x
|
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
¨
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
Delaware
|
95-0740960
|
(State
or other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification Number)
|
4
North 4th Street, Richmond, Virginia
|
23219
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Title
of each class
|
Name
of each exchange on which registered
|
Common
Stock, $0.625 par value
|
New
York Stock Exchange
|
(i)
|
our
cash flows, results of operation or financial
condition;
|
|
(ii)
|
the
consummation of acquisition, disposition or financing transactions and the
effect thereof on our business;
|
|
(iii)
|
governmental
policies and regulatory actions affecting the coal
industry;
|
|
(iv)
|
legal
and administrative proceedings, settlements, investigations and claims and
the availability of insurance coverage related thereto;
|
|
(v)
|
weather
conditions or catastrophic weather-related damage;
|
|
(vi)
|
our
ability to produce coal to meet market expectations and customer
requirements;
|
|
(vii)
|
our
ability to obtain coal from brokerage sources or contract miners in
accordance with their contracts;
|
|
(viii)
|
our
ability to obtain and renew permits necessary for our existing and planned
operations in a timely manner;
|
|
(ix)
|
the
availability of transportation for our produced coal;
|
|
(x)
|
the
expansion of our mining capacity;
|
|
(xi)
|
our
ability to manage production costs, including labor
costs;
|
|
(xii)
|
adjustments
made in price, volume or terms to existing coal supply
agreements
|
|
(xiii)
|
the
market demand for coal, electricity and steel;
|
|
(xiv)
|
concerns
about the environmental impact of coal combustion and the cost and
perceived benefits of alternative sources of energy such as natural gas
and nuclear energy;
|
|
(xv)
|
competition
among coal and other energy producers, at home and
abroad;
|
|
(xvi)
|
our
ability to timely obtain necessary supplies and
equipment;
|
|
(xvii)
|
our
reliance upon and relationships with our customers and
suppliers;
|
|
(xviii)
|
the
creditworthiness of our customers and suppliers;
|
|
(xix)
|
our
ability to attract, train and retain a skilled workforce to meet
replacement or expansion needs;
|
|
(xx)
|
our
assumptions and projections concerning economically recoverable coal
reserve estimates;
|
|
(xxi)
|
future
economic or capital market conditions and foreign currency
fluctuations;
|
|
(xxii)
|
the
availability and costs of credit, surety bonds and letters of credit that
we require;
|
|
(xxiii)
|
the
lack of insurance against all potential operating
risks;
|
|
(xxix)
|
our
assumptions and projections regarding pension and other post-retirement
benefit liabilities;
|
|
(xxx)
|
our
interpretation and application of accounting literature to mining specific
issues; and
|
|
(xxxi)
|
the
successful implementation of our strategic plans and objectives, including
our announced expansion
plans.
|
Page
|
||
PART I
|
||
Item
1.
|
Business
|
1
|
Item
1A.
|
Risk
Factors
|
22
|
Item
1B.
|
Unresolved
Staff Comments
|
28
|
Item
2.
|
Properties
|
29
|
Item
3.
|
Legal
Proceedings
|
29
|
Item
4.
|
Submission
of Matters to a Vote of Security Holders
|
30
|
PART
II
|
||
Item
5.
|
Market
for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
|
31
|
Item
6.
|
Selected
Financial Data
|
33
|
Item
7.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
35
|
Item
7A.
|
Quantitative
and Qualitative Disclosures about Market Risk
|
47
|
Item
8.
|
Financial
Statements and Supplementary Data
|
49
|
Item
9.
|
Changes
in and Disagreements with Accountants on Accounting and Financial
Disclosure
|
84
|
Item
9A.
|
Controls
and Procedures
|
84
|
Item
9B.
|
Other
Information
|
85
|
PART III
|
||
Item
10.
|
Directors,
Executive Officers and Corporate Governance
|
86
|
Item
11.
|
Executive
Compensation
|
87
|
Item
12.
|
Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
|
88
|
Item
13.
|
Certain
Relationships and Related Transactions, and Director
Independence
|
88
|
Item
14.
|
Principal
Accountant Fees and Services
|
88
|
PART IV
|
||
Item
15.
|
Exhibits
and Financial Statement Schedules
|
88
|
SIGNATURES
|
93
|
|
·
|
Produced
coal revenues increased by 8% to $2.1 billion on produced coal sales of
39.9 million tons.
|
|
·
|
Net
income increased by 130% to $94.1
million.
|
|
·
|
Reserve
base of 2.3 billion tons.
|
Region
|
% of Total
|
|||
Powder
River Basin
|
41 | % | ||
Central
Appalachia
|
20 | % | ||
West
(other than Powder River Basin)
|
13 | % | ||
Midwest
|
13 | % | ||
Northern
Appalachia
|
12 | % | ||
All
other
|
1 | % | ||
Total
|
100 | % | ||
End
Use
|
% of Total
|
Electric
Power
|
93%
|
Other
Industrial
|
5%
|
Coke
|
2%
|
Residential
and Commercial
|
<1%
|
Total
|
100%
|
Electricity
Generation Source
|
Cost per million
Kilowatt
Hours
|
|||
Oil
|
$ | 14.69 | ||
Natural
Gas
|
$ | 7.97 | ||
Coal
|
$ | 2.19 | ||
Nuclear
|
$ | 1.84 |
Electricity
Generation Source
|
%
of Total
Electricity Generation
|
|||
Coal
|
50 | % | ||
Nuclear
|
20 | % | ||
Natural
Gas
|
19 | % | ||
Hydroelectric
|
7 | % | ||
Oil
and other (solar, wind, etc.)
|
4 | % | ||
Total
|
100 | % | ||
Resource Group
Name
|
Location
(County)
|
Active/
Inactive
|
Mine
Type
|
Active
Mine Count (4)
|
Mining
Equipment
|
Transportation
|
2007
Production (1)
|
2007
Shipments (2)
|
Year
Established or Acquired
|
||||||||||||
(Thousands
of Tons)
|
|||||||||||||||||||||
West
Virgina Resource Groups
|
|||||||||||||||||||||
Black
Castle
|
Boone
|
Active
|
S | 1 |
HW
|
truck,
barge
|
3,549 | 2,104 |
1987
|
||||||||||||
Delbarton
|
Mingo
|
Active
|
U | 1 |
NS
|
801 | 905 |
1999
|
|||||||||||||
Edwight
|
Raleigh
|
Active
|
S/U | 2 |
HW
|
CSX
|
1,572 | - |
2003
|
||||||||||||
Elk
Run
|
Boone
|
Active
|
U | 5 |
LW
|
CSX
|
2,274 | 1,398 |
1978
|
||||||||||||
Endurance
|
Boone
|
Active
|
S | 1 |
HW
|
CSX
|
1,368 | 727 |
2001
|
||||||||||||
Green
Valley
|
Nicholas
|
Active
|
U | 2 |
CSX
|
759 | 808 |
1996
|
|||||||||||||
Guyandotte
(3)
|
Wyoming
|
Active
|
U | 1 |
NS
|
14 | 14 |
2006
|
|||||||||||||
Independence
|
Boone
|
Active
|
U | 3 |
LW
|
CSX
|
1,755 | 4,159 |
1994
|
||||||||||||
Logan
County
|
Logan
|
Active
|
S/U | 6 |
HW
|
CSX
|
3,783 | 3,722 |
1998
|
||||||||||||
Mammoth
|
Kanawha
|
Active
|
U | 3 |
barge
|
1,431 | 2,039 |
2004
|
|||||||||||||
Marfork
|
Raleigh
|
Active
|
U | 7 |
CSX
|
3,817 | 6,656 |
1993
|
|||||||||||||
Nicholas
Energy
|
Nicholas
|
Active
|
S/U | 2 |
HW
|
NS
|
3,362 | 3,039 |
1997
|
||||||||||||
Progress
|
Boone
|
Active
|
S | 1 |
CSX
|
5,125 | 4,529 |
1998
|
|||||||||||||
Rawl
|
Mingo
|
Active
|
U | 2 |
NS
|
1,044 | 104 |
1974
|
|||||||||||||
Republic
Energy
|
Raleigh
|
Active
|
S | 1 |
truck
|
1,564 | 1,150 |
2004
|
|||||||||||||
Stirrat
|
Logan
|
Active
|
S | 1 |
CSX
|
1,359 | 1,890 |
1993
|
|||||||||||||
Kentucky
Resource Groups
|
|||||||||||||||||||||
Coalgood
Energy
|
Harlan
|
Inactive
|
CSX
|
2 | 13 |
2005
|
|||||||||||||||
Long
Fork
|
Pike
|
Active
|
NS
|
- | 1,641 |
1991
|
|||||||||||||||
Martin
County
|
Martin
|
Inactive
|
NS
|
242 | 270 |
1969
|
|||||||||||||||
New
Ridge
|
Pike
|
Active
|
CSX
|
- | 504 |
1992
|
|||||||||||||||
Sidney
|
Pike
|
Active
|
S/U | 7 |
HW
|
NS
|
4,932 | 3,457 |
1984
|
||||||||||||
Virginia
Resource Group
|
|||||||||||||||||||||
Knox
Creek
|
Tazewell
|
Active
|
U | 1 |
NS
|
706 | 724 |
1997
|
|||||||||||||
Total
|
47 | 39,459 | 39,853 |
(1)
|
For
purposes of this table, coal production has been allocated to the Resource
Group where the coal is mined, rather than the Resource Group where the
coal is processed and shipped. Production amounts above represent coal
extracted from the ground.
|
(2)
|
For purposes of this table, coal
shipments have been allocated to the Resource Group from where the coal is
processed and shipped, rather than the Resource Group where the coal is
mined.
|
(3)
|
Previously
known as Kepler.
|
(4)
|
Active
mine count as of January 31, 2008.
|
|
S –
surface mine
|
|
U –
underground mine
|
|
HW
– highwall miners operated in conjunction with surface
mines
|
|
LW –
longwall mine
|
|
NS –
Norfolk Southern Railway Company
|
|
CSX
– CSX Transportation
|
|
Kentucky
Resource Groups
|
|
Virginia
Resource Group
|
Resource
Group
|
Location
(2)
|
Total
|
Proven
|
Probable
|
Assigned
(3)
|
Unassigned
(3)
|
Owned
|
Leased
|
|||||||||||||||||||||
(In
Thousands of Tons)
|
|||||||||||||||||||||||||||||
West
Virginia
|
|||||||||||||||||||||||||||||
Black
Castle
|
Boone
County
|
88,756 | 61,609 | 27,147 | 41,490 | 47,266 | 1,920 | 86,836 | |||||||||||||||||||||
Delbarton
|
Mingo
County
|
286,747 | 120,442 | 166,305 | 141,249 | 145,498 | 25 | 286,722 | |||||||||||||||||||||
Edwight
|
Raleigh
County
|
8,870 | 8,870 | - | 8,870 | - | - | 8,870 | |||||||||||||||||||||
Elk
Run
|
Boone
County
|
162,767 | 125,451 | 37,316 | 58,403 | 104,364 | 4,660 | 158,107 | |||||||||||||||||||||
Endurance
|
Boone
County
|
25,126 | 25,126 | - | 24,998 | 128 | 24,560 | 566 | |||||||||||||||||||||
Green
Valley
|
Nicholas
County
|
7,135 | 7,135 | - | 7,135 | - | - | 7,135 | |||||||||||||||||||||
Guyandotte
|
Wyoming
County
|
43,603 | 15,266 | 28,337 | - | 43,603 | 330 | 43,273 | |||||||||||||||||||||
Independence
|
Boone
County
|
43,311 | 42,001 | 1,310 | 29,852 | 13,459 | 9,482 | 33,829 | |||||||||||||||||||||
Logan
County
|
Logan
County
|
73,529 | 68,881 | 4,648 | 49,883 | 23,646 | - | 73,529 | |||||||||||||||||||||
Mammoth
|
Kanawha
County
|
87,558 | 67,224 | 20,334 | 74,244 | 13,314 | 42,844 | 44,714 | |||||||||||||||||||||
Marfork
|
Raleigh
County
|
121,721 | 109,411 | 12,310 | 79,125 | 42,596 | 815 | 120,906 | |||||||||||||||||||||
Nicholas
Energy
|
Nicholas
County
|
92,303 | 52,461 | 39,842 | 49,897 | 42,406 | 38,514 | 53,789 | |||||||||||||||||||||
Progress
|
Boone
County
|
22,446 | 22,446 | - | 22,446 | - | - | 22,446 | |||||||||||||||||||||
Rawl
|
Mingo
County
|
96,369 | 68,600 | 27,769 | 59,270 | 37,099 | 1,333 | 95,036 | |||||||||||||||||||||
Republic
Energy
|
Raleigh
County
|
38,209 | 34,387 | 3,822 | 38,209 | - | - | 38,209 | |||||||||||||||||||||
Stirrat
|
Logan
County
|
5,293 | 3,476 | 1,817 | 412 | 4,881 | - | 5,293 | |||||||||||||||||||||
Kentucky
|
|||||||||||||||||||||||||||||
Coalgood
Energy
|
Harlan
County
|
21,261 | 12,357 | 8,904 | - | 21,261 | 2,704 | 18,557 | |||||||||||||||||||||
Long
Fork
|
Pike
County
|
4,964 | 2,764 | 2,200 | 264 | 4,700 | - | 4,964 | |||||||||||||||||||||
Martin
County
|
Martin
County
|
42,554 | 25,865 | 16,689 | 2,783 | 39,771 | 1,336 | 41,218 | |||||||||||||||||||||
New
Ridge
|
Pike
County
|
- | - | - | - | - | - | - | |||||||||||||||||||||
Sidney
|
Pike
County
|
127,055 | 73,055 | 54,000 | 101,938 | 25,117 | 7,028 | 120,027 | |||||||||||||||||||||
Virginia
|
|||||||||||||||||||||||||||||
Knox
Creek
|
Tazewell
County
|
45,087 | 32,942 | 12,145 | 29,354 | 15,733 | - | 45,087 | |||||||||||||||||||||
Subtotal
|
1,444,664 | 979,769 | 464,895 | 819,822 | 624,842 | 135,551 | 1,309,113 | ||||||||||||||||||||||
Land
Management Companies: (4)
|
|||||||||||||||||||||||||||||
Black
King
|
Boone
County, WV
|
32,666 | 32,666 | - | 1,155 | 31,511 | 17,428 | 15,238 | |||||||||||||||||||||
Raleigh
County, WV
|
|||||||||||||||||||||||||||||
Boone
East
|
Boone
County, WV
|
132,145 | 96,131 | 36,014 | 6,180 | 125,965 | 64,721 | 67,424 | |||||||||||||||||||||
Kanawha
County, WV
|
|||||||||||||||||||||||||||||
Boone
West
|
Lincoln
County, WV
|
252,332 | 98,556 | 153,776 | 10,346 | 241,986 | 65,553 | 186,779 | |||||||||||||||||||||
Logan
County, WV
|
|||||||||||||||||||||||||||||
Ceres
Land
|
Raleigh
County, WV
|
33,351 | 24,220 | 9,131 | - | 33,351 | - | 33,351 | |||||||||||||||||||||
Duncan
Fork
|
Various
counties, PA
|
94,086 | 44,449 | 49,637 | - | 94,086 | 79,907 | 14,179 | |||||||||||||||||||||
Lauren
Land
|
Mingo
County, WV
|
181,247 | 119,729 | 61,518 | 11,175 | 170,072 | 18,011 | 163,236 | |||||||||||||||||||||
Logan
County, WV
|
|||||||||||||||||||||||||||||
Various
counties, KY
|
|||||||||||||||||||||||||||||
New
Market Land
|
Wyoming
County, WV
|
7,984 | 4,790 | 3,194 | - | 7,984 | 102 | 7,882 | |||||||||||||||||||||
Raven
Resources
|
Raleigh
County, WV
|
18,978 | 18,978 | - | - | 18,978 | - | 18,978 | |||||||||||||||||||||
Boone
County, WV
|
|||||||||||||||||||||||||||||
Tennessee
Consolidated Coal
|
Various
counties, TN
|
26,907 | 1,332 | 25,575 | - | 26,907 | 24,054 | 2,853 | |||||||||||||||||||||
Subtotal
|
779,696 | 440,851 | 338,845 | 28,856 | 750,840 | 269,776 | 509,920 | ||||||||||||||||||||||
Other
|
N/A
|
59,000 | 38,303 | 20,697 | 24,140 | 34,860 | 1,288 | 57,712 | |||||||||||||||||||||
Total
|
2,283,360 | 1,458,923 | 824,437 | 872,818 | 1,410,542 | 406,615 | 1,876,745 |
(1)
|
Recoverable
reserves represent the amount of proven and probable reserves that can
actually be recovered from the reserve base taking into account all mining
and preparation losses involved in producing a saleable product using
existing methods under current law.
|
(2)
|
All
of the recoverable reserves listed are in Central Appalachia, except for
the Duncan Fork reserves, which are located in Northern Appalachia and
Lauren Land reserves, a portion of which are located in the Illinois
Basin. The reserve numbers of each Resource Group contain a moisture
factor specific to the particular reserves of that Resource Group. The
moisture factor represents the average moisture present in our delivered
coal.
|
(3)
|
Assigned
Reserves represent recoverable reserves that are dedicated to a specific
permitted mine; otherwise, the reserves are considered Unassigned. For
Land Management Companies, Assigned Reserves have been leased to a third
party and are dedicated to a specific permitted mine of the
lessee.
|
(4)
|
Land
management companies are our subsidiaries whose primary purposes are to
acquire and hold our reserves.
|
Recoverable
Reserves (1)
|
||||||||||||||||||||||||
Recoverable
|
Sulfur
Content
|
Avg.
Btu as
|
||||||||||||||||||||||
Reserves
|
+1%
|
(2) |
-1%
|
(2) |
Compliance
|
Received
(3)
|
Coal
Type (4)
|
|||||||||||||||||
(In
Thousands of Tons Except Average Btu as Received)
|
||||||||||||||||||||||||
Resource
Groups:
|
||||||||||||||||||||||||
West
Virginia
|
||||||||||||||||||||||||
Black
Castle
|
88,756 | 35,404 | 53,352 | 22,921 | 12,000 |
Utility
and Industrial
|
||||||||||||||||||
Delbarton
|
286,747 | 111,954 | 174,793 | 127,073 | 12,500 |
High
Vol Met, Utility, and Industrial
|
||||||||||||||||||
Edwight
|
8,870 | 1,555 | 7,315 | 7,315 | 12,800 |
High
Vol Met, Utility, and Industrial
|
||||||||||||||||||
Elk
Run
|
162,767 | 80,695 | 82,072 | 73,177 | 13,400 |
High
Vol Met, Utility, and Industrial
|
||||||||||||||||||
Endurance
|
25,126 | 4,952 | 20,174 | 10,047 | 12,500 |
Utility
and Industrial
|
||||||||||||||||||
Green
Valley
|
7,135 | 921 | 6,214 | 6,214 | 13,100 |
High
Vol Met, Utility, and Industrial
|
||||||||||||||||||
Guyandotte
|
43,603 | - | 43,603 | 43,603 | 13,800 |
Low
Vol Met
|
||||||||||||||||||
Independence
|
43,311 | 14,958 | 28,353 | 3,046 | 13,100 |
High
Vol Met, Utility, and Industrial
|
||||||||||||||||||
Logan
County
|
73,529 | 21,665 | 51,864 | 41,920 | 12,500 |
High
Vol Met, Utility, and Industrial
|
||||||||||||||||||
Mammoth
|
87,558 | 5,216 | 82,342 | 41,706 | 12,000 |
Utility
and Industrial
|
||||||||||||||||||
Marfork
|
121,721 | 54,597 | 67,124 | 42,808 | 13,150 |
High
Vol Met, Utility, and Industrial
|
||||||||||||||||||
Nicholas
Energy
|
92,303 | 41,683 | 50,620 | 31,957 | 11,800 |
Utility
and Industrial
|
||||||||||||||||||
Progress
|
22,446 | 2,316 | 20,130 | 17,809 | 12,400 |
High
Vol Met, Utility, and Industrial
|
||||||||||||||||||
Rawl
|
96,369 | 31,128 | 65,241 | 42,416 | 12,600 |
High
Vol Met, Utility, and Industrial
|
||||||||||||||||||
Republic
|
38,209 | 6,154 | 32,055 | 22,352 | 12,400 |
High
Vol Met and Utility
|
||||||||||||||||||
Stirrat
|
5,293 | - | 5,293 | 5,293 | 13,800 |
High
Vol Met, Utility, and Industrial
|
||||||||||||||||||
Kentucky
|
||||||||||||||||||||||||
Coalgood
Energy
|
21,261 | 4,712 | 16,549 | 11,680 | 11,900 |
High
Vol Met, Utility, and Industrial
|
||||||||||||||||||
Long
Fork
|
4,964 | 3,500 | 1,464 | - | 12,500 |
Utility
and Industrial
|
||||||||||||||||||
Martin
County
|
42,554 | 31,939 | 10,615 | 4,629 | 12,000 |
Utility
and Industrial
|
||||||||||||||||||
New
Ridge
|
- | - | - | - | - | N/A | ||||||||||||||||||
Sidney
|
127,055 | 49,933 | 77,122 | 54,177 | 12,500 |
High
Vol Met, Utility, and Industrial
|
||||||||||||||||||
Virginia
|
||||||||||||||||||||||||
Knox
Creek
|
45,087 | - | 45,087 | 45,087 | 13,300 |
High
Vol Met, Utility, and Industrial
|
||||||||||||||||||
Subtotal
|
1,444,664 | 503,282 | 941,382 | 655,230 | ||||||||||||||||||||
Land
Management Companies: (5)
|
||||||||||||||||||||||||
Black
King
|
32,666 | 15,570 | 17,096 | 13,799 | 13,300 |
High
Vol Met and Utility
|
||||||||||||||||||
Boone
East
|
132,145 | 33,250 | 98,895 | 32,978 | 13,100 |
High
Vol Met, Utility, and Low Vol Met
|
||||||||||||||||||
Boone
West
|
252,332 | 133,849 | 118,483 | 79,369 | 13,100 |
High
Vol Met and Utility
|
||||||||||||||||||
Ceres
Land
|
33,351 | 5,991 | 27,360 | 12,740 | 13,000 |
High
Vol Met and Utility
|
||||||||||||||||||
Duncan
Fork
|
94,086 | 94,086 | - | - | 13,600 |
High
Vol Met, Utility, and Industrial
|
||||||||||||||||||
Lauren
Land
|
181,247 | 85,460 | 95,787 | 72,787 | 12,400 |
High
Vol Met and Utility
|
||||||||||||||||||
New
Market Land
|
7,984 | - | 7,984 | 7,984 | 13,600 |
High
Vol Met and Low Vol Met
|
||||||||||||||||||
Raven
Resources
|
18,978 | 7,449 | 11,529 | 1,369 | 13,100 |
High
Vol Met and Utility
|
||||||||||||||||||
Tennessee
Consolidated Coal
|
26,907 | 20,353 | 6,554 | 4,816 | 12,800 |
High
Vol Met, Utility and Industrial
|
||||||||||||||||||
Subtotal
Land Management
|
779,696 | 396,008 | 383,688 | 225,842 | ||||||||||||||||||||
Other
|
59,000 | 6,638 | 52,362 | 47,214 | 13,000 |
Various
|
||||||||||||||||||
Total
|
2,283,360 | 905,928 | 1,377,432 | 928,286 |
(1)
|
The
reserve numbers of each Resource Group contain a moisture factor specific
to the particular reserves of that Resource Group. The moisture factor
represents the average moisture present in our delivered
coal.
|
(2)
|
+1%
or -1% refers to sulfur content as a percentage in coal by weight.
Compliance coal is less than 1% sulfur content by weight and is included
in the -1% column.
|
(3)
|
Represents
an estimate of the average Btu per pound present in our coal, as it is
received by the customer.
|
(4)
|
Reserve
holdings include metallurgical coal reserves. Although these metallurgical
coal reserves receive the highest selling price in the current coal market
when marketed to steel-making customers, they can also be marketed as an
ultra high Btu, low sulfur utility coal for electricity
generation.
|
(5)
|
Land
management companies are our subsidiaries whose primary purposes are to
acquire and hold our reserves.
|
|
§
|
uncertainties
in assessing the value, strengths and potential profitability of, and
identifying the extent of all weaknesses, risks, contingent and other
liabilities (including environmental liabilities) of, acquisition or other
transaction candidates;
|
|
§
|
the
potential loss of key customers, management and employees of an acquired
business;
|
|
§
|
the
ability to achieve identified operating and financial synergies
anticipated to result from an acquisition or other
transaction;
|
|
§
|
problems
that could arise from the integration of the acquired business;
and
|
|
§
|
unanticipated
changes in business, industry or general economic conditions that affect
the assumptions underlying the acquisition or other transaction
rationale.
|
Richmond,
Virginia
|
Owned
|
Massey
Corporate Headquarters
|
Charleston,
West Virginia
|
Leased
|
Massey
Coal Services Office
|
Chapmanville,
West Virginia
|
Leased
|
Massey
Coal Services Field
Office
|
Item
5. Market for Registrant’s Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity
Securities
|
High
|
Low
|
Dividends
|
||||||||||
Fiscal
Year 2006
|
||||||||||||
Quarter
ended March 31, 2006
|
$ | 41.53 | $ | 33.10 | $ | 0.04 | ||||||
Quarter
ended June 30, 2006
|
$ | 44.34 | $ | 32.15 | $ | 0.04 | ||||||
Quarter
ended September 30, 2006
|
$ | 37.05 | $ | 18.77 | $ | 0.04 | ||||||
Quarter
ended December 31, 2006
|
$ | 28.00 | $ | 19.31 | $ | 0.04 | ||||||
Fiscal
Year 2007
|
||||||||||||
Quarter
ended March 31, 2007
|
$ | 26.35 | $ | 21.55 | $ | 0.04 | ||||||
Quarter
ended June 30, 2007
|
$ | 30.73 | $ | 23.97 | $ | 0.04 | ||||||
Quarter
ended September 30, 2007
|
$ | 26.80 | $ | 16.01 | $ | 0.04 | ||||||
Quarter
ended December 31, 2007
|
$ | 37.99 | $ | 21.49 | $ | 0.05 |
Year
Ended December 31,
|
||||||||||||||||||||
2007
|
2006
|
2005
|
2004
|
2003
|
||||||||||||||||
(In
millions, except per share, per ton, and number of employees
amounts)
|
||||||||||||||||||||
CONSOLIDATED
STATEMENT OF INCOME DATA:
|
||||||||||||||||||||
Produced
coal revenue
|
$ | 2,054.4 | $ | 1,902.3 | $ | 1,777.7 | $ | 1,456.7 | $ | 1,262.1 | ||||||||||
Total
revenue
|
2,413.5 | 2,219.9 | 2,204.3 | 1,766.6 | 1,571.4 | |||||||||||||||
Income
(Loss) before interest and income taxes
|
179.7 | 111.0 | (20.9 | ) | 46.2 | (17.5 | ) | |||||||||||||
Income
(Loss) before cumulative effect of accounting change
|
94.1 | 41.6 | (101.6 | ) | 13.9 | (32.3 | ) | |||||||||||||
Net
income (loss)
|
94.1 | 41.0 | (101.6 | ) | 13.9 | (40.2 | ) | |||||||||||||
Income
(Loss) per share - Basic (1)
|
||||||||||||||||||||
Income
(Loss) before cumulative effect of accounting
|
||||||||||||||||||||
change
|
$ | 1.17 | $ | 0.51 | $ | (1.33 | ) | $ | 0.18 | $ | (0.43 | ) | ||||||||
Net
income (loss)
|
$ | 1.17 | $ | 0.50 | $ | (1.33 | ) | $ | 0.18 | $ | (0.54 | ) | ||||||||
Income
(Loss) per share - Diluted (1)
|
||||||||||||||||||||
Income
(Loss) before cumulative effect of accounting
|
||||||||||||||||||||
change
|
$ | 1.17 | $ | 0.51 | $ | (1.33 | ) | $ | 0.18 | $ | (0.43 | ) | ||||||||
Net
income (loss)
|
$ | 1.17 | $ | 0.50 | $ | (1.33 | ) | $ | 0.18 | $ | (0.54 | ) | ||||||||
Dividends
declared per share
|
$ | 0.17 | $ | 0.16 | $ | 0.16 | $ | 0.16 | $ | 0.16 | ||||||||||
CONSOLIDATED
BALANCE SHEET DATA:
|
||||||||||||||||||||
Working
capital
|
$ | 522.6 | $ | 445.2 | $ | 670.8 | $ | 458.4 | $ | 443.2 | ||||||||||
Total
assets
|
2,860.7 | 2,740.7 | 2,986.5 | 2,650.9 | 2,376.7 | |||||||||||||||
Long-term
debt
|
1,102.7 | 1,102.3 | 1,102.6 | 900.2 | 784.3 | |||||||||||||||
Shareholders'
equity (2)
|
784.0 | 697.3 | 841.0 | 776.9 | 759.0 | |||||||||||||||
OTHER
DATA:
|
||||||||||||||||||||
EBIT
(3)
|
$ | 179.7 | $ | 111.0 | $ | (20.9 | ) | $ | 46.2 | $ | (17.5 | ) | ||||||||
EBITDA
(3)
|
$ | 425.7 | $ | 341.5 | $ | 213.6 | $ | 270.8 | $ | 179.0 | ||||||||||
Average
cash cost per ton sold (4)
|
$ | 43.10 | $ | 42.33 | $ | 35.62 | $ | 30.50 | $ | 28.23 | ||||||||||
Produced
coal revenue per ton sold
|
$ | 51.55 | $ | 48.71 | $ | 42.02 | $ | 36.02 | $ | 30.79 | ||||||||||
Capital
expenditures
|
$ | 270.5 | $ | 298.1 | $ | 346.6 | $ | 347.2 | $ | 164.4 | ||||||||||
Produced
tons sold
|
39.9 | 39.1 | 42.3 | 40.4 | 41.0 | |||||||||||||||
Tons
produced
|
39.5 | 38.6 | 43.1 | 42.0 | 41.0 | |||||||||||||||
Number
of employees
|
5,407 | 5,517 | 5,709 | 5,034 | 4,428 |
(1)
|
In
accordance with accounting principles generally accepted in the United
States (“GAAP”), the effect of certain dilutive securities was excluded
from the calculation of the diluted income (loss) per common share for the
years ended December 31, 2007, 2006, 2005, 2004, and 2003, as such
inclusion would result in
antidilution.
|
(2)
|
Certain
accounting pronouncements adopted in 2007 and 2006 affect the
comparability of the 2007 and 2006 financial statements to prior years.
The adoption of FASB Interpretation No. 48, “Accounting for Uncertainty in
Income Taxes – an interpretation of FASB Statement No. 109” on January 1,
2007 increased equity by $5.2 million (see Note 7 to the Notes to
Consolidated Financial Statements for more information). The adoption of
Emerging Issues Task Force Issue No. 04-6, “Accounting for Stripping Costs
Incurred During Production in the Mining Industry” on January 1, 2006
decreased equity by $93.8 million and the adoption of SFAS No. 158,
“Employer’s Accounting for Defined Benefit Pension and Other
Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106, and
132(R)” on December 31, 2006 decreased equity by $40.2 million (see Notes
5, 10 and 11 to the Notes to Consolidated Financial Statements for more
information).
|
(3)
|
EBIT
is defined as Income (Loss) before interest and taxes. EBITDA is defined
as Income (Loss) before interest and taxes before deducting Depreciation,
depletion, and amortization (“DD&A”). Although neither EBIT nor EBITDA
are measures of performance calculated in accordance with GAAP, we believe
that both measures are useful to an investor in evaluating us because they
are widely used in the coal industry as measures to evaluate a company’s
operating performance before debt expense and as a measure of its cash
flow. Neither EBIT nor EBITDA purport to represent operating income, net
income or cash generated by operating activities and should not be
considered in isolation or as a substitute for measures of performance
calculated in accordance with GAAP. In addition, because neither EBIT nor
EBITDA are calculated identically by all companies, the presentation here
may not be comparable to other similarly titled measures of other
companies. The table below reconciles the GAAP measure of Net income to
EBIT and to EBITDA. For the year ended December 31, 2005, EBIT and EBITDA
include charges related to our capital restructuring of $212.4
million.
|
Year
Ended December 31,
|
||||||||||||||||||||
2007
|
2006
|
2005
|
2004
|
2003
|
||||||||||||||||
(In
millions)
|
||||||||||||||||||||
Net
income (loss)
|
$ | 94.1 | $ | 41.0 | $ | (101.6 | ) | $ | 13.9 | $ | (40.2 | ) | ||||||||
Cumulative
effect of accounting change, net of tax
|
- | 0.6 | - | - | 7.9 | |||||||||||||||
Income
tax expense( benefit)
|
35.4 | 3.4 | 26.2 | (19.5 | ) | (28.3 | ) | |||||||||||||
Net
interest expense
|
50.2 | 66.0 | 54.5 | 51.8 | 43.1 | |||||||||||||||
EBIT
|
179.7 | 111.0 | (20.9 | ) | 46.2 | (17.5 | ) | |||||||||||||
Depreciation,
depletion and amortization
|
246.0 | 230.5 | 234.5 | 224.6 | 196.5 | |||||||||||||||
EBITDA
|
$ | 425.7 | $ | 341.5 | $ | 213.6 | $ | 270.8 | $ | 179.0 |
(4)
|
Average
cash cost per ton is calculated as the sum of Cost of produced coal
revenue and Selling, general and administrative expense (“SG&A”)
(excluding DD&A), divided by the number of produced tons sold.
Although Average cash cost per ton is not a measure of performance
calculated in accordance with GAAP, we believe that it is useful to
investors in evaluating us because it is widely used in the coal industry
as a measure to evaluate a company’s control over its cash costs. Average
cash cost per ton should not be considered in isolation or as a substitute
for measures of performance in accordance with GAAP. In addition, because
Average cash cost per ton is not calculated identically by all companies,
the presentation here may not be comparable to other similarly titled
measures of other companies. The table below reconciles the GAAP measure
of Total costs and expenses to Average cash cost per
ton.
|
Year
Ended December 31,
|
|||||||||||||||||||||||||
2007
|
2006
|
2005
|
2004
|
2003
|
|||||||||||||||||||||
(In
millions, except per ton amounts)
|
|||||||||||||||||||||||||
$
|
per
ton
|
$
|
per
ton
|
$
|
per
ton
|
$
|
per
ton
|
$
|
per
ton
|
||||||||||||||||
Total
costs and expenses
|
$ | 2,233.8 | $ | 2,108.8 | $ | 2,225.2 | $ | 1,720.4 | $ | 1,588.9 | |||||||||||||||
Less:
Freight and handling costs
|
167.6 | 156.5 | 150.9 | 148.8 | 109.7 | ||||||||||||||||||||
Less:
Cost of purchased coal revenue
|
95.2 | 62.6 | 112.6 | 104.1 | 117.3 | ||||||||||||||||||||
Less:
Depreciation, depletion and amortization
|
246.0 | 230.5 | 234.5 | 224.6 | 196.5 | ||||||||||||||||||||
Less:
Other expense
|
7.3 | 6.2 | 8.0 | 9.5 | 9.8 | ||||||||||||||||||||
Less:
Loss on capital restructuring
|
- | - | 212.4 | - | - | ||||||||||||||||||||
Average
cash cost
|
$ | 1,717.7 |
$ 43.10
|
$ | 1,653.0 |
$ 42.33
|
$ | 1,506.8 |
$ 35.62
|
$ | 1,233.4 |
$ 30.50
|
$ | 1,155.6 |
$ 28.23
|
Year
Ended
|
||||||||||||||||
December
31,
|
||||||||||||||||
Increase
|
%
Increase
|
|||||||||||||||
(In
thousands)
|
2007
|
2006
|
(Decrease)
|
(Decrease)
|
||||||||||||
Revenues
|
||||||||||||||||
Produced
coal revenue
|
$ | 2,054,413 | $ | 1,902,259 | $ | 152,154 | 8 | % | ||||||||
Freight
and handling revenue
|
167,641 | 156,531 | 11,110 | 7 | % | |||||||||||
Purchased
coal revenue
|
108,191 | 70,636 | 37,555 | 53 | % | |||||||||||
Other
revenue
|
83,278 | 90,428 | (7,150 | ) | (8 | )% | ||||||||||
Total
revenues
|
$ | 2,413,523 | $ | 2,219,854 | $ | 193,669 | 9 | % |
Year
Ended
|
||||||||||||||||
December
31,
|
||||||||||||||||
(In
millions, except per ton amounts)
|
2007
|
2006
|
Increase
(Decrease)
|
%
Increase (Decrease)
|
||||||||||||
Produced tons
sold:
|
||||||||||||||||
Utility
|
27.4 | 27.7 | (0.3 | ) | (1 | )% | ||||||||||
Metallurgical
|
8.5 | 7.8 | 0.7 | 9 | % | |||||||||||
Industrial
|
4.0 | 3.6 | 0.4 | 11 | % | |||||||||||
Total
|
39.9 | 39.1 | 0.8 | 2 | % | |||||||||||
Produced coal revenue
per ton sold:
|
||||||||||||||||
Utility
|
$ | 45.18 | $ | 42.37 | $ | 2.81 | 7 | % | ||||||||
Metallurgical
|
72.49 | 69.20 | $ | 3.29 | 5 | % | ||||||||||
Industrial
|
50.82 | 53.13 | $ | (2.31 | ) | (4 | )% | |||||||||
Weighted
average
|
51.55 | 48.71 | $ | 2.84 | 6 | % |
Year
Ended
|
||||||||||||||||
December
31,
|
||||||||||||||||
Increase
|
%
Increase
|
|||||||||||||||
(In
thousands)
|
2007
|
2006
|
(Decrease)
|
(Decrease)
|
||||||||||||
Costs
and expenses
|
||||||||||||||||
Cost
of produced coal revenue
|
$ | 1,641,774 | $ | 1,599,092 | $ | 42,682 | 3 | % | ||||||||
Freight
and handling costs
|
167,641 | 156,531 | 11,110 | 7 | % | |||||||||||
Cost
of purchased coal revenue
|
95,241 | 62,613 | 32,628 | 52 | % | |||||||||||
Depreciation,
depletion and amortization, applicable to:
|
||||||||||||||||
Cost
of produced coal revenue
|
242,755 | 227,279 | 15,476 | 7 | % | |||||||||||
Selling,
general and administrative
|
3,280 | 3,259 | 21 | 1 | % | |||||||||||
Selling,
general and administrative
|
75,845 | 53,834 | 22,011 | 41 | % | |||||||||||
Other
expense
|
7,308 | 6,240 | 1,068 | 17 | % | |||||||||||
Total
costs and expenses
|
$ | 2,233,844 | $ | 2,108,848 | $ | 124,996 | 6 | % |
Year
Ended
|
||||||||||||||||
December
31,
|
||||||||||||||||
Increase
|
%
Increase
|
|||||||||||||||
(In
thousands)
|
2006
|
2005
|
(Decrease)
|
(Decrease)
|
||||||||||||
Revenues
|
||||||||||||||||
Produced
coal revenue
|
$ | 1,902,259 | $ | 1,777,724 | $ | 124,535 | 7 | % | ||||||||
Freight
and handling revenue
|
156,531 | 150,898 | 5,633 | 4 | % | |||||||||||
Purchased
coal revenue
|
70,636 | 132,320 | (61,684 | ) | (47 | )% | ||||||||||
Other
revenue
|
90,428 | 143,316 | (52,888 | ) | (37 | )% | ||||||||||
Total
revenues
|
$ | 2,219,854 | $ | 2,204,258 | $ | 15,596 | 1 | % |
Year
Ended December 31,
|
||||||||||||||||
(In
millions, except per ton amounts)
|
2006
|
2005
|
Increase
(Decrease)
|
%
Increase (Decrease)
|
||||||||||||
Produced tons
sold:
|
||||||||||||||||
Utility
|
27.7 | 29.2 | (1.5 | ) | (5 | )% | ||||||||||
Metallurgical
|
7.8 | 9.4 | (1.6 | ) | (17 | )% | ||||||||||
Industrial
|
3.6 | 3.7 | (0.1 | ) | (3 | )% | ||||||||||
Total
|
39.1 | 42.3 | (3.2 | ) | (8 | )% | ||||||||||
Produced coal revenue
per ton sold:
|
||||||||||||||||
Utility
|
$ | 42.37 | $ | 36.66 | $ | 5.71 | 16 | % | ||||||||
Metallurgical
|
69.20 | 54.19 | 15.01 | 28 | % | |||||||||||
Industrial
|
53.13 | 53.19 | (0.06 | ) | 0 | % | ||||||||||
Weighted
average
|
48.71 | 42.02 | 6.69 | 16 | % |
Year
Ended
|
||||||||||||||||
December
31,
|
||||||||||||||||
Increase
|
%
Increase
|
|||||||||||||||
(In
thousands)
|
2006
|
2005
|
(Decrease)
|
(Decrease)
|
||||||||||||
Costs
and expenses
|
||||||||||||||||
Cost
of produced coal revenue
|
$ | 1,599,092 | $ | 1,438,494 | $ | 160,598 | 11 | % | ||||||||
Freight
and handling costs
|
156,531 | 150,898 | 5,633 | 4 | % | |||||||||||
Cost
of purchased coal revenue
|
62,613 | 112,600 | (49,987 | ) | (44 | )% | ||||||||||
Depreciation,
depletion and amortization, applicable to:
|
||||||||||||||||
Cost
of produced coal revenue
|
227,279 | 230,545 | (3,266 | ) | (1 | )% | ||||||||||
Selling,
general and administrative
|
3,259 | 4,020 | (761 | ) | (19 | )% | ||||||||||
Selling,
general and administrative
|
53,834 | 68,254 | (14,420 | ) | (21 | )% | ||||||||||
Other
expense
|
6,240 | 8,018 | (1,778 | ) | (22 | )% | ||||||||||
Loss
on capital restructuring
|
- | 212,378 | (212,378 | ) | (100 | )% | ||||||||||
Total
costs and expenses
|
$ | 2,108,848 | $ | 2,225,207 | $ | (116,359 | ) | (5 | )% |
December
31,
|
December
31,
|
|||||||
2007
|
2006
|
|||||||
(In
Thousands)
|
||||||||
6.875%
senior notes due 2013, net of discount
|
$ | 755,401 | $ | 754,804 | ||||
6.625%
senior notes due 2010
|
335,000 | 335,000 | ||||||
2.25%
convertible senior notes due 2024
|
9,647 | 9,647 | ||||||
4.75%
convertible senior notes due 2023
|
730 | 730 | ||||||
Capital
lease obligations
|
8,823 | 11,232 | ||||||
Fair
value hedge adjustment
|
(5,054 | ) | (6,506 | ) | ||||
Total
debt
|
1,104,547 | 1,104,907 | ||||||
Amounts
due within one year
|
(1,875 | ) | (2,583 | ) | ||||
Total
long-term debt
|
$ | 1,102,672 | $ | 1,102,324 |
Current
Ratings:
|
Moody’s
|
S&P
|
||||||
6.875%
Notes
|
B2 | B | + | |||||
6.625%
Notes
|
B2 | B | + | |||||
2.25%
Notes
|
B2 | B | + | |||||
4.75%
Notes
|
B3 | B | - |
Period
|
Total
Number of Shares Purchased
|
Average
Price Paid per Share
|
Total
Number of Shares Purchased as Part of Publicly Announced Plans or
Programs
|
Maximum
Number of Shares that May Yet Be Purchased Under the Plan
|
|||||||||||||
October
1 through October 31
|
- | - | - | - | |||||||||||||
November
1 through November 30
|
- | - | - | - | |||||||||||||
December
1 through December 31
|
- | - | - | - | |||||||||||||
Total
|
- | - | 11,339,093 |
(1)
|
(1)
|
Calculated
using $420 million that may yet be purchased under our share repurchase
program and $37.04, the closing price of Common Stock as reported on the
New York Stock Exchange on January 31,
2008.
|
Payments
Due by Period (In Thousands)
|
||||||||||||||||||||
Total
|
Within 1
Year
|
1-3
Years
|
3-5
Years
|
Beyond 5
Years
|
||||||||||||||||
Long-term
debt (1)
|
$ | 1,489,251 | $ | 74,695 | $ | 484,391 | $ | 105,003 | $ | 825,162 | ||||||||||
Capital
lease obligations
(2)
|
9,736 | 2,430 | 4,651 | 2,655 | - | |||||||||||||||
Operating
lease obligations (3)
|
161,331 | 42,669 | 73,704 | 39,080 | 5,878 | |||||||||||||||
Coal
lease obligations (4)
|
188,129 | 16,788 | 30,974 | 25,104 | 115,263 | |||||||||||||||
Purchased
coal obligations (5)
|
127,389 | 67,749 | 59,640 | - | - | |||||||||||||||
Other
purchase obligations (6)
|
317,954 | 266,153 | 29,385 | 12,624 | 9,792 | |||||||||||||||
Total
Obligations
|
$ | 2,293,790 | $ | 470,484 | $ | 682,745 | $ | 184,466 | $ | 956,095 |
(1)
|
Long-term
debt obligations reflect the future interest and principal payments of our
fixed rate senior unsecured notes outstanding as of December 31, 2007. See
Note 6 to the Notes to Consolidated Financial Statements for additional
information.
|
(2)
|
Capital
lease obligations include the amount of imputed interest over the terms of
the leases. See Note 13 to the Notes to Consolidated Financial Statements
for additional information.
|
(3)
|
See
Note 13 to the Notes to Consolidated Financial Statements for additional
information.
|
(4)
|
Coal
lease obligations include minimum royalties paid on leased coal rights.
Certain coal leases do not have set expiration dates but extend until
completion of mining of all merchantable and mineable coal reserves. For
purposes of this table, we have generally assumed that minimum royalties
on such leases will be paid for a period of 20
years.
|
(5)
|
Purchased
coal obligations represent commitments to purchase coal from external
production sources under firm contracts as of December 31,
2007.
|
(6)
|
Other
purchase obligations primarily include capital expenditure commitments for
surface mining and other equipment as well as purchases of materials and
supplies. We have purchase agreements with vendors for most types of
operating expenses. However, our open purchase orders (which are not
recognized as a liability until the purchased items are received) under
these purchase agreements, combined with any other open purchase orders,
are not material and are excluded from this table. Other purchase
obligations also include contractual commitments under transportation
contracts. Since the actual tons to be shipped under these contracts are
not set and will vary, the amount included in the table reflects the
minimum payment obligations required by the
contracts.
|
Payments
Due by Years (In Thousands)
|
||
Within
1
Year
|
1
- 3
Years
|
3
- 5
Years
|
$68,032
|
$127,178
|
$134,792
|
|
•
|
the
accuracy of our assumptions of the recoverability of the coal reserves to
be mined;
|
•
|
assumptions
about the availability of skilled labor to staff the new and expanded
mines;
|
•
|
assumptions
about the availability and cost of the capital equipment required for each
of the new and expanded mines; and
|
•
|
unanticipated
changes in business, industry or general economic conditions that affect
the assumptions underlying our rationale for expanding our
production.
|
MASSEY
ENERGY COMPANY
|
|||||||||||||
CONSOLIDATED
STATEMENTS OF INCOME
|
|||||||||||||
(In
Thousands, Except Per Share Amounts)
|
|||||||||||||
Year
Ended
|
|||||||||||||
December
31,
|
December
31,
|
December
31,
|
|||||||||||
2007
|
2006
|
2005
|
|||||||||||
Revenues
|
|||||||||||||
Produced
coal revenue
|
$ | 2,054,413 | $ | 1,902,259 | $ | 1,777,724 | |||||||
Freight
and handling revenue
|
167,641 | 156,531 | 150,898 | ||||||||||
Purchased
coal revenue
|
108,191 | 70,636 | 132,320 | ||||||||||
Other
revenue
|
83,278 | 90,428 | 143,316 | ||||||||||
Total
revenues
|
2,413,523 | 2,219,854 | 2,204,258 | ||||||||||
Costs
and expenses
|
|||||||||||||
Cost
of produced coal revenue
|
1,641,774 | 1,599,092 | 1,438,494 | ||||||||||
Freight
and handling costs
|
167,641 | 156,531 | 150,898 | ||||||||||
Cost
of purchased coal revenue
|
95,241 | 62,613 | 112,600 | ||||||||||
Depreciation,
depletion and amortization, applicable to:
|
|||||||||||||
Cost
of produced coal revenue
|
242,755 | 227,279 | 230,545 | ||||||||||
Selling,
general and administrative
|
3,280 | 3,259 | 4,020 | ||||||||||
Selling,
general and administrative
|
75,845 | 53,834 | 68,254 | ||||||||||
Other
expense
|
7,308 | 6,240 | 8,018 | ||||||||||
Loss
on capital restructuring
|
- | - | 212,378 | ||||||||||
Total
costs and expenses
|
2,233,844 | 2,108,848 | 2,225,207 | ||||||||||
Income
(Loss) before interest and taxes
|
179,679 | 111,006 | (20,949 | ) | |||||||||
Interest
income
|
23,969 | 20,094 | 12,603 | ||||||||||
Interest
expense
|
(74,145 | ) | (86,076 | ) | (67,064 | ) | |||||||
Income
(Loss) before taxes
|
129,503 | 45,024 | (75,410 | ) | |||||||||
Income
tax expense
|
(35,405 | ) | (3,408 | ) | (26,228 | ) | |||||||
Income
(Loss) before cumulative effect of accounting change
|
94,098 | 41,616 | (101,638 | ) | |||||||||
Cumulative
effect of accounting change, net of tax
|
- | (639 | ) | - | |||||||||
Net
income (loss)
|
$ | 94,098 | $ | 40,977 | $ | (101,638 | ) | ||||||
Income
(Loss) per share - Basic
|
|||||||||||||
Income
(Loss) before cumulative effect of accounting change
|
$ | 1.17 | $ | 0.51 | $ | (1.33 | ) | ||||||
Cumulative
effect of accounting change
|
- | (0.01 | ) | - | |||||||||
Net
income (loss)
|
$ | 1.17 | $ | 0.50 | $ | (1.33 | ) | ||||||
Income
(Loss) per share - Diluted
|
|||||||||||||
Income
(Loss) before cumulative effect of accounting change
|
$ | 1.17 | $ | 0.51 | $ | (1.33 | ) | ||||||
Cumulative
effect of accounting change
|
- | (0.01 | ) | - | |||||||||
Net
income (loss)
|
$ | 1.17 | $ | 0.50 | $ | (1.33 | ) | ||||||
Shares
used to calculate income per share
|
|||||||||||||
Basic
|
80,123 | 80,847 | 76,390 | ||||||||||
Diluted
|
80,654 | 81,386 | 76,390 |
CONSOLIDATED
BALANCE SHEETS
|
||||||||
(In
Thousands, Except Share Amounts)
|
||||||||
December
31,
|
December
31,
|
|||||||
2007
|
2006
|
|||||||
ASSETS
|
||||||||
Current
Assets
|
||||||||
Cash
and cash equivalents
|
$ | 365,220 | $ | 239,245 | ||||
Trade
and other accounts receivable, less allowance of $444 and
$576,
|
||||||||
respectively
|
156,572 | 197,105 | ||||||
Inventories
|
183,360 | 191,056 | ||||||
Income
taxes receivable
|
16,302 | - | ||||||
Other
current assets
|
165,940 | 172,322 | ||||||
Total
current assets
|
887,394 | 799,728 | ||||||
Net
Property, Plant and Equipment
|
1,793,920 | 1,776,781 | ||||||
Other
Noncurrent Assets
|
||||||||
Pension
assets
|
47,323 | 34,974 | ||||||
Other
noncurrent assets
|
132,034 | 129,213 | ||||||
Total
other noncurrent assets
|
179,357 | 164,187 | ||||||
Total
assets
|
$ | 2,860,671 | $ | 2,740,696 | ||||
LIABILITIES
AND SHAREHOLDERS' EQUITY
|
||||||||
Current
Liabilities
|
||||||||
Accounts
payable, principally trade and bank overdrafts
|
$ | 148,206 | $ | 117,157 | ||||
Short-term
debt
|
1,875 | 2,583 | ||||||
Payroll
and employee benefits
|
46,512 | 40,380 | ||||||
Income
taxes payable
|
- | 19,412 | ||||||
Other
current liabilities
|
171,269 | 175,005 | ||||||
Total
current liabilities
|
367,862 | 354,537 | ||||||
Noncurrent
Liabilities
|
||||||||
Long-term
debt
|
1,102,672 | 1,102,324 | ||||||
Deferred
income taxes
|
154,705 | 116,690 | ||||||
Other
noncurrent liabilities
|
451,428 | 469,854 | ||||||
Total
noncurrent liabilities
|
1,708,805 | 1,688,868 | ||||||
Total
liabilities
|
2,076,667 | 2,043,405 | ||||||
Shareholders’
Equity
|
||||||||
Capital
stock
|
||||||||
Preferred
– authorized 20,000,000 shares without par value; none
issued
|
- | - | ||||||
Common
– authorized 150,000,000 shares of $0.625 par value;
issued
|
||||||||
82,818,578
and 82,365,259 shares, respectively
|
51,743 | 51,458 | ||||||
Treasury
stock, 2,874,800 and 1,299,000 shares at cost,
respectively
|
(79,986 | ) | (49,995 | ) | ||||
Additional
capital
|
237,684 | 220,650 | ||||||
Retained
earnings
|
601,587 | 515,894 | ||||||
Accumulated
other comprehensive loss
|
(27,024 | ) | (40,716 | ) | ||||
Total
shareholders’ equity
|
784,004 | 697,291 | ||||||
Total
liabilities and shareholders’ equity
|
$ | 2,860,671 | $ | 2,740,696 |
MASSEY
ENERGY COMPANY
|
||||||||||||
CONSOLIDATED
STATEMENT OF CASH FLOWS
|
||||||||||||
(In
Thousands)
|
||||||||||||
Year
Ended
|
||||||||||||
December
31, 2007
|
December
31, 2006
|
December
31, 2005
|
||||||||||
Cash
Flows from Operating Activities
|
||||||||||||
Net
income (loss)
|
$ | 94,098 | $ | 40,977 | $ | (101,638 | ) | |||||
Adjustments
to reconcile Net income (loss) to Cash provided by
operating
|
||||||||||||
activities:
|
||||||||||||
Cumulative
effect of accounting change
|
- | 639 | - | |||||||||
Depreciation,
depletion and amortization
|
246,035 | 230,538 | 234,565 | |||||||||
Share-based
compensation expense
|
19,299 | 7,350 | - | |||||||||
Deferred
income taxes
|
27,403 | (17,381 | ) | 23,259 | ||||||||
Gain
on disposal of assets
|
(6,751 | ) | (46,557 | ) | (63,879 | ) | ||||||
Gain
on reserve exchange
|
(10,284 | ) | - | (38,198 | ) | |||||||
Loss
on repurchase of senior notes
|
- | - | 669 | |||||||||
Loss
on debt restructuring
|
- | - | 212,378 | |||||||||
Writeoff
of deferred financing costs
|
- | - | 6,648 | |||||||||
Accretion
of asset retirement obligations
|
11,758 | 10,166 | 10,156 | |||||||||
Changes
in operating assets and liabilities:
|
||||||||||||
Decrease
(increase) in accounts receivable
|
19,253 | (43,456 | ) | 13,559 | ||||||||
Decrease
(increase) in inventories
|
7,696 | (8,070 | ) | (85,869 | ) | |||||||
Decrease
(increase) in other current assets
|
6,382 | 24,573 | (4,695 | ) | ||||||||
(Increase)
decrease in pension and other assets
|
(191 | ) | 1,165 | (6,830 | ) | |||||||
Increase
(decrease) in accounts payable and bank overdrafts
|
31,049 | (45,632 | ) | 26,917 | ||||||||
(Decrease)
increase in accrued income taxes
|
(35,714 | ) | 42,638 | 15,320 | ||||||||
(Decrease)
increase in other accrued liabilities
|
(558 | ) | 17,046 | 19,502 | ||||||||
(Decrease)
increase in other noncurrent liabilities
|
(2,416 | ) | 4,712 | 12,140 | ||||||||
Asset
retirement obligation payments
|
(11,061 | ) | (4,205 | ) | (3,858 | ) | ||||||
Cash
provided by operating activities
|
395,998 | 214,503 | 270,146 | |||||||||
Cash
Flows from Investing Activities
|
||||||||||||
Capital
expenditures
|
(270,461 | ) | (298,132 | ) | (346,578 | ) | ||||||
Proceeds
from sale of assets
|
28,118 | 51,467 | 73,542 | |||||||||
Cash
utilized by investing activities
|
(242,343 | ) | (246,665 | ) | (273,036 | ) | ||||||
Cash
Flows from Financing Activities
|
||||||||||||
Repurchase
of senior notes
|
- | - | (19,890 | ) | ||||||||
Stock
repurchase
|
(29,991 | ) | (49,995 | ) | - | |||||||
Repayments
of capital lease obligations
|
(2,409 | ) | (10,214 | ) | (19,370 | ) | ||||||
Proceeds
from issuance of 6.875% senior notes
|
- | - | 742,847 | |||||||||
Debt
restructuring
|
- | - | (562,608 | ) | ||||||||
Early
termination of fair value hedge
|
- | - | (7,922 | ) | ||||||||
Proceeds
from sale-leaseback transactions
|
13,146 | 21,819 | 71,697 | |||||||||
Cash
dividends paid
|
(12,837 | ) | (12,814 | ) | (12,208 | ) | ||||||
Proceeds
from stock options exercised
|
4,001 | 2,142 | 7,231 | |||||||||
Excess
income tax benefit from stock option exercises
|
410 | 1,051 | - | |||||||||
Cash
(utilized) provided by financing activities
|
(27,680 | ) | (48,011 | ) | 199,777 | |||||||
Increase
(decrease) in cash and cash equivalents
|
125,975 | (80,173 | ) | 196,887 | ||||||||
Cash
and cash equivalents at beginning of period
|
239,245 | 319,418 | 122,531 | |||||||||
Cash
and cash equivalents at end of period
|
$ | 365,220 | $ | 239,245 | $ | 319,418 | ||||||
Supplemental
Cash Flow Information
|
||||||||||||
Cash
paid during the period for income taxes
|
$ | 34,052 | $ | 157 | $ | 9,205 |
CONSOLIDATED
STATEMENT OF SHAREHOLDERS' EQUITY
|
||||||||||||||||||||||||||||||||
(In
Thousands, Except Per Share Amounts)
|
||||||||||||||||||||||||||||||||
Unamortized
|
Accumulated
|
|||||||||||||||||||||||||||||||
Executive
|
Other
|
Total
|
||||||||||||||||||||||||||||||
Common
Stock
|
Additional
|
Stock
Plan
|
Retained
|
Comprehensive
|
Treasury
|
Shareholders'
|
||||||||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Expense
|
Earnings
|
Loss
|
Stock
|
Equity
|
|||||||||||||||||||||||||
Balance
at December 31, 2004
|
76,431 | $ | 47,769 | $ | 39,925 | $ | (6,162 | ) | $ | 695,492 | $ | (151 | ) | $ | - | $ | 776,873 | |||||||||||||||
Net
loss
|
(101,638 | ) | (101,638 | ) | ||||||||||||||||||||||||||||
Other
comprehensive loss, net of
|
||||||||||||||||||||||||||||||||
deferred
tax of $171:
|
||||||||||||||||||||||||||||||||
Minimum
pension liability
|
||||||||||||||||||||||||||||||||
adjustment
|
(318 | ) | (318 | ) | ||||||||||||||||||||||||||||
Comprehensive
loss
|
(101,956 | ) | ||||||||||||||||||||||||||||||
Dividends
declared ($0.16 per share)
|
(12,233 | ) | (12,233 | ) | ||||||||||||||||||||||||||||
Exercise
of stock options
|
498 | 312 | 6,919 | 7,231 | ||||||||||||||||||||||||||||
Stock
option tax benefit
|
2,563 | 2,563 | ||||||||||||||||||||||||||||||
Amortization
of stock plan expense
|
3,153 | 3,153 | ||||||||||||||||||||||||||||||
Issuance
of restricted stock, net
|
90 | 56 | 4,065 | (4,121 | ) | - | ||||||||||||||||||||||||||
Issuance
of stock for debt conversion
|
4,921 | 3,076 | 162,277 | 165,353 | ||||||||||||||||||||||||||||
Balance
at December 31, 2005
|
81,940 | $ | 51,213 | $ | 215,749 | $ | (7,130 | ) | $ | 581,621 | $ | (469 | ) | $ | - | $ | 840,984 | |||||||||||||||
Net
income
|
40,977 | 40,977 | ||||||||||||||||||||||||||||||
Other
comprehensive income, net of
|
||||||||||||||||||||||||||||||||
deferred
tax of $(21):
|
||||||||||||||||||||||||||||||||
Minimum
pension liability
|
||||||||||||||||||||||||||||||||
adjustment
|
109 | 109 | ||||||||||||||||||||||||||||||
Comprehensive
income
|
41,086 | |||||||||||||||||||||||||||||||
Adoption
of accounting standards:
|
||||||||||||||||||||||||||||||||
Share-based
payments
|
(7,130 | ) | 7,130 | - | ||||||||||||||||||||||||||||
Post-production
stripping costs,
|
||||||||||||||||||||||||||||||||
net
of deferred tax of $59,970
|
(93,798 | ) | (93,798 | ) | ||||||||||||||||||||||||||||
Pension
and postretirement plans,
|
- | |||||||||||||||||||||||||||||||
net
of deferred tax of $25,801
|
(40,356 | ) | (40,356 | ) | ||||||||||||||||||||||||||||
Dividends
declared ($0.16 per share)
|
(12,906 | ) | (12,906 | ) | ||||||||||||||||||||||||||||
Stock
option expense
|
6,112 | 6,112 | ||||||||||||||||||||||||||||||
Exercise
of stock options
|
185 | 115 | 2,027 | 2,142 | ||||||||||||||||||||||||||||
Stock
option tax benefit
|
1,051 | 1,051 | ||||||||||||||||||||||||||||||
Restricted
stock
|
239 | 129 | 2,822 | 2,951 | ||||||||||||||||||||||||||||
Share
repurchase
|
(1,299 | ) | (49,995 | ) | (49,995 | ) | ||||||||||||||||||||||||||
Issuance
of stock for debt conversion
|
1 | 1 | 19 | 20 | ||||||||||||||||||||||||||||
Balance
at December 31, 2006
|
81,066 | $ | 51,458 | $ | 220,650 | $ | - | $ | 515,894 | $ | (40,716 | ) | $ | (49,995 | ) | $ | 697,291 | |||||||||||||||
Net
income
|
94,098 | 94,098 | ||||||||||||||||||||||||||||||
Other
comprehensive income:
|
||||||||||||||||||||||||||||||||
Pension
and postretirement plans,
|
||||||||||||||||||||||||||||||||
net
of deferred tax of $8,754
|
13,692 | 13,692 | ||||||||||||||||||||||||||||||
Comprehensive
income
|
107,790 | |||||||||||||||||||||||||||||||
Adoption
of accounting standards:
|
||||||||||||||||||||||||||||||||
Uncertainty
in income taxes
|
5,182 | 5,182 | ||||||||||||||||||||||||||||||
Dividends
declared ($0.17 per share)
|
(13,587 | ) | (13,587 | ) | ||||||||||||||||||||||||||||
Stock
option expense
|
8,308 | 8,308 | ||||||||||||||||||||||||||||||
Exercise
of stock options
|
299 | 188 | 3,813 | 4,001 | ||||||||||||||||||||||||||||
Stock
option tax benefit
|
410 | 410 | ||||||||||||||||||||||||||||||
Restricted
stock
|
155 | 97 | 4,503 | 4,600 | ||||||||||||||||||||||||||||
Share
repurchase
|
(1,576 | ) | (29,991 | ) | (29,991 | ) | ||||||||||||||||||||||||||
Balance
at December 31, 2007
|
79,944 | $ | 51,743 | $ | 237,684 | $ | - | $ | 601,587 | $ | (27,024 | ) | $ | (79,986 | ) | $ | 784,004 |
Years
|
|
Buildings
and plants
|
20
to 30
|
Equipment
|
3
to 20
|
Capital
leases
|
4
to 7
|
Year
Ended
|
||||||||||||
December
31,
|
December
31,
|
December
31,
|
||||||||||
2007
|
2006
|
2005
|
||||||||||
(In
Thousands, Except Per Share Amounts)
|
||||||||||||
Numerator:
|
||||||||||||
Income
(Loss) before cumulative effect of accounting change - numerator for
basic
|
$ | 94,098 | $ | 41,616 | $ | (101,638 | ) | |||||
Cumulative
effect of accounting change, net of tax
|
- | (639 | ) | - | ||||||||
Effect
of convertible notes
|
200 | - | - | |||||||||
Net
income (loss) - numerator for diluted
|
$ | 94,298 | $ | 40,977 | $ | (101,638 | ) | |||||
Denominator:
|
||||||||||||
Weighted
average shares - denominator for basic
|
80,123 | 80,847 | 76,390 | |||||||||
Effect
of stock options/restricted stock
|
207 | 539 | - | |||||||||
Effect
of convertible notes
|
324 | - | - | |||||||||
Adjusted
weighted average shares - denominator for diluted
|
80,654 | 81,386 | 76,390 | |||||||||
Income
(Loss) per share:
|
||||||||||||
Basic:
|
||||||||||||
Before
cumulative effect of accounting change
|
$ | 1.17 | $ | 0.51 | $ | (1.33 | ) | |||||
Cumulative
effect of accounting change
|
- | (0.01 | ) | - | ||||||||
Net
income (loss)
|
$ | 1.17 | $ | 0.50 | $ | (1.33 | ) | |||||
Diluted:
|
||||||||||||
Before
cumulative effect of accounting change
|
$ | 1.17 | $ | 0.51 | $ | (1.33 | ) | |||||
Cumulative
effect of accounting change
|
- | (0.01 | ) | - | ||||||||
Net
income (loss)
|
$ | 1.17 | $ | 0.50 | $ | (1.33 | ) |
December
31,
|
December
31,
|
|||||||
2007
|
2006
|
|||||||
(In
Thousands)
|
||||||||
Saleable
coal
|
$ | 120,343 | $ | 124,816 | ||||
Raw
coal
|
11,471 | 13,210 | ||||||
Subtotal
coal inventory
|
131,814 | 138,026 | ||||||
Supplies
inventory
|
51,546 | 53,030 | ||||||
Total
inventory
|
$ | 183,360 | $ | 191,056 |
December
31,
|
December
31,
|
|||||||
2007
|
2006
|
|||||||
(In
Thousands)
|
||||||||
Longwall
panel costs
|
$ | 18,029 | $ | 38,843 | ||||
Deposits
|
118,944 | 106,833 | ||||||
Other
|
28,967 | 26,646 | ||||||
Total
other current assets
|
$ | 165,940 | $ | 172,322 |
December
31,
|
December
31,
|
|||||||
2007
|
2006
|
|||||||
(In
Thousands)
|
||||||||
Land,
buildings and equipment
|
$ | 2,082,003 | $ | 2,005,029 | ||||
Mining
properties owned in fee and leased mineral rights
|
704,547 | 690,687 | ||||||
Mine
development
|
863,303 | 781,834 | ||||||
Total
property, plant and equipment
|
3,649,853 | 3,477,550 | ||||||
Less
accumulated depreciation, depletion and amortization
|
(1,855,933 | ) | (1,700,769 | ) | ||||
Net
property, plant and equipment
|
$ | 1,793,920 | $ | 1,776,781 |
December
31,
|
December
31,
|
|||||||||||||||
2007
|
2006
|
|||||||||||||||
(Dollars
In Thousands)
|
||||||||||||||||
Equity
securities (domestic and international)
|
$ | 187,439 | 64.2 | % | $ | 186,695 | 65.4 | % | ||||||||
Debt
securities
|
72,417 | 24.8 | % | 77,902 | 27.3 | % | ||||||||||
Other
(includes cash, cash equivalents and a group annuity
contract)
|
31,891 | 11.0 | % | 20,822 | 7.3 | % | ||||||||||
Total
fair value of plan assets
|
$ | 291,747 | 100.0 | % | $ | 285,419 | 100.0 | % |
Year
Ended
|
||||||||
December
31,
|
December
31,
|
|||||||
2007
|
2006
|
|||||||
(In
Thousands)
|
||||||||
Change
in benefit obligation:
|
||||||||
Benefit
obligation at the beginning of the period
|
$ | 256,925 | $ | 242,400 | ||||
Service
cost
|
9,716 | 9,230 | ||||||
Interest
cost
|
15,023 | 13,922 | ||||||
Actuarial
(gain) loss
|
(18,796 | ) | 957 | |||||
Benefits
paid
|
(10,631 | ) | (9,584 | ) | ||||
Benefit
obligation at the end of the period
|
252,237 | 256,925 | ||||||
Change
in plan assets:
|
||||||||
Fair
value at the beginning of the period
|
285,419 | 246,992 | ||||||
Actual
return on assets
|
16,512 | 29,873 | ||||||
Company
contributions
|
447 | 18,138 | ||||||
Benefits
paid
|
(10,631 | ) | (9,584 | ) | ||||
Fair
value of plan assets at end of period
|
291,747 | 285,419 | ||||||
Funded
status
|
$ | 39,510 | $ | 28,494 | ||||
Qualified
defined benefit pension plan, included in Pension assets
|
47,323 | 34,974 | ||||||
Nonqualified
supplemental benefit pension plan, included in Other noncurrent
liabilities
|
(7,813 | ) | (6,480 | ) | ||||
Accrued
pension assets recognized (net)
|
$ | 39,510 | $ | 28,494 |
2007
|
2006
|
|||||||||||||||
(In
Thousands)
|
||||||||||||||||
Net
loss
|
Prior
service cost
|
Net
loss
|
Prior
service cost
|
|||||||||||||
January
1 beginning balance
|
32,821 | 84 | - | - | ||||||||||||
Changes
to Accumulated other comprehensive loss
|
(10,339 | ) | (24 | ) | 32,821 | 84 | ||||||||||
December
31 ending balance
|
$ | 22,482 | $ | 60 | $ | 32,821 | $ | 84 |
December
31,
|
December
31,
|
|||||||
2007
|
2006
|
|||||||
Discount
rates
|
6.50 | % | 5.90 | % | ||||
Rates
of increase in compensation levels
|
4.00 | % | 4.00 | % |
Year
Ended
|
||||||||||||
December
31,
|
December
31,
|
December
31,
|
||||||||||
2007
|
2006
|
2005
|
||||||||||
(In
Thousands)
|
||||||||||||
Service
cost
|
$ | 9,716 | $ | 9,230 | $ | 9,324 | ||||||
Interest
cost
|
15,023 | 13,922 | 12,864 | |||||||||
Expected
return on plan assets
|
(22,427 | ) | (19,952 | ) | (17,737 | ) | ||||||
Recognized
loss
|
4,068 | 6,226 | 3,607 | |||||||||
Amortization
of prior service cost
|
39 | 39 | 40 | |||||||||
Net
periodic pension expense
|
$ | 6,419 | $ | 9,465 | $ | 8,098 |
December
31,
|
December
31,
|
December
31,
|
||||||||||
2007
|
2006
|
2005
|
||||||||||
Discount
rates
|
5.90 | % | 5.75 | % | 5.75 | % | ||||||
Rates
of increase in compensation levels
|
4.00 | % | 4.00 | % | 4.00 | % | ||||||
Expected
long-term rate of return on plan assets
|
8.00 | % | 8.00 | % | 8.00 | % |
Expected
Pension
|
||||
Benefit
Payments
|
||||
(In
Thousands)
|
||||
2008
|
$ | 11,635 | ||
2009
|
12,424 | |||
2010
|
13,049 | |||
2011
|
13,764 | |||
2012
|
14,665 | |||
Years
2013 to 2017
|
87,977 |
December
31,
|
December
31,
|
|||||||
2007
|
2006
|
|||||||
(In
Thousands)
|
||||||||
6.875%
senior notes due 2013, net of discount
|
$ | 755,401 | $ | 754,804 | ||||
6.625%
senior notes due 2010
|
335,000 | 335,000 | ||||||
2.25%
convertible senior notes due 2024
|
9,647 | 9,647 | ||||||
4.75%
convertible senior notes due 2023
|
730 | 730 | ||||||
Capital
lease obligations
|
8,823 | 11,232 | ||||||
Fair
value hedge adjustment
|
(5,054 | ) | (6,506 | ) | ||||
Total
debt
|
1,104,547 | 1,104,907 | ||||||
Amounts
due within one year
|
(1,875 | ) | (2,583 | ) | ||||
Total
long-term debt
|
$ | 1,102,672 | $ | 1,102,324 |
(In
Thousands)
|
||||
2008
|
$ | 1,875 | ||
2009
|
1,967 | |||
2010
|
337,218 | |||
2011
|
2,670 | |||
2012
|
13 | |||
Beyond
2012*
|
770,457 |
*
|
The
4.75% Notes and the 2.25% Notes in the amounts of $0.7 million and $9.6
million, respectively, included herein may be redeemed at the option of
the holders in 2009 and 2011,
respectively.
|
Year
Ended
|
|||||||||||||
December
31,
|
December
31,
|
December
31,
|
|||||||||||
2007
|
2006
|
2005
|
|||||||||||
(In
Thousands)
|
|||||||||||||
Current:
|
|||||||||||||
Federal
|
$ | 7,876 | $ | 20,694 | $ | 2,852 | |||||||
State
and local
|
126 | 95 | 117 | ||||||||||
|
Total
current
|
8,002 | 20,789 | 2,969 | |||||||||
Deferred:
|
|||||||||||||
Federal
|
24,593 | (15,439 | ) | 21,773 | |||||||||
State
and local
|
2,810 | (1,942 | ) | 1,486 | |||||||||
Total
deferred
|
27,403 | (17,381 | ) | 23,259 | |||||||||
Income
tax expense
|
$ | 35,405 | $ | 3,408 | $ | 26,228 |
Year
Ended
|
||||||||||||
December
31,
|
December
31,
|
December
31,
|
||||||||||
2007
|
2006
|
2005
|
||||||||||
(In
Thousands)
|
||||||||||||
U.S.
statutory federal tax expense (benefit)
|
$ | 45,326 | $ | 15,758 | $ | (26,394 | ) | |||||
Increase
(Decrease) resulting from:
|
||||||||||||
State
taxes
|
(116 | ) | (2,393 | ) | 1,322 | |||||||
Non-deductible
penalties
|
8,062 | 852 | 546 | |||||||||
Percentage
depletion
|
(33,501 | ) | (25,897 | ) | (29,932 | ) | ||||||
Non-deductible
compensation
|
711 | 1,279 | 9,653 | |||||||||
Non-deductible
refinancing and exchange offer costs
|
(4,809 | ) | - | 71,737 | ||||||||
Extraterritorial
excluded income
|
- | (797 | ) | (1,160 | ) | |||||||
Valuation
allowance adjustment
|
31,343 | 16,066 | 5,309 | |||||||||
Uncertain
tax positions
|
(2,325 | ) | (1,197 | ) | (4,284 | ) | ||||||
Refund
from settlement of 2001 IRS audit
|
(4,609 | ) | - | - | ||||||||
Other,
net
|
(4,677 | ) | (263 | ) | (569 | ) | ||||||
Income
tax expense
|
$ | 35,405 | $ | 3,408 | $ | 26,228 |
Year
Ended
|
|||||||||
December
31,
|
December
31,
|
||||||||
2007
|
2006
|
||||||||
(In
Thousands)
|
|||||||||
Deferred
tax assets:
|
|||||||||
Postretirement
benefit obligations
|
$ | 66,235 | $ | 68,555 | |||||
Workers'
compensation
|
22,588 | 21,456 | |||||||
Reclamation
and mine closure
|
47,281 | 51,440 | |||||||
Alternative
minimum tax credit carryforwards
|
119,651 | 135,103 | |||||||
Accounting
change on post-production stripping costs
|
- | 59,970 | |||||||
Litigation
|
10,247 | 18,103 | |||||||
Deferred
compensation
|
24,660 | 17,812 | |||||||
Federal
net operating loss
|
98,434 | 21,892 | |||||||
State
net operating loss
|
28,194 | 30,682 | |||||||
Other
|
27,483 | 9,708 | |||||||
Total
deferred tax assets
|
444,773 | 434,721 | |||||||
Valuation
allowance for deferred tax assets
|
(194,122 | ) | (163,656 | ) | |||||
Total
deferred tax assets, net of valuation allowance
|
250,651 | 271,065 | |||||||
Deferred
tax liabilities:
|
|||||||||
Plant,
equipment and mine development
|
(275,362 | ) | (270,693 | ) | |||||
Mining
property and mineral rights
|
(117,609 | ) | (107,267 | ) | |||||
Deferred
royalties
|
(10,339 | ) | (9,642 | ) | |||||
Other
|
(2,046 | ) | (153 | ) | |||||
Total
deferred tax liablities
|
(405,356 | ) | (387,755 | ) | |||||
Deferred
income taxes
|
$ | (154,705 | ) | $ | (116,690 | ) |
(In
Thousands)
|
||||
Balance
at January 1, 2007
|
$ | 2,325 | ||
Additions
based on tax positions related to the current year
|
- | |||
Additions
for tax positions of prior years
|
49,130 | |||
Reductions
for tax positions of prior years
|
(2,325 | ) | ||
Settlements
|
(49,130 | ) | ||
Reductions
due to lapse of applicable statute of limitations
|
- | |||
Balance
at December 31, 2007
|
$ | - |
December
31,
|
December
31,
|
||||||||
2007
|
2006
|
||||||||
(In
Thousands)
|
|||||||||
Reclamation
(Note 9)
|
$ | 142,213 | $ | 142,687 | |||||
Other
postretirement benefits (Note 10)
|
141,087 | 138,109 | |||||||
Workers'
compensation and black lung (Note 11)
|
90,702 | 89,227 | |||||||
Other
|
77,426 | 99,831 | |||||||
Total
other noncurrent liabilities
|
|
$ | 451,428 | $ | 469,854 |
Year
Ended
|
||||||||
December
31,
|
December
31,
|
|||||||
2007
|
2006
|
|||||||
(In
Thousands)
|
||||||||
Reclamation
liability at beginning of period
|
$ | 171,954 | $ | 156,776 | ||||
Accretion
expense
|
11,758 | 10,166 | ||||||
Liability
assumed/incurred
|
2,168 | 3,627 | ||||||
Liability
disposed
|
(142 | ) | - | |||||
Revisions
in estimated cash flows
|
(6,036 | ) | 5,590 | |||||
Payments
|
(11,061 | ) | (4,205 | ) | ||||
Reclamation
liability at end of period
|
168,641 | 171,954 | ||||||
Less
amount included in Other current liabilities
|
26,428 | 29,267 | ||||||
Total
reclamation, included in Other noncurrent liabilities
|
$ | 142,213 | $ | 142,687 |
Year
Ended
|
||||||||||||
December
31,
|
December
31,
|
December
31,
|
||||||||||
2007
|
2006
|
2005
|
||||||||||
(In
Thousands)
|
||||||||||||
Service
cost
|
$ | 3,668 | $ | 3,758 | $ | 3,607 | ||||||
Interest
cost
|
8,467 | 7,959 | 6,926 | |||||||||
Amortization
of net loss
|
1,864 | 2,307 | 1,704 | |||||||||
Amortization
of prior service credit
|
(750 | ) | (750 | ) | (2,651 | ) | ||||||
Net
periodic postretirement benefit cost
|
$ | 13,249 | $ | 13,274 | $ | 9,586 |
Year
Ended
|
||||||||
December
31,
|
December
31,
|
|||||||
2007
|
2006
|
|||||||
(In
Thousands)
|
||||||||
Change
in benefit obligation:
|
||||||||
Benefit
obligation at the beginning of the period
|
$ | 144,325 | $ | 135,999 | ||||
Service
cost
|
3,668 | 3,758 | ||||||
Interest
cost
|
8,467 | 7,959 | ||||||
Actuarial
(gain)/loss
|
(3,546 | ) | 1,985 | |||||
Benefits
paid
|
(5,181 | ) | (5,376 | ) | ||||
Benefit
obligation at the end of the period
|
$ | 147,733 | $ | 144,325 | ||||
Accrued
postretirement benefit obligation
|
$
|
147,733 |
$
|
144,325 | ||||
Amount
included in Payroll and employee benefits
|
6,646 | 6,216 | ||||||
Postretirement
benefit obligation, included in Other noncurrent
liabilities
|
$ | 141,087 | $ | 138,109 |
Year
Ended
|
||||||||||||||||
2007
|
2006
|
|||||||||||||||
(In
Thousands)
|
||||||||||||||||
Net
loss
|
Prior
service credit
|
Net
loss
|
Prior
service credit
|
|||||||||||||
January
1 beginning balance
|
$ | 23,434 | $ | (5,521 | ) | $ | - | $ | - | |||||||
Changes
to Accumulated other comprehensive loss
|
(3,302 | ) | 458 | 23,434 | (5,521 | ) | ||||||||||
December
31 ending balance
|
$ | 20,132 | $ | (5,063 | ) | $ | 23,434 | $ | (5,521 | ) |
December
31,
|
December
31,
|
|||||||
2007
|
2006
|
|||||||
Health
care cost trend rate for next year
|
8.50 | % | 8.20 | % | ||||
Ultimate
trend rate
|
5.00 | % | 5.00 | % | ||||
Year
that the rate reaches ultimate trend rate
|
2013
|
2011
|
1-Percentage
Point Increase
|
1-Percentage
Point Decrease
|
|||||||
(In
Thousands)
|
||||||||
Effect
on total of service and interest costs components
|
$ | 1,997 | $ | (1,609 | ) | |||
Effect
on accumulated postretirement benefit obligation
|
$ | 21,497 | $ | (17,661 | ) |
Expected
Benefit Payments
|
||||
(In
Thousands)
|
||||
2008
|
$ | 6,889 | ||
2009
|
7,589 | |||
2010
|
8,231 | |||
2011
|
8,969 | |||
2012
|
9,504 | |||
Years
2013 to 2017
|
52,371 |
December
31,
|
December
31,
|
|||||||
2007
|
2006
|
|||||||
(In
Thousands)
|
||||||||
Accrued
self-insured black lung obligation
|
$ | 53,412 | $ | 53,284 | ||||
Workers'
compensation (traumatic injury)
|
58,788 | 56,042 | ||||||
Total
accrued workers' compensation and black lung
|
112,200 | 109,326 | ||||||
Less
amount included in Other current liabilities
|
21,498 | 20,099 | ||||||
Workers'
compensation & black lung in Other noncurrent
liabilities
|
$ | 90,702 | $ | 89,227 |
Year
Ended
|
||||||||
December
31,
|
December
31,
|
|||||||
2007
|
2006
|
|||||||
(In
Thousands)
|
||||||||
Beginning
of year accrued self-insured black lung obligation
|
$ | 53,284 | $ | 50,779 | ||||
Service
cost
|
2,495 | 2,619 | ||||||
Interest
cost
|
3,117 | 2,861 | ||||||
Actuarial
gain
|
(3,989 | ) | (1,601 | ) | ||||
Benefit
payments
|
(1,495 | ) | (1,374 | ) | ||||
Accrued
self-insured black lung obligation
|
$ | 53,412 | $ | 53,284 |
2007
|
2006
|
|||||||
(In
Thousands)
|
||||||||
Net
gain
|
Net
gain
|
|||||||
January
1 beginning balance
|
$ | (10,102 | ) | $ | - | |||
Changes
to Accumulated other comprehensive loss
|
(485 | ) | (10,102 | ) | ||||
December
31 ending balance
|
(10,587 | ) | (10,102 | ) |
Year
Ended
|
||||||||||||
December
31,
|
December
31,
|
December
31,
|
||||||||||
2007
|
2006
|
2005
|
||||||||||
(In
Thousands)
|
||||||||||||
Self-insured
black lung benefits:
|
||||||||||||
Service
cost
|
$ | 2,495 | $ | 2,619 | $ | 2,392 | ||||||
Interest
cost
|
3,117 | 2,861 | 2,694 | |||||||||
Amortization
of actuarial gain
|
(3,194 | ) | (3,759 | ) | (4,691 | ) | ||||||
2,418 | 1,721 | 395 | ||||||||||
Other
workers' compensation benefits
|
30,842 | 36,381 | 40,609 | |||||||||
$ | 33,260 | $ | 38,102 | $ | 41,004 |
1-Percentage
Point Increase
|
1-Percentage
Point Decrease
|
|||||||
Increase/decrease
in medical cost trend rate:
|
||||||||
Effect
on total of service and interest costs components
|
$ | 165 | $ | (133 | ) | |||
Effect
on accumulated black lung obligation
|
$ | 1,344 | $ | (1,101 | ) | |||
Increase/decrease
in cost of living trend rate:
|
||||||||
Effect
on total service and interest cost components
|
$ | 655 | $ | (530 | ) | |||
Effect
on accumulated black lung obligation
|
$ | 5,526 | $ | (4,556 | ) |
Expected
Benefit Payments
|
||||
(In
Thousands)
|
||||
2008
|
$ | 3,299 | ||
2009
|
3,442 | |||
2010
|
3,576 | |||
2011
|
3,706 | |||
2012
|
3,836 | |||
Years
2013 to 2017
|
20,871 |
|
·
|
Massey
Energy Company 1996 Executive Stock Plan, as amended and restated
effective November 30, 2000 (the“1996
Plan”),
|
|
·
|
Massey
Energy Company 1997 Stock Appreciation Rights Plan, as amended and
restated effective November 30, 2000 (the “SAR
Plan”),
|
|
·
|
Massey
Energy Company 1999 Executive Performance Incentive Plan, as amended and
restated effective November 30, 2000 (the “1999
Plan”),
|
|
·
|
Massey
Energy Company Stock Plan for Non-Employee Directors, as amended and
restated effective May 24, 2005 (the “1995
Plan”),
|
|
·
|
Massey
Energy Company 1997 Restricted Stock Plan for Non-Employee Directors, as
amended and restated effective May 24, 2005 (the “1997
Plan”).
|
Year
Ended
|
||||
December
31,
|
||||
2005
|
||||
(In
Thousands, Except Per Share Amounts)
|
||||
Net
loss, as reported
|
$ | (101,638 | ) | |
Deduct:
Total stock-based employee compensation expense
|
||||
for
stock options determined under Black-Scholes option
|
||||
pricing
model (net of tax)
|
(3,959 | ) | ||
Pro
forma net loss
|
$ | (105,597 | ) | |
Loss
per share:
|
||||
Basic
- as reported
|
$ | (1.33 | ) | |
Basic
- pro forma
|
$ | (1.38 | ) | |
Diluted
- as reported
|
$ | (1.33 | ) | |
Diluted
- pro forma
|
$ | (1.38 | ) |
Years
Ended December 31,
|
||||||||||||
Options
Granted
|
2007
|
2006
|
2005
|
|||||||||
Number
of shares underlying options
|
556,979 | 642,434 | 842,222 | |||||||||
Contractual
term in years
|
10 | 10 | 10 | |||||||||
Assumptions
used to estimate fair value:
|
||||||||||||
Expected
dividend yield
|
0.6% - 0.7 | % | 0.4% - 0.7 | % | 0.3% - 0.4 | % | ||||||
Expected
volatility
|
46% - 50 | % | 46% - 55 | % | 53% - 55 | % | ||||||
Risk-free
interest rate
|
3.00% - 4.74 | % | 4.82% - 4.85 | % | 3.82% - 4.41 | % | ||||||
Expected
term in years
|
1.2 - 4.25 | 1.2 - 5 | 1.3 - 5 | |||||||||
Weighted-average
fair value estimates at grant date:
|
||||||||||||
In
thousands
|
$ | 5,542 | $ | 5,192 | $ | 14,309 | ||||||
Fair
value per share
|
$ | 9.95 | $ | 8.08 | $ | 16.99 |
Weighted
|
||||||||||
Weighted
|
average
|
|||||||||
Number
of
|
average
exercise
|
contractual
|
Aggregate
|
|||||||
Options
|
price
|
term
(years)
|
Intrinsic
Value
|
|||||||
(In
Thousands, Except Exercise Price and Contractual Term)
|
||||||||||
Outstanding
at December 31, 2006
|
2,795 | $ | 19.83 | |||||||
Granted
|
557 | 29.46 | ||||||||
Exercised
|
(300 | ) | 13.33 | |||||||
Forfeited/expired
|
(378 | ) | 34.05 | |||||||
Outstanding
at December 31, 2007
|
2,674 | $ | 26.39 |
7.6
|
$ 26,656
|
|||||
Exercisable
at December 31, 2007
|
1,217 | $ | 21.25 |
6.5
|
$ 18,350
|
Weighted
average
|
||||||||
grant
date
|
||||||||
(Shares
In Thousands)
|
Shares
|
fair
value
|
||||||
Unvested
at December 31, 2006
|
516 | $ | 27.71 | |||||
Granted
|
209 | $ | 28.48 | |||||
Vested
|
(148 | ) | $ | 25.60 | ||||
Forfeited
|
(62 | ) | $ | 27.99 | ||||
Unvested
at December 31, 2007
|
515 | $ | 28.64 |
For
the years ended December 31,
|
||||||||
2007
|
2006
|
|||||||
Awarded
|
310,900 | 411,372 | ||||||
Settled
|
81,461 | 80,261 | ||||||
Settlement
amount (in millions)
|
$ | 2.3 | $ | 2.1 |
Capital
Leases
|
Operating
Leases
|
|||||||
(In
Thousands)
|
||||||||
2008
|
$ | 2,430 | $ | 42,669 | ||||
2009
|
2,256 | 39,920 | ||||||
2010
|
2,395 | 33,784 | ||||||
2011
|
2,655 | 23,020 | ||||||
2012
|
- | 16,060 | ||||||
Beyond
2012
|
- | 5,878 | ||||||
Total
minimum lease payments
|
9,736 | $ | 161,331 | |||||
Less
imputed interest
|
913 | |||||||
Present
value of minimum capital lease payments
|
$ | 8,823 |
For
the years ended December 31,
|
||||||||||||
2007
|
2006
|
2005
|
||||||||||
Utility
coal
|
60 | % | 62 | % | 60 | % | ||||||
Metallurgical
coal
|
30 | % | 28 | % | 29 | % | ||||||
Industrial
coal
|
10 | % | 10 | % | 11 | % |
Three
Months Ended
|
||||||||||||||||
March
31, 2007
|
June 30, 2007
(1)
|
September
30, 2007
|
December 31,
2007
(2)
|
|||||||||||||
(In
Thousands, Except Per Share Amounts)
|
||||||||||||||||
Total
revenue
|
$ | 607,320 | $ | 617,802 | $ | 603,441 | $ | 584,960 | ||||||||
Income
before interest and taxes
|
55,557 | 60,127 | 35,343 | 28,652 | ||||||||||||
Income
before taxes
|
39,531 | 45,316 | 20,478 | 24,178 | ||||||||||||
Net
income
|
32,607 | 34,938 | 21,408 | 5,145 | ||||||||||||
Income
per share (basic and diluted):
|
||||||||||||||||
Net
income
|
$ | 0.40 | $ | 0.43 | $ | 0.27 | $ | 0.06 | ||||||||
Three
Months Ended
|
||||||||||||||||
March 31, 2006
(3)
|
June 30, 2006
(3)
|
September 30, 2006
(4)
|
December
31, 2006
|
|||||||||||||
(In
Thousands, Except Per Share Amounts)
|
||||||||||||||||
Total
revenue
|
$ | 559,469 | $ | 556,116 | $ | 555,897 | $ | 548,372 | ||||||||
Income
before interest and taxes
|
24,290 | 20,337 | 46,614 | 19,765 | ||||||||||||
Income
before taxes
|
7,617 | 3,882 | 30,197 | 3,328 | ||||||||||||
Income
before cumulative effect of accounting change
|
6,250 | 3,225 | 24,156 | 7,985 | ||||||||||||
Net
income
|
5,611 | 3,225 | 24,156 | 7,985 | ||||||||||||
Income
per share (basic and diluted):
|
||||||||||||||||
Income
before cumulative effect of accounting change
|
$ | 0.08 | $ | 0.04 | $ | 0.30 | $ | 0.10 | ||||||||
Net
income
|
$ | 0.07 | $ | 0.04 | $ | 0.30 | $ | 0.10 |
|
•
|
Information
regarding the directors required by this item is found under the heading
Election of
Directors.
|
|
•
|
Information
regarding Massey’s Audit Committee required by this item is found under
the heading Committees
of the Board.
|
|
•
|
Information
regarding Section 16(a) Beneficial Ownership Reporting Compliance required
by this item is found under the heading Section 16(a) Beneficial
Ownership Reporting
Compliance.
|
|
•
|
Information
regarding Massey’s Code of Ethics required by this item is found under the
heading Code of
Ethics.
|
Plan
Category
|
(a)
Number of securities to be issued upon exercise of outstanding options,
warrants and rights (1)
|
(b)
Weighted-average per share exercise price of outstanding options, warrants
and rights
|
(c)
Number of securities remaining available for future issuance under equity
compensation plans (excluding securities reflected in column
(a))
|
|||||||||
Equity
compensation plans approved by
|
||||||||||||
shareholders
|
2,673,857 | $ | 26.39 | 2,400,244 | ||||||||
Equity
compensation plans not approved by
|
||||||||||||
shareholders
(2)
|
- | - | - | |||||||||
Total
|
2,673,857 | $ | 26.39 | 2,400,244 |
(1)
|
There
are no outstanding warrants or
rights.
|
(2)
|
We
do not have any equity compensation plans that have not been approved by
our shareholders.
|
(a)
|
Documents
filed as part of this report:
|
1.
Financial Reports:
|
||
Consolidated
Statements of Income for the Fiscal Years Ended December 31, 2007, 2006,
and 2005
|
||
Consolidated
Balance Sheets at December 31, 2007 and 2006
|
||
Consolidated
Statements of Cash Flows for the Fiscal Years Ended December 31, 2007,
2006, and 2005
|
||
Consolidated
Statements of Shareholders’ Equity for the Fiscal Years Ended December 31,
2007, 2006, and 2005
|
||
Notes
to Consolidated Financial Statements
|
||
2.
Financial Statement Schedules: Except as set forth below, all schedules
have been omitted since the required information is not present or not
present in amounts sufficient to require submission of the schedule, or
because the information required is included in the Consolidated Financial
Statements and Notes thereto.
|
||
Schedule
II—Valuation and Qualifying Accounts
|
||
3.
Exhibits:
|
Exhibit
No.
|
Description
|
|
3.1
|
Certificate
of Ownership and Merger merging Massey Energy Company with and into Fluor
Corporation accompanied by Restated Certificate of Incorporation of Massey
Energy Company, as amended [filed as Exhibit 3.1 to Massey’s annual report
on Form 10-K for the fiscal year ended October 31, 2000 and incorporated
by reference]
|
|
3.2
|
Restated
Bylaws (as amended as of February 19, 2008) of Massey Energy Company
[filed as Exhibit 3.1 to Massey’s current report on Form 8-K filed
February 21, 2008 and incorporated by reference]
|
|
4.1
|
Senior
Indenture, dated May 29, 2003, by and among Massey Energy Company,
subsidiaries of Massey Energy Company, as Guarantors and Wilmington Trust
Company, as Trustee, in connection with the Company’s 4.75% Convertible
Senior Notes [filed as Exhibit 4.1 to Massey’s current report on Form 8-K
filed May 30, 2003 and incorporated by reference]
|
|
4.2
|
First
Supplemental Indenture, dated May 29, 2003, by and among Massey Energy
Company, subsidiaries of Massey Energy Company, as Guarantors, and
Wilmington Trust Company, as Trustee, supplementing that certain Senior
Indenture dated May 29, 2003, in connection with the Company’s 4.75%
Convertible Senior Notes [filed as Exhibit 4.2 to Massey’s current report
on Form 8-K filed May 30, 2003 and incorporated by
reference]
|
|
4.3
|
Indenture,
dated November 10, 2003, by and among Massey Energy Company, subsidiaries
of Massey Energy Company, as Guarantors, and Wilmington Trust Company, as
Trustee, in connection with the Company’s 6.625% Senior Notes [filed as
Exhibit 4.1 to Massey’s current report on Form 8-K filed November 12, 2003
and incorporated by reference]
|
|
4.4
|
Second
Supplemental Indenture, dated April 7, 2004, by and among Massey Energy
Company, subsidiaries of Massey Energy Company, as Guarantors, and
Wilmington Trust Company, as Trustee, supplementing that certain Senior
Indenture dated May 29, 2003, in connection with the Company’s 2.25%
Convertible Senior Notes [filed as Exhibit 4.1 to Massey’s current report
on Form 8-K filed April 4, 2004 and incorporated by
reference]
|
|
4.5
|
Indenture,
dated as of December 21, 2005, Massey Energy Company, subsidiaries of
Massey Energy Company, as Guarantors, and Wilmington Trust Company, as
Trustee, in connection with the Company’s 6.875% Senior Notes [filed as
Exhibit 4.1 to Massey’s current report on Form 8-K filed December 21,
2005, and incorporated by reference]
|
|
10.1
|
Amended
and Restated Credit Agreement dated as of August 15, 2006, among A. T.
Massey Coal Company, Inc. and certain of its subsidiaries, as Borrowers,
Massey Energy Company and certain of its subsidiaries, as Guarantors, Bank
of America, N. A., as Syndication Agent, General Electric Capital
Corporation, as Documentation Agent, The CIT Group/Business Credit, Inc.,
as Collateral Agent, UBS Securities LLC, as Arranger, UBS AG, Stamford
Branch, as Administrative Agent, and UBS Loan Finance LLC, as Swingline
Lender, and the lenders party thereto [filed as Exhibit 10.6 to Massey’s
current report on Form 8-K filed August 18, 2006 and incorporated by
reference]
|
|
10.2
|
First
Amendment to Amended and Restated Credit Agreement dated March 12, 2007
[filed as Exhibit 10.1 to Massey’s quarterly report on Form 10-Q filed May
10, 2007 and incorporated by reference]
|
|
10.3
|
Limited
Consent and Second Amendment to Amended and Restated Credit Agreement
dated July 19, 2007 [filed as Exhibit 10.1 to Massey’s quarterly report on
Form 10-Q filed August 9, 2007 and incorporated by
reference]
|
|
10.4
|
Massey
Energy Company 1982 Shadow Stock Plan (as amended and restated effective
November 30, 2000) [filed as Exhibit 10.8 to Massey’s annual report on
Form 10-K for the fiscal year ended October 31, 2000 and incorporated by
reference]
|
|
10.5
|
Massey
Energy Company 1988 Executive Stock Plan (as amended and restated
effective November 30, 2000) [filed as Exhibit 10.6 to Massey’s annual
report on Form 10-K for the fiscal year ended October 31, 2000 and
incorporated by reference]
|
|
10.6
|
Massey
Energy Company 1996 Executive Stock Plan (as amended and restated
effective November 30, 2000) [filed as Exhibit 10.13 to Massey’s annual
report on Form 10-K for the fiscal year ended October 31, 2000 and
incorporated by reference]
|
|
10.7
|
Amendment
to Massey Energy 1996 Executive Stock Plan [filed as Exhibit 10.4 to
Massey’s current report on Form 8-K filed November 16, 2006 and
incorporated by reference]
|
|
10.8
|
Massey
Energy Company 1997 Stock Appreciation Rights Plan (as amended and
restated effective November 30, 2000) [filed as Exhibit 10.9 to Massey’s
annual report on Form 10-K for the fiscal year ended October 31, 2000 and
incorporated by reference]
|
|
10.9
|
Massey
Energy Company 1999 Executive Performance Incentive Plan (as amended and
restated effective November 30, 2000) [filed as Exhibit 10.1 to Massey’s
annual report on Form 10-K for the fiscal year ended October 31, 2000 and
incorporated by reference]
|
|
10.10
|
Amendment
to Massey Energy Company 1999 Executive Performance Incentive Plan
[contained in Item 1.01 to Massey’s current report on Form 8-K filed
February 24, 2006 and incorporated by
reference]
|
Exhibit No. |
Description
|
|
10.11
|
Second
Amendment to Massey Energy Company 1999 Executive Performance Incentive
Plan [filed as Exhibit 10.5 to Massey’s current report on Form 8-K filed
November 16, 2006 and incorporated by reference]
|
|
10.12
|
Massey
Energy Company 2006 Stock and Incentive Compensation Plan (as amended and
restated effective August 15, 2006) [filed as Exhibit 10.1 to Massey’s
current report on Form 8-K filed August 18, 2006 and incorporated by
reference]
|
|
10.13
|
Amendment
to Massey Energy Company 2006 Stock and Incentive Compensation Plan [filed
as Exhibit 10.1 to Massey’s current report on Form 8-K filed November 16,
2006 and incorporated by reference]
|
|
10.14
|
Form
of Non-Employee Director Initial Restricted Stock Award Agreement under
the Massey Energy Company 2006 Stock and Incentive Compensation Plan
[filed as Exhibit 10.1 to Massey’s current report on Form 8-K filed
February 21, 2008 and incorporated by reference]
|
|
10.15
|
Form
of Non-Employee Director Initial Restricted Unit Award Agreement under the
Massey Energy Company 2006 Stock and Incentive Compensation Plan [filed as
Exhibit 10.2 to Massey’s current report on Form 8-K filed February 21,
2008 and incorporated by reference]
|
|
10.16
|
Form
of Non-Employee Director Annual Restricted Stock Award Agreement under the
Massey Energy Company 2006 Stock and Incentive Compensation Plan [filed as
Exhibit 10.3 to Massey’s current report on Form 8-K filed February 21,
2008 and incorporated by reference]
|
|
10.17
|
Form
of stock option agreement under the Massey Energy Company 2006 Stock and
Incentive Compensation Plan [filed as Exhibit 10.2 to Massey’s current
report on Form 8-K filed November 16, 2007 and incorporated by
reference]
|
|
10.18
|
Form
of restricted stock agreement under the Massey Energy Company 2006 Stock
and Incentive Compensation Plan [filed as Exhibit 10.3 to Massey’s current
report on Form 8-K filed November 16, 2007 and incorporated by
reference]
|
|
10.19
|
Form
of restricted unit agreement under the Massey Energy Company 2006 Stock
and Incentive Compensation Plan [filed as Exhibit 10.4 to Massey’s current
report on Form 8-K filed November 16, 2007 and incorporated by
reference]
|
|
10.20
|
Form
of cash incentive award agreement based on earnings before taxes under the
Massey Energy Company 2006 Stock and Incentive Compensation Plan [filed as
Exhibit 10.5 to Massey’s current report on Form 8-K filed November 16,
2007 and incorporated by reference]
|
|
10.21
|
Form
of cash incentive award agreement based on earnings before interest,
taxes, deprecation and amortization under the Massey Energy Company 2006
Stock and Incentive Compensation Plan [filed as Exhibit 10.6 to Massey’s
current report on Form 8-K filed November 16, 2007 and incorporated by
reference]
|
|
10.22
|
Massey
Executive Deferred Compensation Program (as amended and restated as of
January 1, 2005) [filed as Exhibit 10.2 to Massey’s current report on Form
8-K filed February 25, 2005 and incorporated by
reference]
|
|
10.23
|
First
Amendment to the Massey Executive Deferred Compensation Program [filed as
Exhibit 10.10 to Massey’s current report on Form 8-K filed November 17,
2005 and incorporated by reference]
|
|
10.24
|
A.T.
Massey Coal Company, Inc. Executive Deferred Compensation Plan (as amended
and restated as of January 1, 2005) [filed as Exhibit 10.3 to Massey’s
current report on Form 8-K filed February 25, 2005 and incorporated by
reference]
|
|
10.25
|
First
Amendment to the A.T. Massey Coal Company, Inc. Executive Deferred
Compensation Plan [filed as Exhibit 10.11 to Massey’s current report on
Form 8-K filed November 17, 2005 and incorporated by
reference]
|
|
10.26
|
Second
Amendment to the A.T. Massey Coal Company, Inc. Executive Deferred
Compensation Plan [filed as Exhibit 10.2 to Massey’s quarterly report on
Form 10-Q filed August 9, 2006 and incorporated by
reference]
|
|
10.27
|
Massey
Energy Company Executive Physical Program [filed as Exhibit 10.3 to
Massey’s annual report on Form 10-K for the fiscal year ended October 31,
2000 and incorporated by reference]
|
|
10.28
|
Massey
Executives’ Supplemental Benefit Plan (as amended and restated as of
January 1, 2005) [filed as Exhibit 10.1 to Massey’s current report on Form
8-K filed January 5, 2006 and incorporated by
reference]
|
|
10.29
|
Massey
Executives’ Supplemental Benefit Plan Agreement (effective as of January
1, 2005) between Massey and Don L. Blankenship [filed as Exhibit 10.2 to
Massey’s current report on Form 8-K filed January 5, 2006 and incorporated
by reference]
|
|
10.30
|
Letter
Agreement dated December 20, 2005 between Massey Energy Company and Don L.
Blankenship [filed as Exhibit 10.1 to Massey’s current report on Form 8-K
filed December 22, 2005 and incorporated by reference]
|
|
10.31
|
Letter
Agreement dated December 27, 2006, between Massey Energy Company and Don
L. Blankenship [filed as Exhibit 10.1 to Massey’s current report on Form
8-K filed January 3, 2007 and incorporated by
reference]
|
Exhibit No. | Description | |
10.32
|
Letter
Agreement dated November 13, 2007, between Massey Energy Company and Don
L. Blankenship [filed herewith]
|
|
10.33
|
Retention
and Employment Agreement dated November 13, 2007 between Massey Energy
Company and John
Christopher Adkins [filed herewith]
|
|
10.34
|
Employment
Agreement dated May 25, 2006 between Massey Energy Company and Michael K.
Snelling [filed herewith]
|
|
10.35
|
Special
Successor and Development Retention Program between Fluor Corporation and
Don L. Blankenship dated as of September 1998 [filed as Exhibit 10.21 to
Fluor’s annual report on Form 10-K for the fiscal year ended October 31,
1998 and incorporated by reference]
|
|
10.36
|
Retention
and Change in Control Agreement dated November 1, 2005 between Massey
Energy Company and Baxter F. Phillips, Jr. [filed as Exhibit 10.6 to
Massey’s current report on Form 8-K filed November 17, 2005 and
incorporated by reference]
|
|
10.37
|
Form
of Change in Control Severance Agreement for Tier 1 Participants [filed as
Exhibit 10.7 to Massey’s current report on Form 8-K filed November 16,
2007 and incorporated by reference]
|
|
10.38
|
Form
of Change in Control Severance Agreement for Tier 2 Participants [filed as
Exhibit 10.8 to Massey’s current report on Form 8-K filed November 16,
2007 and incorporated by reference]
|
|
10.39
|
Form
of Change in Control Severance Agreement for Tier 3 Participants [filed as
Exhibit 10.9 to Massey’s current report on Form 8-K filed November 16,
2007 and incorporated by reference]
|
|
10.40
|
Change
in Control Severance Agreement dated as of December 21, 2005 between
Massey Energy Company and Don L. Blankenship [filed as Exhibit 10.5 to
Massey’s current report on Form 8-K filed December 22, 2005 and
incorporated by reference]
|
|
10.41
|
Change
in Control Severance Agreement dated as of December 21, 2005 between
Massey Energy Company and J. Christopher Adkins [filed as Exhibit 10.6 to
Massey’s current report on Form 8-K filed December 22, 2005 and
incorporated by reference]
|
|
10.42
|
Change
in Control Severance Agreement dated as of December 21, 2005 between
Massey Energy Company and Eric B. Tolbert [filed as Exhibit 10.39 to
Massey’s annual report on Form 10-K filed March 1, 2007 and incorporated
by reference]
|
|
10.43
|
Change
in Control Severance Agreement dated as of May 25, 2006 between Massey
Energy Company and Michael K. Snelling [filed herewith]
|
|
10.44
|
Massey
Energy Company 2008 Long Term Incentive Award Program as reported on
Massey’s current report on Form 8-K [filed November 16, 2007 and
incorporated by reference]
|
|
10.45
|
Massey
Energy Company 2008 Bonus Program as reported on Massey’s current report
on Form 8-K [filed November 16, 2007 and incorporated by
reference]
|
|
10.46
|
Base
salary amounts set for Massey’s named executive officers as reported on
Massey’s current report on Form 8-K [filed November 16, 2007 and
incorporated by reference]
|
|
10.47
|
Massey
Energy Company Non-Employee Director Compensation Summary (as amended and
restated effective November 12, 2007) [filed as Exhibit 10.1 to Massey’s
current report on Form 8-K filed
November
16, 2007 and incorporated by reference]
|
|
10.48
|
Massey
Energy Company Stock Plan for Non-Employee Directors (as amended and
restated effective May 24, 2005) [filed as Exhibit 10.1 to Massey’s
current report on Form 8-K filed May 26, 2005 and incorporated by
reference]
|
|
10.49
|
First
Amendment to Massey Energy Company Stock Plan for Non-Employee Directors
[filed as Exhibit 10.3 to Massey’s quarterly report on Form 10-Q filed
August 9, 2006 and incorporated by reference]
|
|
10.50
|
Second
Amendment to Massey Energy Company Stock Plan for Non-Employee Directors
[filed as Exhibit 10.2 to Massey’s current report on Form 8-K filed
November 16, 2006 and incorporated by reference]
|
|
10.51
|
Massey
Energy Company 1997 Restricted Stock Plan for Non-Employee Directors (as
amended and restated effective May 24, 2005) [filed as Exhibit 10.1 to
Massey’s current report on Form 8-K filed May 31, 2005 and incorporated by
reference]
|
|
10.52
|
First
Amendment to Massey Energy Company 1997 Restricted Stock Plan for
Non-Employee Directors [filed as Exhibit 10.4 to Massey’s quarterly report
on Form 10-Q filed August 9, 2006 and incorporated by
reference]
|
|
10.53
|
Second
Amendment to Massey Energy Company 1997 Restricted Stock Plan for
Non-Employee Directors [filed as Exhibit 10.3 to Massey’s current report
on Form 8-K filed November 16, 2006 and incorporated by
reference]
|
|
10.54
|
Third
Amendment to Massey Energy Company 1997 Restricted Stock Plan for
Non-Employee Directors [filed as Exhibit 10.1 to Massey’s current report
on Form 8-K filed May 24, 2007 and incorporated by
reference]
|
|
10.55
|
Massey
Energy Company Deferred Directors’ Fees Program (amended and restated
effective February 23, 2001) [filed as Exhibit 10.15 to Massey’s annual
report on Form 10-K for the fiscal year ended October 31, 2000 and
incorporated by reference]
|
Exhibit No. | Description | |
10.56
|
Distribution
Agreement between Fluor Corporation and Massey Energy Company dated as of
November 30, 2000 [filed as Exhibit 10.1 to Massey’s current report on
Form 8-K filed December 15, 2000 and incorporated by this
reference]
|
|
10.57
|
Tax
Sharing Agreement between Fluor Corporation, Massey Energy Company and
A.T. Massey Coal Company, Inc. dated as of November 30, 2000 [filed as
Exhibit 10.2 to Massey’s current report on Form 8-K filed December 15,
2000 and incorporated by this reference]
|
|
16.1
|
Letter
from Arnett and Foster to the Securities and Exchange Commission, dated
November 16, 2007 [filed as Exhibit 16.1 to Massey’s current report on
Form 8-K filed November 17, 2007 and incorporated by
reference]
|
|
21
|
Massey
Energy Company Subsidiaries [filed herewith]
|
|
23.1
|
Consent
of Independent Registered Public Accounting Firm [filed
herewith]
|
|
23.2
|
Consent
of Robert H. Furman, recognized Clean Water Act penalty violation expert
dated August 9, 2007 [filed as Exhibit 23.1 to Massey’s quarterly report
on Form 10-Q filed August 9, 2007 and incorporated by
reference]
|
|
24
|
Manually
signed Powers of Attorney executed by Massey directors [filed
herewith]
|
|
31.1
|
Certification
of Chief Executive Officer, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 [filed herewith]
|
|
31.2
|
Certification
of Chief Financial Officer, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 [filed herewith]
|
|
32.1
|
Certification
of Chief Executive Officer pursuant to 18 U.S.C., Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 [furnished
herewith]
|
|
32.2
|
Certification
of Chief Financial Officer pursuant to 18 U.S.C., Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 [furnished
herewith]
|
MASSEY
ENERGY COMPANY
|
||||
February
29, 2008
|
||||
By:
|
/s/ ERIC B. TOLBERT
|
|||
Eric
B. Tolbert,
|
||||
Vice
President and Chief Financial
Officer
|
Signature
|
Title
|
Date
|
Principal
Executive Officer and Director:
|
||
/s/ DON
L. BLANKENSHIP
Don
L. Blankenship
|
Chairman,
Chief Executive Officer and
President
|
February
29, 2008
|
Principal
Financial Officer:
|
||
/s/ ERIC
B. TOLBERT
Eric
B. Tolbert
|
Vice
President and Chief Financial Officer
|
February
29, 2008
|
Principal
Accounting Officer:
|
||
/s/ DAVID
W. OWINGS
David
W. Owings
|
Controller
|
February
29, 2008
|
Other
Directors:
|
||
*
James
B. Crawford
|
Director
|
February
29, 2008
|
*
Robert
H. Foglesong
|
Director
|
February
29, 2008
|
*
Richard
M. Gabrys
|
Director
|
February
29, 2008
|
*
E.
Gordon Gee
|
Director
|
February
29, 2008
|
*
Bobby
R. Inman
|
Director
|
February
29, 2008
|
*
Lady
Judge
|
Director
|
February
29, 2008
|
*
Dan
R. Moore
|
Director
|
February
29, 2008
|
*
Baxter
F. Phillips, Jr.
|
Director,
Executive Vice President and Chief Administrative Officer
|
February
29, 2008
|
By:
|
/s/ RICHARD R. GRINNAN
|
February 29,
2008
|
||
Richard
R. Grinnan
|
||||
Attorney-in-fact
|
*
|
Manually
signed Powers of Attorney authorizing Eric B. Tolbert., Richard R. Grinnan
and Jeffrey M. Jarosinski, and each of them, to sign the annual report on
Form 10-K for the fiscal year ended December 31, 2007 and any amendments
thereto as attorneys-in-fact for certain directors and officers of the
registrant are included herein as Exhibits
24.
|
Description
|
Balance
at Beginning of Period
|
Amounts
Charged to Costs and Expenses
|
Deductions
(1)
|
Other
(2)
|
Balance
at End of Period
|
||||||||||||||||
YEAR
ENDED DECEMBER 31, 2007
|
|||||||||||||||||||||
Reserves
deducted from asset accounts:
|
|||||||||||||||||||||
Allowance
for accounts and notes
|
|||||||||||||||||||||
receivable
|
$ | 576 | $ | (132 | ) | $ | - | $ | - | $ | 444 | ||||||||||
YEAR
ENDED DECEMBER 31, 2006
|
|||||||||||||||||||||
Reserves
deducted from asset accounts:
|
|||||||||||||||||||||
Allowance
for accounts and notes
|
|||||||||||||||||||||
receivable
|
$ | 2,063 | $ | 12 | $ | (1,499 | ) | $ | - | $ | 576 | ||||||||||
YEAR
ENDED DECEMBER 31, 2005
|
|||||||||||||||||||||
Reserves
deducted from asset accounts:
|
|||||||||||||||||||||
Allowance
for accounts and notes
|
|||||||||||||||||||||
receivable
|
$ | 4,240 | $ | (1,780 | ) | $ | (397 | ) | $ | - |
(3)
|
$ | 2,063 |
(1)
|
Reserves
utilized, unless otherwise
indicated.
|
(2)
|
Reclassifications,
unless otherwise indicated.
|
(3)
|
In
2005, as part of the consideration for the sale of our ownership interest
in Big Elk Mining Company, we received a $30 million non-interest bearing
note and established an allowance of $11.5 million due to collectibility
concerns. This reserve was reversed in the fourth quarter of 2005 as a
result of the early repayment of the
note.
|