Revenue Performance - For the three months ended September 30, 2020, total revenues increased by 2% to $19.471 million compared to $19.133 million for the same period in 2019[116]. - Consumables revenue for the same period rose by 7% to $15.844 million, driven by higher volumes, while license royalties decreased by 17% to $3.627 million[116]. - Total revenues for the nine months ended September 30, 2020, were $43,217,000, down 20% from $54,039,000 in the same period of 2019[131]. - Consumables revenue decreased by 19% to $33,231,000 for the nine months ended September 30, 2020, primarily due to lower volume and less favorable price and product mix[131]. - For the three months ended September 30, 2020, total reported revenues were $19,471,000, a slight increase from $19,133,000 in the same period of 2019[151]. Income and Expenses - The company recorded a net income of $5.0 million for the three months ended September 30, 2020, compared to a net income of $3.9 million for the same period in 2019[115]. - Operating expenses for the three months ended September 30, 2020, decreased by 24% to $7,283,000 from $9,585,000 in the same period of 2019[120]. - Payroll and benefits expenses decreased by 14% to $2,285,000 for the three months ended September 30, 2020, primarily due to a reduction in headcount[121]. - Legal and professional fees decreased by 55% to $1,321,000 for the three months ended September 30, 2020, mainly due to cost reductions in consulting and outsourced IT[122]. - Total other income for the three months ended September 30, 2020, was $8,654,000, a decrease of 33% from $12,909,000 in the same period of 2019[126]. - Total other income decreased by 55% to $23.1 million for the nine months ended September 30, 2020, compared to $51.6 million in the same period of 2019[140]. - Income tax expense significantly decreased to $1.3 million for the nine months ended September 30, 2020, compared to $14.9 million in the same period of 2019, driven by a pretax loss of $19.4 million[144]. Impairment and Asset Management - The impairment charge for long-lived assets was $26.1 million as of June 30, 2020, primarily due to a significant decline in revenues from the PGI segment[112]. - Impairment of long-lived assets for the nine months ended September 30, 2020, was $26,103,000, with no comparable expense in 2019[133]. - The company incurred an impairment charge of $23,232,000 in the PGI segment during the nine months ended September 30, 2020[163]. Operational Changes and Agreements - The company entered into a 15-year supply agreement with Cabot Norit Americas, expected to provide material incremental volume and lower operating costs[108]. - The acquisition of Marshall Mine was completed for a nominal purchase price, with associated reclamation costs estimated at approximately $19.7 million[110]. - The company has deferred payroll tax payments totaling $0.3 million under the CARES Act, with repayment scheduled for 2021 and 2022[114]. - The evolving impact and duration of the COVID-19 pandemic may affect the company's business operations and financial performance[181]. - The company expects future operating cost efficiencies and positive impacts on gross margins from operations tied to its Supply Agreement[181]. Segment Performance - The operating income for the Refined Coal segment was $12,817,000 for the three months ended September 30, 2020, down from $18,158,000 in 2019, reflecting a decrease of approximately 29.5%[155]. - The PGI segment reported an operating loss of $1,270,000 for the three months ended September 30, 2020, compared to a loss of $977,000 in the same period of 2019[157]. - For the nine months ended September 30, 2020, equity earnings from Tinuum Group were $20,462,000, down from $50,757,000 in the same period of 2019, indicating a decrease of approximately 59.7%[158]. - The total segment operating income for the nine months ended September 30, 2020 was $870,000, a significant drop from $59,836,000 in the same period of 2019[151]. - PGI Segment operating loss increased to $(33,584,000) for the nine months ended September 30, 2020, compared to $(8,301,000) in 2019, reflecting a significant deterioration in performance[163]. Cash Flow and Financing - Operating cash flow decreased to $34,918,000 for the nine months ended September 30, 2020, compared to $47,598,000 in 2019, a decline of 27.1%[172]. - The company received a PPP Loan of $3.3 million on April 21, 2020, which is unsecured and has a maturity date of April 21, 2022[167]. - As of September 30, 2020, the company had $5.0 million of borrowing availability under its Line of Credit with no outstanding borrowings[171]. - Cash flows from operating activities decreased by $12.7 million for the nine months ended September 30, 2020, compared to the same period in 2019, primarily due to a net income decrease of $47.2 million[173]. - Cash flows used in financing activities decreased by $20.7 million for the nine months ended September 30, 2020, primarily due to a decrease in dividends paid by $8.8 million and principal loan repayments of $6.0 million[175]. Future Outlook - The company anticipates improvements in gross margin starting in 2021 due to a Supply Agreement[132]. - The company expects future cash flows from Tinuum Group to range from $90 million to $110 million through 2021, contingent on maintaining existing contracts and market conditions[166]. - Total capital expenditures for 2020 are anticipated to be lower than in 2019, with an increase expected in 2021 due to planned maintenance[164].

Financial Performance - For the three months ended June 30, 2020, the company reported a net loss of $23.8 million compared to a net income of $8.1 million for the same period in 2019, representing a significant decline in performance [110]. - Total revenues for the three months ended June 30, 2020, were $11.5 million, down 26% from $15.6 million in the same period of 2019, primarily due to lower sales volumes [112]. - Total revenues for the six months ended June 30, 2020, decreased by 32% to $23.746 million compared to $34.906 million for the same period in 2019 [129]. - The company reported a pretax loss of $25.2 million for the six months ended June 30, 2020, compared to pretax income of $30.8 million for the same period in 2019 [146]. - Consolidated Adjusted EBITDA for the six months ended June 30, 2020, was $23.08 million, down from $33.13 million in 2019 [152]. Revenue Breakdown - Consumables revenue decreased by 28% to $8.2 million for the three months ended June 30, 2020, compared to $11.4 million in 2019, driven by a 5.4% decrease in overall power generation [113]. - Consumables revenues decreased by 34% to $17.387 million for the six months ended June 30, 2020, primarily due to lower volumes and a 5% decrease in overall power generation [130]. - License royalties from related parties decreased by 21% to $3.3 million for the three months ended June 30, 2020, due to a reduction in production and lower royalty rates [114]. - The company recognized $8.168 million in earnings from equity method investments for the three months ended June 30, 2020, down 61% from $20.935 million in the same period in 2019 [122]. - Equity earnings from Tinuum Group for the three months ended June 30, 2020, were $6,764,000, down from $19,244,000 in 2019, reflecting a decrease of about 64.8% [159]. Operating Expenses - Operating expenses increased by 366% to $35.1 million for the three months ended June 30, 2020, compared to $7.5 million in the same period of 2019, largely due to the impairment charge [116]. - Operating expenses for the six months ended June 30, 2020, increased by 173% to $44.545 million compared to $16.321 million for the same period in 2019, largely due to an impairment charge [133]. - The company’s payroll and benefits expenses rose by 36% to $3.8 million for the three months ended June 30, 2020, primarily due to severance costs related to an executive resignation [116]. - Payroll and benefits expenses increased by 22% to $6.554 million for the six months ended June 30, 2020, primarily due to severance costs [134]. Impairment Charges - The company incurred impairment charges of $26.1 million related to long-lived assets during the three months ended June 30, 2020, significantly impacting operating expenses [116]. - For the three months ended June 30, 2020, the company recorded an impairment charge of $26.1 million [121]. - The PGI segment incurred an impairment charge of $23,232,000 for the three months ended June 30, 2020, contributing to the increased operating loss [164]. Cash Flow and Liquidity - Cash and cash equivalents increased from $17.1 million as of December 31, 2019, to $21.7 million as of June 30, 2020, reflecting a net change of $4.653 million [183]. - Operating activities provided $24,085,000 in cash for the six months ended June 30, 2020, a decrease of 21.2% from $30,572,000 in 2019 [183]. - The company made principal payments of $12 million on its Senior Term Loan during the six months ended June 30, 2020 [178]. - The company declared and paid quarterly cash dividends of $4.8 million for the six months ended June 30, 2020, compared to $9.2 million in 2019, a decrease of 47.2% [181]. - Cash flows from operating activities decreased by $6.5 million for the six months ended June 30, 2020, compared to the same period in 2019, primarily due to a net income decrease of $48.2 million [184]. Future Outlook and Risks - The company anticipates continued challenges in revenue generation due to the expiration of IRC Section 45 tax credits by December 31, 2021, affecting the RC segment [106]. - The company expects lower royalty rates per ton in 2020 and 2021 due to higher depreciation and reduced lease payments [131]. - The company expects lower pro-rata share of Tinuum Group's earnings for the remainder of 2020 and 2021 due to higher depreciation and reduced lease payments [140]. - Future earnings in the RC segment are expected to be impacted by coal-fired electricity generation dispatch and lease renegotiations [169]. - The company anticipates ongoing challenges related to the commercialization of technologies and operational disruptions due to COVID-19 [192]. COVID-19 Impact - The impact of COVID-19 has led to increased operational costs and inefficiencies, although both business segments have continued to operate during the pandemic [109]. - The company emphasizes the importance of not placing undue reliance on forward-looking statements and advises consulting SEC filings for additional risk discussions [192]. - Risks associated with forward-looking statements include potential changes in regulations, economic conditions, and the impact of COVID-19 on demand for products and services [191].

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 March 31, 2020 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 ______________________________________ | --- | --- | |-------- ...

United States SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________________________________ FORM 10-K ______________________________________ x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019 or ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 001-37822 Advanced Emissions Solutions, Inc. (Name of registrant as specified in its charter) Delaware ...

Financial Performance - For the three months ended September 30, 2019, the company recognized net income of $3.9 million, a decrease of 29.1% compared to $5.5 million for the same period in 2018 [110]. - Total revenues for the three months ended September 30, 2019, were $19.1 million, representing a 272% increase from $5.1 million in the same period of 2018 [114]. - For the nine months ended September 30, 2019, total revenues increased to $54,039 thousand, a 306% increase from $13,319 thousand in the same period of 2018 [127]. - Consolidated net income for the nine months ended September 30, 2019, was $26.4 million, down from $28.5 million in the same period of 2018, reflecting a decrease of 7.3% [145]. - Cash flows from operating activities for the nine months ended September 30, 2019, were $47.6 million, an increase of $51.9 million compared to the same period in 2018 [171]. Revenue Breakdown - Consumables revenue increased to $14.7 million for the three months ended September 30, 2019, up 1,314% from $1.0 million in the same period of 2018, primarily due to Carbon Solutions' operations [114]. - Consumables revenue for the nine months ended September 30, 2019 was $41,243 thousand, up 1,626% from $2,390 thousand in the prior year [127]. - License royalties increased by 7% to $4.4 million for the three months ended September 30, 2019, compared to $4.1 million in the same period of 2018 [114]. - The company recognized $50.8 million in equity earnings from Tinuum Group for the nine months ended September 30, 2019, compared to $33.6 million in the same period of 2018 [136]. Operating Expenses - Operating expenses for the three months ended September 30, 2019, totaled $9.6 million, a 130% increase from $4.2 million in the same period of 2018 [117]. - Operating expenses for the nine months ended September 30, 2019 totaled $25,906 thousand, an 81% increase from $14,347 thousand in the same period of 2018 [129]. - General and administrative expenses surged by 149% to $7,699 thousand for the nine months ended September 30, 2019, up from $3,098 thousand in the prior year [132]. - Legal and professional fees rose by 53% to $5,300 thousand for the nine months ended September 30, 2019, compared to $3,459 thousand in the same period of 2018 [129]. Equity Method Investments - Earnings from equity method investments for the three months ended September 30, 2019, were $14.4 million, a 48% increase from $9.7 million in the same period of 2018 [122]. - Earnings from equity method investments increased to $57,051 thousand for the nine months ended September 30, 2019, a 51% increase from $37,857 thousand in the same period of 2018 [134]. - Earnings from equity method investments in Tinuum Group for the three months ended September 30, 2019, were $11.7 million, compared to $8.1 million in the same period of 2018, marking a 44.5% increase [151]. Cash Flow and Liquidity - Cash, cash equivalents, and restricted cash decreased from $23.8 million as of December 31, 2018, to $20.2 million as of September 30, 2019 [169]. - The company declared and paid quarterly cash dividends totaling $13.7 million for the nine months ended September 30, 2019, compared to $15.2 million for the same period in 2018 [164]. - As of September 30, 2019, there were no outstanding borrowings under the Line of Credit, indicating a strong liquidity position [165]. - Total cash distributions from Tinuum Group for the nine months ended September 30, 2019, were $50.3 million, up from $33.6 million in 2018, contributing to improved liquidity [161]. Future Outlook - The company expects lower royalty earnings per ton of refined coal through 2021 due to higher depreciation recognized on royalty-bearing facilities [115]. - The company anticipates future earnings and distributions from Tinuum Group to be lower due to higher depreciation, reduced lease payments, and closures of two utilities [124]. - The company expects future earnings in the RC segment to be influenced by coal-fired electricity generation dispatch and lease renegotiations [152]. - Future cash flows from Tinuum Group are expected to range from $150 million to $175 million through 2021, a decrease from the previous estimate of $175 million to $200 million [161]. Acquisitions and Investments - The company acquired 100% of ADA Carbon Solutions, LLC on December 7, 2018, to expand its product offerings in the mercury control industry [109]. - The company incurred $4.7 million in additional cost of revenue expense due to a step-up in basis of acquired finished goods inventory related to the Carbon Solutions Acquisition [158]. - The company anticipates growth in its target markets and plans to increase research and development activities in the future [181].

Financial Performance - For the three months ended June 30, 2019, the company reported net income of $8.1 million, a decrease of 47.1% compared to $15.3 million for the same period in 2018 [102]. - Total revenues for the three months ended June 30, 2019, were $15.577 million, representing a significant increase of 265% from $4.273 million in the same period of 2018 [105]. - Total revenues for the six months ended June 30, 2019, reached $34.9 million, a 327% increase from $8.2 million in the same period in 2018 [118]. - Net income for the six months ended June 30, 2019 was $22.5 million, primarily due to earnings from equity method investees of $42.6 million [170]. Revenue Breakdown - Consumables revenue increased to $11.386 million for the three months ended June 30, 2019, up 1,468% from $726,000 in the prior year, primarily due to operations from Carbon Solutions [105]. - Consumables revenue increased to $26.5 million for the six months ended June 30, 2019, compared to $1.3 million in 2018, reflecting growth from Carbon Solutions' operations [118]. - License royalties increased by 19% to $4.191 million for the three months ended June 30, 2019, driven by additional third-party investors for new refined coal facilities [105]. - Earnings from equity method investments increased by 32% to $20.935 million for the three months ended June 30, 2019, compared to $15.889 million in the same period of 2018 [112]. - Earnings from equity method investments for the six months ended June 30, 2019, were $42.6 million, up 51% from $28.1 million in the same period in 2018 [127]. Operating Expenses - Operating expenses rose to $7.545 million for the three months ended June 30, 2019, a 47% increase from $5.138 million in the same quarter of 2018 [107]. - Operating expenses increased to $16.3 million for the six months ended June 30, 2019, a 60% increase from $10.2 million in 2018, driven by higher payroll, legal fees, and depreciation [122]. - Legal and professional fees increased by 29% to $1.569 million, attributed to integration costs from the Carbon Solutions Acquisition [109]. - Depreciation and amortization expenses surged by 951% to $757,000 due to the addition of long-lived and intangible assets from the Carbon Solutions Acquisition [111]. Interest and Tax Expenses - Interest expense rose significantly by 382% to $(1.987) million for the three months ended June 30, 2019, compared to $(412,000) in the prior year [112]. - Interest expense rose by $1.6 million to $1.6 million for the three months ended June 30, 2019, primarily due to the Senior Term Loan related to the Carbon Solutions Acquisition [115]. - Income tax expense for the three months ended June 30, 2019, was $6.6 million, compared to a tax benefit of $1.3 million in the same period in 2018, driven by increased pre-tax income [116]. - Income tax expense for the six months ended June 30, 2019, was $8.3 million, up from $1.2 million in the same period of 2018, primarily due to increased forecasted pre-tax income [134]. Cash Flow and Dividends - Cash flows from operating activities for the six months ended June 30, 2019 were $30.6 million, an increase of $34.0 million compared to the same period in 2018 [170]. - Quarterly cash dividends declared during the six months ended June 30, 2019 totaled $9.2 million, compared to $10.2 million in the same period in 2018 [163]. - Cash dividends paid during the six months ended June 30, 2019 were $9.2 million, compared to $10.2 million in the same period in 2018 [173]. - The company repurchased 248,591 shares of common stock for $2.8 million during the six months ended June 30, 2019 [162]. Segment Performance - The RC segment's operating income for the six months ended June 30, 2019, was $49.979 million, compared to $32.977 million for the same period in 2018 [145]. - The PGI segment reported an operating loss of $7.324 million for the six months ended June 30, 2019, compared to a loss of $2.325 million in the same period of 2018 [145]. - PGI segment operating loss increased to $3.9 million for the three months ended June 30, 2019, compared to a loss of $1.4 million in the same period in 2018 [149]. - PGI Segment EBITDA loss was $4.5 million for the six months ended June 30, 2019, an increase of $2.2 million compared to the same period in 2018 [155]. Investments and Future Outlook - The carrying value of the investment in Tinuum Group was $42.5 million as of June 30, 2019, reflecting cumulative pro-rata share of income exceeding cash distributions [130]. - Future cash flows from Tinuum are expected to range from $175 million to $200 million through 2021, based on 21 invested facilities as of June 30, 2019 [159]. - Cash distributions from Tinuum Group were $33.8 million for the six months ended June 30, 2019, up from $25.5 million in 2018 [159]. - Cash distributions from Tinuum Group decreased by $25.5 million for the six months ended June 30, 2019 compared to the same period in 2018 [173]. Debt and Financing - The Senior Term Loan amounts to $70 million, with principal payments of $6 million required quarterly, and $16 million paid during the six months ended June 30, 2019 [161]. - The borrowing availability of the Line of Credit was decreased to $5.0 million due to decreased collateral requirements [165]. - The financial covenants in the Line of Credit were amended to maintain a minimum cash balance of $5.0 million [167]. - As of June 30, 2019, there were no outstanding borrowings under the Line of Credit [164].

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 March 31, 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 ______________________________________ | --- | --- | |-------- ...

Part I [Business](index=3&type=section&id=Item%201.%20Business) ADES provides environmental solutions through its Refined Coal (RC) segment, reliant on expiring tax credits, and its Power Generation and Industrials (PGI) segment, which expanded its activated carbon offerings - The company operates two primary segments: Refined Coal (RC), reliant on tax credits expiring by 2021, and Power Generation and Industrials (PGI), focused on activated carbon consumables[5](index=5&type=chunk) - ADES acquired Carbon Solutions for **$75.0 million** on December 7, 2018, expanding its activated carbon market offerings, primarily funded by a **$70.0 million** senior term loan[6](index=6&type=chunk) Revenue by Type (2017-2018) | Revenue Type | 2018 (in thousands) | 2017 (in thousands) | | :--- | :--- | :--- | | Consumables | $8,733 | $4,246 | | License royalties, related party | $15,140 | $9,672 | | Equipment sales | $72 | $31,446 | | **Total revenues** | **$23,945** | **$45,364** | - Business is heavily influenced by environmental regulations like the Mercury and Air Toxics Standards (MATS), driving demand for pollutant control products[9](index=9&type=chunk)[26](index=26&type=chunk) Tinuum Group RC Facility Status (as of Dec 31, 2018) | Status | Number of RC Facilities | | :--- | :--- | | Total Facilities | 28 | | Not Operating | 9 | | Operating (Invested) | 19 | | Operating (Retained) | 0 | - Section 45 tax credits, a key driver for the RC segment, expire in December 2019 for two facilities and in 2021 for the remaining facilities[13](index=13&type=chunk) [Risk Factors](index=13&type=section&id=Item%201A.%20Risk%20Factors) The company faces substantial risks from dependence on environmental regulations, declining coal use, expiration of Section 45 tax credits by 2021, integration of the Carbon Solutions acquisition, and potential limitations on tax loss carryforwards - Demand for products is highly dependent on environmental laws like MATS, and changes to these regulations could materially harm the business[49](index=49&type=chunk) - A substantial portion of earnings from the Refined Coal (RC) segment will be eliminated after 2021 due to the expiration of Section 45 tax credits, which the PGI segment may not sufficiently replace[77](index=77&type=chunk)[78](index=78&type=chunk)[79](index=79&type=chunk) - The company faces risks in integrating the Carbon Solutions acquisition, including assimilating operations, retaining customers and employees, and realizing expected synergies[65](index=65&type=chunk)[66](index=66&type=chunk)[67](index=67&type=chunk) - An "ownership change" under IRC Section 382 could significantly limit the company's ability to use its **$104.6 million** in tax loss and credit carryforwards[98](index=98&type=chunk)[99](index=99&type=chunk) - Covenants in the Senior Term Loan may prevent the company from paying dividends or repurchasing stock starting in Q3 2020, as future net cash flows from the RC business are expected to fall below the required **$100 million** threshold[109](index=109&type=chunk) - A significant portion of Tinuum Group's earnings comes from related tax equity investors, and renegotiation or termination of these leases would materially and adversely affect the business[82](index=82&type=chunk)[83](index=83&type=chunk) [Unresolved Staff Comments](index=21&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - There are no unresolved staff comments[116](index=116&type=chunk) [Properties](index=21&type=section&id=Item%202.%20Properties) The company operates through leased corporate facilities in Colorado and owned/leased manufacturing and mining properties in Louisiana, including an activated carbon plant and lignite mine - The company leases office, warehouse, and laboratory space in Colorado totaling approximately **32,000 square feet**[117](index=117&type=chunk) - The company owns or controls approximately **1,750 acres** of coal land for its Five Forks surface mine in Louisiana, supplying raw material for its activated carbon plant[118](index=118&type=chunk) [Legal Proceedings](index=22&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in various litigation matters arising in the ordinary course of business, with details in Note 8 of the financial statements - Information regarding legal proceedings is found in Note 8, "Commitments and Contingencies," of the financial statements[122](index=122&type=chunk) [Mine Safety Disclosures](index=22&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Mine safety violation disclosures, as required by the Dodd-Frank Act, are included in Exhibit 95 of the Form 10-K - The statement concerning mine safety violations is included in Exhibit 95 to this report[123](index=123&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=23&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on NASDAQ, with a quarterly dividend program and active stock repurchases, including a new **$20.0 million** program authorized in November 2018 - The company commenced a quarterly cash dividend program of **$0.25 per common share** in June 2017[126](index=126&type=chunk) Common Stock Repurchase Activity (Q4 2018) | Period | Total Shares Purchased | Average Price Paid per Share | Approx. Dollar Value Remaining (in thousands) | | :--- | :--- | :--- | :--- | | Oct 1-31, 2018 | — | $— | $— | | Nov 1-30, 2018 | 145,688 | $10.13 | — | | Dec 1-31, 2018 | 1,193,104 | $10.34 | $5,826 | | **Total** | **1,338,792** | | **$5,826** | - In November 2018, the Board authorized a new stock repurchase program for up to **$20.0 million** of common stock, effective until December 31, 2019[131](index=131&type=chunk) [Selected Financial Data](index=25&type=section&id=Item%206.%20Selected%20Financial%20Data) This section provides a five-year financial summary, highlighting 2018 revenues of **$23.9 million** (down from **$45.4 million** in 2017) and net income of **$35.5 million**, boosted by **$54.2 million** in equity method earnings Five-Year Selected Financial Data Summary (2014-2018) | (in thousands, except per share) | 2018 | 2017 | 2016 | 2015 | 2014 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Statement of Operations Data** | | | | | | | Revenues | $23,945 | $45,364 | $56,747 | $73,381 | $23,333 | | Earnings from equity method investments | $54,208 | $53,843 | $45,584 | $8,921 | $42,712 | | Net income (loss) | $35,454 | $27,873 | $97,678 | $(30,141) | $1,387 | | Net income (loss), per share, basic | $1.78 | $1.30 | $4.40 | $(1.37) | $0.06 | | Dividends declared per common share | $1.00 | $0.75 | $— | $— | $— | | **Balance Sheet Data (as of Dec 31)** | | | | | | | Total assets | $159,664 | $82,618 | $107,296 | $60,775 | $93,699 | | Total borrowings | $74,125 | $— | $— | $28,025 | $15,910 | | Stockholders' equity (deficit) | $67,947 | $73,455 | $76,165 | $(24,978) | $(697) | - The Carbon Solutions Acquisition on December 7, 2018, contributed **$5.6 million** in revenues and a net loss of **$0.4 million** for the period from December 7 to December 31, 2018[136](index=136&type=chunk) - In 2018, the company entered into a **$70.0 million** senior term loan facility to fund the Carbon Solutions Acquisition, significantly increasing total borrowings[136](index=136&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2018, total revenue decreased by **47%** to **$23.9 million** due to completed equipment sales, offset by increased royalties and consumables, while net income rose to **$35.5 million** driven by equity method earnings and significant capital returns [Results of Operations](index=27&type=section&id=Item%207.%20Results%20of%20Operations) Total revenue decreased **47%** to **$23.9 million** in 2018 due to completed equipment sales, partially offset by increased royalties and consumables, leading to a wider operating loss but strong pre-tax income from equity method earnings Consolidated Revenue Comparison (2017-2018) | Revenue Type | 2018 (in thousands) | 2017 (in thousands) | Change ($ in thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Consumables | $8,733 | $4,246 | $4,487 | 106% | | License royalties, related party | $15,140 | $9,672 | $5,468 | 57% | | Equipment sales | $72 | $31,446 | $(31,374) | (100)% | | **Total revenues** | **$23,945** | **$45,364** | **$(21,419)** | **(47)%** | - Equipment sales revenue decreased by **$31.4 million** as all long-term ACI and DSI system contracts were completed by the end of 2017, with no similar future contracts expected[148](index=148&type=chunk)[150](index=150&type=chunk) - Consumables revenue increased by **106%**, primarily due to the Carbon Solutions Acquisition, which contributed **$5.6 million** in revenue from December 7 to December 31, 2018[147](index=147&type=chunk) - Legal and professional fees increased by **89%** to **$8.2 million**, mainly due to **$4.5 million** in costs related to the Carbon Solutions Acquisition[153](index=153&type=chunk)[155](index=155&type=chunk) - Earnings from equity method investments remained stable at approximately **$54 million**, with Tinuum Services earnings increasing by **$2.1 million** (**42%**) due to more RC facilities in operation[157](index=157&type=chunk)[158](index=158&type=chunk) - The company earned **$7.0 million** in Section 45 tax credits in 2018, up from **$3.5 million** in 2017, from the operation of retained RC facilities[163](index=163&type=chunk) [Business Segments](index=35&type=section&id=Item%207.%20Business%20Segments) The RC segment's operating income increased to **$65.5 million** in 2018, while the PGI segment reported an operating loss of **$2.6 million** due to declining equipment sales not offset by new consumables revenue Segment Operating Income (Loss) Comparison (2017-2018) | Segment | 2018 (in thousands) | 2017 (in thousands) | Change ($ in thousands) | | :--- | :--- | :--- | :--- | | Refined Coal | $65,454 | $59,908 | $5,546 | | Power Generation and Industrials | $(2,621) | $379 | $(3,000) | | **Total segment operating income** | **$62,833** | **$60,287** | **$2,546** | - The RC segment's operating income increased by **$5.5 million**, driven by higher M-45 royalties, increased earnings from Tinuum Services, and lower 453A interest expense[175](index=175&type=chunk)[177](index=177&type=chunk) - The PGI segment's operating income decreased by **$3.0 million**, swinging to a loss, primarily due to the sharp decline in equipment sales revenue not offset by incremental revenue from the Carbon Solutions acquisition[175](index=175&type=chunk)[178](index=178&type=chunk) [Liquidity and Capital Resources](index=38&type=section&id=Item%207.%20Liquidity%20and%20Capital%20Resources) The company's 2018 liquidity was impacted by the **$65.8 million** Carbon Solutions acquisition, funded by a **$70.0 million** Senior Term Loan, alongside significant capital returns and projected **$200-225 million** in future Tinuum cash flows Summary of Cash Flows (2017-2018) | (in thousands) | 2018 | 2017 | | :--- | :--- | :--- | | Net cash used in operating activities | $(9,889) | $(11,748) | | Net cash (used in) provided by investing activities | $(16,543) | $48,386 | | Net cash provided by (used in) financing activities | $19,511 | $(32,889) | | **Net change in Cash** | **$(6,921)** | **$3,749** | - The company executed a **$70.0 million** Senior Term Loan with Apollo to primarily fund the Carbon Solutions Acquisition, receiving net proceeds of **$67.9 million** after discounts and paying **$2.0 million** in issuance costs[185](index=185&type=chunk)[196](index=196&type=chunk) - Investing activities were dominated by the **$62.5 million** net cash used for the Carbon Solutions acquisition, a sharp contrast to 2017 which saw **$48.9 million** in cash distributions from Tinuum Group classified as investing cash flow[194](index=194&type=chunk)[195](index=195&type=chunk) - The company returned significant capital to shareholders, paying **$20.2 million** in dividends and using **$25.3 million** for stock repurchases during 2018[187](index=187&type=chunk)[188](index=188&type=chunk)[197](index=197&type=chunk)[198](index=198&type=chunk) - Future cash flows from Tinuum (distributions and royalties, net of taxes) are expected to range from **$200 million** to **$225 million** through 2021[183](index=183&type=chunk) [Contractual Obligations](index=42&type=section&id=Item%207.%20Contractual%20Obligations) As of December 31, 2018, total contractual obligations were **$87.7 million**, primarily comprising a **$70.0 million** Senior Term Note and significant capital and operating lease obligations Contractual Obligations as of December 31, 2018 | (in thousands) | Total | Less than 1 year | 1-3 years | 4-5 years | After 5 years | | :--- | :--- | :--- | :--- | :--- | :--- | | Senior Term Note | $70,000 | $24,000 | $46,000 | $— | $— | | Capital lease obligations | $9,642 | $1,749 | $3,509 | $1,902 | $2,482 | | Operating leases | $8,055 | $3,619 | $3,905 | $531 | $— | | **Total** | **$87,697** | **$29,368** | **$53,414** | **$2,433** | **$2,482** | [Critical Accounting Policies and Estimates](index=42&type=section&id=Item%207.%20Critical%20Accounting%20Policies%20and%20Estimates) Critical accounting policies involve significant management judgments and estimates, particularly in business combinations, income taxes, and asset retirement obligations - Business Combinations: Allocating the purchase price of acquisitions like Carbon Solutions requires significant estimates for the fair value of tangible and intangible assets, such as customer relationships and developed technology[204](index=204&type=chunk) - Income Taxes: Management judgment is critical in determining the valuation allowance for deferred tax assets, assessing if they are "more likely than not" to be realized[209](index=209&type=chunk) - Asset Retirement Obligation: The company must estimate future costs to reclaim its mine assets, involving judgments about timing, amount, and scope of reclamation work required by regulations[208](index=208&type=chunk) [Financial Statements and Supplementary Data](index=45&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for 2018 and 2017, including key figures like **$159.7 million** in total assets and **$35.5 million** in net income, with an unqualified opinion from Moss Adams LLP - The financial statements were audited by Moss Adams LLP, which provided an unqualified opinion on both the financial statements and the company's internal control over financial reporting[214](index=214&type=chunk)[215](index=215&type=chunk) - The company adopted the new revenue recognition standard, ASC 606, on January 1, 2018, using the modified retrospective method, resulting in a cumulative-effect adjustment increasing retained earnings by **$3.0 million**[216](index=216&type=chunk)[226](index=226&type=chunk) Consolidated Balance Sheet Summary | (in thousands) | As of Dec 31, 2018 | As of Dec 31, 2017 | | :--- | :--- | :--- | | Total current assets | $59,776 | $36,888 | | **Total Assets** | **$159,664** | **$82,618** | | Total current liabilities | $40,719 | $6,878 | | **Total Liabilities** | **$91,717** | **$9,163** | | **Total Stockholders' Equity** | **$67,947** | **$73,455** | Consolidated Statement of Operations Summary | (in thousands, except per share) | Year Ended Dec 31, 2018 | Year Ended Dec 31, 2017 | | :--- | :--- | :--- | | Total revenues | $23,945 | $45,364 | | Operating loss | $(6,400) | $(4,142) | | Earnings from equity method investments | $54,208 | $53,843 | | **Net income** | **$35,454** | **$27,873** | | **Diluted EPS** | **$1.76** | **$1.29** | [Tinuum Group, LLC and Subsidiaries Consolidated Financial Statements](index=100&type=section&id=TINUUM%20GROUP%2C%20LLC%20AND%20SUBSIDIARIES%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) Audited financial statements for Tinuum Group, a key equity investee, show total revenues of **$615.1 million** and net income of **$135.8 million** in 2018, reflecting significant growth Tinuum Group - Consolidated Statement of Operations Summary | (in thousands) | 2018 | 2017 | | :--- | :--- | :--- | | Total Revenues | $615,060 | $393,397 | | Gross Profit | $107,135 | $95,552 | | Income from Operations | $83,473 | $72,594 | | **Net Income Available to Class A and B Members** | **$135,800** | **$109,836** | Tinuum Group - Consolidated Balance Sheet Summary | (in thousands) | As of Dec 31, 2018 | As of Dec 31, 2017 | | :--- | :--- | :--- | | Total current assets | $54,958 | $31,605 | | **Total Assets** | **$147,949** | **$106,660** | | Total current liabilities | $50,908 | $48,280 | | **Total Liabilities** | **$65,354** | **$56,630** | | **Total Members' Equity** | **$82,595** | **$49,209** | - As of December 31, 2018, Tinuum had **19 REF facilities** sold to or under lease with third-party investors, up from **17** in the prior year[412](index=412&type=chunk) - In January 2019, subsequent to the reporting period, Tinuum Group completed a transaction for an additional RC facility, bringing the total number of invested facilities to **20**[361](index=361&type=chunk)[467](index=467&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=90&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None reported[364](index=364&type=chunk) [Controls and Procedures](index=90&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded disclosure controls and internal control over financial reporting were effective as of December 31, 2018, though the assessment excluded the Carbon Solutions acquisition, which represented **54%** of total assets - Management concluded that disclosure controls and procedures were effective as of December 31, 2018[365](index=365&type=chunk) - The assessment of internal control over financial reporting as of December 31, 2018, excluded the newly acquired Carbon Solutions[366](index=366&type=chunk)[373](index=373&type=chunk) - Carbon Solutions represented **54%** of consolidated total assets and **23%** of consolidated revenues for the year ended December 31, 2018[366](index=366&type=chunk)[373](index=373&type=chunk) [Other Information](index=93&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - None reported[377](index=377&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=93&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information regarding directors, executive officers, and corporate governance is incorporated by reference from the definitive proxy statement - Information is incorporated by reference from the definitive proxy statement[377](index=377&type=chunk) [Executive Compensation](index=94&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the definitive proxy statement - Information is incorporated by reference from the definitive proxy statement[378](index=378&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=94&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Security ownership information is incorporated by reference, with **549,780** securities issuable under approved equity compensation plans as of December 31, 2018 Equity Compensation Plan Information as of December 31, 2018 | Plan Category | Number of securities to be issued upon exercise | Weighted-average exercise price | Number of securities remaining available for future issuance | | :--- | :--- | :--- | :--- | | Equity compensation plans approved by security holders | 549,780 | $12.23 | 2,376,111 | | Equity compensation plans not approved by security holders | — | $— | — | | **Total** | **549,780** | | **2,376,111** | [Certain Relationships and Related Transaction and Director Independence](index=94&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transaction%20and%20Director%20Independence) Information regarding related party transactions and director independence is incorporated by reference from the definitive proxy statement - Information is incorporated by reference from the definitive proxy statement[382](index=382&type=chunk) [Principal Accountant Fees and Services](index=94&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information regarding principal accountant fees and services is incorporated by reference from the definitive proxy statement - Information is incorporated by reference from the definitive proxy statement[383](index=383&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=95&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all financial statements, schedules, and exhibits filed as part of the Form 10-K, including the audited consolidated financial statements of Tinuum Group, LLC - All financial statement schedules are omitted because the required information is not applicable or is included in the Consolidated Financial Statements and Notes[385](index=385&type=chunk) - The report includes the consolidated financial statements of Tinuum Group, LLC and its subsidiaries for the years ended December 31, 2018 and 2017, as required by SEC Rule 3-09[392](index=392&type=chunk) - Key exhibits filed include the Tax Asset Protection Plan, the Term Loan and Security Agreement with Apollo, and various amendments to the Line of Credit with CoBiz Bank[386](index=386&type=chunk)[388](index=388&type=chunk)