Delaware | 1-13105 | 43-0921172 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) | (I.R.S. Employer Identification No.) |
(d) | Exhibits |
The following exhibit is attached hereto and filed herewith. |
Exhibit | ||
No. | Description | |
99.1
|
Press release dated April 26, 2011. |
1
Dated: April 26, 2011 | Arch Coal, Inc. |
|||
By: | /s/ Robert G. Jones | |||
Robert G. Jones | ||||
Senior Vice PresidentLaw, General Counsel and Secretary |
2
Exhibit | ||
No. | Description | |
99.1
|
Press release dated April 26, 2011. |
Quarter Ended | ||||||||
In $ millions, except per share data | 3/31/11 | 3/31/10 | ||||||
Revenues |
$ | 872.9 | $ | 711.9 | ||||
Income from Operations |
102.2 | 32.2 | ||||||
Net Income (Loss)1 |
55.6 | (1.8 | ) | |||||
Fully Diluted EPS/LPS |
0.34 | (0.01 | ) | |||||
Adjusted EBITDA2 |
$ | 191.4 | $ | 131.4 |
1/- | Net income (loss) attributable to ACI. | |
2/- | Adjusted EBITDA is defined and reconciled under Reconciliation of Non-GAAP Measures in this release. |
1
2
Arch Coal, Inc. | ||||||||||||
1Q11 | 4Q10 | 1Q10 | ||||||||||
Tons sold (in millions) |
36.2 | 42.0 | 37.5 | |||||||||
Average sales price per ton |
$ | 21.94 | $ | 18.65 | $ | 17.74 | ||||||
Cash cost per ton |
$ | 15.89 | $ | 13.59 | $ | 13.45 | ||||||
Cash margin per ton |
$ | 6.05 | $ | 5.06 | $ | 4.29 | ||||||
Total operating cost per ton |
$ | 18.19 | $ | 15.87 | $ | 15.80 | ||||||
Operating margin per ton |
$ | 3.75 | $ | 2.78 | $ | 1.94 |
Powder River Basin | ||||||||||||
1Q11 | 4Q10 | 1Q10 | ||||||||||
Tons sold (in millions) |
28.8 | 34.6 | 30.6 | |||||||||
Average sales price per ton |
$ | 13.51 | $ | 12.51 | $ | 11.64 | ||||||
Cash cost per ton |
$ | 10.26 | $ | 9.56 | $ | 9.33 | ||||||
Cash margin per ton |
$ | 3.25 | $ | 2.95 | $ | 2.31 | ||||||
Total operating cost per ton |
$ | 11.71 | $ | 10.92 | $ | 10.79 | ||||||
Operating margin per ton |
$ | 1.80 | $ | 1.59 | $ | 0.85 |
3
Western Bituminous Region | ||||||||||||
1Q11 | 4Q10 | 1Q10 | ||||||||||
Tons sold (in millions) |
4.2 | 4.2 | 4.1 | |||||||||
Average sales price per ton |
$ | 31.77 | $ | 28.79 | $ | 28.97 | ||||||
Cash cost per ton |
$ | 20.51 | $ | 19.31 | $ | 21.45 | ||||||
Cash margin per ton |
$ | 11.26 | $ | 9.48 | $ | 7.52 | ||||||
Total operating cost per ton |
$ | 25.41 | $ | 24.79 | $ | 26.38 | ||||||
Operating margin per ton |
$ | 6.36 | $ | 4.00 | $ | 2.59 |
Central Appalachia | ||||||||||||
1Q11 | 4Q10 | 1Q10 | ||||||||||
Tons sold (in millions) |
3.2 | 3.2 | 2.8 | |||||||||
Average sales price per ton |
$ | 85.10 | $ | 71.91 | $ | 68.43 | ||||||
Cash cost per ton |
$ | 60.57 | $ | 49.79 | $ | 47.20 | ||||||
Cash margin per ton |
$ | 24.53 | $ | 22.12 | $ | 21.23 | ||||||
Total operating cost per ton |
$ | 67.14 | $ | 57.78 | $ | 55.57 | ||||||
Operating margin per ton |
$ | 17.96 | $ | 14.13 | $ | 12.86 |
4
2011 | 2012 | |||||||||||||||
Tons | Price | Tons | Price | |||||||||||||
Powder River Basin |
||||||||||||||||
Committed, Priced |
109.8 | $ | 13.64 | 69.2 | $ | 14.25 | ||||||||||
Committed, Unpriced |
5.2 | 11.0 | ||||||||||||||
Western Bituminous Region |
||||||||||||||||
Committed, Priced |
17.5 | $ | 32.22 | 9.9 | $ | 35.46 | ||||||||||
Central Appalachia |
||||||||||||||||
Committed, Priced (Coking/PCI) |
5.8 | $ | 113.42 | 0.4 | $ | 120.88 | ||||||||||
Committed, Priced (Steam) |
6.8 | $ | 67.12 | 1.5 | $ | 74.08 |
| Earnings per diluted share on a GAAP basis is projected to be between $2.03 and $2.52, including amortization of coal supply agreements. Excluding this charge, adjusted earnings per diluted share would be in the range of $2.10 to $2.60. | ||
| Adjusted EBITDA is forecasted to be in the $930 million to $1.05 billion range. |
5
| Capital spending is expected to remain in the $370 million to $410 million range. | ||
| Depreciation, depletion and amortization expense (excluding non-cash amortization of acquired coal supply agreements) is projected to be between $376 million and $386 million. |
6
Three Months Ended March 31, | ||||||||
2011 | 2010 | |||||||
(Unaudited) | ||||||||
Revenues |
||||||||
Coal sales |
$ | 872,938 | $ | 711,874 | ||||
Costs, expenses and other |
||||||||
Cost of coal sales |
653,684 | 550,750 | ||||||
Depreciation, depletion and amortization |
83,537 | 88,519 | ||||||
Amortization of acquired sales contracts, net |
5,944 | 10,753 | ||||||
Selling, general and administrative expenses |
30,435 | 27,166 | ||||||
Change in fair value of coal derivatives and coal trading activities, net |
(1,784 | ) | 5,877 | |||||
Other operating income, net |
(1,116 | ) | (3,391 | ) | ||||
770,700 | 679,674 | |||||||
Income from operations |
102,238 | 32,200 | ||||||
Interest expense, net: |
||||||||
Interest expense |
(34,580 | ) | (35,083 | ) | ||||
Interest income |
746 | 338 | ||||||
(33,834 | ) | (34,745 | ) | |||||
Income (loss) before income taxes |
68,404 | (2,545 | ) | |||||
Provision for (benefit from) income taxes |
12,530 | (775 | ) | |||||
Net income (loss) |
55,874 | (1,770 | ) | |||||
Less: Net income attributable to noncontrolling interest |
(273 | ) | (26 | ) | ||||
Net income (loss) attributable to Arch Coal, Inc. |
$ | 55,601 | $ | (1,796 | ) | |||
Earnings (loss) per common share |
||||||||
Basic earnings (loss) per common share |
$ | 0.34 | $ | (0.01 | ) | |||
Diluted earnings (loss) per common share |
$ | 0.34 | $ | (0.01 | ) | |||
Weighted average shares outstanding |
||||||||
Basic |
162,576 | 162,372 | ||||||
Diluted |
163,773 | 162,372 | ||||||
Dividends declared per common share |
$ | 0.10 | $ | 0.09 | ||||
Adjusted
EBITDA (A) |
$ | 191,446 | $ | 131,446 | ||||
(A) | Adjusted EBITDA is defined and reconciled under Reconciliation of Non-GAAP Measures later in this release. |
March 31, | December 31, | |||||||
2011 | 2010 | |||||||
(Unaudited) | ||||||||
Assets |
||||||||
Current assets |
||||||||
Cash and cash equivalents |
$ | 69,220 | $ | 93,593 | ||||
Trade accounts receivable |
258,499 | 208,060 | ||||||
Other receivables |
44,818 | 44,260 | ||||||
Inventories |
247,908 | 235,616 | ||||||
Prepaid royalties |
42,719 | 33,932 | ||||||
Deferred income taxes |
18,673 | | ||||||
Coal derivative assets |
15,952 | 15,191 | ||||||
Other |
101,153 | 104,262 | ||||||
Total current assets |
798,942 | 734,914 | ||||||
Property, plant and equipment, net |
3,263,555 | 3,308,892 | ||||||
Other assets |
||||||||
Prepaid royalties |
69,737 | 66,525 | ||||||
Goodwill |
114,963 | 114,963 | ||||||
Deferred income taxes |
331,242 | 361,556 | ||||||
Equity investments |
204,424 | 177,451 | ||||||
Other |
117,115 | 116,468 | ||||||
Total other assets |
837,481 | 836,963 | ||||||
Total assets |
$ | 4,899,978 | $ | 4,880,769 | ||||
Liabilities and Stockholders Equity |
||||||||
Current liabilities |
||||||||
Accounts payable |
$ | 183,866 | $ | 198,216 | ||||
Coal derivative liabilities |
4,178 | 4,947 | ||||||
Deferred income taxes |
| 7,775 | ||||||
Accrued expenses and other current liabilities |
228,165 | 245,411 | ||||||
Current maturities of debt and short-term borrowings |
69,518 | 70,997 | ||||||
Total current liabilities |
485,727 | 527,346 | ||||||
Long-term debt |
1,539,028 | 1,538,744 | ||||||
Asset retirement obligations |
336,975 | 334,257 | ||||||
Accrued pension benefits |
38,808 | 49,154 | ||||||
Accrued postretirement benefits other than pension |
36,920 | 37,793 | ||||||
Accrued workers compensation |
35,964 | 35,290 | ||||||
Other noncurrent liabilities |
124,243 | 110,234 | ||||||
Total liabilities |
2,597,665 | 2,632,818 | ||||||
Redeemable noncontrolling interest |
10,718 | 10,444 | ||||||
Stockholders Equity |
||||||||
Common stock |
1,647 | 1,645 | ||||||
Paid-in capital |
1,740,765 | 1,734,709 | ||||||
Treasury stock, at cost |
(53,848 | ) | (53,848 | ) | ||||
Retained earnings |
600,751 | 561,418 | ||||||
Accumulated other comprehensive income (loss) |
2,280 | (6,417 | ) | |||||
Total stockholders equity |
2,291,595 | 2,237,507 | ||||||
Total liabilities and stockholders equity |
$ | 4,899,978 | $ | 4,880,769 | ||||
Three Months Ended March 31, | ||||||||
2011 | 2010 | |||||||
(Unaudited) | ||||||||
Operating activities |
||||||||
Net income (loss) |
$ | 55,874 | $ | (1,770 | ) | |||
Adjustments to reconcile to cash provided by operating activities: |
||||||||
Depreciation, depletion and amortization |
83,537 | 88,519 | ||||||
Amortization of acquired sales contracts, net |
5,944 | 10,753 | ||||||
Prepaid royalties expensed |
8,916 | 6,599 | ||||||
Employee stock-based compensation expense |
5,290 | 3,684 | ||||||
Amortization of debt financing costs |
2,442 | 2,461 | ||||||
Changes in: |
||||||||
Receivables |
(53,586 | ) | (37,013 | ) | ||||
Inventories |
(12,292 | ) | (2,382 | ) | ||||
Coal derivative assets and liabilities |
(1,087 | ) | 5,547 | |||||
Accounts payable, accrued expenses and other current liabilities |
(31,596 | ) | (6,844 | ) | ||||
Deferred income taxes |
(1,026 | ) | 150 | |||||
Other |
23,729 | 23,627 | ||||||
Cash provided by operating activities |
86,145 | 93,331 | ||||||
Investing activities |
||||||||
Capital expenditures |
(38,711 | ) | (31,975 | ) | ||||
Proceeds from dispositions of property, plant and equipment |
516 | 95 | ||||||
Purchases of investments and advances to affiliates |
(34,419 | ) | (10,071 | ) | ||||
Additions to prepaid royalties |
(20,915 | ) | (23,340 | ) | ||||
Cash used in investing activities |
(93,529 | ) | (65,291 | ) | ||||
Financing activities |
||||||||
Net increase (decrease) in borrowings under lines of credit and commercial paper program |
3,681 | (19,324 | ) | |||||
Net payments on other debt |
(5,161 | ) | (4,742 | ) | ||||
Debt financing costs |
(8 | ) | (200 | ) | ||||
Dividends paid |
(16,269 | ) | (14,623 | ) | ||||
Issuance of common stock under incentive plans |
768 | 85 | ||||||
Cash used in financing activities |
(16,989 | ) | (38,804 | ) | ||||
Decrease in cash and cash equivalents |
(24,373 | ) | (10,764 | ) | ||||
Cash and cash equivalents, beginning of period |
93,593 | 61,138 | ||||||
Cash and cash equivalents, end of period |
$ | 69,220 | $ | 50,374 | ||||
March 31, | December 31, | |||||||
2011 | 2010 | |||||||
(Unaudited) | ||||||||
Commercial paper |
$ | 60,585 | $ | 56,904 | ||||
6.75% senior notes ($450.0 million face value) due 2013 |
451,456 | 451,618 | ||||||
8.75% senior notes ($600.0 million face value) due 2016 |
587,572 | 587,126 | ||||||
7.25% senior notes ($500.0 million face value) due 2020 |
500,000 | 500,000 | ||||||
Other |
8,933 | 14,093 | ||||||
1,608,546 | 1,609,741 | |||||||
Less: current maturities of debt and short-term borrowings |
69,518 | 70,997 | ||||||
Long-term debt |
$ | 1,539,028 | $ | 1,538,744 | ||||
Adjusted EBITDA is defined as net income attributable to the Company before the effect of net interest expense, income taxes, depreciation, depletion and amortization and the amortization of acquired sales contracts. Adjusted EBITDA may also be adjusted for items that may not reflect the trend of future results. | ||
Adjusted EBITDA is not a measure of financial performance in accordance with generally accepted accounting principles, and items excluded to calculate Adjusted EBITDA are significant in understanding and assessing our financial condition. Therefore, Adjusted EBITDA should not be considered in isolation nor as an alternative to net income, income from operations, cash flows from operations or as a measure of our profitability, liquidity or performance under generally accepted accounting principles. We believe that Adjusted EBITDA presents a useful measure of our ability to service and incur debt based on ongoing operations. Furthermore, analogous measures are used by industry analysts to evaluate operating performance. In addition, acquisition related expenses are excluded to make results more comparable between periods. Investors should be aware that our presentation of Adjusted EBITDA may not be comparable to similarly titled measures used by other companies. The table below shows how we calculate Adjusted EBITDA. |
Three Months Ended March 31, | ||||||||
2011 | 2010 | |||||||
(Unaudited) | ||||||||
Net income (loss) |
$ | 55,874 | $ | (1,770 | ) | |||
Income tax expense (benefit) |
12,530 | (775 | ) | |||||
Interest expense, net |
33,834 | 34,745 | ||||||
Depreciation, depletion and amortization |
83,537 | 88,519 | ||||||
Amortization of acquired sales contracts, net |
5,944 | 10,753 | ||||||
Net income attributable to noncontrolling
interest |
(273 | ) | (26 | ) | ||||
Adjusted EBITDA |
$ | 191,446 | $ | 131,446 | ||||
Adjusted net income and adjusted diluted earnings per common share are adjusted for the after-tax impact of acquisition related costs and are not measures of financial performance in accordance with generally accepted accounting principles. We believe that adjusted net income and adjusted diluted earnings per common share better reflect the trend of our future results by excluding items relating to significant transactions. The adjustments made to arrive at these measures are significant in understanding and assessing our financial condition. Therefore, adjusted net income and adjusted diluted earnings per share should not be considered in isolation, nor as an alternative to net income or diluted earnings per common share under generally accepted accounting principles. |
Three Months Ended March 31, | ||||||||
2011 | 2010 | |||||||
(Unaudited) | ||||||||
Net income (loss) attributable to Arch Coal |
$ | 55,601 | $ | (1,796 | ) | |||
Amortization of acquired sales contracts, net |
5,944 | 10,753 | ||||||
Tax impact of adjustments |
(2,170 | ) | (3,925 | ) | ||||
Adjusted net income attributable to Arch Coal |
$ | 59,375 | $ | 5,032 | ||||
Diluted weighted average shares outstanding |
163,773 | 162,372 | ||||||
Diluted earnings per share |
$ | 0.34 | $ | (0.01 | ) | |||
Amortization of acquired sales contracts, net |
$ | 0.03 | $ | 0.06 | ||||
Tax impact of adjustments |
$ | (0.01 | ) | $ | (0.02 | ) | ||
Adjusted diluted earnings per share |
$ | 0.36 | $ | 0.03 | ||||
Three Months Ended March 31, | ||||||||
2011 | 2010 | |||||||
(Unaudited) | ||||||||
Cash provided by operating activities |
$ | 86,145 | $ | 93,331 | ||||
Capital expenditures |
(38,711 | ) | (31,975 | ) | ||||
Free cash flow |
$ | 47,434 | $ | 61,356 | ||||
Targeted Results | ||||||||
Year Ended | ||||||||
December 31, 2011 | ||||||||
Low | High | |||||||
(Unaudited) | ||||||||
Net income attributable to Arch Coal, Inc. |
331,000 | 412,000 | ||||||
Income tax expense |
68,000 | 97,000 | ||||||
Interest expense, net |
136,000 | 134,000 | ||||||
Depreciation, depletion and amortization |
376,000 | 386,000 | ||||||
Amortization of acquired sales contracts, net |
19,000 | 21,000 | ||||||
Adjusted EBITDA |
$ | 930,000 | $ | 1,050,000 | ||||
Targeted Results | ||||||||
Year Ended | ||||||||
December 31, 2011 | ||||||||
Low | High | |||||||
(Unaudited) | ||||||||
Net income attributable to Arch Coal |
$ | 331,000 | $ | 412,000 | ||||
Amortization of acquired sales contracts, net |
19,000 | 21,000 | ||||||
Tax impact of adjustments |
(6,935 | ) | (7,665 | ) | ||||
Adjusted net income attributable to Arch Coal |
$ | 343,065 | $ | 425,335 | ||||
Diluted weighted average shares outstanding |
163,450 | 163,450 | ||||||
Diluted earnings per share |
$ | 2.03 | $ | 2.52 | ||||
Amortization of acquired sales contracts, net |
0.12 | 0.13 | ||||||
Tax impact of adjustments |
(0.05 | ) | (0.05 | ) | ||||
Adjusted diluted earnings per share |
$ | 2.10 | $ | 2.60 | ||||