Consolidated Financial Results
Three Months Ended September 30, 2012 Compared to Three Months Ended September 30, 2011
As mentioned above, results for the 2012 Quarter were impacted by an asset impairment charge at our Pontiki mining complex, which was idled on August 29, 2012 following a closure order by the Mine Safety and Health Administration with respect to the Pontiki coal preparation plant and associated surface facilities. Sufficient progress has been made in our efforts to improve the near-term cost structure at Pontiki to justify the capital investment and expense to complete the first phase of repairs necessary to allow the complex to resume operation. Repairs at Pontiki are expected to begin shortly and should be completed by the end of the year. By resuming operations at Pontiki, ARLP expects to recoup the required investment for these initial repairs and preserve potential future option value for the mining complex. Nevertheless, Pontiki continues to face significant uncertainties regarding the long-term viability of its operations once its 2013 coal sales contracts expire. Given these uncertainties, we determined that an impairment of Pontiki's assets was required in the 2012 Quarter. The $19.0 million impairment charge primarily reflects the adjustment of the mine's assets to the fair value of equipment currently in use at Pontiki that could be used at other operations.
On the strength of record sales volumes, coal sales revenues rose to $499.0 million in the 2012 Quarter, an increase of 5.3% compared to the 2011 Quarter. Higher sales volumes, particularly from the new Tunnel Ridge longwall and the recently acquired Onton mine, pushed coal sales volumes to 8.9 million tons in the 2012 Quarter, an increase of 7.0% compared to the 2011 Quarter. Increased sales volumes more than offset reduced metallurgical coal sold into the export markets, which drove total average coal sales prices lower in the 2012 Quarter to $56.00 per ton sold, an $0.89 per ton decrease compared to the 2011 Quarter.