Equity Method Investments

9 Months Ended

Sep. 30, 2020

Equity Method Investments and Joint Ventures [Abstract]

Equity Method InvestmentsThe Company currently has three equity method investments in limited liability companies that own refined coal production plants (the “clean energy investments”) whose activities qualify for income tax credits under Section 45 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”).

During the three months ended September 30, 2020 and 2019, the Company reduced its long-term obligations for its three investments as a result of lower than anticipated production levels and lower expected future variable debt payments to the respective project sponsor. The Company recognized a net gain of approximately $15 million and $7 million, respectively, which was recognized as a component of the net loss of the equity method investments in the condensed consolidated statements of operations.

Summarized financial information, in the aggregate, for the Company’s significant equity method investments on a 100% basis for the three and nine months ended September 30, 2020 and 2019 are as follows:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In millions)	2020		2019		2020		2019
Total revenues	$	113.5	$	101.6	$	288.8	$	274.1
Gross loss	(1.4)		(1.1)		(3.6)		(3.1)
Operating and non-operating expense	5.2		5.2		14.4		14.3
Net loss	$	(6.6)	$	(6.3)	$	(18.0)	$	(17.4)

The Company’s net losses from its equity method investments include amortization expense related to the excess of the cost basis of the Company’s investment over the underlying assets of each individual investee. For the three months ended September 30, 2020 and 2019, the Company recognized net losses from equity method investments of $2.9 million and $10.4 million, respectively. For the nine months ended September 30, 2020 and 2019, the Company recognized net losses from equity method investments of $37.4 million and $43.6 million, respectively, which were recognized as a component of other expense, net in the condensed consolidated statements of operations. The Company recognizes the income tax credits and benefits from the clean energy investments as part of its provision for income taxes.