EXHIBIT 13
SELECTED FINANCIAL INFORMATION
Year Ended December 31, | |||||||||||||||||||||
2003 | 2002 | 2001 | 2000 | 1999 | |||||||||||||||||
(1,2,3,4) | (5,6,7) | (8,9,10) | (8,9,11,12) | (13,14) | |||||||||||||||||
(In thousands, except per share data) | |||||||||||||||||||||
Statement of Operations Data: | |||||||||||||||||||||
Coal sales revenues | $ | 1,435,488 | $ | 1,473,558 | $ | 1,403,370 | $ | 1,342,171 | $ | 1,509,596 | |||||||||||
Income (loss) from operations | 40,371 | 29,277 | 62,456 | 73,984 | (327,026 | ) | |||||||||||||||
Income (loss) before cumulative effect of accounting change | 20,340 | (2,562 | ) | 7,209 | (12,736 | ) | (350,093 | ) | |||||||||||||
Cumulative effect of accounting change | (3,654 | ) | — | — | — | 3,813 | |||||||||||||||
Net income (loss) | 16,686 | (2,562 | ) | 7,209 | (12,736 | ) | (346,280 | ) | |||||||||||||
Preferred stock dividends | (6,589 | ) | — | — | — | — | |||||||||||||||
Net income (loss) available to common shareholders | $ | 10,097 | $ | (2,562 | ) | $ | 7,209 | $ | (12,736 | ) | $ | (346,280 | ) | ||||||||
Basic and diluted earnings (loss) per common share before cumulative effect of accounting change | $ | .26 | $ | (0.05 | ) | $ | .15 | $ | (0.33 | ) | $ | (9.12 | ) | ||||||||
Basic and diluted earnings (loss) per common share | $ | .19 | $ | (0.05 | ) | $ | .15 | $ | (0.33 | ) | $ | (9.02 | ) | ||||||||
Balance Sheet Data: | |||||||||||||||||||||
Total assets | $ | 2,387,649 | $ | 2,182,808 | $ | 2,203,559 | $ | 2,232,614 | $ | 2,332,374 | |||||||||||
Working capital | 237,007 | 37,799 | 49,813 | (37,556 | ) | (54,968 | ) | ||||||||||||||
Long-term debt, less current maturities | 700,022 | 740,242 | 767,355 | 1,090,666 | 1,094,993 | ||||||||||||||||
Other long-term obligations | 722,954 | 653,789 | 625,819 | 606,628 | 655,166 | ||||||||||||||||
Stockholders’ equity | $ | 688,035 | $ | 534,863 | $ | 570,742 | $ | 219,874 | $ | 241,295 | |||||||||||
Common Stock Data: | |||||||||||||||||||||
Dividends per share | $ | .23 | $ | .23 | $ | .23 | $ | .23 | $ | .46 | |||||||||||
Shares outstanding at year-end | 53,204 | 52,434 | 52,353 | 38,173 | 38,164 | ||||||||||||||||
Cash Flow Data: | |||||||||||||||||||||
Cash provided by operating activities | $ | 162,361 | $ | 176,417 | $ | 145,661 | $ | 135,772 | $ | 279,963 | |||||||||||
Depreciation, depletion and amortization | 158,464 | 174,752 | 177,504 | 201,512 | 235,658 | ||||||||||||||||
Capital expenditures | 132,427 | 137,089 | 123,414 | 115,080 | 98,715 | ||||||||||||||||
Dividend payments | 17,481 | 12,045 | 11,565 | 8,778 | 17,609 | ||||||||||||||||
Operating Data: | |||||||||||||||||||||
Tons sold | 100,634 | 106,691 | 109,455 | 105,519 | 111,177 | ||||||||||||||||
Tons produced | 93,966 | 99,641 | 104,471 | 100,060 | 109,524 | ||||||||||||||||
Tons purchased from third parties | 6,602 | 8,060 | 5,569 | 5,084 | 3,781 |
(1) | On January 1, 2003, the Company adopted Statement of Financial Accounting Standards No. 143, Asset Retirement Obligations. Implementation of this pronouncement resulted in a cumulative effect of accounting change of $3.7 million (net of tax). |
(2) | During the fourth quarter of 2003, the Company sold a portion of its investment in Natural Resource Partners and recognized a gain of $42.7 million. |
(3) | During 2003, the Company recognized expenses of $16.2 million for amounts earned under a long-term incentive compensation plan. |
(4) | During 2003, in connection with the Company’s repayment of Arch Western’s term loans, the Company recognized expenses of $9.0 million related to early debt extinguishment costs and costs resulting from the termination of hedge accounting for interest rate swaps. Additionally, subsequent to the termination |
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of hedge accounting for interest rate swaps, the Company recognized income of $13.4 million related to changes in the market value of the swaps. | |
(5) | During the year ended December 31, 2002, the Company settled certain coal contracts with a customer that was partially unwinding its coal supply position and desired to buy out of the remaining terms of those contracts. The settlements resulted in a pre-tax gain of $5.6 million which was recognized in other revenues in the Consolidated Statement of Operations. |
(6) | The Company recognized a pre-tax gain of $4.6 million during the year ended December 31, 2002 as a result of a workers’ compensation premium adjustment refund from the State of West Virginia. During 1998, the Company entered into the West Virginia workers’ compensation plan at one of its subsidiary operations. The subsidiary paid standard base rates until the West Virginia Division of Workers’ Compensation could determine the actual rates based on claims experience. Upon review, the Division of Workers’ Compensation refunded $4.6 million in premiums which was recognized as an adjustment to cost of coal sales in the Consolidated Statement of Operations. |
(7) | During the year ended December 31, 2002, the Company was notified by the BLM that it would receive a royalty rate reduction for certain tons mined at its West Elk location. The rate reduction applies to a specified number of tons beginning October 1, 2001 and ending no later than October 1, 2005. The retroactive portion of the refund totaled $3.3 million and has been recognized in 2002 as a reduction of cost of coal sales in the Consolidated Statements of Operations. Additionally, Canyon Fuel was notified by the BLM that it would receive a royalty rate reduction for certain tons mined at its Skyline mine. The rate reduction applies to certain tons mined from September 1, 2001 through September 1, 2006. The Company’s portion of the retroactive refund was $1.1 million, and is reflected in 2002 as income from equity investments in the Consolidated Statements of Operations. |
(8) | At the West Elk underground mine in Gunnison County, Colorado, following the detection of combustion-related gases in a portion of the mine, the Company idled its operation on January 28, 2000. On July 12, 2000, after controlling the combustion-related gases, the Company resumed production at the West Elk mine and started to ramp up to normal levels of production. The Company recognized partial pre-tax insurance settlements of $31.0 million during 2000 and a final pre-tax insurance settlement related to the event of $9.4 million during 2001. |
(9) | The IRS issued a notice outlining the procedures for obtaining tax refunds on certain excise taxes paid by the industry on export sales tonnage. The notice was the result of a 1998 federal court decision that found such taxes to be unconstitutional. The Company recorded $12.7 million of pre-tax income related to these excise tax recoveries during 2000. During 2001 the Company recorded an additional $4.6 million of pre-tax income resulting from additional favorable developments associated with these tax refunds. |
(10) | The Company recognized a $7.4 million pre-tax gain during 2001 from a state tax credit covering prior periods. |
(11) | As a result of adjustments to employee postretirement medical benefits, the Company recognized $9.8 million of pre-tax curtailment gains resulting from previously unrecognized postretirement benefit changes which occurred in prior years. |
(12) | The Company settled certain workers’ compensation liabilities with the state of West Virginia partially offset by adjusting other workers’ compensation liabilities resulting in a net pre-tax gain of $8.3 million. |
(13) | The Company changed its depreciation method on preparation plants and loadouts during the first quarter of 1999 and recorded a cumulative effect of applying the new method for years prior to 1999, which resulted in a decrease to net loss in 1999 of $3.8 million (net of tax). |
(14) | The loss from operations for 1999 reflects one-time pre-tax charges of $387.7 million related principally to the write-down of assets at its Dal-Tex, Hobet 21 and Coal-Mac operations and the write-down of certain other coal reserves in central Appalachia. Included in this charge was a $23.1 million pre-tax charge related to the restructuring of the Company’s administrative work force and the closure of mines in Illinois, Kentucky and West Virginia. |
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STOCKHOLDER INFORMATION
Common Stock |
Arch Coal’s common stock is listed and traded on the New York Stock Exchange and also has unlisted trading privileges on the Chicago Stock Exchange. The ticker symbol is ACI.
March 31, | June 30, | September 30, | December 31, | |||||||||||||
Quarter Ended | 2003 | 2003 | 2003 | 2003 | ||||||||||||
Dividends per common share | $ | .0575 | $ | .0575 | $ | .0575 | $ | .0575 | ||||||||
High | $ | 22.50 | $ | 24.55 | $ | 23.60 | $ | 32.20 | ||||||||
Low | $ | 16.50 | $ | 17.18 | $ | 19.12 | $ | 22.06 | ||||||||
Close | $ | 19.01 | $ | 22.98 | $ | 22.21 | $ | 31.17 |
March 31, | June 30, | September 30, | December 31, | |||||||||||||
Quarter Ended | 2002 | 2002 | 2002 | 2002 | ||||||||||||
Dividends per common share | $ | .0575 | $ | .0575 | $ | .0575 | $ | .0575 | ||||||||
High | $ | 23.84 | $ | 25.04 | $ | 22.57 | $ | 23.00 | ||||||||
Low | $ | 17.55 | $ | 19.88 | $ | 14.21 | $ | 19.50 | ||||||||
Close | $ | 21.20 | $ | 22.57 | $ | 16.50 | $ | 21.59 |
On March 1, 2004, Arch Coal’s common stock closed at $30.57 on the New York Stock Exchange. At that date, there were 10,325 holders of record of Arch Coal’s common stock.
Dividends |
In 2003, Arch Coal paid dividends totaling $12.1 million, or $.23 per share, on its outstanding shares of common stock. In 2002, Arch Coal paid dividends totaling $12.0 million, or $.23 per share, on its outstanding shares of common stock. There is no assurance as to the amount or payment of dividends in the future because they are dependent on Arch Coal’s future earnings, capital requirements and financial condition.
Stock Information |
Questions by stockholders regarding stockholder records, stock transfers, stock certificates, dividends, the Dividend Reinvestment Plan or other stock inquiries should be directed to:
American Stock Transfer & Trust Company
Independent Auditors |
Ernst & Young LLP
Corporate Governance and Financial Information |
Code of Business Conduct |
The Company has established a Code of Business Conduct which operates as its Code of Ethics and which applies to all salaried employees of the Company, including the Company’s CEO, CFO and Controller. The Code of Business Conduct is available on the Company’s website atwww.archcoal.com under the “Investors” section.
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Corporate Governance Guidelines |
The Board of Directors of the Company has adopted Corporate Governance Guidelines which address various matters pertaining to Director selection and duties. The Guidelines are available on the Company’s website atwww.archcoal.com under the “Investors” section.
Committee Charters |
Each of the Audit, Personnel & Compensation and Nominating & Corporate Governance Committees of the Company’s Board of Directors has adopted and maintains a written Charter. Each of these Charters is available on the Company’s website atwww.archcoal.com under the “Investors” section.
Document Copies. |
Copies of the above documents and the Company’s Securities and Exchange Commission Form 10-K are available without charge. Requests for these documents — as well as inquiries from stockholders and security analysts — should be directed to:
Investor Relations
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