Delaware | 23-1128670 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
9540 South Maroon Circle, Suite 200 Englewood, CO | 80112 |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer | o | Accelerated filer | x | |
Non-accelerated filer | o | (Do not check if a smaller reporting company.) | Smaller reporting company | o |
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March 31, 2014 | December 31, 2013 | ||||||
(In thousands) | |||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 61,900 | $ | 61,110 | |||
Receivables: | |||||||
Trade | 64,715 | 66,196 | |||||
Contractual third-party reclamation receivables | 8,213 | 8,487 | |||||
Other | 1,375 | 5,086 | |||||
74,303 | 79,769 | ||||||
Inventories | 35,447 | 39,972 | |||||
Restricted investments and bond collateral | 16,900 | 5,998 | |||||
Other current assets | 16,643 | 18,190 | |||||
Total current assets | 205,193 | 205,039 | |||||
Property, plant and equipment: | |||||||
Land and mineral rights | 278,198 | 278,188 | |||||
Plant and equipment | 673,189 | 657,696 | |||||
951,387 | 935,884 | ||||||
Less accumulated depreciation, depletion and amortization | 461,754 | 445,848 | |||||
Net property, plant and equipment | 489,633 | 490,036 | |||||
Advanced coal royalties | 7,263 | 7,311 | |||||
Reclamation deposits | 75,315 | 74,921 | |||||
Restricted investments and bond collateral | 523,483 | 69,235 | |||||
Contractual third-party reclamation receivables, less current portion | 88,036 | 88,303 | |||||
Intangible assets, net of accumulated amortization of $14.5 million and $14.1 million at March 31, 2014 and December 31, 2013, respectively | 1,099 | 1,520 | |||||
Other assets | 17,125 | 10,320 | |||||
Total Assets | $ | 1,407,147 | $ | 946,685 |
March 31, 2014 | December 31, 2013 | ||||||
(In thousands) | |||||||
Liabilities and Shareholders’ Deficit | |||||||
Current liabilities: | |||||||
Current installments of long-term debt | $ | 48,586 | $ | 44,343 | |||
Accounts payable and accrued expenses: | |||||||
Trade | 62,598 | 57,507 | |||||
Production taxes | 46,794 | 41,905 | |||||
Workers’ compensation | 712 | 717 | |||||
Postretirement medical benefits | 13,955 | 13,955 | |||||
SERP | 390 | 390 | |||||
Deferred revenue | 16,034 | 14,068 | |||||
Asset retirement obligations | 22,227 | 23,353 | |||||
Other current liabilities | 24,390 | 16,790 | |||||
Total current liabilities | 235,686 | 213,028 | |||||
Long-term debt, less current installments | 751,645 | 295,494 | |||||
Workers’ compensation, less current portion | 6,680 | 6,744 | |||||
Excess of black lung benefit obligation over trust assets | 9,376 | 8,675 | |||||
Postretirement medical benefits, less current portion | 271,275 | 270,374 | |||||
Pension and SERP obligations, less current portion | 23,524 | 24,176 | |||||
Deferred revenue, less current portion | 43,299 | 46,567 | |||||
Asset retirement obligations, less current portion | 259,036 | 256,511 | |||||
Intangible liabilities, net of accumulated amortization of $12.7 million and $12.4 million at March 31, 2014 and December 31, 2013, respectively | 5,339 | 5,606 | |||||
Other liabilities | 7,503 | 7,389 | |||||
Total liabilities | 1,613,363 | 1,134,564 | |||||
Shareholders’ deficit: | |||||||
Preferred stock of $1.00 par value | |||||||
Authorized 5,000,000 shares; issued and outstanding 121,223 shares at March 31, 2014 and 159,960 at December 31, 2013 | 121 | 160 | |||||
Common stock of $2.50 par value | |||||||
Authorized 30,000,000 shares; issued and outstanding 14,862,595 shares at March 31, 2014 and 14,592,231 shares at December 31, 2013 | 37,155 | 36,479 | |||||
Other paid-in capital | 134,952 | 134,861 | |||||
Accumulated other comprehensive loss | (63,369 | ) | (63,595 | ) | |||
Accumulated deficit | (315,075 | ) | (295,784 | ) | |||
Total shareholders’ deficit | (206,216 | ) | (187,879 | ) | |||
Total Liabilities and Shareholders’ Deficit | $ | 1,407,147 | $ | 946,685 |
Three Months Ended March 31, | |||||||
2014 | 2013 | ||||||
(In thousands, except per share data) | |||||||
Revenues | $ | 180,202 | $ | 161,448 | |||
Cost, expenses and other: | |||||||
Cost of sales | 138,630 | 130,421 | |||||
Depreciation, depletion and amortization | 16,059 | 14,426 | |||||
Selling and administrative | 13,331 | 11,887 | |||||
Heritage health benefit expenses | 3,544 | 3,951 | |||||
Loss (gain) on sales of assets | 38 | (234 | ) | ||||
Restructuring charges | 397 | — | |||||
Other operating loss (income) | 150 | (4,737 | ) | ||||
172,149 | 155,714 | ||||||
Operating income | 8,053 | 5,734 | |||||
Other income (expense): | |||||||
Interest expense | (20,798 | ) | (10,160 | ) | |||
Interest income | 302 | 297 | |||||
Loss on foreign exchange | (6,790 | ) | — | ||||
Other income | 93 | 70 | |||||
(27,193 | ) | (9,793 | ) | ||||
Loss before income taxes | (19,140 | ) | (4,059 | ) | |||
Income tax expense (benefit) | (110 | ) | 28 | ||||
Net loss | (19,030 | ) | (4,087 | ) | |||
Less net loss attributable to noncontrolling interest | — | (1,702 | ) | ||||
Net loss attributable to the Parent company | (19,030 | ) | (2,385 | ) | |||
Less preferred stock dividend requirements | 261 | 340 | |||||
Net loss applicable to common shareholders | $ | (19,291 | ) | $ | (2,725 | ) | |
Net loss per share applicable to common shareholders: | |||||||
Basic and diluted | $ | (1.30 | ) | $ | (0.19 | ) | |
Weighted average number of common shares outstanding | |||||||
Basic and diluted | 14,787 | 14,282 |
Three Months Ended March 31, | |||||||
2014 | 2013 | ||||||
(In thousands) | |||||||
Net loss | $ | (19,030 | ) | $ | (4,087 | ) | |
Other comprehensive income (loss): | |||||||
Pension and other postretirement plans: | |||||||
Amortization of accumulated actuarial gains or losses, pension | 359 | 741 | |||||
Amortization of accumulated actuarial gains or losses, transition obligations, and prior service costs, postretirement medical benefit | 5 | 1,001 | |||||
Tax effect of other comprehensive income gains | (138 | ) | — | ||||
Other comprehensive income | 226 | 1,742 | |||||
Comprehensive loss attributable to the Parent company | $ | (18,804 | ) | $ | (2,345 | ) |
Preferred Stock | Common Stock | Other Paid-In Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total Shareholders’ Deficit | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||
(In thousands, except shares data) | |||||||||||||||||||||||||||||
Balance at December 31, 2013 | 159,960 | $ | 160 | 14,592,231 | $ | 36,479 | $ | 134,861 | $ | (63,595 | ) | $ | (295,784 | ) | $ | (187,879 | ) | ||||||||||||
Preferred dividends declared | — | — | — | — | — | — | (261 | ) | (261 | ) | |||||||||||||||||||
Common stock issued as compensation | — | — | — | — | 728 | — | — | 728 | |||||||||||||||||||||
SARs exercised | — | — | 5,723 | 14 | (14 | ) | — | — | — | ||||||||||||||||||||
Conversion of convertible notes and securities | (38,737 | ) | (39 | ) | 264,641 | 662 | (623 | ) | — | — | — | ||||||||||||||||||
Net loss | — | — | — | — | — | — | (19,030 | ) | (19,030 | ) | |||||||||||||||||||
Other comprehensive income | — | — | — | — | — | 226 | — | 226 | |||||||||||||||||||||
Balance at March 31, 2014 | 121,223 | $ | 121 | 14,862,595 | $ | 37,155 | $ | 134,952 | $ | (63,369 | ) | $ | (315,075 | ) | $ | (206,216 | ) |
Three Months Ended March 31, | |||||||
2014 | 2013 | ||||||
(In thousands) | |||||||
Cash flows from operating activities: | |||||||
Net loss | $ | (19,030 | ) | $ | (4,087 | ) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||
Depreciation, depletion and amortization | 16,059 | 14,426 | |||||
Accretion of asset retirement obligation and receivable | 3,479 | 3,180 | |||||
Non-cash tax benefits | (138 | ) | — | ||||
Amortization of intangible assets and liabilities, net | 153 | 164 | |||||
Share-based compensation | 728 | 2,386 | |||||
Loss (gain) on sales of assets | 38 | (234 | ) | ||||
Amortization of deferred financing costs | 271 | 933 | |||||
Loss on sales of investment securities | — | 7 | |||||
Loss on foreign exchange | 6,790 | — | |||||
Changes in operating assets and liabilities: | |||||||
Receivables, net | 5,202 | 120 | |||||
Inventories | 4,525 | (2,687 | ) | ||||
Excess of black lung benefit obligation over trust assets | 701 | 83 | |||||
Accounts payable and accrued expenses | 10,959 | 3,245 | |||||
Deferred revenue | (1,302 | ) | 160 | ||||
Income tax payable | 28 | 27 | |||||
Accrual for workers’ compensation | (69 | ) | (191 | ) | |||
Asset retirement obligations | (1,352 | ) | (3,207 | ) | |||
Accrual for postretirement medical benefits | 906 | 1,985 | |||||
Pension and SERP obligations | (293 | ) | 742 | ||||
Other assets and liabilities | 1,993 | 4,164 | |||||
Net cash provided by operating activities | 29,648 | 21,216 | |||||
Cash flows from investing activities: | |||||||
Additions to property, plant and equipment | (3,050 | ) | (5,301 | ) | |||
Change in restricted investments and bond collateral and reclamation deposits | (465,544 | ) | (6,435 | ) | |||
Net proceeds from sales of assets | — | 441 | |||||
Proceeds from the sale of restricted investments | — | 5,619 | |||||
Receivable from customer for property and equipment purchases | (10 | ) | (49 | ) | |||
Other | (60 | ) | — | ||||
Net cash used in investing activities | (468,664 | ) | (5,725 | ) | |||
Cash flows from financing activities: | |||||||
Change in book overdrafts | (315 | ) | 820 | ||||
Borrowings from long-term debt, net of debt premium | 454,219 | — | |||||
Repayments of long-term debt | (6,239 | ) | (6,573 | ) | |||
Borrowings on revolving lines of credit | — | 6,000 | |||||
Repayments on revolving lines of credit | — | (6,000 | ) | ||||
Debt issuance costs and other refinancing costs | (7,598 | ) | (156 | ) | |||
Preferred dividends paid | (261 | ) | (340 | ) | |||
Net cash provided by (used in) financing activities | 439,806 | (6,249 | ) | ||||
Net increase in cash and cash equivalents | 790 | 9,242 | |||||
Cash and cash equivalents, beginning of period | 61,110 | 31,610 | |||||
Cash and cash equivalents, end of period | $ | 61,900 | $ | 40,852 |
1. | BASIS OF PRESENTATION |
Beginning Balance | Restructuring Charges | Restructuring Payments | Ending Balance | |||||||||||
$ | 5.1 | $ | 0.4 | $ | 0.4 | $ | 5.1 |
2. | INVENTORIES |
March 31, 2014 | December 31, 2013 | ||||||
(In thousands) | |||||||
Coal stockpiles | $ | 1,189 | $ | 543 | |||
Coal fuel inventories | 1,844 | 6,161 | |||||
Materials and supplies | 33,189 | 34,233 | |||||
Reserve for obsolete inventory | (775 | ) | (965 | ) | |||
Total | $ | 35,447 | $ | 39,972 |
3. | RESTRICTED INVESTMENTS AND BOND COLLATERAL |
March 31, 2014 | December 31, 2013 | ||||||
(In thousands) | |||||||
Coal Segment: | |||||||
WML debt reserve account | $ | 13,068 | $ | 13,067 | |||
Reclamation bond collateral: | |||||||
Kemmerer Mine | 24,944 | 24,966 | |||||
Absaloka Mine | 11,670 | 11,653 | |||||
Rosebud Mine | 3,145 | 3,145 | |||||
Beulah Mine | 1,270 | 1,270 | |||||
Power Segment: | |||||||
Letter of credit account | — | 5,998 | |||||
Corporate Segment: | |||||||
Proceeds from the New Notes held in escrow | 454,219 | — | |||||
Other requirements for Sherritt Acquisition held in escrow | 16,900 | — | |||||
Postretirement medical benefit bonds | 8,481 | 8,467 | |||||
Workers’ compensation bonds | 6,686 | 6,667 | |||||
Total restricted investments and bond collateral | 540,383 | 75,233 | |||||
Less current portion | (16,900 | ) | (5,998 | ) | |||
Total restricted investments and bond collateral, less current portion | $ | 523,483 | $ | 69,235 |
Carrying Value | Fair Value | ||||||
(In thousands) | |||||||
Cash and cash equivalents | $ | 503,391 | $ | 503,391 | |||
Time deposits | 2,444 | 2,444 | |||||
Held-to-maturity securities | 34,548 | 34,707 | |||||
$ | 540,383 | $ | 540,542 |
Amortized cost | $ | 34,548 | |
Gross unrealized holding gains | 440 | ||
Gross unrealized holding losses | (281 | ) | |
Fair value | $ | 34,707 |
Amortized Cost | Fair Value | ||||||
(In thousands) | |||||||
Due within one year | $ | 1,193 | $ | 1,217 | |||
Due in five years or less | 19,539 | 19,752 | |||||
Due after five years to ten years | 6,718 | 6,717 | |||||
Due in more than ten years | 7,098 | 7,021 | |||||
$ | 34,548 | $ | 34,707 |
4. | LINES OF CREDIT AND LONG-TERM DEBT |
Total Debt Outstanding | |||||||
March 31, 2014 | December 31, 2013 | ||||||
(In thousands) | |||||||
10.75% Senior Notes due 2018 | $ | 251,500 | $ | 251,500 | |||
New Notes - 10.75% senior notes due 2018 | 425,000 | — | |||||
8.02% WML term debt due 2018 | 81,000 | 85,500 | |||||
Capital lease obligations | 21,465 | 10,153 | |||||
Other | 1,093 | 1,209 | |||||
Debt premium (discount), net | 20,173 | (8,525 | ) | ||||
Total debt outstanding | 800,231 | 339,837 | |||||
Less current installments | (48,586 | ) | (44,343 | ) | |||
Total debt outstanding, less current installments | $ | 751,645 | $ | 295,494 |
As of March 31, 2014 | |||
(In thousands) | |||
2014 | $ | 19,569 | |
2015 | 24,710 | ||
2016 | 24,055 | ||
2017 | 24,664 | ||
2018 | 684,556 | ||
Thereafter | 2,504 | ||
Total | 780,058 | ||
Plus: debt premium (discount), net | 20,173 | ||
Total debt | $ | 800,231 |
5. | POSTRETIREMENT MEDICAL BENEFITS AND PENSION |
Three Months Ended March 31, | |||||||
2014 | 2013 | ||||||
(In thousands) | |||||||
Components of net periodic benefit cost: | |||||||
Service cost | $ | 822 | $ | 1,109 | |||
Interest cost | 3,203 | 3,035 | |||||
Amortization of deferred items | 5 | 1,001 | |||||
Total net periodic benefit cost | $ | 4,030 | $ | 5,145 |
Three Months Ended March 31, | |||||||
2014 | 2013 | ||||||
(In thousands) | |||||||
Former mining operations | $ | 2,403 | $ | 3,119 | |||
Current operations | 1,627 | 2,026 | |||||
Total net periodic benefit cost | $ | 4,030 | $ | 5,145 |
Three Months Ended March 31, | |||||||
2014 | 2013 | ||||||
(In thousands) | |||||||
Components of net periodic benefit cost: | |||||||
Service cost | $ | 500 | $ | 534 | |||
Interest cost | 1,747 | 1,625 | |||||
Expected return on plan assets | (2,154 | ) | (2,060 | ) | |||
Amortization of deferred items | 359 | 741 | |||||
Total net periodic pension cost | $ | 452 | $ | 840 |
6. | HERITAGE HEALTH BENEFIT EXPENSES |
Three Months Ended March 31, | |||||||
2014 | 2013 | ||||||
(In thousands) | |||||||
Health care benefits | $ | 2,276 | $ | 3,176 | |||
Combined benefit fund payments | 512 | 576 | |||||
Workers’ compensation benefits | 136 | 116 | |||||
Black lung benefits | 620 | 83 | |||||
Total | $ | 3,544 | $ | 3,951 |
7. | ASSET RETIREMENT OBLIGATIONS, CONTRACTUAL THIRD-PARTY RECLAMATION RECEIVABLE, AND RECLAMATION DEPOSITS |
Asset Retirement Obligation | Contractual Third-Party Reclamation Receivable | Reclamation Deposits | |||||||||
(In thousands) | |||||||||||
Rosebud | $ | 127,989 | $ | 21,656 | $ | 75,315 | |||||
Jewett | 74,247 | 74,247 | — | ||||||||
Absaloka | 37,286 | 346 | — | ||||||||
Beulah | 17,764 | — | — | ||||||||
Kemmerer | 17,569 | — | — | ||||||||
Savage | 5,499 | — | — | ||||||||
ROVA | 909 | — | — | ||||||||
Total | $ | 281,263 | $ | 96,249 | $ | 75,315 |
Three Months Ended March 31, | |||||||
2014 | 2013 | ||||||
(In thousands) | |||||||
Asset retirement obligations, beginning of year (including current portion) | $ | 279,864 | $ | 263,847 | |||
Accretion | 5,836 | 5,481 | |||||
Liabilities settled | (4,437 | ) | (5,839 | ) | |||
Asset retirement obligations, end of period | 281,263 | 263,489 | |||||
Less current portion | (22,227 | ) | (23,154 | ) | |||
Asset retirement obligations, less current portion | $ | 259,036 | $ | 240,335 |
Carrying Value | Fair Value | Fair Value Hierarchy | |||||||
(In thousands) | |||||||||
Cash and cash equivalents | $ | 49,627 | $ | 49,627 | Level 1 | ||||
Held-to-maturity securities | 25,688 | 26,401 | Level 2 | ||||||
$ | 75,315 | $ | 76,028 |
Amortized cost | $ | 25,688 | |
Gross unrealized holding gains | 826 | ||
Gross unrealized holding losses | (113 | ) | |
Fair value | $ | 26,401 |
Amortized Cost | Fair Value | ||||||
(In thousands) | |||||||
Within one year | $ | 479 | $ | 468 | |||
Due in five years or less | 17,562 | 17,880 | |||||
Due after five years to ten years | 4,869 | 5,023 | |||||
Due in more than ten years | 2,778 | 3,030 | |||||
$ | 25,688 | $ | 26,401 |
8. | DERIVATIVE INSTRUMENTS |
Derivative Instruments | Balance Sheet Location | March 31, 2014 | ||||
Canadian dollar foreign exchange forward contracts | Other current assets | $ | 246 | |||
Canadian dollar foreign exchange forward contracts | Other current liabilities | (7,036 | ) |
Derivative Instruments | Statement of Operations Location | Three Months Ended March 31, 2014 | ||||
Canadian dollar foreign exchange forward contracts | Loss on foreign exchange | $ | (6,790 | ) |
9. | FAIR VALUE MEASUREMENTS |
• | Level 1, defined as observable inputs such as quoted prices in active markets for identical assets. |
• | Level 2, defined as observable inputs other than Level 1 prices. These include quoted prices for similar assets or liabilities in an active market, quoted prices for identical assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. |
• | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. |
Carrying Value | Fair Value | ||||||
(In thousands) | |||||||
December 31, 2013 | $ | 328,473 | $ | 364,329 | |||
March 31, 2014 | $ | 777,670 | $ | 823,603 |
10. | SHAREHOLDERS’ EQUITY AND ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) |
Pension | Postretirement medical benefits | Tax effect of other comprehensive income gains | Accumulated other comprehensive loss | ||||||||||||
(In thousands) | |||||||||||||||
Balance at December 31, 2013 | $ | (12,255 | ) | $ | (20,292 | ) | $ | (31,048 | ) | $ | (63,595 | ) | |||
Other comprehensive income (loss) before reclassifications | — | — | (138 | ) | (138 | ) | |||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | 359 | 5 | — | 364 | |||||||||||
Balance at March 31, 2014 | $ | (11,896 | ) | $ | (20,287 | ) | $ | (31,186 | ) | $ | (63,369 | ) |
Details about accumulated other comprehensive loss components | Amount reclassified from accumulated other comprehensive loss1 | Affected line item in the statement where net income (loss) is presented | ||||
Three Months Ended March 31, 2014 | ||||||
Amortization of defined benefit pension items | ||||||
Actuarial losses | $ | 359 | 2 | |||
Amortization of postretirement medical items | ||||||
Prior service costs | $ | (159 | ) | 3 | ||
Actuarial losses | 164 | 3 | ||||
$ | 5 | Total |
(1) | Amounts in parentheses indicate debits to income/loss. |
(2) | These accumulated other comprehensive loss components are included in the computation of net periodic pension cost. (See Note 5 - Pension for additional details) |
(3) | These accumulated other comprehensive loss components are included in the computation of net periodic postretirement medical cost. (See Note 5 - Postretirement Medical Benefits for additional details) |
Three Months Ended March 31, | |||||||
2014 | 2013 | ||||||
(In thousands) | |||||||
Recognition of fair value of restricted stock units, stock options and SARs over vesting period; and issuance of stock | $ | 728 | $ | 1,663 | |||
Contributions of stock to the Company's 401(k) plan | — | 723 | |||||
Total share-based compensation expense | $ | 728 | $ | 2,386 |
Units | Weighted Average Grant-Date Fair Value | Unamortized Compensation Expense (In thousands) | |||||||||
Non-vested at December 31, 2013 | 588,727 | $ | 9.37 | ||||||||
Granted | — | — | |||||||||
Vested | — | — | |||||||||
Non-vested at March 31, 2014 | 588,727 | $ | 9.37 | $ | 1,618 | (1) |
(1) | Expected to be recognized over the next three years. |
Stock Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (In years) | Aggregate Intrinsic Value (In thousands) | Unamortized Compensation Expense (In thousands) | |||||||||||||
Outstanding at December 31, 2013 | 145,806 | $ | 21.97 | ||||||||||||||
Exercised | — | $ | — | ||||||||||||||
Expired | — | $ | — | ||||||||||||||
Outstanding and exercisable at March 31, 2014 | 145,806 | $ | 21.97 | 4.0 | $ | 1,139 | $ | — |
SARs | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (In years) | Aggregate Intrinsic Value (In thousands) | Unamortized Compensation Expense (In thousands) | ||||||||||||
Outstanding at December 31, 2013 | 70,734 | $ | 22.60 | |||||||||||||
Exercised | (25,667 | ) | $ | — | ||||||||||||
Expired | — | $ | — | |||||||||||||
Outstanding and exercisable at March 31, 2014 | 45,067 | $ | 23.95 | 1.9 | $ | 352 | $ | — |
Three Months Ended March 31, | |||||
2014 | 2013 | ||||
(In thousands) | |||||
Convertible securities | 828 | 1,093 | |||
Restricted stock units, stock options and SARs | 779 | 978 | |||
Total shares excluded from diluted shares calculation | 1,607 | 2,071 |
Coal | Power | Heritage | Corporate | Consolidated | |||||||||||||||
(In thousands) | |||||||||||||||||||
Three Months Ended March 31, 2014 | |||||||||||||||||||
Revenues | $ | 158,190 | $ | 22,012 | $ | — | $ | — | $ | 180,202 | |||||||||
Restructuring charges | — | 397 | — | — | 397 | ||||||||||||||
Depreciation, depletion, and amortization | 13,459 | 2,524 | — | 76 | 16,059 | ||||||||||||||
Operating income (loss) | 13,447 | 1,744 | (3,830 | ) | (3,308 | ) | 8,053 | ||||||||||||
Total assets | 697,916 | 167,998 | 15,622 | 525,611 | 1,407,147 | ||||||||||||||
Capital expenditures | 3,053 | 35 | — | (38 | ) | 3,050 | |||||||||||||
Three Months Ended March 31, 2013 | |||||||||||||||||||
Revenues | $ | 142,112 | $ | 19,336 | $ | — | $ | — | $ | 161,448 | |||||||||
Depreciation, depletion, and amortization | 11,801 | 2,531 | — | 94 | 14,426 | ||||||||||||||
Operating income (loss) | 13,472 | (1,003 | ) | (4,175 | ) | (2,560 | ) | 5,734 | |||||||||||
Total assets | 711,128 | 186,309 | 15,877 | 29,701 | 943,015 | ||||||||||||||
Capital expenditures | 5,010 | 134 | — | 157 | 5,301 |
Three Months Ended March 31, | |||||||
2014 | 2013 | ||||||
(In thousands) | |||||||
Income from operations | $ | 8,053 | $ | 5,734 | |||
Interest expense | (20,798 | ) | (10,160 | ) | |||
Interest income | 302 | 297 | |||||
Loss on foreign exchange | (6,790 | ) | — | ||||
Other income | 93 | 70 | |||||
Loss before income taxes | $ | (19,140 | ) | $ | (4,059 | ) |
(1) | in the event of a sale or other disposition of all or substantially all of the assets of such Guarantor Subsidiary, by way of merger, consolidation or otherwise, a sale or other disposition of all of the Equity Interests of such Guarantor Subsidiary then held by the Issuers or any Restricted Subsidiary; provided, that the sale or other disposition does not violate the “Asset Sales” provisions of the Indenture; |
(2) | if such Guarantor Subsidiary is designated as an Unrestricted Subsidiary in accordance with the provisions of the Indenture, upon effectiveness of such designation; |
(3) | upon Legal Defeasance or Covenant Defeasance (as such terms are defined in the indenture) or upon satisfaction and discharge of the Indenture; |
(4) | upon the liquidation or dissolution of such Guarantor Subsidiary, provided no event of default has occurred and is continuing; or |
(5) | at such time as such Guarantor Subsidiary is no longer required to be a Guarantor Subsidiary of the Senior Notes as described in the Indenture, provided no event of default has occurred and is continuing. |
Assets | Parent/ Issuer | Co-Issuer | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Consolidating Adjustments | Total | ||||||||||||||||||
Current assets: | ||||||||||||||||||||||||
Cash and cash equivalents | $ | 28,759 | $ | 4,043 | $ | 8,794 | $ | 20,304 | $ | — | $ | 61,900 | ||||||||||||
Receivables: | ||||||||||||||||||||||||
Trade | — | 12,456 | 22,857 | 29,402 | — | 64,715 | ||||||||||||||||||
Contractual third-party reclamation receivables | — | — | 44 | 8,169 | — | 8,213 | ||||||||||||||||||
Intercompany receivable/payable | (2,263 | ) | — | 3,499 | (33,946 | ) | 32,710 | — | ||||||||||||||||
Other | 273 | 208 | 244 | 681 | (31 | ) | 1,375 | |||||||||||||||||
(1,990 | ) | 12,664 | 26,644 | 4,306 | 32,679 | 74,303 | ||||||||||||||||||
Inventories | — | 1,845 | 15,133 | 18,469 | — | 35,447 | ||||||||||||||||||
Restricted investments and bond collateral | 16,900 | — | — | — | — | 16,900 | ||||||||||||||||||
Other current assets | 7,044 | 425 | 3,168 | 6,005 | 1 | 16,643 | ||||||||||||||||||
Total current assets | 50,713 | 18,977 | 53,739 | 49,084 | 32,680 | 205,193 | ||||||||||||||||||
Property, plant and equipment: | ||||||||||||||||||||||||
Land and mineral rights | — | 1,395 | 104,640 | 172,163 | — | 278,198 | ||||||||||||||||||
Plant and equipment | 3,966 | 220,932 | 245,368 | 202,923 | — | 673,189 | ||||||||||||||||||
3,966 | 222,327 | 350,008 | 375,086 | — | 951,387 | |||||||||||||||||||
Less accumulated depreciation, depletion and amortization | 2,781 | 74,177 | 138,718 | 246,079 | (1 | ) | 461,754 | |||||||||||||||||
Net property, plant and equipment | 1,185 | 148,150 | 211,290 | 129,007 | 1 | 489,633 | ||||||||||||||||||
Advanced coal royalties | — | — | 3,000 | 4,263 | — | 7,263 | ||||||||||||||||||
Reclamation deposits | — | — | — | 75,315 | — | 75,315 | ||||||||||||||||||
Restricted investments and bond collateral | 469,385 | — | 36,615 | 17,483 | — | 523,483 | ||||||||||||||||||
Contractual third-party reclamation receivables | — | — | 302 | 87,734 | — | 88,036 | ||||||||||||||||||
Intangible assets | — | 871 | — | 228 | — | 1,099 | ||||||||||||||||||
Investment in subsidiaries | 237,926 | — | — | 3,770 | (241,696 | ) | — | |||||||||||||||||
Other assets | 15,563 | — | 569 | 4,493 | (3,500 | ) | 17,125 | |||||||||||||||||
Total assets | $ | 774,772 | $ | 167,998 | $ | 305,515 | $ | 371,377 | $ | (212,515 | ) | $ | 1,407,147 |
Liabilities and Shareholders’ Deficit | Parent/ Issuer | Co-Issuer | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Consolidating Adjustments | Total | ||||||||||||||||||
Current liabilities | ||||||||||||||||||||||||
Current installments of long-term debt | $ | 22,785 | $ | — | $ | 4,596 | $ | 21,205 | $ | — | $ | 48,586 | ||||||||||||
Accounts payable and accrued expenses: | ||||||||||||||||||||||||
Trade | 9,000 | 6,331 | 14,710 | 32,557 | — | 62,598 | ||||||||||||||||||
Production taxes | — | 405 | 22,442 | 23,947 | — | 46,794 | ||||||||||||||||||
Workers’ compensation | 712 | — | — | — | — | 712 | ||||||||||||||||||
Postretirement medical benefits | 12,042 | — | 329 | 1,583 | 1 | 13,955 | ||||||||||||||||||
SERP | 390 | — | — | — | — | 390 | ||||||||||||||||||
Deferred revenue | — | 9,581 | 4,813 | 1,640 | — | 16,034 | ||||||||||||||||||
Asset retirement obligations | — | — | 3,554 | 18,673 | — | 22,227 | ||||||||||||||||||
Other current liabilities | 19,196 | 5,053 | — | 172 | (31 | ) | 24,390 | |||||||||||||||||
Total current liabilities | 64,125 | 21,370 | 50,444 | 99,777 | (30 | ) | 235,686 | |||||||||||||||||
Long-term debt, less current installments | 677,385 | — | 12,912 | 64,848 | (3,500 | ) | 751,645 | |||||||||||||||||
Workers’ compensation, less current portion | 6,680 | — | — | — | — | 6,680 | ||||||||||||||||||
Excess of black lung benefit obligation over trust assets | 9,376 | — | — | — | — | 9,376 | ||||||||||||||||||
Postretirement medical benefits, less current portion | 185,447 | — | 50,472 | 35,356 | — | 271,275 | ||||||||||||||||||
Pension and SERP obligations, less current portion | 12,921 | 98 | 9,494 | 1,011 | — | 23,524 | ||||||||||||||||||
Deferred revenue, less current portion | — | 38,325 | — | 4,974 | — | 43,299 | ||||||||||||||||||
Asset retirement obligations, less current portion | — | 909 | 51,300 | 206,827 | — | 259,036 | ||||||||||||||||||
Intangible liabilities | — | 5,339 | — | — | — | 5,339 | ||||||||||||||||||
Other liabilities | 6,440 | — | — | 1,063 | — | 7,503 | ||||||||||||||||||
Intercompany receivable/payable | 18,613 | — | (4,326 | ) | 5,633 | (19,920 | ) | — | ||||||||||||||||
Total liabilities | 980,987 | 66,041 | 170,296 | 419,489 | (23,450 | ) | 1,613,363 | |||||||||||||||||
Shareholders’ deficit | ||||||||||||||||||||||||
Preferred stock | 121 | — | — | — | — | 121 | ||||||||||||||||||
Common stock | 37,155 | 5 | 110 | 132 | (247 | ) | 37,155 | |||||||||||||||||
Other paid-in capital | 134,953 | 52,842 | 92,896 | 66,027 | (211,766 | ) | 134,952 | |||||||||||||||||
Accumulated other comprehensive loss | (63,369 | ) | (162 | ) | 17,372 | (13,937 | ) | (3,273 | ) | (63,369 | ) | |||||||||||||
Accumulated earnings (deficit) | (315,075 | ) | 49,272 | 24,841 | (100,334 | ) | 26,221 | (315,075 | ) | |||||||||||||||
Total equity (deficit) | (206,215 | ) | 101,957 | 135,219 | (48,112 | ) | (189,065 | ) | (206,216 | ) | ||||||||||||||
Total liabilities and shareholders’ deficit | $ | 774,772 | $ | 167,998 | $ | 305,515 | $ | 371,377 | $ | (212,515 | ) | $ | 1,407,147 |
Assets | Parent/ Issuer | Co-Issuer | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Consolidating Adjustments | Total | ||||||||||||||||||
Current assets: | ||||||||||||||||||||||||
Cash and cash equivalents | $ | 25,326 | $ | 3,341 | $ | 7,942 | $ | 24,501 | $ | — | $ | 61,110 | ||||||||||||
Receivables: | ||||||||||||||||||||||||
Trade | — | 12,934 | 17,389 | 35,873 | — | 66,196 | ||||||||||||||||||
Contractual third-party reclamation receivables | — | — | 44 | 8,443 | — | 8,487 | ||||||||||||||||||
Intercompany receivable/payable | (3,568 | ) | — | 4,384 | (33,681 | ) | 32,865 | — | ||||||||||||||||
Other | 95 | 210 | 2,974 | 1,831 | (24 | ) | 5,086 | |||||||||||||||||
(3,473 | ) | 13,144 | 24,791 | 12,466 | 32,841 | 79,769 | ||||||||||||||||||
Inventories | — | 6,161 | 16,077 | 17,735 | (1 | ) | 39,972 | |||||||||||||||||
Deferred income taxes | — | — | 870 | — | (870 | ) | — | |||||||||||||||||
Restricted investments and bond collateral | — | 5,998 | — | — | — | 5,998 | ||||||||||||||||||
Other current assets | 6,115 | 143 | 6,883 | 5,049 | — | 18,190 | ||||||||||||||||||
Total current assets | 27,968 | 28,787 | 56,563 | 59,751 | 31,970 | 205,039 | ||||||||||||||||||
Property, plant and equipment: | ||||||||||||||||||||||||
Land and mineral rights | — | 1,395 | 104,631 | 172,163 | (1 | ) | 278,188 | |||||||||||||||||
Plant and equipment | 3,939 | 220,872 | 229,998 | 202,886 | 1 | 657,696 | ||||||||||||||||||
3,939 | 222,267 | 334,629 | 375,049 | — | 935,884 | |||||||||||||||||||
Less accumulated depreciation, depletion and amortization | 2,705 | 71,653 | 132,189 | 239,302 | (1 | ) | 445,848 | |||||||||||||||||
Net property, plant and equipment | 1,234 | 150,614 | 202,440 | 135,747 | 1 | 490,036 | ||||||||||||||||||
Advanced coal royalties | — | — | 3,000 | 4,311 | — | 7,311 | ||||||||||||||||||
Reclamation deposits | — | — | — | 74,921 | — | 74,921 | ||||||||||||||||||
Restricted investments and bond collateral | 15,134 | — | 36,619 | 17,482 | — | 69,235 | ||||||||||||||||||
Contractual third-party reclamation receivables | — | — | 293 | 88,010 | — | 88,303 | ||||||||||||||||||
Intangible assets | — | 1,283 | — | 238 | (1 | ) | 1,520 | |||||||||||||||||
Investment in subsidiaries | 266,847 | — | — | 3,770 | (270,617 | ) | — | |||||||||||||||||
Other assets | 8,636 | — | 586 | 3,098 | (2,000 | ) | 10,320 | |||||||||||||||||
Total assets | $ | 319,819 | $ | 180,684 | $ | 299,501 | $ | 387,328 | $ | (240,647 | ) | $ | 946,685 |
Liabilities and Shareholders’ Deficit | Parent/ Issuer | Co-Issuer | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Consolidating Adjustments | Total | ||||||||||||||||||
Current liabilities | ||||||||||||||||||||||||
Current installments of long-term debt | $ | 20,392 | $ | — | $ | 2,790 | $ | 21,161 | $ | — | $ | 44,343 | ||||||||||||
Accounts payable and accrued expenses: | ||||||||||||||||||||||||
Trade | 4,122 | 10,119 | 12,522 | 30,743 | 1 | 57,507 | ||||||||||||||||||
Production taxes | — | 3 | 17,429 | 24,472 | 1 | 41,905 | ||||||||||||||||||
Workers’ compensation | 717 | — | — | — | — | 717 | ||||||||||||||||||
Postretirement medical benefits | 12,042 | — | 329 | 1,583 | 1 | 13,955 | ||||||||||||||||||
SERP | 390 | — | — | — | — | 390 | ||||||||||||||||||
Deferred revenue | — | 9,024 | 3,969 | 1,075 | — | 14,068 | ||||||||||||||||||
Asset retirement obligations | — | — | 3,104 | 20,250 | (1 | ) | 23,353 | |||||||||||||||||
Other current liabilities | 11,302 | 5,053 | 317 | 142 | (24 | ) | 16,790 | |||||||||||||||||
Total current liabilities | 48,965 | 24,199 | 40,460 | 99,426 | (22 | ) | 213,028 | |||||||||||||||||
Long-term debt, less current installments | 224,582 | — | 2,664 | 70,248 | (2,000 | ) | 295,494 | |||||||||||||||||
Workers’ compensation, less current portion | 6,744 | — | — | — | — | 6,744 | ||||||||||||||||||
Excess of black lung benefit obligation over trust assets | 8,675 | — | — | — | — | 8,675 | ||||||||||||||||||
Postretirement medical benefits, less current portion | 185,858 | — | 49,418 | 35,098 | — | 270,374 | ||||||||||||||||||
Pension and SERP obligations, less current portion | 13,069 | 99 | 9,381 | 1,627 | — | 24,176 | ||||||||||||||||||
Deferred revenue, less current portion | — | 41,297 | — | 5,271 | (1 | ) | 46,567 | |||||||||||||||||
Asset retirement obligations, less current portion | — | 892 | 50,472 | 205,147 | — | 256,511 | ||||||||||||||||||
Intangible liabilities | — | 5,606 | — | — | — | 5,606 | ||||||||||||||||||
Other liabilities | 5,939 | — | 6,220 | 1,450 | (6,220 | ) | 7,389 | |||||||||||||||||
Intercompany receivable/payable | 13,866 | — | 525 | 6,434 | (20,825 | ) | — | |||||||||||||||||
Total liabilities | 507,698 | 72,093 | 159,140 | 424,701 | (29,068 | ) | 1,134,564 | |||||||||||||||||
Shareholders’ deficit | ||||||||||||||||||||||||
Preferred stock | 160 | — | — | — | — | 160 | ||||||||||||||||||
Common stock | 36,479 | 5 | 110 | 132 | (247 | ) | 36,479 | |||||||||||||||||
Other paid-in capital | 134,861 | 52,835 | 94,370 | 64,401 | (211,606 | ) | 134,861 | |||||||||||||||||
Accumulated other comprehensive loss | (63,595 | ) | (164 | ) | 17,492 | (14,153 | ) | (3,175 | ) | (63,595 | ) | |||||||||||||
Accumulated earnings (deficit) | (295,784 | ) | 55,915 | 28,389 | (87,753 | ) | 3,449 | (295,784 | ) | |||||||||||||||
Total equity (deficit) | (187,879 | ) | 108,591 | 140,361 | (37,373 | ) | (211,579 | ) | (187,879 | ) | ||||||||||||||
Total liabilities and shareholders’ deficit | $ | 319,819 | $ | 180,684 | $ | 299,501 | $ | 387,328 | $ | (240,647 | ) | $ | 946,685 |
Parent/ Issuer | Co-Issuer | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Consolidating Adjustments | Total | ||||||||||||||||||
Revenues | $ | — | $ | 22,012 | $ | 64,292 | $ | 93,898 | $ | — | $ | 180,202 | |||||||||||
Costs and expenses: | |||||||||||||||||||||||
Cost of sales | — | 16,454 | 50,558 | 71,618 | — | 138,630 | |||||||||||||||||
Depreciation, depletion and amortization | 76 | 2,524 | 6,269 | 7,190 | — | 16,059 | |||||||||||||||||
Selling and administrative | 3,746 | 894 | 2,994 | 5,697 | — | 13,331 | |||||||||||||||||
Heritage health benefit expenses | 3,326 | — | — | 218 | — | 3,544 | |||||||||||||||||
Loss (gain) on sales of assets | — | — | (1 | ) | 39 | — | 38 | ||||||||||||||||
Restructuring charges | — | 397 | — | — | — | 397 | |||||||||||||||||
Other operating income | — | — | 150 | — | — | 150 | |||||||||||||||||
7,148 | 20,269 | 59,970 | 84,762 | — | 172,149 | ||||||||||||||||||
Operating income (loss) | (7,148 | ) | 1,743 | 4,322 | 9,136 | — | 8,053 | ||||||||||||||||
Other income (expense): | |||||||||||||||||||||||
Interest expense | (18,673 | ) | (44 | ) | (110 | ) | (1,978 | ) | 7 | (20,798 | ) | ||||||||||||
Interest income | 123 | 4 | 25 | 157 | (7 | ) | 302 | ||||||||||||||||
Loss on foreign exchange | (6,790 | ) | — | — | — | — | (6,790 | ) | |||||||||||||||
Other income | 1 | — | 55 | 37 | — | 93 | |||||||||||||||||
(25,339 | ) | (40 | ) | (30 | ) | (1,784 | ) | — | (27,193 | ) | |||||||||||||
Income (loss) before income taxes and income of consolidated subsidiaries | (32,487 | ) | 1,703 | 4,292 | 7,352 | — | (19,140 | ) | |||||||||||||||
Equity in income of subsidiaries | 13,319 | — | — | — | (13,319 | ) | — | ||||||||||||||||
Income (loss) before income taxes | (19,168 | ) | 1,703 | 4,292 | 7,352 | (13,319 | ) | (19,140 | ) | ||||||||||||||
Income tax expense (benefit) | (138 | ) | — | (1,511 | ) | 6,626 | (5,087 | ) | (110 | ) | |||||||||||||
Net income (loss) | (19,030 | ) | 1,703 | 5,803 | 726 | (8,232 | ) | (19,030 | ) | ||||||||||||||
Less net loss attributable to noncontrolling interest | — | — | — | — | — | — | |||||||||||||||||
Net income (loss) attributable to the Parent company | $ | (19,030 | ) | $ | 1,703 | $ | 5,803 | $ | 726 | $ | (8,232 | ) | $ | (19,030 | ) |
Parent/ Issuer | Co-Issuer | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Consolidating Adjustments | Total | ||||||||||||||||||
Revenues | $ | — | $ | 19,336 | $ | 50,687 | $ | 100,401 | $ | (8,976 | ) | $ | 161,448 | ||||||||||
Costs and expenses: | |||||||||||||||||||||||
Cost of sales | — | 16,954 | 40,421 | 82,022 | (8,976 | ) | 130,421 | ||||||||||||||||
Depreciation, depletion and amortization | 94 | 2,531 | 5,189 | 6,612 | — | 14,426 | |||||||||||||||||
Selling and administrative | 3,054 | 855 | 2,637 | 5,341 | — | 11,887 | |||||||||||||||||
Heritage health benefit expenses | 3,689 | — | — | 262 | — | 3,951 | |||||||||||||||||
Gain on sales of assets | — | — | (133 | ) | (101 | ) | — | (234 | ) | ||||||||||||||
Other operating income | — | — | (4,737 | ) | — | — | (4,737 | ) | |||||||||||||||
6,837 | 20,340 | 43,377 | 94,136 | (8,976 | ) | 155,714 | |||||||||||||||||
Operating income (loss) | (6,837 | ) | (1,004 | ) | 7,310 | 6,265 | — | 5,734 | |||||||||||||||
Other income (expense): | |||||||||||||||||||||||
Interest expense | (7,584 | ) | (10 | ) | (74 | ) | (2,500 | ) | 8 | (10,160 | ) | ||||||||||||
Interest income | 30 | 10 | 44 | 221 | (8 | ) | 297 | ||||||||||||||||
Other income (loss) | — | — | 92 | (22 | ) | — | 70 | ||||||||||||||||
(7,554 | ) | — | 62 | (2,301 | ) | — | (9,793 | ) | |||||||||||||||
Income (loss) before income taxes and income of consolidated subsidiaries | (14,391 | ) | (1,004 | ) | 7,372 | 3,964 | — | (4,059 | ) | ||||||||||||||
Equity in income of subsidiaries | 10,304 | — | — | — | (10,304 | ) | — | ||||||||||||||||
Income (loss) before income taxes | (4,087 | ) | (1,004 | ) | 7,372 | 3,964 | (10,304 | ) | (4,059 | ) | |||||||||||||
Income tax expense (benefit) | — | — | 496 | 2,823 | (3,291 | ) | 28 | ||||||||||||||||
Net income (loss) | (4,087 | ) | (1,004 | ) | 6,876 | 1,141 | (7,013 | ) | (4,087 | ) | |||||||||||||
Less net loss attributable to noncontrolling interest | (1,702 | ) | — | — | — | — | (1,702 | ) | |||||||||||||||
Net income (loss) attributable to the Parent company | $ | (2,385 | ) | $ | (1,004 | ) | $ | 6,876 | $ | 1,141 | $ | (7,013 | ) | $ | (2,385 | ) |
Parent/Issuer | Co-Issuer | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Consolidating Adjustments | Total | ||||||||||||||||||
Net income (loss) | $ | (19,030 | ) | $ | 1,703 | $ | 5,803 | $ | 726 | $ | (8,232 | ) | $ | (19,030 | ) | ||||||||
Other comprehensive income (loss) | |||||||||||||||||||||||
Amortization of accumulated actuarial gains or losses, pension | 359 | 2 | — | 128 | (130 | ) | 359 | ||||||||||||||||
Amortization of accumulated actuarial gains or losses, transition obligations, and prior service costs, postretirement medical benefit | 5 | — | (119 | ) | 88 | 31 | 5 | ||||||||||||||||
Tax effect of other comprehensive income gains | (138 | ) | — | — | — | — | (138 | ) | |||||||||||||||
Other comprehensive income (loss) | 226 | 2 | (119 | ) | 216 | (99 | ) | 226 | |||||||||||||||
Comprehensive income (loss) attributable to the Parent company | $ | (18,804 | ) | $ | 1,705 | $ | 5,684 | $ | 942 | $ | (8,331 | ) | $ | (18,804 | ) |
Parent/Issuer | Co-Issuer | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Consolidating Adjustments | Total | ||||||||||||||||||
Net income (loss) | $ | (4,087 | ) | $ | (1,004 | ) | $ | 6,876 | $ | 1,141 | $ | (7,013 | ) | $ | (4,087 | ) | |||||||
Other comprehensive income (loss) | |||||||||||||||||||||||
Amortization of accumulated actuarial gains or losses, pension | 741 | 6 | — | 193 | (199 | ) | 741 | ||||||||||||||||
Amortization of accumulated actuarial gains or losses, transition obligations, and prior service costs, postretirement medical benefit | 1,001 | — | — | 213 | (213 | ) | 1,001 | ||||||||||||||||
Other comprehensive income (loss) | 1,742 | 6 | — | 406 | (412 | ) | 1,742 | ||||||||||||||||
Comprehensive income (loss) attributable to the Parent company | $ | (2,345 | ) | $ | (998 | ) | $ | 6,876 | $ | 1,547 | $ | (7,425 | ) | $ | (2,345 | ) |
Statements of Cash Flows | Parent/ Issuer | Co-Issuer | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Consolidating Adjustments | Total | ||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||||||
Net income (loss) | $ | (19,030 | ) | $ | 1,703 | $ | 5,803 | $ | 726 | $ | (8,232 | ) | $ | (19,030 | ) | |||||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||||||||||||||||||
Equity in income of subsidiaries | (13,319 | ) | — | — | — | 13,319 | — | |||||||||||||||||
Depreciation, depletion, and amortization | 76 | 2,524 | 6,269 | 7,190 | — | 16,059 | ||||||||||||||||||
Accretion of asset retirement obligation and receivable | — | 18 | 1,278 | 2,183 | — | 3,479 | ||||||||||||||||||
Non-cash tax benefits | (138 | ) | — | — | — | — | (138 | ) | ||||||||||||||||
Amortization of intangible assets and liabilities, net | — | 146 | — | 7 | — | 153 | ||||||||||||||||||
Share-based compensation | 569 | 7 | 37 | 115 | — | 728 | ||||||||||||||||||
Loss (gain) on sales of assets | — | — | (1 | ) | 39 | — | 38 | |||||||||||||||||
Amortization of deferred financing costs | 149 | — | — | 122 | — | 271 | ||||||||||||||||||
Loss on foreign exchange | 6,790 | — | — | — | — | 6,790 | ||||||||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||||||||||
Receivables, net | (178 | ) | 480 | (2,738 | ) | 6,104 | 1,534 | 5,202 | ||||||||||||||||
Inventories | — | 4,316 | 944 | (735 | ) | — | 4,525 | |||||||||||||||||
Excess of black lung benefit obligation over trust assets | 701 | — | — | — | — | 701 | ||||||||||||||||||
Accounts payable and accrued expenses | 5,670 | (3,386 | ) | 7,356 | 1,327 | (8 | ) | 10,959 | ||||||||||||||||
Deferred revenue | — | (2,415 | ) | 844 | 269 | — | (1,302 | ) | ||||||||||||||||
Income tax payable | — | — | — | 28 | — | 28 | ||||||||||||||||||
Accrual for workers’ compensation | (69 | ) | — | — | — | — | (69 | ) | ||||||||||||||||
Asset retirement obligations | — | — | (9 | ) | (1,343 | ) | — | (1,352 | ) | |||||||||||||||
Accrual for postretirement medical benefits | (374 | ) | — | 935 | 345 | — | 906 | |||||||||||||||||
Pension and SERP obligations | 83 | 1 | 113 | (490 | ) | — | (293 | ) | ||||||||||||||||
Other assets and liabilities | (183 | ) | (309 | ) | (1,616 | ) | (2,880 | ) | 6,981 | 1,993 | ||||||||||||||
Distributions received from subsidiaries | 42,500 | — | — | — | (42,500 | ) | — | |||||||||||||||||
Net cash provided by (used in) operating activities | 23,247 | 3,085 | 19,215 | 13,007 | (28,906 | ) | 29,648 | |||||||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||||||
Additions to property, plant and equipment | 38 | (35 | ) | (2,609 | ) | (444 | ) | — | (3,050 | ) | ||||||||||||||
Change in restricted investments and bond collateral and reclamation deposits | (471,151 | ) | 5,998 | 4 | (395 | ) | — | (465,544 | ) |
Receivable from customer for property and equipment purchases | — | — | — | (10 | ) | — | (10 | ) | ||||||||||||||||
Other | — | — | — | (60 | ) | — | (60 | ) | ||||||||||||||||
Net cash provided by (used in) investing activities | (471,113 | ) | 5,963 | (2,605 | ) | (909 | ) | — | (468,664 | ) | ||||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||||||
Change in book overdrafts | — | — | (317 | ) | 2 | — | (315 | ) | ||||||||||||||||
Borrowings from long-term debt | 454,219 | — | — | — | — | 454,219 | ||||||||||||||||||
Repayments of long-term debt | — | — | (875 | ) | (5,364 | ) | — | (6,239 | ) | |||||||||||||||
Debt issuance costs and other refinancing costs | (7,598 | ) | — | — | — | — | (7,598 | ) | ||||||||||||||||
Dividends/distributions | (261 | ) | (8,500 | ) | (18,000 | ) | (16,000 | ) | 42,500 | (261 | ) | |||||||||||||
Transactions with Parent/affiliates | 4,939 | 154 | 3,434 | 5,067 | (13,594 | ) | — | |||||||||||||||||
Net cash provided by (used in) financing activities | 451,299 | (8,346 | ) | (15,758 | ) | (16,295 | ) | 28,906 | 439,806 | |||||||||||||||
Net increase (decrease) in cash and cash equivalents | 3,433 | 702 | 852 | (4,197 | ) | — | 790 | |||||||||||||||||
Cash and cash equivalents, beginning of period | 25,326 | 3,341 | 7,942 | 24,501 | — | 61,110 | ||||||||||||||||||
Cash and cash equivalents, end of period | $ | 28,759 | $ | 4,043 | $ | 8,794 | $ | 20,304 | $ | — | $ | 61,900 |
Statements of Cash Flows | Parent/ Issuer | Co-Issuer | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Consolidating Adjustments | Total | ||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||||||
Net income (loss) | $ | (4,087 | ) | $ | (1,004 | ) | $ | 6,876 | $ | 1,141 | $ | (7,013 | ) | $ | (4,087 | ) | ||||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||||||||||||||||||
Equity in income of subsidiaries | (10,304 | ) | — | — | — | 10,304 | — | |||||||||||||||||
Depreciation, depletion, and amortization | 94 | 2,531 | 5,189 | 6,612 | — | 14,426 | ||||||||||||||||||
Accretion of asset retirement obligation and receivable | — | 16 | 1,050 | 2,114 | — | 3,180 | ||||||||||||||||||
Amortization of intangible assets and liabilities, net | — | 156 | — | 8 | — | 164 | ||||||||||||||||||
Share-based compensation | 682 | 10 | 681 | 1,013 | — | 2,386 | ||||||||||||||||||
Gain on sales of assets | — | — | (133 | ) | (101 | ) | — | (234 | ) | |||||||||||||||
Amortization of deferred financing costs | 771 | — | 13 | 149 | — | 933 | ||||||||||||||||||
Loss on sales of investment securities | — | — | 7 | — | — | 7 | ||||||||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||||||||||
Receivables, net | 49 | 2,885 | (2,467 | ) | (3,355 | ) | 3,008 | 120 | ||||||||||||||||
Inventories | — | (2,181 | ) | (753 | ) | 247 | — | (2,687 | ) | |||||||||||||||
Excess of black lung benefit obligation over trust assets | 83 | — | — | — | — | 83 | ||||||||||||||||||
Accounts payable and accrued expenses | (8,202 | ) | 5,960 | (10 | ) | 6,979 | (1,482 | ) | 3,245 | |||||||||||||||
Deferred revenue | — | (1,927 | ) | 1,703 | 384 | — | 160 | |||||||||||||||||
Income tax payable | — | — | (1,679 | ) | 1,706 | — | 27 | |||||||||||||||||
Accrual for workers’ compensation | (191 | ) | — | — | — | — | (191 | ) | ||||||||||||||||
Asset retirement obligations | — | — | (190 | ) | (3,017 | ) | — | (3,207 | ) | |||||||||||||||
Accrual for postretirement medical benefits | (100 | ) | — | 1,478 | 607 | — | 1,985 | |||||||||||||||||
Pension and SERP obligations | 320 | 4 | 177 | 241 | — | 742 | ||||||||||||||||||
Other assets and liabilities | (187 | ) | 465 | (195 | ) | 4,081 | — | 4,164 | ||||||||||||||||
Distributions received from subsidiaries | 19,600 | — | — | — | (19,600 | ) | — | |||||||||||||||||
Net cash provided by (used in) operating activities | (1,472 | ) | 6,915 | 11,747 | 18,809 | (14,783 | ) | 21,216 | ||||||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||||||
Additions to property, plant and equipment | (157 | ) | (134 | ) | (4,224 | ) | (786 | ) | — | (5,301 | ) | |||||||||||||
Change in restricted investments and bond collateral and reclamation deposits | (398 | ) | (3 | ) | (151 | ) | (5,883 | ) | — | (6,435 | ) | |||||||||||||
Net proceeds from sales of assets | — | — | 309 | 132 | — | 441 | ||||||||||||||||||
Proceeds from the sale of investments | — | — | 120 | 5,499 | — | 5,619 |
Receivable from customer for property and equipment purchases | — | — | — | (49 | ) | — | (49 | ) | ||||||||||||||||
Net cash provided by (used in) investing activities | (555 | ) | (137 | ) | (3,946 | ) | (1,087 | ) | — | (5,725 | ) | |||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||||||
Change in book overdrafts | — | — | (7 | ) | 827 | — | 820 | |||||||||||||||||
Repayments of long-term debt | — | — | (713 | ) | (5,860 | ) | — | (6,573 | ) | |||||||||||||||
Borrowings on revolving lines of credit | — | — | — | 6,000 | — | 6,000 | ||||||||||||||||||
Repayments on revolving lines of credit | — | — | — | (6,000 | ) | — | (6,000 | ) | ||||||||||||||||
Debt issuance costs and other refinancing costs | — | — | — | (156 | ) | — | (156 | ) | ||||||||||||||||
Dividends/distributions | (340 | ) | (6,500 | ) | (8,000 | ) | (5,100 | ) | 19,600 | (340 | ) | |||||||||||||
Transactions with Parent/affiliates | (22,106 | ) | (16 | ) | 2,255 | 4,076 | 15,791 | — | ||||||||||||||||
Net cash provided by (used in) financing activities | (22,446 | ) | (6,516 | ) | (6,465 | ) | (6,213 | ) | 35,391 | (6,249 | ) | |||||||||||||
Net increase (decrease) in cash and cash equivalents | (24,473 | ) | 262 | 1,336 | 11,509 | 20,608 | 9,242 | |||||||||||||||||
Cash and cash equivalents, beginning of period | 14,836 | 4,545 | 5,362 | 6,867 | — | 31,610 | ||||||||||||||||||
Cash and cash equivalents, end of period | $ | (9,637 | ) | $ | 4,807 | $ | 6,698 | $ | 18,376 | $ | 20,608 | $ | 40,852 |
ITEM 2 | — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. |
• | changes in our post-retirement medical benefit and pension obligations and the impact of the recently enacted healthcare legislation; |
• | the impact of the recently enacted healthcare legislation and its effect on our employee health benefit costs; |
• | our potential inability to expand or continue current coal operations due to limitations in obtaining bonding capacity for new mining permits, and/or increases in our mining costs as a result of increased bonding expenses; |
• | our substantial level of indebtedness, now and following the Sherritt Acquisition, and potential inability to maintain compliance with debt covenant requirements; |
• | the potential inability of our subsidiaries to pay dividends to us due to restrictions in our debt arrangements, reductions in planned coal deliveries or other business factors; |
• | the effect of Environmental Protection Agency inquiries and regulations on the operations of the power plants we provide coal to; |
• | the effect of prolonged maintenance or unplanned outages at our operations or those of our major power generating customers; |
• | future legislation and changes in regulations, governmental policies and taxes, including those aimed at reducing emissions of elements such as mercury, sulfur dioxides, nitrogen oxides, particulate matter or greenhouse gases; |
• | our ability to complete the Sherritt Acquisition; |
• | our expansion into international operations as a result of the Sherritt Acquisition which will expose us to risks relating to exchange rates and exchange controls, general economic and political conditions, costs associated with compliance with governmental regulations in multiple jurisdictions, tax-related risks and export or import requirements for, or restrictions related to, our products; |
• | our efforts to effectively integrate the Sherritt operations with our existing business and our ability to manage our expanded operations following the acquisition; |
• | our ability to realize growth opportunities and cost synergies as a result of the Sherritt Acquisition; and |
• | other factors that are described in “Risk Factors” in our 2013 Form 10-K and any subsequent quarterly filing on Form 10-Q. |
Three Months Ended March 31, | |||||||
2014 | 2013 | ||||||
(In thousands) | |||||||
Loss on foreign exchange | $ | (6,790 | ) | $ | — | ||
Interest expense on New Notes | (6,144 | ) | — | ||||
Sherritt Acquisition bridge facility commitment fee | (4,875 | ) | — | ||||
Restructuring charges | (397 | ) | — | ||||
Impact (pre-tax) | $ | (18,206 | ) | $ | — |
• | We recorded $6.8 million of Loss on foreign exchange. In the first quarter of 2014, we entered into two foreign currency exchange forward contracts to purchase Canadian Dollars in order to hedge a portion of our exposure to fluctuating rates of exchange on anticipated Canadian Dollar-denominated Sherritt Acquisition cash flows. |
• | We recorded $6.1 million of incremental interest expense related to the New Notes and is included in Interest expense. |
• | We recorded $4.9 million of interest expense related to the Sherritt Acquisition bridge facility. Upon closing of the $425 million private offering, our bridge facility commitment expired unexercised and as a result; the related commitment fee of $4.9 million was expensed and is included in Interest expense. |
• | We recorded $0.4 million of restructuring charges related to the ROVA restructuring and is included in Restructuring charges. |
Three Months Ended March 31, | ||||||||||||||
Increase / (Decrease) | ||||||||||||||
2014 | 2013 | $ | % | |||||||||||
(In millions) | ||||||||||||||
Revenues | $ | 180.2 | $ | 161.4 | $ | 18.8 | 11.6 | % | ||||||
Net loss applicable to common shareholders | (19.3 | ) | (2.7 | ) | (16.6 | ) | 614.8 | % | ||||||
Adjusted EBITDA(1) | 28.9 | 25.7 | 3.2 | 12.5 | % |
(1) | Adjusted EBITDA , a non-GAAP measure, is defined and reconciled to net loss at the end of this “Results of Operations” section. |
Three Months Ended March 31, 2014 | |||
(In millions) | |||
Increase in our power segment operating income primarily due to fewer planned and unplanned outages. | $ | 3.1 | |
Decrease in interest expense due to reduced debt levels. | 0.4 | ||
Decrease in our coal segment primarily due to transportation issues at our Absaloka Mine offset by increased production at our Beulah Mine. | (1.7 | ) | |
Decrease due to other factors. | (0.2 | ) | |
Total | $ | 1.6 |
Three Months Ended March 31, | ||||||||||||||
Increase / (Decrease) | ||||||||||||||
2014 | 2013 | $ | % | |||||||||||
(In thousands, except per ton data) | ||||||||||||||
Revenues | $ | 158,190 | $ | 142,112 | $ | 16,078 | 11.3 | % | ||||||
Operating income | 13,447 | 13,472 | (25 | ) | (0.2 | )% | ||||||||
Adjusted EBITDA(1) | 30,567 | 29,906 | 661 | 2.2 | % | |||||||||
Tons sold—millions of equivalent tons | 6.8 | 6.1 | 0.7 | 11.5 | % |
(1) | Adjusted EBITDA, a non-GAAP measure, is defined and reconciled to net loss at the end of this “Results of Operations” section. |
Three Months Ended March 31, | ||||||||||||||
Increase / (Decrease) | ||||||||||||||
2014 | 2013 | $ | % | |||||||||||
(In thousands) | ||||||||||||||
Revenues | $ | 22,012 | $ | 19,336 | $ | 2,676 | 13.8 | % | ||||||
Operating income (loss) | 1,744 | (1,003 | ) | 2,747 | 273.9 | % | ||||||||
Adjusted EBITDA(1) | 4,833 | 1,709 | 3,124 | 182.8 | % | |||||||||
Megawatts hours | 404 | 340 | 64 | 18.8 | % |
(1) | Adjusted EBITDA, a non-GAAP measure, is defined and reconciled to net loss at the end of this “Results of Operations” section. |
Three Months Ended March 31, | ||||||||||||||
Increase / (Decrease) | ||||||||||||||
2014 | 2013 | $ | % | |||||||||||
(In thousands) | ||||||||||||||
Heritage segment operating expenses | $ | 3,830 | $ | 4,175 | $ | (345 | ) | (8.3 | )% |
Three Months Ended March 31, | ||||||||||||||
Increase / (Decrease) | ||||||||||||||
2014 | 2013 | $ | % | |||||||||||
(In thousands) | ||||||||||||||
Corporate segment operating expenses | $ | 3,308 | $ | 2,560 | $ | 748 | 29.2 | % |
• | are used widely by investors to measure a company’s operating performance without regard to items excluded from the calculation of such terms, which can vary substantially from company to company depending upon accounting methods and book value of assets, capital structure and the method by which assets were acquired, among other factors; and |
• | help investors to more meaningfully evaluate and compare the results of our operations from period to period by removing the effect of our capital structure and asset base from our operating results. |
• | do not reflect our cash expenditures, or future requirements for capital and major maintenance expenditures or contractual commitments; |
• | do not reflect income tax expenses or the cash requirements necessary to pay income taxes; |
• | do not reflect changes in, or cash requirements for, our working capital needs; and |
• | do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on certain of our debt obligations. |
Three Months Ended March 31, | |||||||
2014 | 2013 | ||||||
(In thousands) | |||||||
Reconciliation of Adjusted EBITDA to Net loss | |||||||
Net loss | $ | (19,030 | ) | $ | (4,087 | ) | |
Income tax expense (benefit) | (110 | ) | 28 | ||||
Other income | (93 | ) | (70 | ) | |||
Interest income | (302 | ) | (297 | ) | |||
Loss on foreign exchange | 6,790 | — | |||||
Interest expense | 20,798 | 10,160 | |||||
Depreciation, depletion and amortization | 16,059 | 14,426 | |||||
Accretion of ARO and receivable | 3,479 | 3,180 | |||||
Amortization of intangible assets and liabilities | 153 | 164 | |||||
EBITDA | 27,744 | 23,504 | |||||
Restructuring charges | 397 | — | |||||
(Gain)/loss on sale of assets | 38 | (234 | ) | ||||
Share-based compensation | 728 | 2,386 | |||||
Adjusted EBITDA | $ | 28,907 | $ | 25,656 |
Three Months Ended March 31, | |||||||
2014 | 2013 | ||||||
(In thousands) | |||||||
Adjusted EBITDA by Segment | |||||||
Coal | $ | 30,567 | $ | 29,906 | |||
Power | 4,833 | 1,709 | |||||
Heritage | (3,830 | ) | (4,175 | ) | |||
Corporate | (2,663 | ) | (1,784 | ) | |||
Total | $ | 28,907 | $ | 25,656 |
Three Months Ended March 31, | |||||||
2014 | 2013 | ||||||
(In thousands) | |||||||
Adjusted EBITDA | |||||||
Guarantor and Issuer | $ | 10,237 | $ | 9,744 | |||
Non-Guarantor | 18,670 | 15,912 | |||||
Total | $ | 28,907 | $ | 25,656 |
March 31, | December 31, | ||||||
2014 | 2013 | ||||||
(In millions) | |||||||
Cash and cash equivalents | $ | 61.9 | $ | 61.1 | |||
WML revolving line of credit | 23.1 | 23.1 | |||||
Corporate revolving line of credit | 20.0 | 20.0 | |||||
Total | $ | 105.0 | $ | 104.2 |
2014 remaining | $ | 13.5 | |
2015 | 20.0 | ||
2016 | 20.0 | ||
2017 | 22.0 | ||
2018 | 5.5 |
Three Months Ended March 31, | 2014 Remaining Expected Amounts | ||||||||||
2014 | 2013 | ||||||||||
(In millions) | |||||||||||
Postretirement medical benefits | $ | 2.7 | $ | 3.1 | $ | 11.1 | |||||
CBF premiums | 0.5 | 0.6 | 1.5 | ||||||||
Workers’ compensation benefits | 0.1 | 0.2 | 0.5 | ||||||||
Total heritage health payments | $ | 3.3 | $ | 3.9 | $ | 13.1 | |||||
Pension contributions | $ | 0.6 | $ | — | $ | 3.7 |
Three Months Ended March 31, | |||||||
2014 | 2013 | ||||||
(In thousands) | |||||||
Cash provided by (used in): | |||||||
Operating activities | $ | 29,648 | $ | 21,216 | |||
Investing activities | (468,664 | ) | (5,725 | ) | |||
Financing activities | 439,806 | (6,249 | ) |
ITEM 3 | — QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. |
ITEM 4 | — CONTROLS AND PROCEDURES. |
ITEM 1 | — LEGAL PROCEEDINGS. |
ITEM 1A | — RISK FACTORS. |
ITEM 4 | — MINE SAFETY DISCLOSURE. |
ITEM 6 | — EXHIBITS. |
WESTMORELAND COAL COMPANY | ||
Date: | April 25, 2014 | /s/ Kevin A. Paprzycki |
Kevin A. Paprzycki | ||
Chief Financial Officer and Treasurer (Principal Financial Officer and A Duly Authorized Officer) | ||
Date: | April 25, 2014 | /s/ Russell H. Werner |
Russell H. Werner | ||
Controller (Principal Accounting Officer and A Duly Authorized Officer) |
Incorporated by Reference | |||||||
Exhibit Number | Exhibit Description | Form | File Number | Exhibit | Filing Date | Filed Herewith | Submitted Herewith |
31.1 | Certification of Chief Executive Officer pursuant to Rule 13a-14(a) | X | |||||
31.2 | Certification of Chief Financial Officer pursuant to Rule 13a-14(a) | X | |||||
32 | Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 | X | |||||
95.1 | Mine Safety Disclosure | X | |||||
101.INS | XBRL Instance Document | X | |||||
101.SCH | XBRL Taxonomy Extension Schema Document | X | |||||
101.CAL | XBRL Taxonomy Calculation Linkbase Document | X | |||||
101.LAB | XBRL Taxonomy Label Linkbase Document | X | |||||
101.PRE | XBRL Taxonomy Presentation Linkbase Document | X | |||||
101.DEF | XBRL Taxonomy Definition Document | X |
1. | I have reviewed this Quarterly Report on Form 10-Q of Westmoreland Coal Company; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | April 25, 2014 | /s/ Keith E. Alessi |
Name: Keith E. Alessi | ||
Title: Chief Executive Officer | ||
(Principal Executive Officer) |
1. | I have reviewed this Quarterly Report on Form 10-Q of Westmoreland Coal Company; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | April 25, 2014 | /s/ Kevin A. Paprzycki |
Name: Kevin A. Paprzycki | ||
Title: Chief Financial Officer and Treasurer | ||
(Principal Financial Officer) |
Date: | April 25, 2014 | /s/ Keith E. Alessi |
Name: Keith E. Alessi | ||
Chief Executive Officer | ||
(Principal Executive Officer) |
Date: | April 25, 2014 | /s/ Kevin A. Paprzycki |
Name: Kevin A. Paprzycki | ||
Chief Financial Officer and Treasurer | ||
(Principal Financial Officer) |
Westmoreland Coal Company | |||||||||||||||||||||||
10-Q Safety Statistics | |||||||||||||||||||||||
Quarter Ending March 31, 2014 | |||||||||||||||||||||||
Received | Received | ||||||||||||||||||||||
Total | Notice of | Notice of | Legal | ||||||||||||||||||||
Section | Total Dollar | Number | Pattern of | Potential | Actions | Legal | Legal | ||||||||||||||||
Mine or | 104(d) | Value of | of | Violations | to Have | Pending | Actions | Actions | |||||||||||||||
Operating | Section | Section | Citations | Section | Section | MSHA | Mining | Under | Pattern | as of | Initiated | Resolved | |||||||||||
Name/MSHA | 104 S&S | 104(b) | and | 110(b)(2) | 107(a) | Assessments | Related | Section | Under | Last Day | During | During | |||||||||||
Identification | Citations | Orders | Orders | Violations | Orders | Proposed | Fatalities | (yes/no) | (yes/no) | of Period | Period | Period | |||||||||||
Number | (#)(1) | (#)(2) | (#)(3) | (#)(4) | (#)(5) | (#)(6) | (#)(7) | (#)(8) | (#)(8) | (#)(9) | (#)(9) | (#)(9) | |||||||||||
Rosebud Mine & Crusher Conveyor | |||||||||||||||||||||||
24-01747 | — | — | — | — | — | $ | 38,127 | — | No | No | 10 | 1 | — | ||||||||||
Absaloka Mine | |||||||||||||||||||||||
24-00910 | 1 | — | — | — | — | $ | — | — | No | No | — | — | 1 | ||||||||||
Savage Mine | |||||||||||||||||||||||
24-00106 | — | — | — | — | — | $ | — | — | No | No | — | — | — | ||||||||||
Jewett Mine | |||||||||||||||||||||||
41-03164 | 3 | — | — | — | — | $ | — | — | No | No | 1 | — | — | ||||||||||
Beulah Mine | |||||||||||||||||||||||
32-00043 | — | — | — | — | — | $ | 216 | — | No | No | — | — | — | ||||||||||
Kemmerer Mine | |||||||||||||||||||||||
48-00086 | 3 | — | — | — | — | $ | 9,817 | — | No | No | 4 | 3 | — |
(1) | Mine Act Section 104(a) citations are for alleged violations of mandatory health or safety standards that could significantly and substantially contribute to the cause and effect of a coal mine safety or health hazard. |
(2) | Mine Act Section 104(b) orders are for alleged failures to totally abate a citation within the period of time specified in the citation. |
(3) | Mine Act Section 104(d) citations and orders are for an alleged unwarrantable failure to comply with mandatory health or safety standards. |
(4) | Total number of flagrant violations issued under Section 110(b)(2) of the Mine Act. |
(5) | Mine Act Section 107(a) orders are for alleged conditions or practices that could reasonably be expected to cause death or serious physical harm before such condition or practice can be abated and result in orders of immediate withdrawal from the area of the mine affected by the condition. |
(6) | Total dollar value of MSHA assessments proposed during the quarter ended March 31, 2014. |
(7) | Total number of mining-related fatalities during the quarter ended March 31, 2014. |
(8) | Mine Act Section 104(e) written notices are for an alleged pattern of violations of mandatory health or safety standards that are of such nature as could have significantly and substantially contributed to the cause and effect of a coal mine health or safety hazard, or the potential to have such a pattern. |
(9) | Any pending legal action before the Federal Mine Safety and Health Review Commission (the “Commission”) involving a coal mine owned and operated by us. The number of legal actions pending as of March 31, 2014 that fall into each of the following categories is as follows: |
BASIS OF PRESENTATION - Restructuring Charges (Details) (USD $)
|
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2014
|
Mar. 31, 2013
|
Mar. 31, 2014
Other Restructuring [Member]
|
Dec. 31, 2013
Other Restructuring [Member]
|
|
Restructuring Cost and Reserve [Line Items] | ||||
Remaining Period of Contract | 5 years | |||
Beginning balance | $ 5,100,000 | |||
Restructuring charges | 397,000 | 0 | 400,000 | |
Restructuring Payments | 400,000 | |||
Ending balance | $ 5,100,000 | $ 5,100,000 |
ASSET RETIREMENT OBLIGATIONS, CONTRACTUAL THIRD-PARTY RECLAMATION RECEIVABLES, AND RECLAMATION DEPOSITS - Carrying Value and Estimated Fair Value of Reclamation Deposits (Detail) (USD $)
In Thousands, unless otherwise specified |
Mar. 31, 2014
|
Dec. 31, 2013
|
---|---|---|
Asset Retirement Obligation [Line Items] | ||
Reclamation deposits | $ 75,315 | $ 74,921 |
Carrying Value
|
||
Asset Retirement Obligation [Line Items] | ||
Reclamation deposits | 75,315 | |
Carrying Value | Cash and cash equivalents | Level 1
|
||
Asset Retirement Obligation [Line Items] | ||
Reclamation deposits | 49,627 | |
Carrying Value | Held-to-maturity securities | Level 2
|
||
Asset Retirement Obligation [Line Items] | ||
Reclamation deposits | 25,688 | |
Fair Value
|
||
Asset Retirement Obligation [Line Items] | ||
Reclamation deposits | 76,028 | |
Fair Value | Cash and cash equivalents | Level 1
|
||
Asset Retirement Obligation [Line Items] | ||
Reclamation deposits | 49,627 | |
Fair Value | Held-to-maturity securities | Level 2
|
||
Asset Retirement Obligation [Line Items] | ||
Reclamation deposits | $ 26,401 |
POSTRETIREMENT MEDICAL BENEFITS AND PENSION - Postretirement Medicial Benefit Obligations Balance Sheet Disclosures (Details) (Postretirement Medical Benefits, USD $)
In Thousands, unless otherwise specified |
3 Months Ended | |
---|---|---|
Mar. 31, 2014
|
Mar. 31, 2013
|
|
Postretirement Medical Benefits
|
||
Components of net periodic benefit cost: | ||
Service cost | $ 822 | $ 1,109 |
Interest cost | 3,203 | 3,035 |
Amortization of deferred items | 5 | 1,001 |
Total net periodic benefit cost | $ 4,030 | $ 5,145 |
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