 2018	Nov. 30, 2018	May 05, 2017
Class of Stock [Line Items]
Stock repurchased	$ 9	$ 245	$ 92	$ 267
Maximum
Class of Stock [Line Items]
Requirement to own shares outstanding as percent								4.99%
Common Stock
Class of Stock [Line Items]
Stock repurchased (in shares)	184,715		676,201		248,591	825,418
Stock repurchased	$ 2,100		$ 7,500		$ 2,800	$ 9,100
Common Stock | Maximum
Class of Stock [Line Items]
Number of shares authorized to be repurchased (in shares)							20,000,000.0

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Stockholders' Equity - Dividends (Details) - $ / shares	3 Months Ended
	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2018	Mar. 31, 2018
Equity [Abstract]
Dividends declared (in dollars per share)	$ 0.25	$ 0.25	$ 0.25	$ 0.25

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Stock-Based Compensation - Allocation of Compensation Expense (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	$ 541,000	$ 675,000	$ 858,000	$ 1,010,000
Proceeds from stock options exercised			0
Restricted stock awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	541,000	675,000	858,000	952,000
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	$ 0	$ 0	$ 0	$ 58,000

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Stock-Based Compensation - Summary of Unrecognized Compensation Cost (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2019 USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized Compensation Cost	$ 3,632
Expected Weighted- Average Period of Recognition (in years)	1 year 11 months 19 days
Restricted stock awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized Compensation Cost	$ 3,632
Expected Weighted- Average Period of Recognition (in years)	1 year 11 months 19 days

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Stock-Based Compensation - Narrative (Details)	6 Months Ended
	Jun. 30, 2019
Restricted stock awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	3 years
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	3 years
Expected term (in years)	5 years

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Stock-Based Compensation - Summary of Non-vested Restricted Stock Activity (Details)	6 Months Ended
	Jun. 30, 2019 $ / shares shares
Restricted stock awards
Number of SAR's Outstanding and Exercisable
Non-vested shares, Beginning balance (in shares) | shares	280,852
Granted (in shares) | shares	252,590
Vested (in shares) | shares	(77,992)
Forfeited (in shares) | shares	(2,412)
Non-vested shares, Ending balance (in shares) | shares	453,038
Units
Non-vested shares, Weighted-Average Grant Date Fair Value, Beginning Balance (in usd per share) | $ / shares	$ 9.92
Granted, Weighted-Average Grant Date Fair Value (in usd per share) | $ / shares	10.91
Vested in period, Weighted-Average Grant Date Fair Value (in usd per share) | $ / shares	9.51
Forfeited, Weighted-Average Grant Date Fair Value (in usd per share) | $ / shares	10.92
Non-vested shares, Weighted-Average Grant Date Fair Value, Ending Balance (in usd per share) | $ / shares	$ 10.54
RSUs
Number of SAR's Outstanding and Exercisable
Non-vested shares, Beginning balance (in shares) | shares	20,000
Granted (in shares) | shares	0
Vested (in shares) | shares	0
Forfeited (in shares) | shares	0
Non-vested shares, Ending balance (in shares) | shares	20,000
Units
Non-vested shares, Weighted-Average Grant Date Fair Value, Beginning Balance (in usd per share) | $ / shares	$ 10.52
Granted, Weighted-Average Grant Date Fair Value (in usd per share) | $ / shares	0.00
Vested in period, Weighted-Average Grant Date Fair Value (in usd per share) | $ / shares	0.00
Forfeited, Weighted-Average Grant Date Fair Value (in usd per share) | $ / shares	0.00
Non-vested shares, Weighted-Average Grant Date Fair Value, Ending Balance (in usd per share) | $ / shares	$ 10.52

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Stock-Based Compensation - Summary of Option Activity (Details) - Stock options $ / shares in Units, $ in Thousands	6 Months Ended
	Jun. 30, 2019 USD ($) $ / shares shares
Employee and Director Options
Options outstanding, start of year (in shares) | shares	529,780
Options granted (in shares) | shares	0
Options exercised (in shares) | shares	0
Options expired / forfeited (in shares) | shares	(10,000)
Options outstanding, end of year (in shares) | shares	519,780
Options vested and exercisable (in shares) | shares	519,780
Weighted Average Exercise Price
Options outstanding, start of year (in usd per share) | $ / shares	$ 12.23
Options granted (in usd per share) | $ / shares	0.00
Options exercised (in usd per share) | $ / shares	0.00
Options expired / forfeited (in usd per share) | $ / shares	19.28
Options outstanding, end of year (in usd per share) | $ / shares	12.09
Options vested and exercisable, weighted average exercise price (in usd per share) | $ / shares	$ 12.09
Options outstanding, intrinsic value | $	$ 734
Options exercisable, intrinsic value | $	$ 734
Options outstanding, weighted average remaining contractual term	11 months 23 days
Options exercisable, weighted average remaining contractual term	11 months 23 days

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Supplemental Financial Information - Prepaid expenses and other assets and Other assets (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Jan. 01, 2019	Dec. 31, 2018
Prepaid expenses and other assets:
Prepaid expenses	$ 1,904		$ 1,233
Prepaid income taxes	1,970		2,940
Other	1,724		1,397
Other current assets	5,598		5,570
Other long-term assets:
Highview Investment	552		552
Spare parts	3,222		3,278
Mine development costs, net	3,167		2,531
Mine reclamation asset, net	2,390		0
Prepaid royalty expense, long-term	955		955
Right of use assets, operating leases, net	5,488		0
Other long-term assets	779		677
Total	$ 16,553	$ 14,949	$ 7,993

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Supplemental Financial Information - Narrative (Details) - USD ($) $ in Millions	6 Months Ended	12 Months Ended
	Jun. 30, 2019	Dec. 31, 2014
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Mine reserves, amortization period	18 years
Mine
Investment [Line Items]
Useful life	18 years
Highview Enterprises Limited
Investment [Line Items]
Ownership interest, percent		8.00%
Payments to acquire investments		$ 2.8

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Supplemental Financial Information - Other Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Jan. 01, 2019	Dec. 31, 2018
Other current liabilities:
Current portion of operating lease obligations	$ 2,725
Accrued interest	996		$ 407
Income and other taxes payable	909		479
Other	922		1,252
Other current liabilities	5,552		2,138
Other long-term liabilities:
Operating lease obligations, long-term	2,824		0
Mine reclamation liability	2,490		624
Other long-term liabilities	135		316
Other long-term liabilities	$ 5,449	$ 4,811	$ 940

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Supplemental Financial Information - Supplemental Income Statement, Interest Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Interest on Senior Term Loan	$ 1,134	$ 0	$ 2,404	$ 0
Debt discount and debt issuance costs	470	0	851	0
453A interest	326	404	648	740
Other	57	8	188	8
Interest expense	$ 1,987	$ 412	$ 4,091	$ 748

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Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Income Tax Disclosure [Abstract]
Income tax expense (benefit)	$ 6,634	$ (1,349)	$ 8,333	$ 1,220
Effective tax rate	45.00%	(10.00%)	27.00%	5.00%
Increase in valuation allowance	$ (4,800)

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Business Segment Information - Segment Operating Results (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2019 USD ($) segment	Jun. 30, 2018 USD ($)
Segment Reporting Information [Line Items]
Number of reportable segments | segment			2
Revenues:
Earnings in equity method investments	$ 20,935	$ 15,889	$ 42,625	$ 28,142
Total revenues	15,577	4,273	34,906	8,172
Total reported revenues	15,577	4,273
Segment operating income (loss):
Total segment operating income	(4,260)	(1,569)	(7,815)	(3,281)
453A interest	326	404	648	740
Decrease in inventories			3,794	0
Refined Coal
Revenues:
Earnings in equity method investments	20,935	15,889	42,625	28,142
Total revenues	4,191	3,523	8,411	6,753
Refined Coal | RMC6, LLC (RCM6)
Segment operating income (loss):
453A interest	300	400	600	700
Power Generation and Industrials
Revenues:
Earnings in equity method investments	0	0	0	0
Total revenues	11,049	750	25,602	1,419
Consumables
Revenues:
Total revenues	11,386	726	26,495	1,347
Consumables | Refined Coal
Revenues:
Total revenues	0	0	0	0
Consumables | Power Generation and Industrials
Revenues:
Total revenues	11,049	726	25,602	1,347
Other
Revenues:
Total revenues	0	24	0	72
Other | Refined Coal
Revenues:
Total revenues		0		0
Other | Power Generation and Industrials
Revenues:
Total revenues		24		72
Operating Segments
Revenues:
Total reported revenues	36,175	20,162	76,638	36,314
Segment operating income (loss):
Total segment operating income	20,734	16,888	42,655	30,652
Operating Segments | Refined Coal
Revenues:
Earnings in equity method investments	20,935	15,889	42,625	28,142
Royalties, related party	4,191	3,523	8,411	6,753
Total reported revenues	25,126	19,412	51,036	34,895
Segment operating income (loss):
Total segment operating income	24,596	18,275	49,979	32,977
Operating Segments | Power Generation and Industrials
Revenues:
Total reported revenues	11,049	750	25,602	1,419
Segment operating income (loss):
Total segment operating income	(3,862)	(1,387)	(7,324)	(2,325)
Decrease in inventories	1,300		4,700
Severance costs	700		2,600
Operating Segments | Consumables | Power Generation and Industrials
Revenues:
Total revenues	11,049	726	25,602	1,347
Operating Segments | Other | Power Generation and Industrials
Revenues:
Total revenues	0	24	0	72
Intersegment Eliminations | Refined Coal
Revenues:
Earnings in equity method investments	(20,935)	(15,889)	(42,625)	(28,142)
Corporate and Other
Revenues:
Total reported revenues	337	0	893	0
Segment operating income (loss):
Total segment operating income	$ (353)	$ 0	$ (751)	$ 0

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Business Segment Information - Reconciliation of Reportable Segment Amounts (Details) - USD ($) $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2018	Mar. 31, 2018	Jun. 30, 2019	Jun. 30, 2018
Segment Reporting Information [Line Items]
Consolidated operating income	$ (4,260)		$ (1,569)		$ (7,815)	$ (3,281)
Corporate payroll and benefits	(2,798)		(2,759)		(5,354)	(4,973)
Corporate legal and professional fees	(1,569)		(1,213)		(3,545)	(2,761)
Corporate general and administrative	(2,421)		(1,094)		(4,563)	(2,264)
Corporate depreciation and amortization	(757)		(72)		(2,859)	(188)
Other income (expense), net	60		34		130	60
Net income	8,114	$ 14,402	15,291	$ 7,662	22,516	22,953
Operating Segments
Segment Reporting Information [Line Items]
Consolidated operating income	20,734		16,888		42,655	30,652
All Other and Corporate
Segment Reporting Information [Line Items]
Consolidated operating income	(353)		0		(751)	0
Segment Reconciling Items
Segment Reporting Information [Line Items]
Consolidated operating income	20,381		16,888		41,904	30,652
Corporate payroll and benefits	(804)		(950)		(1,236)	(2,097)
Corporate legal and professional fees	(1,556)		(1,140)		(3,517)	(2,588)
Corporate general and administrative	1,715		(884)		(3,149)	(1,825)
Corporate depreciation and amortization	(7)		(22)		(20)	(74)
Corporate interest (expense) income, net	(1,604)		(8)		(3,255)	(8)
Other income (expense), net	53		58		122	113
Net income	$ 14,748		$ 13,942		$ 30,849	$ 24,173

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Business Segment Information - Segment Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Segment Reporting Information [Line Items]
Assets	$ 187,072	$ 159,664
Equity method investments	48,403	6,634
Operating Segments
Segment Reporting Information [Line Items]
Assets	135,742	97,254
Operating Segments | Refined Coal
Segment Reporting Information [Line Items]
Assets	53,131	11,468
Operating Segments | Power Generation and Industrials
Segment Reporting Information [Line Items]
Assets	82,611	85,786
All Other and Corporate
Segment Reporting Information [Line Items]
Assets	$ 51,330	$ 62,410

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Fair Value Measurements - Estimated Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Carrying Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cost method investment	$ 552	$ 552
Highview Obligation	213	213
Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cost method investment	552	552
Highview Obligation	$ 213	$ 213

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Fair Value Measurements - Narrative (Details) - USD ($) $ in Thousands	Dec. 07, 2018	Jun. 30, 2019
Fair Value Disclosures [Abstract]
Time deposits, $250,000 or more		$ 250
ADA Carbon Solutions, LLC
Business Combination, Separately Recognized Transactions [Line Items]
Consideration transferred	$ 66,500

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Restructuring - Narrative (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Restructuring Cost and Reserve [Line Items]
Restructuring charges		$ 0	$ 899	$ 172	$ 899
Employee Severance | ADA Carbon Solutions, LLC
Restructuring Cost and Reserve [Line Items]
Restructuring charges	$ 600

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Restructuring - Utilization of Restructuring Accruals (Details) - Employee Severance $ in Thousands	6 Months Ended
	Jun. 30, 2019 USD ($)
Restructuring Reserve [Roll Forward]
Remaining accrual as of December 31, 2017	$ 2,208
Expense provision	172
Cash payments and other	(1,293)
Change in estimates	(104)
Remaining accrual as of June 30, 2019	$ 983

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Restructuring - Net Pretax Benefits (Charges), Incurred by Segment (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2019 USD ($) employee	Jun. 30, 2018 USD ($) employee	Jun. 30, 2019 USD ($) employee	Jun. 30, 2018 USD ($) employee
Restructuring Cost and Reserve [Line Items]
Approximate Number of Employees | employee	0	6	1	6
Restructuring charges	$ 0	$ 899,000	$ 172,000	$ 899,000
Changes in estimates	0	0	(104,000)	0
Total pretax charge, net of reversals	0	899,000	68,000	899,000
Operating Segments | Refined Coal
Restructuring Cost and Reserve [Line Items]
Restructuring charges	0	280,000	0	280,000
Changes in estimates	0	0	0	0
Total pretax charge, net of reversals	0	280,000	0	280,000
Operating Segments | Power Generation and Industrials
Restructuring Cost and Reserve [Line Items]
Restructuring charges	0	496,000	0	496,000
Changes in estimates	0	0	0	0
Total pretax charge, net of reversals	0	496,000	0	496,000
All Other and Corporate
Restructuring Cost and Reserve [Line Items]
Restructuring charges	0	123,000	172,000	123,000
Changes in estimates	0	0	(104,000)	0
Total pretax charge, net of reversals	$ 0	$ 123,000	$ 68,000	$ 123,000

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Subsequent Events (Details) - $ / shares		3 Months Ended
	Aug. 05, 2019	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2018	Mar. 31, 2018
Subsequent Event [Line Items]
Dividends declared (in dollars per share)		$ 0.25	$ 0.25	$ 0.25	$ 0.25
Subsequent Event
Subsequent Event [Line Items]
Dividends declared (in dollars per share)	$ 0.25