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EX-31.2 - CERTIFICATION - James River Coal COjrcc_10q-ex3102.htm
EX-32.2 - CERTIFICATION - James River Coal COjrcc_10q-ex3202.htm
EX-31.1 - CERTIFICATION - James River Coal COjrcc_10q-ex3101.htm
EX-32.1 - CERTIFICATION - James River Coal COjrcc_10q-ex3201.htm


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
(Mark One)
 
x       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2009
OR

¨       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________________ to __________________

Commission File Number - 000-51129
 
 
 
JAMES RIVER COAL COMPANY
 
Exact name of registrant as specified in its charter)

Virginia
 
54-1602012
(State or other jurisdiction
 
(I.R.S. Employer
of incorporation or organization)
 
Identification No.)
    
   
901 E. Byrd Street, Suite 1600
   
Richmond, Virginia
 
23219
(Address of principal executive offices)
 
(Zip Code)

Registrant’s telephone number, including area code:  (804) 780-3000

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes    ý             No    o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes    o             No    o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ý
Accelerated filer  o
Non-accelerated filer (Do not check if a smaller reporting company)  o
Smaller reporting company  o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes    o             No    ý

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
Yes    ý             No    o

The number of shares of the registrant’s Common Stock, par value $.01 per share, outstanding as of October 16, 2009 was 27,553,964.




 
 

 

FORM 10-Q INDEX
 
   
 
     
     
 
     
 
     
   6
     
  7
     
 
     
 
     
     
17 
     
30 
     
31 
     
31 
     
31 
     
 
     
43 
     
43
     
43
     
43
     
43
     
     
44
 
 

 
-2-

 


PART I                                      FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

JAMES RIVER COAL COMPANY
AND SUBSIDIARIES

Condensed Consolidated Balance Sheets
(in thousands)

   
September 30, 2009
   
December 31, 2008
 
Assets
 
(unaudited)
       
             
Current assets:
           
Cash and cash equivalents
  $ 7,635       3,324  
Receivables:
               
Trade
    46,372       33,086  
Other
    211       475  
Total receivables
    46,583       33,561  
Inventories:
               
Coal
    28,379       6,847  
Materials and supplies
    11,279       9,581  
Total inventories
    39,658       16,428  
Prepaid royalties
    5,023       2,803  
Other current assets
    5,422       5,094  
Total current assets
    104,321       61,210  
Property, plant, and equipment, at cost:
               
Land
    7,239       6,693  
Mineral rights
    230,932       229,841  
Buildings, machinery and equipment
    353,560       320,982  
Mine development costs
    40,178       39,596  
Total property, plant, and equipment
    631,909       597,112  
Less accumulated depreciation, depletion, and amortization
    285,193       252,264  
Property, plant and equipment, net
    346,716       344,848  
Goodwill
    26,492       26,492  
Other assets
    30,255       30,996  
Total assets
  $ 507,784       463,546  
                 
                 
See accompanying notes to condensed consolidated financial statements.
 


 
-3-

 

JAMES RIVER COAL COMPANY
AND SUBSIDIARIES

Condensed Consolidated Balance Sheets
(in thousands, except share amounts)

   
September 30, 2009
   
December 31, 2008
 
Liabilities and Shareholders' Equity
 
(unaudited)
       
             
Current liabilities:
           
Current maturities of long-term debt (note 2)
  $ -       18,000  
Accounts payable
    51,947       57,068  
Accrued salaries, wages, and employee benefits
    10,015       6,642  
Workers' compensation benefits
    9,300       9,300  
Black lung benefits
    1,539       1,539  
Accrued taxes
    5,729       4,457  
Other current liabilities
    16,497       19,165  
Total current liabilities
    95,027       116,171  
Long-term debt, less current maturities
    150,000       150,000  
Other liabilities:
               
Noncurrent portion of workers' compensation benefits
    48,707       46,477  
Noncurrent portion of black lung benefits
    30,330       29,029  
Pension obligations
    20,097       19,693  
Asset retirement obligations
    39,370       36,409  
Other
    586       529  
Total other liabilities
    139,090       132,137  
Total liabilities
    384,117       398,308  
                 
Commitments and contingencies (note 4)
               
Shareholders' equity:
               
Preferred stock, $1.00 par value.  Authorized 10,000,000 shares
    -       -  
Common stock, $.01 par value.  Authorized 100,000,000 shares;
               
issued and outstanding 27,553,964 and 27,393,493 shares
               
as of September 30, 2009 and December 31, 2008, respectively
    276       274  
Paid-in-capital
    275,431       272,366  
Accumulated deficit
    (133,555 )     (187,712 )
Accumulated other comprehensive loss
    (18,485 )     (19,690 )
Total shareholders' equity
    123,667       65,238  
                 
Total liabilities and shareholders' equity
  $ 507,784       463,546  
                 
See accompanying notes to condensed consolidated financial statements.
 

 
-4-

 

JAMES RIVER COAL COMPANY
AND SUBSIDIARIES

Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)

   
Three Months
   
Three Months
 
   
Ended
   
Ended
 
   
September 30, 2009
   
September 30, 2008
 
             
Revenues
  $ 168,320       151,842  
Cost of sales:
               
Cost of coal sold
    128,361       138,873  
Depreciation, depletion and amortization
    15,572       17,158  
Total cost of sales
    143,933       156,031  
Gross profit (loss)
    24,387       (4,189 )
Selling, general and administrative expenses
    10,266       9,057  
Total operating income (loss)
    14,121       (13,246 )
Interest expense (note 2)
    3,923       4,625  
Interest income
    (5 )     (55 )
Charges associated with repayment and amendment of debt (note 2)
    -       4,223  
Miscellaneous income, net
    (43 )     (327 )
Total other expense, net
    3,875       8,466  
Income (loss) before income taxes
    10,246       (21,712 )
Income tax expense
    438       -  
Net income (loss)
  $ 9,808       (21,712 )
Earnings (loss) per common share (note 5)
               
Basic earnings (loss) per common share
  $ 0.36       (0.86 )
Diluted earnings (loss) per common share
  $ 0.36       (0.86 )
                 
                 
See accompanying notes to condensed consolidated financial statements.
 


 
-5-

 

JAMES RIVER COAL COMPANY
AND SUBSIDIARIES

Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)

   
Nine Months
   
Nine Months
 
   
Ended
   
Ended
 
   
September 30, 2009
   
September 30, 2008
 
             
Revenues
  $ 532,090       427,733  
Cost of sales:
               
Cost of coal sold
    388,789       393,470  
Depreciation, depletion and amortization
    45,967       52,000  
Total cost of sales
    434,756       445,470  
Gross profit (loss)
    97,334       (17,737 )
Selling, general and administrative expenses
    30,112       25,123  
Total operating income (loss)
    67,222       (42,860 )
Interest expense (note 2)
    11,790       13,700  
Interest income
    (55 )     (317 )
Charges associated with repayment and amendment of debt (note 2)
    -       7,236  
Miscellaneous income, net
    (187 )     (1,073 )
Total other expense, net
    11,548       19,546  
Income (loss) before income taxes
    55,674       (62,406 )
Income tax expense
    1,517       -  
Net income (loss)
  $ 54,157       (62,406 )
Earnings (loss) per common share (note 5)
               
Basic earnings (loss) per common share
  $ 1.97       (2.62 )
Diluted earnings (loss) per common share
  $ 1.97       (2.62 )
                 
                 
See accompanying notes to condensed consolidated financial statements.
 

 
-6-

 


JAMES RIVER COAL COMPANY
AND SUBSIDIARIES
Condensed Consolidated Statements of Changes in Shareholders’
Equity and Comprehensive Income (Loss)
(in thousands)
(unaudited)


 
   
Common
 stock
shares
   
Common
 stock par
value
   
Paid-in-
capital
   
Retained
earnings (accumulated
deficit)
   
Accumulated other comprehensive income (loss)
   
Total
 
                                     
Balances, January 1, 2008
    21,906     $ 219       159,403       (91,719 )     1,871       69,774  
Net loss
    -       -       -       (95,993 )     -       (95,993 )
Amortization of black lung liability
    -       -       -       -       (562 )     (562 )
Black lung obligation adjustment
    -       -       -       -       (5,334 )     (5,334 )
Pension liability adjustment
    -       -       -       -       (15,665 )     (15,665 )
Comprehensive loss
                                            (117,554 )
Issuance on common stock, net of offering costs of $421
    4,913       49       93,771       -       -       93,820  
Common stock issued for acquisition of mineral rights
    388       4       15,996       -       -       16,000  
Issuance of restricted stock awards, net of forfeitures
    238       2       (2 )     -       -       -  
Repurchase of shares for tax withholding
    (72 )     -       (2,474 )     -       -       (2,474 )
Exercise of Stock Options
    20       -       542       -       -       542  
Stock based compensation
    -       -       5,130       -       -       5,130  
Balances, December 31, 2008
    27,393       274       272,366       (187,712 )     (19,690 )     65,238  
Net Income
    -       -       -       54,157       -       54,157  
Amortization of pension actuarial amount
    -       -       -       -       1,205       1,205  
Comprehensive income
                                            55,362  
Issuance of restricted stock awards, net of forfeitures
    234       2       (2 )     -       -       -  
Repurchase of shares for tax withholding
    (78 )     -       (1,541 )     -       -       (1,541 )
Exercise of Stock Options
    5       -       75       -       -       75  
Stock based compensation
    -       -       4,533       -       -       4,533  
Balances, September 30, 2009
    27,554     $ 276       275,431       (133,555 )     (18,485 )     123,667  
                                                 
                                                 
                                                 
                                                 
See accompanying notes to condensed consolidated financial statements.


 
-7-

 

 

JAMES RIVER COAL COMPANY
AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)

   
Nine Months
   
Nine Months
 
   
Ended
   
Ended
 
   
September 30, 2009
   
September 30, 2008
 
Cash flows from operating activities:
           
Net income (loss)
  $ 54,157       (62,406 )
Adjustments to reconcile net income (loss) to net cash provided  by operating activities
               
Depreciation, depletion, and amortization
    45,967       52,000  
Accretion of asset retirement obligations
    2,385       2,018  
Amortization of deferred financing costs
    880       1,118  
Stock-based compensation
    4,533       3,614  
Gain on sale or disposal of property, plant, and equipment
    (24 )     (163 )
Deferred income taxes
    150       -  
Write-off of deferred financing costs
    -       2,383  
Changes in operating assets and liabilities:
               
Receivables
    (13,022 )     5,661  
Inventories
    (21,096 )     (3,740 )
Prepaid royalties and other current assets
    (2,548 )     (2,033 )
Other assets
    (289 )     662  
Accounts payable
    (5,121 )     5,958  
Accrued salaries, wages, and employee benefits
    3,373       2,107  
Accrued taxes
    (269 )     (1,265 )
Other current liabilities
    (3,025 )     6,327  
Workers' compensation benefits
    2,230       1,828  
Black lung benefits
    1,301       1,027  
Pension obligations
    1,609       (1,218 )
Asset retirement obligation
    (422 )     (978 )
Other liabilities
    57       161  
Net cash provided by operating activities
    70,826       13,061  
Cash flows from investing activities:
               
Additions to property, plant, and equipment
    (48,651 )     (59,498 )
Proceeds from sale of property, plant, and equipment
    61       1,108  
Net cash used in investing activities
    (48,590 )     (58,390 )
Cash flows from financing activities:
               
Borrowings under Revolver
    12,500       21,500  
Repayments under Revolver
    (30,500 )     (8,500 )
Repayment of long-term debt
    -       (22,025 )
Net proceeds from issuance of common stock
    -       93,955  
Debt issuance costs
    -       (486 )
Proceeds from exercise of stock option
    75       542  
Net cash provided by (used in) financing activities
    (17,925 )     84,986  
Increase in cash
    4,311       39,657  
Cash at beginning of period
    3,324       5,413  
Cash at end of period
  $ 7,635       45,070  

See accompanying notes to condensed consolidated financial statements.


 
-8-

 


JAMES RIVER COAL COMPANY
AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 
(1)
Summary of Significant Accounting Policies and Other Information
 
Description of Business and Principles of Consolidation
 
James River Coal Company and its wholly owned subsidiaries (collectively the Company) mine, process and sell bituminous, steam- and industrial-grade coal through five operating complexes located throughout eastern Kentucky and one in southern Indiana. Substantially all coal sales and account receivables relate to the electric utility and industrial markets.
 
The interim condensed consolidated financial statements of the Company presented in this report are unaudited. All significant intercompany balances and transactions have been eliminated in consolidation. The results of operations for any interim period are not necessarily indicative of the results to be expected for the full year. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto for the year ended December 31, 2008. The balances presented as of or for the year ended December 31, 2008 are derived from the Company’s audited consolidated financial statements.
 
Management of the Company has made a number of estimates and assumptions relating to the reporting of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in order to prepare these condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles. Significant estimates made by management include the valuation allowance for deferred tax assets, asset retirement obligations and amounts accrued related to the Company’s workers’ compensation, black lung, pension and health claim obligations. Actual results could differ from these estimates. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of normal recurring accruals, which are necessary to present fairly the consolidated financial position of the Company and the consolidated results of its operations and cash flows for all periods presented.

The Company’s management has evaluated the period from October 1, 2009 through November 2, 2009, for subsequent events requiring recognition or disclosure in the financial statements. During this period, no material recognizable subsequent events were identified.

Recent Accounting Pronouncements
 
In June 2009, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standard (“SFAS”) No. 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles, a replacement of FASB Statement No. 162.  This statement modifies the Generally Accepted Accounting Principles (“GAAP”) hierarchy by establishing only two levels of GAAP, authoritative and nonauthoritative accounting literature. Effective July 2009, the FASB Accounting Standards Codification (“ASC”), also known collectively as the “Codification,” is considered the single source of authoritative U.S. accounting and reporting standards, except for additional authoritative rules and interpretive releases issued by the SEC.  Nonauthoritative guidance and literature would include, among other things, FASB Concepts Statements, American Institute of Certified Public Accountants Issue Papers and Technical Practice Aids and accounting textbooks. The Codification was developed to organize GAAP pronouncements by topic so that users can more easily access authoritative accounting guidance.  It is organized by topic, subtopic, section, and paragraph, each of which is identified by a numerical designation.  This statement applies beginning in third quarter 2009.  All accounting references have been updated, and therefore SFAS references have been replaced with ASC references.

The guidance in Earnings Per Share Topic, ASC 260-10-45, addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting, and therefore need to be included in the earnings allocation in computing earnings per share under the two-class method. Unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method. The Company’s unvested restricted stock awards are considered “participating securities” because they contain non-forfeitable rights to dividends.  The guidance in ASC 260-10-45-59(A) is effective for the Company’s financial statements January 1, 2009, and all prior-period earnings per share data presented has been adjusted retrospectively (note 5).

 
-9-

 


(2) 
Long Term Debt and Interest Expense

Long-term debt is as follows (amounts in thousands):

   
September 30,
2009
   
December 31,
2008
 
Senior Notes
  $ 150,000     $ 150,000  
Revolver
    -       18,000  
     Total long-term debt
    150,000       168,000  
Less amounts classified as current
    -       18,000  
     Total long-term debt, less current maturities
  $ 150,000     $ 150,000  
 
Senior Notes
 
The $150.0 million of Senior Notes are due on June 1, 2012 (the Senior Notes).  The Senior Notes are unsecured and accrue interest at 9.375% per annum.  Interest payments on the Senior Notes are required semi-annually.  The Company may redeem the Senior Notes, in whole or in part, at any time on or after June 1, 2009 at redemption prices ranging from 104.86% in 2009 to 100% in 2011.

The Senior Notes limit the Company’s ability, among other things, to pay cash dividends.  In addition, if a change of control occurs (as defined in the Indenture), each holder of the Senior Notes will have the right to require the Company to repurchase all or a part of the Senior Notes at a price equal to 101% of their principal amount, plus any accrued interest to the date of repurchase.

Senior Secured Credit Facilities
 
In 2007, the Company entered into a $35.0 million Revolving Credit Agreement (the Revolver) and a Term Credit Agreement (collectively the Facilities). The Term Credit Agreement consists of a term facility (the Term Facility) and a $60.0 million letter of credit facility (the Letter of Credit Facility).  The Company repaid the outstanding balance of the Term Facility in October 2008 and used $5.2 million of the Company’s cash to secure letters of credit under the Letter of Credit Facility.  The $5.2 million of cash used to secure the letters of credit under the Letter of Credit Facility is included in other assets on the Company’s consolidated balance sheets as of September 30, 2009 and December 31, 2008.  The Letter of Credit Facility does not constitute a loan to the Company and accordingly is not available for borrowing by the Company.  The Letter of Credit Facility supports the issuance of up to $60.0 million of letters of credit by the Company.    
 
The following is a summary of significant terms of the Facilities, as amended, as of September 30, 2009.
 
 
Revolver
Letter of Credit Facility
Maturity
February 2012(c)
February 2013
Interest/Usage Rate
Company’s option of Base Rate(a) plus 1.75% or LIBOR plus 2.75% per annum
10.0% effective January 1, 2009; and 12.5% effective April 1, 2009 to the Letter of Credit Facility’s maturity date.
Maximum Availability
Lesser of $35.0 million or the borrowing base (b)
$60.0 million 
Periodic Principal Payments
None 
Not applicable 

 
(a)
Base rate is the higher of (1) the Federal Fund Rate plus 0.5%, and (2) the prime rate.
 
(b)
The Revolver’s borrowing base is the sum of up to 85% of the eligible accounts receivable plus the lesser of (1) up to 60% of eligible inventory and (2) up to 85% of the net orderly liquidation value of eligible inventory; minus reserve from time to time set by administrative agent.  
 
(c)
The outstanding balances on the Revolver, if any, is classified as current on our balance sheet based on our intent to pay the balance within the next year.


 
-10-

 


The Revolver provides that the Company can use up to $10.0 million of the Revolver availability to issue letters of credit. The Revolver provides for a 2.75% fee on any outstanding letters of credit issued under the Revolver and a 0.75% fee on the unused portion of the Revolver. The Facilities require certain mandatory prepayments from certain asset sales, incurrence of indebtedness and excess cash flow. The Facilities include financial covenants that require us to maintain a minimum Adjusted EBITDA and a maximum Leverage Ratio and limit capital expenditures, each as defined by the agreement. The Facilities are secured by substantially all of our assets.

Effective July 1, 2009, the $10.0 million minimum liquidity reserve as defined under the Company’s credit agreements was no longer required.  As of September 30, 2009, the Company has $35.0 million of borrowing capacity under the Revolver.  The Company was in compliance with all of the financial covenants under the Facilities and Senior Notes as of September 30, 2009. 

Interest Expense and Other

During the three and nine months ended September 30, 2009, the Company paid approximately $0.1 million and $7.4 million, respectively, in interest.  During the three and nine months ended September 30, 2008, the Company paid $0.7 million and $9.3 million, respectively, in interest.

In connection with mandatory tenders and repayments of a portion of the Term Facility in 2008, the Company expensed approximately $1.3 million and $2.4 million of unamortized financing charges on the Term Facility in the three and nine months ended September 30, 2008, respectively.  The write-off of the unamortized financing charges is included in charges associated with repayment and amendment of debt in the Company’s condensed consolidated financials statements.
 
In connection with amendments to the Term Facility and Letter of Credit Facility in 2008, the Company expensed $3.0 million and $4.9 million of fees paid in the three and nine months ended September 30, 2008, respectively.  These fees were included in charges associated with repayment and amendment of debt in the Company’s condensed consolidated financial statements.

(3)
Equity
 
Preferred Stock and Shareholder Rights Agreement
 
The Company has authorized 10,000,000 shares of preferred stock, $1.00 par value per share, the rights and preferences of which are established by the Board of the Directors. The Company has reserved 500,000 of these shares as Series A Participating Cumulative Preferred Stock for issuance under a shareholder rights agreement (the Rights Agreement).
 
On May 25, 2004, the Company’s shareholders approved the Rights Agreement and declared a dividend of one preferred share purchase right (Right) for each two shares of common stock outstanding.  Each Right entitles the registered holder to purchase from the Company one one-hundredth (1/100) of a share of our Series A Participating Cumulative Preferred Stock, par value $1.00 per share, at a price of $200 per one one-hundredth of a Series A preferred share.  The Rights are not exercisable until a person or group of affiliated or associated persons (an Acquiring Person) has acquired or announced the intention to acquire 20% or more of the Company’s outstanding common stock.
 
In the event that the Company is acquired in a merger or other business combination transaction or 50% or more of the Company’s consolidated assets or earning power is sold after a person or group has become an Acquiring Person, each holder of a Right, other than the Rights beneficially owned by the Acquiring Person (which will thereafter be void), will receive, upon the exercise of the Right, that number of shares of common stock of the acquiring company which at the time of such transaction will have a market value of two times the exercise price of the Right.  In the event that any person becomes an Acquiring Person, each Right holder, other than the Acquiring Person (whose Rights will become void), will have the right to receive upon exercise that number of shares of common stock having a market value of two times the exercise price of the Right.
 
The rights will expire May 25, 2014, unless that expiration date is extended. The Board of Directors may redeem the Rights at a price of $0.001 per Right at any time prior to the time that a person or group becomes an Acquiring Person. 
 
Equity Based Compensation
 
Under the 2004 Equity Incentive Plan (the Plan), participants may be granted stock options (qualified and nonqualified), stock appreciation rights (SARs), restricted stock, restricted stock units, and performance shares. The total number of shares that may be awarded under the Plan is 2,400,000, and no more than 1,000,000 of the shares reserved under the Plan may be granted in the form of incentive stock options.  The Company currently has the following types of equity awards outstanding under the Plan.

 
-11-

 


Restricted Stock Awards
 
Pursuant to the Plan certain directors and employees have been awarded restricted common stock with such shares vesting over two to five years. The related expense is amortized over the vesting period.
  
Stock Option Awards
 
Pursuant to the Plan certain directors and employees have been awarded options to purchase common stock with such options vesting ratably over three to five years. The Company’s stock options have been issued at exercise prices equal to or greater than the fair value of the Company’s stock at the date of grant.

Shares awarded or subject to purchase under the Plan that are not delivered or purchased, or revert to the Company as a result of forfeiture or termination, expiration or cancellation of an award or that are used to exercise an award or for tax withholding, will be again available for issuance under the Plan. At September 30, 2009, there were 834,730 shares available under the Plan for future awards.

The following table highlights the expense related to share-based payment for the periods ended September 30
 (in thousands):

 
   
Three months ended
   
Nine months ended
 
   
September 30,
   
September 30,
 
   
2009
   
2008
   
2009
   
2008
 
Restricted stock
  $ 1,375     $ 1,415     $ 4,293       3,376  
Stock options
    72       79       240       238  
Stock based compensation
  $ 1,447     $ 1,494     $ 4,533       3,614  
 
The fair value of the restricted stock outstanding and issued is equal to the value of shares at the grant date. At this time, the Company expects no significant forfeitures of its restricted shares or options before vesting. The fair value of stock options was estimated using the Black-Scholes option pricing model. The Company used a risk free rate of 2.6% and a volatility of 90% for options issued during 2009. The Company uses historical experience to estimate its volatility. The Company has assumed no dividends would be issued in valuing its options.

The following is a summary of restricted stock and stock option awards for the nine months ended September 30, 2009:
 
   
Restricted Stock
   
Stock Options
 
         
Weighted
       
Weighted
 
         
Average
       
Average
 
   
Number of
 
Fair Value
 
Number of
 
Exercise
 
   
Shares
   
at Issue
   
Shares
   
Price
 
December 31, 2008
    702,049     $ 22.78       261,000     $ 16.51  
Granted
    234,311       13.87       20,000       13.87  
Exercised/Vested
    (192,308 )     14.33       (5,000 )     15.00  
Canceled
    -       -       -       -  
September 30, 2009
    744,052       22.18       276,000       16.34  
 
 
The following table summarizes additional information about the stock options outstanding at September 30, 2009.
 

 
-12-

 

 

 
 
   
Range of
Exercise Price
Shares
 
Weighted
Average
Exercise
 Price
Weighted Average
 Remaining
Contractual Life
(Years)
Aggregate
Intrinsic
Value (1) 
 (in 000's)
                     
Outstanding at September 30, 2009
 
$10.80-$36.30
276,000
 
$16.34
 
5.7
 
 $      1,692
                     
Exercisable at September 30, 2009
 
$10.80-$36.30
236,004
 
$15.47
 
5.2
 
 $      1,539
                     
Vested and expected to vest at September 30, 2009
 
276,000
 
$16.34
 
5.7
 
 $      1,692
                     
(1) The difference between a stock award's exercise price and the underlying stock's market price at September 30, 2009.
      No value is assigned to stock awards whose option price exceeds the  stock's market price at September 30, 2009.
 
The following table summarizes the Company’s total unrecognized compensation cost related to stock based compensation as of September 30, 2009.
 
 
         
Weighted Average
 
         
Remaining Period
 
   
Unearned
   
Of Expense
 
   
Compensation
   
Recognition
 
   
(in 000's)
   
(in years)
 
Stock Options
  $ 486     1.9  
Restricted Stock
    11,210     2.8  
Total
  $ 11,696          
 
 
 
(4)
Commitments and Contingencies
 
The Company has established irrevocable letters of credit totaling $59.1 million as of September 30, 2009 to guarantee performance under certain contractual arrangements.  The letters of credit were issued under the Company’s Letter of Credit Facility (see note 2).
 
The Company is involved in various claims and legal actions arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Company’s condensed consolidated financial position, results of operations or liquidity.
 
(5) 
Earnings (loss) Per Share
 
Basic earnings (loss) per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated based on the weighted average number of common shares outstanding during the period and, when dilutive, potential common shares from the exercise of stock options and restricted common stock subject to continuing vesting requirements, pursuant to the treasury stock method.


 
-13-

 

The following table provides a reconciliation of the number of shares used to calculate basic and diluted earnings (loss) per share (in thousands):

   
Three Months Ended
   
Nine Months Ended
 
   
September 30,
   
September 30,
 
   
2009
   
2008
   
2009
   
2008
 
                         
Basic earnings per common share:
                       
Net income (loss)
  $ 9,808       (21,712 )   $ 54,157       (62,406 )
Income allocated to participating securities
    (265 )     -       (1,504 )     -  
Net income (loss) available to common shareholders
  $ 9,543       (21,712 )   $ 52,653       (62,406 )
                                 
Weighted average number of common and common equivalent shares outstanding:
                               
Basic number of common shares outstanding
    26,810       25,173       26,745       23,793  
Dilutive effect of unvested restricted stock
                               
(participating securities)
    744       -       764       -  
Dilutive effect of stock options
    50       -       44       -  
Diluted number of common shares and
                               
common equivalent shares outstanding
    27,604       25,173       27,553       23,793  
                                 
Basic earnings (loss) per common share
  $ 0.36       (0.86 )   $ 1.97       (2.62 )
                                 
                                 
Diluted net income per common share:
                               
Net income (loss)
  $ 9,808       (21,712 )   $ 54,157       (62,406 )
Income allocated to participating securities
    -       -       -       -  
Net income (loss) available to potential common
                               
shareholders
  $ 9,808       (21,712 )   $ 54,157       (62,406 )
                                 
Diluted net earnings (loss) per share
  $ 0.36       (0.86 )   $ 1.97       (2.62 )
 
For periods in which there was a loss, the Company has excluded from its diluted loss per share calculation options to purchase shares with underlying exercise prices less than the average market prices and the unvested portion of time vested restricted shares, as inclusion of these securities would have reduced the net loss per share.  The excluded instruments would have increased the diluted weighted average number of common and common equivalent shares outstanding by approximately 0.9 million and 0.8 million for the three and nine months September 30, 2008, respectively.  In addition, in periods of net losses, the Company has not allocated any portion of such losses to participating securities holders for its basic loss per share calculation as such participating securities holders are not contractually obligated to fund such losses.
 

 
-14-

 


(6) 
Pension Expense
 
In 2007, the Company froze pension plan benefit accruals for all employees covered under its qualified non-contributory defined benefit pension plan.   The components of net periodic benefit cost are as follows (amounts in thousands):
 
   
Three Months Ended
   
Nine Months Ended
 
   
September 30,
   
September 30,
 
   
2009
   
2008
   
2009
   
2008
 
Interest cost
  $ 915       911        2,745        2,734   
Expected return on plan assets
    (775 )     (1,089 )     (2,324 )     (3,268 )
Amortization of actuarial amount
    402             1,205        
Net periodic cost (benefit)
  $ 542       (178 )     1,626        (534 )

 
(7)
Pneumoconiosis (Black Lung) Benefits
 
The expense for black lung benefits consists of the following (amounts in thousands):
 
   
Three Months Ended
   
Nine Months Ended
 
   
September 30,
   
September 30,
 
   
2009
   
2008
   
2009
   
2008
 
                         
Service Cost
  $ 306       120        919        360   
Interest cost
    428        491        1,284        1,472   
Amortization of actuarial amount
          (141 )           (422 )
Total expense
  $ 734       470       2,203        1,410  
 
(8) 
Financial Instruments

The estimated fair value of financial instruments has been determined by the Company using available market information. As of September 30, 2009 and December 31, 2008, except for long-term debt obligations, the carrying amounts of all financial instruments approximate their fair values due to their short maturities.
 
The Company believes that the fair value of its Senior Notes was $145.1 million and $112.1 million at September 30, 2009 and December 31, 2008, respectively, based on available market information at that date.  The Company believes that the carrying amount of the Revolver approximated the fair value at December 31, 2008, due to the variable interest rate and recent amendment to that facility.  

(9) 
Segment Information

The Company has two segments based on the coal basins in which the Company operates. These basins are located in Central Appalachia (CAPP) and in the Midwest (Midwest). The Company’s CAPP operations are located in eastern Kentucky and the Company’s Midwest operations are located in southern Indiana. Coal quality, coal seam height, transportation methods and regulatory issues are generally consistent within a basin. Accordingly, market and contract pricing have been developed by coal basin. The Company manages its coal sales by coal basin, not by individual mine complex. Mine operations are evaluated based on their per-ton operating costs. Operating segment results are shown below (in thousands).

 
-15-

 


 
   
Three Months Ended
   
Nine Months Ended
 
   
September 30,
   
September 30,
 
   
2009
   
2008
   
2009
   
2008
 
Revenues
                       
CAPP
  $ 141,371       123,691       453,859       353,388  
Midwest
    26,949       28,151       78,231       74,345  
Corporate
    -       -       -       -  
Total
  $ 168,320       151,842       532,090       427,733  
                                 
Depreciation, depletion and amortization
                               
CAPP
  $ 12,616       13,700       36,424       41,087  
Midwest
    2,943       3,441       9,504       10,848  
Corporate
    13       17       39       65  
Total
  $ 15,572       17,158       45,967       52,000  
                                 
Total operating income (loss)
                               
CAPP
  $ 20,883       (6,756 )     87,422       (20,035 )
Midwest
    (1,138 )     (1,773 )     (2,623 )     (9,171 )
Corporate
    (5,624 )     (4,717 )     (17,577 )     (13,654 )
Total
  $ 14,121       (13,246 )     67,222       (42,860 )
                                 
Net earnings (loss) (1)
                               
CAPP
  $ 20,883       (6,756 )     87,422       (20,035 )
Midwest
    (1,138 )     (1,773 )     (2,623 )     (9,171 )
Corporate
    (9,937 )     (13,183 )     (30,642 )     (33,200 )
Total
  $ 9,808       (21,712 )     54,157       (62,406 )
 
(1)  Income and expense items that are not included in income (loss) from operations are not allocated to the segments.

   
September 30,
   
December 31,
 
   
2009
   
2008
 
Total Assets
           
CAPP
  $ 405,890       336,631  
Midwest
    93,198       89,792  
Corporate
    8,696       37,123  
Total
  $ 507,784       463,546  
                 
Goodwill
               
  CAPP
  $ -       -  
 Midwest
    26,492       26,492  
  Corporate
    -       -  
Total
  $ 26,492       26,492  
 

 
-16-

 

 
ITEM 2.   MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
 
The following discussion and analysis is provided to increase the understanding of, and should be read in conjunction with, the Condensed Consolidated Financial Statements and accompanying notes contained herein and the Company’s annual report on Form 10-K for the year ended December 31, 2008.

Overview

We mine, process and sell bituminous, steam- and industrial-grade coal through six operating subsidiaries (“mining complexes”) located throughout eastern Kentucky and in southern Indiana. We have two reportable business segments based on the coal basins in which we operate (Central Appalachia (CAPP) and the Midwest (Midwest)). We derived 92% of our total revenues (contract and spot) in the nine months ended September 30, 2009 from coals sales to electric utility customers and the remaining 8% from coal sales to industrial and other companies.

CAPP Segment

In Central Appalachia, our coal is primarily sold to customers in the southern portion of the South Atlantic region of the United States. The South Atlantic Region includes the states of Florida, Georgia, South Carolina, North Carolina, West Virginia, Virginia, Maryland and Delaware. We have been providing coal to customers in the South Atlantic region since our formation in 1988. For the nine months ended September 30, 2009, our CAPP segment produced 5.4 million tons of coal (including contract coal and purchased coal). Of the CAPP tons produced, 83% came from Company operated underground mines. For the nine months ended September 30, 2009, we shipped 5.1 million tons of coal and generated coal sale revenues of $453.9 million from our CAPP segment. For the nine months ended September 30, 2009, Georgia Power Company and South Carolina Public Service Authority were our largest customers, representing approximately 38% and 37% of our total revenues, respectively.  No other CAPP customer accounted for more than 10% of our total revenues. 

Midwest Segment

In the Midwest, the majority of our coal is sold in the East North Central Region, which includes the states of Illinois, Indiana, Ohio, Michigan and Wisconsin. For the nine months ended September 30, 2009, our Midwest mines produced 2.4 million tons of coal. Of the Midwest tons produced, 81% came from Company operated surface mines. For the nine months ended September 30, 2009, we shipped 2.4 million tons of coal and generated coal sale revenues of $78.2 million from our Midwest segment. For the nine months ended September 30, 2009, our Midwest segment’s largest customer represented approximately 6% of our total revenues.

Results of Operations

Three Months Ended September 30, 2009 Compared with the Three Months Ended September 30, 2008

The following tables show selected operating results for the three months ended September 30, 2009 compared to the three months ended September 30, 2008 (in thousands except per ton amounts).

 
-17-

 


   
Three Months Ended September 30,
 
   
2009
   
2008
 
   
Total
   
Per Ton
   
Total
   
Per Ton
 
Volume shipped (tons)
    2,439             2,777        
                             
Revenues
  $ 168,320       69.01     $ 151,842       54.68  
Cost of coal sold
    128,361       52.63       138,873       50.01  
Depreciation, depletion and amortization
    15,572       6.38       17,158       6.18  
Gross profit (loss)
    24,387       10.00       (4,189 )     (1.51 )
Selling, general and administrative
    10,266       4.21       9,057       3.26  
 
Volume and Revenues by Segment
 
   
Three Months Ended September 30,
 
   
2009
   
2008
 
   
CAPP
   
Midwest
   
CAPP
   
Midwest
 
                         
Volume (tons shipped)
    1,647       792       1,932       845  
                                 
Coal sales revenue
  $ 141,371       26,949       123,691       28,151  
                                 
Average sales price per ton
  $ 85.84       34.03       64.02       33.31  

Coal sales revenue for the three months ended September 30, increased from $151.8 million in 2008 to $168.3 million in 2009. This increase was due to an increase in the average sales price per ton in the CAPP region, which was partially offset by a decrease in tons shipped in the CAPP and Midwest regions.

For the three months ended September 30, 2009, the CAPP region sold approximately 1.5 million tons of coal under long-term contracts (92% of total CAPP sales volume) at an average selling price of $87.06 per ton. For the three months ended September 30, 2008, the CAPP region sold approximately 1.1 million tons of coal under long-term contracts (56% of total CAPP sales volume) at an average selling price of $52.08 per ton.  For the three months ended September 30, 2009, the CAPP region sold 0.1 million tons of coal (8% of total CAPP sales volume) under short term contracts (includes spot sales) at an average selling price of $70.43 per ton. For the three months ended September 30, 2008, the CAPP region sold 0.8 million tons of coal (44% of total CAPP sales volume) under short term contracts (includes spot sales) at an average selling price of $78.97 per ton.

The Midwest’s region sales of coal were under long term contracts for the 2009 and 2008.  For the three months ended September 30, 2009, the Midwest region sold 0.8 million tons at an average sales price of $34.03 per ton.  For the three months ended September 30, 2008, the Midwest region sold 0.8 million tons at an average sales price of $33.31 per ton.

Operating Costs by Segment
 
   
Three Months Ended September 30,
 
   
2009
   
2008
 
   
CAPP
   
Midwest
   
Corporate
   
CAPP
   
Midwest
   
Corporate
 
                                     
Cost of coal sold
  $ 103,946       24,415       -       113,187       25,686       -  
                                                 
Per ton
    63.11       30.83       -       58.59       30.40       -  
                                                 
Depreciation, depletion and amortization
    12,616       2,943       13       13,700       3,441       17  
                                                 
Per ton
    7.66       3.72       -       7.09       4.07       -  


 
-18-

 

 
Cost of Coal Sold
 
For the three months ended September 30, the cost of coal sold, excluding depreciation, depletion and amortization, decreased from $138.9 million in 2008 to $128.4 million in 2009 due to less tons sold.  Our cost per ton of coal sold in the CAPP region increased from $58.59 per ton in the 2008 period to $63.11 per ton in the 2009 period.  This $4.52 increase in cost per ton of coal sold was primarily the result of lower productivity due to increased federal and state regulatory scrutiny which caused an increase in labor costs as compared to the prior year, a decrease in tons produced in response to market conditions and the impact of increased average sales prices on our sales related costs (primarily royalties and severance taxes). The major components of this increase include an increase in the Company’s sales related costs of $3.17 per ton, preparation and loading costs of $1.41 per ton and labor and benefit costs of $0.46 per ton.  These increases were offset by a decrease in variable costs of $0.93 per ton, primarily due to a decrease in certain raw material costs.  For more detail regarding the increased regulatory activity see “Part II – Item 1A – Risk Factors – Underground mining is subject to increased regulation, and may require us to incur additional cost.”
 
Our cost per ton of coal sold in the Midwest increased $0.43 per ton from $30.43 in the 2008 period to $30.83 per ton in the 2009 period.

Depreciation, depletion and amortization
 
For the three months ended September 30, depreciation, depletion and amortization decreased from $17.2 million in 2008 to $15.6 million in 2009.  In the CAPP region, depreciation, depletion and amortization decreased $1.1 million to $12.6 million or $7.66 per ton.  In the Midwest, depreciation, depletion and amortization decreased $0.5 million to $2.9 million or $3.72 per ton.
 
Selling, general and administrative
 
Selling, general and administrative expenses increased from $9.1 million for the three months ended September 30, 2008 to $10.3 million for the three months ended September 30, 2009.  The increase was primarily due to higher letter of credit fees and an increase in certain salary and benefit amounts, including stock compensation.  The increase in the letter of credit fees is due to an increase in the usage fee under our Letter of Credit Facility.
 
Income Taxes

Our effective tax rate for the three months ended September 30, 2009 and 2008 was 4.3% and 0.0%, respectively.  Our effective income tax rate is impacted primarily by changes in the amount of the valuation allowance recorded and the effects of percentage depletion.   For 2009, we expect that a portion of our available net operating loss carryforward will be utilized to reduce current tax expense, and therefore the previously established valuation allowance will be reduced.  The criteria for recording a valuation allowance are described in “Critical Accounting Estimates – Income Taxes.”  As of September 30, 2009, we had a $47.7 million valuation allowance against gross deferred tax assets.  For 2008, our effective tax rate was impacted by the conclusion that a benefit from the expected net operating loss was not more likely than not to be realized.  Percentage depletion is an income tax deduction that is limited to a percentage of taxable income from each of our mining properties.  Because percentage depletion can be deducted in excess of cost basis in the properties, it creates a permanent difference and directly impacts the effective tax rate.  Fluctuations in the effective tax rate may occur due to the varying levels of profitability (and thus, taxable income and percentage depletion) at each of our mine locations.

Nine Months Ended September 30, 2009 Compared with the Nine Months Ended September 30, 2008

The following tables show selected operating results for the nine months ended September 30, 2009 compared to the nine months ended September 30, 2008 (in thousands except per ton amounts).

 
-19-

 

   
Nine Months Ended September 30,
 
   
2009
   
2008
 
   
Total
   
Per Ton
   
Total
   
Per Ton
 
Volume shipped (tons)
    7,477             8,591        
                             
Revenues
  $ 532,090       71.16     $ 427,733       49.79  
Cost of coal sold
    388,789       52.00       393,470       45.80  
Depreciation, depletion and amortization
    45,967       6.15       52,000       6.05  
Gross profit (loss)
    97,334       13.02       (17,737 )     (2.06 )
Selling, general and administrative
    30,112       4.03       25,123       2.92  

 
Volume and Revenues by Segment

   
Nine Months Ended September 30,
 
   
2009
   
2008
 
                         
   
CAPP
 
Midwest
   
CAPP
   
Midwest
 
                         
Volume (tons shipped)
    5,092       2,385       6,290       2,301  
                                 
Coal sales revenue
  $ 453,859       78,231       353,388       74,345  
                                 
Average sales price per ton
  $ 89.13       32.80       56.18       32.31  

Coal sales revenue for the nine months ended September 30, increased from $427.7 million in 2008 to $532.1 million in 2009. This increase was due to an increase in the average sales price per ton in the CAPP region and an increase in tons shipped in the Midwest region, which was partially offset by a decrease in tons shipped in the CAPP region.

For the nine months ended September 30, 2009, the CAPP region sold approximately 4.7 million tons of coal under long-term contracts (92% of total CAPP sales volume) at an average selling price of $89.84 per ton. For the nine months ended September 30, 2008, the CAPP region sold approximately 3.2 million tons of coal under long-term contracts (52% of total CAPP sales volume) at an average selling price of $50.65 per ton.  For the nine months ended September 30, 2009, the CAPP region sold 0.4 million tons of coal (8% of total CAPP sales volume) under short term contracts (includes spot sales) at an average selling price of $81.06 per ton. For the nine months ended September 30, 2008, the CAPP region sold 3.1 million tons of coal (48% of total CAPP sales volume) under short term contracts (includes spot sales) at an average selling price of $62.01 per ton.

The Midwest’s region sales of coal were under long term contracts for both 2009 and 2008.  For the nine months ended September 30, 2009, the Midwest region sold 2.4 million tons at an average sales price of $32.80 per ton.  For the nine months ended September 30, 2008, the Midwest region sold 2.3 million tons at an average sales price of $32.31 per ton.  

Operating Costs by Segment

   
Nine Months Ended September 30,
 
   
2009
   
2008
 
                                     
   
CAPP
   
Midwest
   
Corporate
   
CAPP
   
Midwest
   
Corporate
 
                                     
Cost of coal sold
  $ 319,382       69,407       -       322,549       70,921       -  
                                                 
Per ton
    62.72       29.10       -       51.28       30.82       -  
                                                 
Depreciation, depletion and amortization
    36,424       9,504       39       41,087       10,848       65  
                                                 
Per ton
    7.15       3.98       -       6.53       4.71       -  
 

 
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Cost of Coal Sold
 
For the nine months ended September 30, the cost of coal sold, excluding depreciation, depletion and amortization, decreased from $393.5 million in 2008 to $388.8 million in 2009 due to less tons sold.  Our cost per ton of coal sold in the CAPP region increased from $51.28 per ton in the 2008 period to $62.72 per ton in the 2009 period.  This $11.44 increase in cost per ton of coal sold was primarily the result of lower productivity due to increased federal and state regulatory scrutiny which caused an increase in labor costs as compared to prior year, a decrease in tons produced in response to market conditions, an increase in machine parts and repairs costs, and the impact of increased average sales prices on our sales related costs (primarily royalties and severance taxes). The major components of this increase include an increase in the Company’s sales related costs of $4.29 per ton, labor and benefit costs of $2.96 per ton, preparation and loading costs of $1.74 per ton and other variable costs of $1.52 per ton.    For more detail regarding the increased regulatory activity see “Part II – Item 1A – Risk Factors – Underground mining is subject to increased regulation, and may require us to incur additional cost.”

Our cost per ton of coal sold in the Midwest decreased $1.72 per ton from $30.82 in the 2008 period to $29.10 per ton in the 2009 period.  The decrease in cost per ton of coal sold was due to a $2.34 decrease in variable costs.  The decrease in the variable costs was primarily due to a decrease in diesel and explosives costs.

Depreciation, depletion and amortization
 
For the nine months ended September 30, depreciation, depletion and amortization decreased from $52.0 million in 2008 to $46.0 million in 2009.  In the CAPP region, depreciation, depletion and amortization decreased $4.7 million to $36.4 million or $7.15 per ton.  In the Midwest, depreciation, depletion and amortization decreased $1.3 million to $9.5 million or $3.98 per ton.
 
Selling, general and administrative
 
Selling, general and administrative expenses increased from $25.1 million for the nine months ended September 30, 2008 to $30.1 million for the nine months ended September 30, 2009.  The increase was primarily due to higher letter of credit fees, and an increase in certain salary and benefit amounts. The increase in the letter of credit fees is due to an increase in the usage fee under our Letter of Credit Facility.
 
Income Taxes

Our effective tax rate for the nine months ended September 30, 2009 and 2008 was 2.7% and 0.0%, respectively.  Our effective income tax rate is impacted primarily by changes in the amount of the valuation allowance recorded and the effects of percentage depletion.    For 2009, we expect that a portion of our available net operating loss carryforward will be utilized to reduce current tax expense, and therefore the previously established valuation allowance will be reduced.  The criteria for recording a valuation allowance are described in “Critical Accounting Estimates – Income Taxes.”  As of September 30, 2009, we had a $47.7 million valuation allowance against gross deferred tax assets.  For 2008, our effective tax rate was impacted by the conclusion that a benefit from the expected net operating loss was not more likely than not to be realized.    Percentage depletion is an income tax deduction that is limited to a percentage of taxable income from each of our mining properties.  Because percentage depletion can be deducted in excess of cost basis in the properties, it creates a permanent difference and directly impacts the effective tax rate.  Fluctuations in the effective tax rate may occur due to the varying levels of profitability (and thus, taxable income and percentage depletion) at each of our mine locations.

Liquidity and Capital Resources

The following chart reflects the components of our debt as of September 30, 2009 and December 31, 2008:

   
September 30,
2009
   
December 31,
2008
 
Senior Notes
  $ 150,000     $ 150,000  
Revolver
    -       18,000  
     Total long-term debt
    150,000       168,000  
Less amounts classified as current
    -       18,000  
     Total long-term debt, less current maturities
  $ 150,000     $ 150,000  
 

 
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