SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One):
| x | ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]. |
For the fiscal year ended December 31, 2003
OR
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]. |
For the transition period from to
Commission File Number: 1-7775
A. Full title of plan and the address of the plan, if different from that of the issuer named below:
COAL COMPANY SALARY DEFERRAL
AND PROFIT SHARING PLAN
B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:
Massey Energy Company
4 North 4th Street
Richmond, Virginia 23219
REQUIRED INFORMATION
Financial Statements. The following financial statements and schedules are filed as part of this annual report and appear immediately after the signature page hereof.
| 1. | Statement of Net Assets Available for Benefits |
| 2. | Statement of Changes in Net Assets Available for Benefits |
| 3. | Notes to Financial Statements |
| 4. | Schedule H, Line 4i - Schedule of Assets (Held at End of Year) |
| 5. | Schedule H, Line 4a - Schedule of Delinquent Participant Contributions. |
Exhibits. The following exhibits are filed as part of this annual report:
Exhibit 23.1 - Consent of Ernst & Young LLP.
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.
| COAL COMPANY SALARY DEFERRAL AND PROFIT SHARING PLAN | ||
| By: |
/s/ John M. Poma | |
| John M. Poma | ||
| Vice President, Human Resources | ||
Dated: June 28, 2004
COAL COMPANY SALARY DEFERRAL AND PROFIT SHARING PLAN
Financial Statements and Supplemental Schedules
Years ended December 31, 2003 and 2002
with Report of Independent Registered Public Accounting Firm
Coal Company Salary Deferral and Profit Sharing Plan
Financial Statements and Supplemental Schedules
Years ended December 31, 2003 and 2002
Contents
| 1 | ||
| Financial Statements |
||
| 2 | ||
| 3 | ||
| 4 | ||
| Schedule H, Line 4i – Schedule of Assets (Held at End of Year) |
11 | |
| Schedule H, Line 4a – Schedule of Delinquent Participant Contributions |
12 | |
Report of Independent Registered Public Accounting Firm
Board of Directors
Coal Company Salary Deferral and Profit Sharing Plan
We have audited the accompanying statements of net assets available for benefits of the Coal Company Salary Deferral and Profit Sharing Plan as of December 31, 2003 and 2002, and the related statement of changes in net assets available for benefits for the year ended December 31, 2003. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 2003 and 2002, and the changes in its net assets available for benefits for the year ended December 31, 2003 in conformity with U.S. generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedule of assets (held at the end of the year) and schedule of delinquent participant contributions as of December 31, 2003, are presented for purposes of additional analysis and are not a required part of the financial statements but are supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. These supplemental schedules are the responsibility of the Plan’s management. The supplemental schedules have been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, are fairly stated in all material respects in relation to the financial statements taken as a whole.
/s/ Ernst & Young LLP
Richmond, Virginia
June 18, 2004
1
Coal Company Salary Deferral and Profit Sharing Plan
Statements of Net Assets Available for Benefits
| December 31 | ||||||
| 2003 |
2002 | |||||
| Investments, at fair value |
$ | 137,261,922 | $ | 115,742,562 | ||
| Receivables: |
||||||
| Investment income |
— | 404,127 | ||||
| Contributions due from employees |
— | 314,681 | ||||
| Contributions due from employer |
70,770 | 986,588 | ||||
| Total receivables |
70,770 | 1,705,396 | ||||
| Net assets available for benefits |
$ | 137,332,692 | $ | 117,447,958 | ||
See accompanying notes.
2
Coal Company Salary Deferral and Profit Sharing Plan
Statement of Changes in Net Assets Available for Benefits
Year ended December 31, 2003
| Additions: |
||||
| Employer contributions |
$ | 2,640,690 | ||
| Employee contributions |
9,228,294 | |||
| Investment income |
2,209,282 | |||
| Assets transferred from the Tennessee West Virginia Pension Plan |
1,990,922 | |||
| Net appreciation in fair value of investments |
19,053,901 | |||
| Total additions |
35,123,089 | |||
| Deductions: |
||||
| Withdrawals by participants |
(15,238,355 | ) | ||
| Total deductions |
(15,238,355 | ) | ||
| Net assets available for benefits at beginning of year |
117,447,958 | |||
| Net assets available for benefits at end of year |
$ | 137,332,692 | ||
See accompanying notes.
3
Coal Company Salary Deferral and Profit Sharing Plan
Notes to Financial Statements
December 31, 2003 and 2002
1. Plan Description
The following description of the Coal Company Salary Deferral and Profit Sharing Plan (the Plan) provides only general information. Participants should refer to the Summary Plan Description for a more complete description of the Plan’s provisions and definitions of certain terms reference herein.
General
The Plan is a contributory defined contribution plan established effective January 1, 1985 by A. T. Massey Coal Company, Inc., (the Company or the Plan Sponsor), a wholly owned subsidiary of Massey Energy Company and is administered by the Company for the benefit of eligible employees, including eligible employees of certain subsidiaries. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
Effective April 1, 2003, the Plan’s trustee was changed from Wachovia Bank, N.A. to AMVESCAP National Trust Company (the Trustee).
Effective October 1, 2003, the Board of Directors of the Company approved the merger of the Tennessee West Virginia Pension Plan into the Plan. Assets of the Tennessee West Virginia Plan were transferred to the Plan on October 1, 2003.
Participation
Effective May 1, 2003, eligible employees may begin participation on any date after hire. Prior to this date, eligible employees could begin participation on the first day of the calendar quarter after hire.
Participant Accounts
Each participant’s account is credited with the participant’s contributions and allocations of (a) the Company’s contributions and (b) plan earnings, net of fund management fees. Allocations of earnings are based on participant account balances within each fund. Forfeited balances of terminated participants’ nonvested accounts are used to reduce future Company contributions. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account balance.
4
Coal Company Salary Deferral and Profit Sharing Plan
Notes to Financial Statements (continued)
1. Plan Description (continued)
Contributions and Vesting
Participants may elect to defer up to 15% of their compensation, as defined by the Plan and as limited by restrictions of the Internal Revenue Code. The Plan Sponsor contributes 30% of the first 10% of compensation that a participant contributes to the Plan with the exception of those employed at a new above ground operation reopened or acquired on or after October 1, 2003. Effective October 1, 2003, the Plan Sponsor contributes 10% of the first 10% of compensation that a participant employed at a new above ground operation contributes to the Plan.
The Plan Sponsor also may continue to contribute a discretionary amount to the Plan each year as determined by its management.
The Matching Account for a Participant who was an Employee on September 30, 2001, is fully vested and nonforfeitable at all times. The Discretionary Matching Account and Matching Account for an individual who was hired on or after October 1, 2001 shall become fully vested if the Participant dies or reaches his Normal Retirement Age while employed by the Plan Sponsor or any of its participating subsidiaries. Otherwise, such Participant shall vest 20% after two years of service and then shall vest 20% each year after the first two years until fully vested.
Upon enrollment in the Plan, employees may direct their investments to any of the Plan’s fund options. Effective May 1, 2003, participants may change their investment options daily. Prior to this date, participants could change their investment options monthly.
Distributions
Participants may obtain distributions from their accounts, subject to certain restrictions, upon termination of employment, retirement, upon reaching age 59 1/2, or by incurring a disability or hardship, as defined by the Plan. Designated beneficiaries are entitled to receive the participant’s unpaid benefits upon the death of the participant.
5
Coal Company Salary Deferral and Profit Sharing Plan
Notes to Financial Statements (continued)
1. Plan Description (continued)
Loans to Participants
Loans are made from the participant’s account and are secured by the participant’s remaining account balance. Prior to January 1, 2002, participants were permitted to borrow from their accounts a minimum of $1,000 and a maximum equal to the lesser of 50% of the participant’s account or $50,000 in accordance with the Department of Labor’s regulations on loans to participants. Loans shall bear a reasonable rate of interest and must be repaid over a period not to exceed 5 years unless the loan was used to purchase the participant’s primary residence, in which case the loan term may not exceed 10 years. Principal and interest is paid ratably through regular payroll deductions. Loans to terminated participants and loans in default are treated as distributions to the participant. Effective December 31, 2001, the provision to grant new loans to participants was eliminated.
Plan Termination
Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants would receive the full value of their individual account.
2. Summary of Accounting Policies
Accounting Method
The financial statements of the Plan have been prepared using the accrual method of accounting.
Use of Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.
6
Coal Company Salary Deferral and Profit Sharing Plan
Notes to Financial Statements (continued)
2. Summary of Accounting Policies (continued)
Investments
Except for common trusts, the Plan’s investments are stated at fair value which equals the quoted market price the last day of the year. Common trusts are valued at quoted redemption values determined by the trustee. Participant loans are valued at their outstanding balances, which approximate fair value. Securities transactions are recorded as of the trade date. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date.
Administrative Expenses
Expenses of the Plan are paid by the Plan Sponsor.
3. Investments
As of December 31, 2003, all of the Plan’s investments are held in a trust fund administered by the Trustee. As of December 31, 2002, all of the Plan’s investments were held in a trust fund administered by Wachovia Bank, N.A. At December 31, 2003 and 2002, investments in each fund (including short-term investments allocated to such funds) consisted of the following:
| December 31 | ||||||
| 2003 |
2002 | |||||
| Invesco Core Fixed Income Trust |
$ | 29,066,625 | $ | — | ||
| American Balanced Fund |
27,137,369 | 22,945,921 | ||||
| Invesco Stable Value Fund Trust |
26,183,078 | — | ||||
| American Fundamental Investors |
24,965,793 | 19,886,319 | ||||
| AIM Constellation Fund |
15,993,774 | 12,414,307 | ||||
| Massey Energy Stock Fund |
5,796,706 | 3,380,526 | ||||
| Pimco Renaissance Fund |
3,880,903 | 1,130,718 | ||||
| Vanguard 500 Fund |
2,362,017 | 805,453 | ||||
| Loan Fund |
1,875,657 | 3,742,127 | ||||
| Wachovia Fixed Income Fund |
— | 27,491,271 | ||||
| Wachovia Money Market Fund |
— | 23,945,920 | ||||
| $ | 137,261,922 | $ | 115,742,562 | |||
7
Coal Company Salary Deferral and Profit Sharing Plan
Notes to Financial Statements (continued)
3. Investments (continued)
During 2003, the Plan’s investments (including investments purchased and sold, as well as held during the year) appreciated in value by $19,053,901 as follows:
| Year ended December 31, 2003 |
||||
| American Fundamental Investors |
$ | 5,571,522 | ||
| American Balanced Fund |
4,324,688 | |||
| AIM Constellation Fund |
3,576,250 | |||
| Massey Energy Stock Fund |
3,257,658 | |||
| Pimco Renaissance Fund |
1,133,664 | |||
| Invesco Core Fixed Income Trust |
893,534 | |||
| Vanguard 500 Fund |
371,085 | |||
| Wachovia Fixed Income Fund |
(74,500 | ) | ||
| $ | 19,053,901 | |||
4. Related Party Transactions
Certain Plan assets are invested in funds sponsored by the Trustee. Prior to April 1, 2003, certain Plan assets were invested in funds sponsored by Wachovia Bank N.A. Transactions involving these instruments are considered to be party-in-interest transactions for which statutory exemption exists under the Department of Labor Regulations.
5. Income Tax Status
The Plan has received a determination letter from the Internal Revenue Service dated April 28, 2003, stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code (the Code) and, therefore, the related trust is exempt from taxation. Subsequent to this determination by the Internal Revenue Service, the Plan was amended. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The Plan Administrator believes the Plan is being operated in compliance with the applicable requirements of the Code and, therefore, believes that the Plan, as amended, is qualified and the related trust is tax-exempt.
8
Coal Company Salary Deferral and Profit Sharing Plan
Notes to Financial Statements (continued)
6. Differences Between Financial Statements and Forms 5500
The following is a reconciliation of net assets available for benefits per the financial statements to the Form 5500:
| December 31 | ||||||
| 2003 |
2002 | |||||
| Net assets available for benefits per the financial statements |
$ | 137,332,692 | $ | 117,447,958 | ||
| Amounts allocated to withdrawn participants |
— | 1,589,086 | ||||
| Net assets available for benefits per the Form 5500 |
$ | 137,332,692 | $ | 115,858,872 | ||
The following is a reconciliation of benefits paid to participants per the financial statements to the Form 5500:
| Year ended December 31, 2003 |
||||
| Benefits paid to participants per the financial statements |
$ | 15,238,355 | ||
| Add: Amounts allocated on Form 5500 to withdrawn participants in the current year |
— | |||
| Less: Amounts allocated on form 5500 to withdrawn participants in the prior year |
(1,589,086 | ) | ||
| Benefits paid to participants per the Form 5500 |
$ | 13,649,269 | ||
Amounts allocated to withdrawn participants are recorded on the Form 5500 for benefit claims that have been processed and approved for payment prior to year-end but not yet paid.
9
Coal Company Salary Deferral and Profit Sharing Plan
Schedule H, Line 4i – Schedule of Assets (Held at End of Year)
Employer Identification Number 54-0295165, Plan Number 002
Year ended December 31, 2003
| Identity of Issue, Borrower, Lessor or Similar Party |
Description of Investment Including |
Current Value | |||
| Common/Collective Trusts: |
|||||
| *Invesco Core Fixed Income Trust |
954,569 shares | $ | 29,066,625 | ||
| *Invesco Stable Value Trust |
26,183,078 shares | 26,183,078 | |||
| Total Common/Collective Trusts |
$ | 55,249,703 | |||
| Registered Investment Companies: |
|||||
| American Balanced Fund |
1,569,541 shares | $ | 27,137,369 | ||
| American Fundamental Investors |
865,365 shares | 24,965,793 | |||
| AIM Equity Funds, Inc. – Constellation Fund Class A |
743,551 shares | 15,993,774 | |||
| Pimco Funds Multi Manager – Renaissance Fund Class A |
168,442 shares | 3,880,903 | |||
| Vanguard 500 Index Fund |
23,006 shares | 2,362,017 | |||
| Total Registered Investment Companies |
$ | 74,339,856 | |||
| Common Stock Fund: |
|||||
| Massey Energy Company |
273,946 units | $ | 5,796,706 | ||
| *Participant Loans |
Interest rates range from 7.0% to 11.5%; maturity dates vary with remaining terms of 1 to 10 years | $1,875,657 | |||
| Grand Total |
$ | 137,261,922 | |||
| * | Party-in-interest. |
11
Coal Company Salary Deferral and Profit Sharing Plan
Schedule H, Line 4a – Schedule of Delinquent Participant Contributions
Employer Identification Number 54-0295165, Plan Number 002
Year ended December 31, 2003
| Participant Contributions Transferred Late to Plan |
Total That Constitute Nonexempt Prohibited Transactions | |
| $15,121 |
$ — |
12