Coal royalty revenues for the three months ended June 30, 2004 were $17.5 million compared with $12.2 million for the same period in 2003, an increase of $5.3 million, or 43 percent. Production by our lessees increased by 1.3 million tons, or 20 percent, to 7.9 million tons in the second quarter of 2004 from 6.6 million tons in the second quarter of 2003. Average royalties per ton increased to $2.21 in the second quarter of 2004 from $1.86 in the comparable 2003 period. The increase in the average royalties per ton was primarily due to stronger market conditions for coal resulting in higher prices for coal sold by our lessees and increased production from two lessees with higher royalty rates, offset by decreased production from our New Mexico property. At the property level, these variances were primarily due to the following factors:
* Production on the Coal River property increased by 1.3 million tons and revenues increased by $3.3 million. One lessee, which utilizes longwall mining, began mining on one of our subleased properties from an adjacent property during the first quarter of 2004, which resulted in an additional 0.7 million tons of coal production, or $1.4 million in revenues in the second quarter of 2004. The addition of a mine operator and a new mine by another of our lessees contributed approximately 0.3 million tons of coal production, or $1.2 million of revenue. The commencement of operations in July 2003 on our West Coal River property contributed an additional 0.2 million tons, or $0.4 million of revenue. Increased demand also fueled a coal sales price increase in the region, which in turn resulted in a five percent increase in our average gross royalty per ton on the Coal River property, from $2.41 per ton in the second quarter of 2003 to $2.53 per ton in the second quarter of 2004.
* Production on the Wise property increased by 0.1 million tons, and revenues increased $1.3 million. The revenue increase was primarily due to increased coal sales prices fueled by a stronger demand in the region, resulting in higher price realizations by our lessees. This caused the average gross royalty per ton to increase 20 percent from $2.27 per ton in the second quarter of 2003 to $2.73 per ton in the second quarter of 2004.
* Production on the Spruce Laurel property increased by 0.1 million tons and revenues increased by $0.4 million. The revenue increase was primarily due to increased coal sales prices fueled by a stronger demand in the region. The higher royalty rates received from our lessees resulted in a 27 percent increase in the average gross royalty per ton on the Spruce Laurel property, from $1.98 per ton in the second quarter of 2003 to $2.52 per ton in the second quarter of 2004.
* These increases were offset, in part, by a decline in production from our New Mexico property, which was caused by a decrease in our lessee's market share.
Coal services revenues were $0.9 million for the three months ended June 30, 2004 compared with $0.5 million for the three months ended June 30, 2003, an increase of $0.4 million, or 73 percent. The increase was primarily the result of start-up operations at our West Coal River and Bull Creek facilities in July 2003 and February 2004, respectively.
Minimum rental revenues decreased to zero for the three months ended June 30, 2004 from $0.2 million in the comparable period of 2003. All lessees met or exceeded their minimum obligations during the second quarter of 2004.
Royalty expenses were $1.8 million for the three months ended June 30, 2004 compared with $0.4 million for the three months ended June 30, 2003, an increase of $1.4 million. This increase was the result of an increase in production by lessees on subleased properties, primarily on our Coal River property. Production on these subleased properties increased to 1.0 million tons in the second quarter of 2004 from 0.2 million tons in the second quarter of 2003, representing a 0.8 million ton increase.
Operating expenses decreased by 48 percent, to $0.3 million in the second quarter of 2004, compared with $0.5 million in the same period of 2003. We incurred expenses of $0.2 million in the second quarter of 2003 to maintain idled mines on our West Coal River property, which is part of our Coal River property. These costs were assumed by a new lessee in May 2003.
General and administrative expenses increased $0.3 million, or 15 percent, to $2.0 million in the second quarter of 2004, from $1.7 million in the same period of 2003. The increase was primarily attributable to increased consulting fees used to evaluate acquisition opportunities and increased payroll due to the addition of employees.
Depreciation, depletion and amortization for the three months ended June 30, 2004 was $4.9 million compared with $4.2 million for the same period of 2003, an increase of $0.7 million or 17 percent. This increase was a result of increased production by several of our lessees over the comparable periods and depreciation on our West Coal River and Bull Creek facilities which began start-up operations in July 2003 and February 2004, respectively. These increases were partially offset by a decline in production from our New Mexico property which has a higher cost basis.
| | Six Months
Ended June 30, | |
Percentage |
| | 2004 2003 | | Change |
| | (in thousands) | | |
| Financial Highlights | | | | |
| | | | | |
Revenues | | | | |
Coal royalties | $ 34,377 | $ 23,698 | | 45% |
Coal services | 1,726 | 1,039 | | 66% |
Timber | 295 | 749 | | (61%) |
Minimum rentals | - | 815 | | - |
Other | 297 | 221 | | 34% |
Total revenues | 36,695 | 26,522 | | 38% |
| | | | |
Operating costs and expenses | | | | |
Royalties | 3,411 | 730 | | 367% |
Operating | 386 | 1,005 | | (62%) |
Taxes other than income | 514 | 589 | | (13%) |
General and administrative | 3,959 | 3,538 | | 12% |
Depreciation, depletion and amortization | 9,621 | 8,368 | | 15% |
Total operating costs and expenses | 17,891 | 14,230 | | 26% |
| | | | | |
| Operating income | 18,804 | 12,292 | | 53% |
| | | | | |
| Interest expense, net | (2,208) | (1,512) | | 46% |
| | 16,596 | 10,780 | | 54% |
Cumulative effect of change in accounting principle | - | (107) | | - |
| | | | | |
| Net Income | $ 16,596 | $ 10,673 | | 55% |
| | | | |
Operating Statistics | | | | |
| | | | |
Royalty coal tons produced by lessees (tons in thousands) | 15,894 | 13,023 | | 22% |
Average royalty per ton ($/ton) | $ 2.16 | $ 1.82 | | 19% |
Revenues. Our revenues in the first half of 2004 were $36.7 million compared with $26.5 million for the same period in 2003, an increase of $10.2 million, or 38 percent. The increase in revenues primarily related to increased coal royalties received from our lessees.
Coal royalty revenues for the six months ended June 30, 2004 were $34.4 million compared with $23.7 million for the same period in 2003, an increase of $10.7 million, or 45 percent. Production by our lessees increased by 2.9 million tons, or 22 percent, to 15.9 million tons in the first half of 2004 from 13.0 million tons in the first half of 2003. Average royalties per ton increased to $2.16 in the first half of 2004 from $1.82 in the comparable 2003 period. The increase in the average royalties per ton was primarily due to stronger market conditions for coal resulting in higher prices for coal sold by our lessees and increased production from two lessees with higher royalty rates, offset by decreased production from our New Mexico property. At the property level, these variances were primarily due to the following factors:
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* Production on the Coal River property increased by 2.7 million tons and revenues increased by $7.1 million. One lessee, which utilizes longwall mining, began mining on one of our subleased properties from an adjacent property during the first quarter of 2004, which resulted in an additional 1.8 million tons of coal production, or $4.0 million in revenues in the first half of 2004. The addition of a mine operator and a new mine by another of our lessees contributed approximately 0.5 million tons of coal production, or $1.9 million of revenue. The commencement of operations in July 2003 on our West Coal River property also contributed an additional 0.3 million tons, or $0.7 million of revenue. Increased demand also fueled a coal sales price increase in the region, which in turn resulted in an eight percent increase in our average gross royalty per ton on the Coal River property, from $2.34 per ton in the first half of 2003 to $2.52 per ton in the first half of 2004.
* Production on the Wise property increased by 0.5 million tons and revenues increased by $2.7 million, of which approximately $1.6 million related to the average royalty rate received from our lessees. Increased coal prices fueled by stronger demand in the region resulted in higher price realizations by our lessees. This caused a 16 percent increase in the average gross royalty per ton from $2.25 per ton in the first half of 2003 to $2.60 per ton in the first half of 2004. Production increased primarily due to additional mining equipment being added by two of our lessees.
* Production on the Spruce Laurel property increased by 0.2 million tons and revenues increased by $0.9 million. The revenue increase was primarily the result of increased coal sales prices fueled by stronger demand in the region . The higher royalty rates received from our lessees resulted in a 31 percent increase in the average gross royalty per ton on the Spruce Laurel property, from $1.90 per ton in the first half of 2003 to $2.49 per ton in the first half of 2004.
* These increases were offset, in part, by a decline in production from our New Mexico property, which was caused by a decrease in our lessee's market share.
Coal services revenues were $1.7 million for the six months ended June 30, 2004 compared with $1.0 million for the six months ended June 30, 2003, an increase of $0.7 million, or 66 percent. This increase was primarily the result of start-up operations at our West Coal River and Bull Creek facilities in July 2003 and February 2004, respectively.
Timber revenues decreased to $0.3 million for the six months ended June 30, 2004 compared with $0.7 million in the first half of 2003, a decrease of $0.4 million, or 61 percent. The decrease was due to the timing of a parcel sale of our standing timber in 2003 and poor weather conditions in the second quarter of 2004.
Minimum rental revenues decreased to zero for the six months ended June 30, 2004 from $0.8 million in the comparable period of 2003. All lessees met their minimum obligations during the first six months of 2004. The $0.8 million recognized in the first half of 2003 primarily related to four leases. Each of these leases was assigned to a new lessee approved by us. The leases were amended at the time of assignment to allow the new lessees additional time to offset actual production against minimum rental payments.
Operating Costs and Expenses. Our aggregate operating costs and expenses for the first half of 2004 were $17.9 million, compared with $14.2 million for the same period in 2003, an increase of $3.7 million, or 26 percent. The increase in operating costs and expenses primarily related to increases in royalty expenses, general and administrative expenses and depreciation, depletion and amortization, offset by a decrease in operating expenses.
Royalty expenses were $3.4 million for the six months ended June 30, 2004 compared with $0.7 million for the six months ended June 30, 2003, an increase of $2.7 million. This increase was the result of an increase in production by lessees on subleased properties, primarily on our Coal River property. Production on these subleased properties increased to 2.3 million tons in the first half of 2004 from 0.4 million tons in the first half of 2003, representing a 1.9 million ton increase.
Operating expenses decreased by 62 percent, to $0.4 million in the first half of 2004 compared with $1.0 million in the same period of 2003. We incurred expenses of $0.6 million in the first half of 2003 to maintain idled mines on our West Coal River property, which is part of our Coal River property. These costs were assumed by a new lessee in May 2003.
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General and administrative expenses increased $0.5 million, or 12 percent, to $4.0 million in the first half of 2004, from $3.5 million in the same period of 2003. Approximately $0.2 million was attributable to costs related to a secondary public offering for the sale of common units held by an affiliate of Peabody Energy Corporation. The remainder is primarily attributable to increased consulting fees used to evaluate acquisition opportunities and increased payroll due to the addition of employees.
Depreciation, depletion and amortization for the six months ended June 30, 2004 was $9.6 million compared with $8.4 million for the same period of 2003, an increase of $1.2 million, or 15 percent. This increase was a result of increased production by several of our lessees over the comparable periods and depreciation on our West Coal River and Bull Creek facilities which began start-up operations in July 2003 and February 2004, respectively. These increases were partially offset by a decline in production from our New Mexico property which has a higher cost basis.
Interest Expense. Interest expense, net of interest income, was $2.2 million for the six months ended June 30, 2004 compared with $1.5 million for the same period in 2003, an increase of $0.7 million, or 46 percent. The increase was primarily due to our closing in March 2003 of a private placement of $90 million ten-year senior unsecured notes payable (the "Notes"), which bear interest at a fixed rate of 5.77 percent. Prior to the private placement, the $90 million was included on our revolving credit facility, which bears interest at a generally lower rate based on the Eurodollar rate plus an applicable margin which ranges from 1.25 to 2.25 percent.
Liquidity and Capital Resources
Since the Partnership's inception in 2001, cash generated from operations and our borrowing capacity, supplemented with the issuance of new common units, have been sufficient to meet our scheduled distributions, working capital requirements and capital expenditures. Our primary cash requirements consist of distributions to our general partner and unitholders, normal operating and administrative expenses, interest and principal payments on our long-term debt capital investment in fee-based coal handling facilities and acquisitions of new assets or businesses.
Cash Flows. Net cash provided by operating activities was $26.1 million in the first half of 2004 compared with $19.4 million in first half of 2003. The increase was largely due to increased production by our lessees and higher average gross royalties per ton.
Net cash used in investing activities was $0.5 million in the first half of 2004 compared with $1.2 million in first half of 2003. Cash used in investing activities for the six months ended June 30, 2004 primarily related to the completion of a new coal loading facility on our Coal River property in West Virginia and two smaller infrastructure projects. Net cash used in investing activities for the six months ended June 30, 2003 primarily related to additional expenditures to complete the close of an acquisition in December 2002.
Net cash used in financing activities was $20.3 million in the first half of 2004 compared with $17.1 million in first half of 2003. Distributions to partners increased to $19.3 million for the first six months of 2004 from $17.6 million in the same period of 2003. Changes in borrowings and debt issuance costs accounted for the remainder of the increase.
In July 2004, we announced a $0.02 per unit increase in our quarterly distribution payable August 13, 2004 to unitholders of record August 4, 2004, to $0.54 or $2.16 per unit on an annualized basis. This will increase distributions to partners by approximately $0.4 million in the third quarter of 2004 and in future quarters as approved by the board of directors of our general partner.
Long-Term Debt. As of June 30, 2004, we had outstanding borrowings of $90.2 million, consisting of $1.5 million borrowed under our revolving credit facility and $90.0 million of the Notes, partially offset by $1.3 million fair value of the interest rate swap described below. The current portion of the Notes as of June 30, 2004 was $3.0 million.
Hedging Activities. In March 2003, we entered into an interest rate swap agreement with a notional amount of $30 million, to hedge a portion of the fair value of the Notes. This swap is designated as a fair value hedge and has been reflected as a decrease in long-term debt of $1.3 million as of June 30, 2004, with a corresponding increase in other liabilities. Under the terms of the interest rate swap agreement, the counterparty pays us a fixed annual rate of 5.77 percent on a total notional amount of $30 million, and we pay the counterparty a variable rate equal to the floating interest rate, which is determined semi-annually and is based on the six month London Interbank Offering Rate ("LIBOR") plus 2.36 percent.
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Investment in Joint Venture. In July 2004, we acquired from affiliates of Massey Energy Company a 50 percent interest in a joint venture formed to own and operate end-user coal handling facilities. The purchase price was approximately $28.5 million and was funded through the Partnership's credit facility. The joint venture owns coal handling facilities which store and manage coal for three industrial coal consumers in the chemical, paper and lime production industries located in Tennessee, Virginia and Kentucky. A combination of fixed monthly fees and per ton throughput fees are paid by those consumers under long term leases expiring between 2007 and 2019. We expect to receive cash distributions from the joint venture of approximately $3.5 to $4.0 million per year over the next several years.
Future Capital Needs and Commitments. For the remainder of 2004, we anticipate making additional capital expenditures, excluding acquisitions, of approximately $0.1 million for coal services related projects and other property and equipment. Part of our strategy is to make acquisitions which increase cash available for distribution to our unitholders. Our ability to make these acquisitions in the future will depend in part on the availability of debt financing and on our ability to periodically use equity financing through the issuance of new units. Since completing a large acquisition in late 2002, our ability to incur additional debt has been restricted due to limitations in our debt instruments. After considering the effect of the Massey Energy Company joint venture, which we funded in July 2004, we have approximately $17.4 million of borrowing capacity available under our revolving credit facility. This limitation may necessitate the issuance of new units, as opposed to using debt, to provide a large part of the funding for acquisitions in the future.
We believe that we will continue to have adequate liquidity to fund future recurring operating and investing activities. Short-term cash requirements, such as operating expenses and quarterly distributions to our general partner and unitholders, are expected to be funded through operating cash flows. Long-term cash requirements for asset acquisitions are expected to be funded by several sources, including cash flows from operating activities, borrowings under credit facilities and the issuance of additional equity and debt securities. Our ability to complete future debt and equity offerings will depend on various factors, including prevailing market conditions, interest rates and our financial condition and credit rating at the time.
Environmental
Surface Mining Valley Fills. Over the course of the last several years, opponents of surface mining have filed three lawsuits challenging the legality of permits authorizing the construction of valley fills for the disposal of coal mining overburden under federal and state laws applicable to surface mining activities. Although two of these challenges were successful in the United States District Court for the Southern District of West Virginia (the "District Court"), the United States Court of Appeals for the Fourth Circuit overturned both of those decisions in Bragg v. Robertson in 2001 and in Kentuckians For The Commonwealth v. Rivenburgh in 2003.
A ruling on July 8, 2004, which was made by the District Court in connection with a third lawsuit, may impair our lessees' ability to obtain permits that are needed to conduct surface mining operations. In this case, Ohio Valley Environmental Coalition v. Bulen, the District Court determined that the Army Corps of Engineers (the "Corps") violated the Clean Water Act and other federal statutes when it issued Nationwide Permit 21 ("NWP21"). Section 404 of the Clean Water Act authorizes the Corps to issue general permits to allow parties to construct in navigable waters surface impoundments, valley fills and other structures that are needed for surface mining without having to obtain an individual Section 404 permit.
The District Court's order prohibits the Corps from issuing any new permits under NWP21 in areas subject to the District Court's jurisdiction, which are a number of counties in West Virginia. The ruling only voided such permits where work has not yet commenced, and the decision thus leaves some ambiguity about its potential applicability to permits that have already been issued under NWP 21 where the work has already begun. Unless this decision is overturned on appeal, companies seeking to construct surface mining impoundments or valley fills in navigable waters in the areas covered by this decision will need to apply for and obtain individual permits under Section 404 of the Clean Water Act. Obtaining individual Section 404 permits for surface mining activities is likely to substantially increase both the time for and the costs of our lessees obtaining permits. These increased permitting costs, and any delay or inability to obtain Section 404 permits, could impair our lessees' ability to produce coal and adversely affect our coal royalty revenues.
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Mine Health and Safety Laws. The operations of our lessees are subject to stringent health and safety standards that have been imposed by federal legislation since the adoption of the Mine Health and Safety Act of 1969. The Mine Health and Safety Act of 1969 resulted in increased operating costs and reduced productivity. The Mine Safety and Health Act of 1977, which significantly expanded the enforcement of health and safety standards of the Mine Health and Safety Act of 1969, imposes comprehensive health and safety standards on all mining operations. In addition, as part of the Mine Health and Safety Acts of 1969 and 1977, the Black Lung Acts require payments of benefits by all businesses conducting current mining operations to coal miners with black lung and to some beneficiaries of a miner who dies from this disease.
Environmental Compliance. The operations of our lessees are subject to environmental laws and regulations adopted by various governmental authorities in the jurisdictions in which these operations are conducted. The terms of the Partnership's coal property leases impose liability for all environmental and reclamation liabilities arising under those laws and regulations on the relevant lessees. The lessees are bonded and have indemnified the Partnership against any and all future environmental liabilities. The Partnership regularly visits coal properties under lease to monitor lessee compliance with environmental laws and regulations and to review mining activities. Management believes that the Partnership's lessees will be able to comply with existing regulations and does not expect any material impact on the Partnership's financial condition or results of operations.
We have some reclamation bonding requirements with respect to certain of our unleased and inactive properties. As of June 30, 2004, the Partnership's environmental liabilities totaled $1.6 million. Given the uncertainty of when the reclamation area will meet regulatory standards, a change in this estimate could occur in the future.
Recent Accounting Pronouncements
In June 2001, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 141, Business Combinations and SFAS No. 142, Goodwill and Other Intangible Assets, under which the Partnership classified its leased coal mineral rights as intangible assets. In April 2004, the FASB issued a FASB Staff Position ("FSP") that amends certain sections of SFAS No. 141 and No. 142 relating to the characterization of coal mineral rights. The FSP is effective for the first reporting period beginning after April 29, 2004. As allowed by the FSP, the Partnership early adopted the FSP in April 2004 and, accordingly, reclassified its leased coal mineral rights back to tangible property. The Partnership discontinued straight-line amortization upon adoption and will deplete its coal mineral rights using the units-of-production method on a prospective basis. The amount capitalized related to mineral rights represents its fair value at the time such right was acquired, less accumulated amortization. Pursuant to the FSP, for comparative presentation purposes, $4.9 million was reclassified from other noncurrent assets to property and equipment as of December 31, 2003 on the accompanying consolidated balance sheet.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Market risk is the risk of loss arising from adverse changes in market rates and prices. The principal market risks to which we are exposed are interest rate risk and coal price risks.
We are also indirectly exposed to the credit risk of our lessees. If our lessees become financially insolvent, our lessees may not be able to continue operating or meeting their minimum lease payment obligations. As a result, our coal royalty revenues could decrease due to lower production volumes.
As of June 30, 2004, $90 million of our borrowings were financed with debt which has a fixed interest rate throughout its term. In connection with this financing, we executed an interest rate derivative transaction to effectively convert the interest rate on one-third of the amount financed from a fixed rate of 5.77 percent to a floating rate of LIBOR plus 2.36 percent. The interest rate swap has been accounted for as a fair value hedge in compliance with SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended by SFAS No. 137 and SFAS No. 138.
Forward-Looking Statements
Statements included in this report which are not historical facts (including any statements concerning plans and objectives of management for future operations or economic performance, or assumptions related thereto) are forward-looking statements. In addition, the Partnership and its representatives may from time to time make other oral or written statements which are also forward-looking statements.
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Such forward-looking statements include, among other things, statements regarding development activities, capital expenditures, acquisitions and dispositions, expected commencement dates of coal mining, projected quantities of future coal production by the Partnership's lessees, costs and expenditures as well as projected demand or supply for coal and coal handling joint venture operations, which will affect sales levels, prices, royalties and distributions realized by the Partnership.
These forward-looking statements are made based upon management's current plans, expectations, estimates, assumptions and beliefs concerning future events impacting the Partnership and, therefore, involve a number of risks and uncertainties. The Partnership cautions that forward-looking statements are not guarantees and that actual results could differ materially from those expressed or implied in the forward-looking statements.
Important factors that could cause the actual results of operations or financial condition of the Partnership to differ materially from those expressed or implied in the forward-looking statements include, but are not necessarily limited to:
* the ability to acquire new coal reserves on satisfactory terms;
* the price for which such reserves can be sold;
* the volatility of commodity prices for coal;
* the ability to lease new and existing coal reserves;
* the ability of lessees to produce sufficient quantities of coal on an economic basis from the Partnership's reserves;
* the ability of lessees to obtain favorable contracts for coal produced from the Partnership's reserves;
* competition among producers in the coal industry generally;
* the extent to which the amount and quality of actual production differs from estimated recoverable proved coal reserves;
* unanticipated geological problems;
* availability of required materials and equipment;
* the occurrence of unusual weather or operating conditions including force majeure events;
* the failure of equipment or processes to operate in accordance with specifications or expectations;
* delays in anticipated start-up dates of lessees' mining operations and related coal infrastructure projects;
* environmental risks affecting the mining of coal reserves;
* the timing of receipt of necessary governmental permits by the Partnership's lessees;
* the risks associated with having or not having price risk management programs;
* labor relations and costs;
* accidents;
* changes in governmental regulation or enforcement practices, especially with respect to environmental, health and safety matters, including with
respect to emissions levels applicable to coal-burning power generators;
* uncertainties relating to the outcome of litigation regarding permitting of the disposal of coal overburden;
* risks and uncertainties relating to general domestic and international economic (including inflation and interest rates) and political conditions;
* the experience and financial condition of lessees, including their ability to satisfy their royalty, environmental, reclamation and other obligations to
the Partnership and others;
* coal handling joint venture operations;
* changes in financial market conditions; and
* other risk factors as detailed in the Partnership's Securities and Exchange Commission filings on Annual Report on Form 10-K.
Many of such factors are beyond the Partnership's ability to control or predict. Readers are cautioned not to put undue reliance on forward-looking statements.
While the Partnership periodically reassesses material trends and uncertainties affecting the Partnership's results of operations and financial condition in connection with the preparation of Management's Discussion and Analysis of Results of Operations and Financial Condition and certain other sections contained in the Partnership's quarterly, annual or other reports filed with the Securities and Exchange Commission, the Partnership does not undertake any obligation to review or update any particular forward-looking statement, whether as a result of new information, future events or otherwise.
21
Item 4. Controls and Procedures
(a) Disclosure of Controls and Procedures.
The Partnership, under the supervision, and with the participation, of its management, including its principal executive officer and principal financial officer, performed an evaluation of the design and operation of the Partnership's disclosure controls and procedures (as defined Exchange Act Rules 13a-15(e) and 15(d)-15(e)) as of the end of the period covered by this report. Based on that evaluation, the general partner's principal executive officer and principal financial officer concluded that such disclosure controls and procedures are effective to ensure that material information relating to the Partnership, including its consolidated subsidiaries, is accumulated and communicated to the Partnership's management and made known to the principal executive officer and principal financial officer, particularly during the period for which this periodic report was being prepared.
(b) Changes in Internal Control Over Financial Reporting.
No changes were made in the Partnership's internal control over financial reporting during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II. Other Information
Items 1, 2, 3, 4 and 5 are not applicable and have been omitted.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.1 Fourth Amendment to Credit Agreement dated as of July 1, 2004 among Penn Virginia Operating Co., LLC, PNC Bank, National Association, as
agent, and the other financial institutions party thereto.
10.2 Purchase and Sale Agreement by and among A. T. Massey Coal Company, Inc., Marten County Coal Corporation, Tennessee Consolidated Coal
Co., Tennessee Energy Corp. and Road Fork Development Company, Inc. and Loadout LLC and Penn Virginia Resource Partners, L. P. dated as of
July 1, 2004 (incorporated by reference to Registrant's Report on Form 8-K filed on July 20, 2004).
12 Statement of Computation of Ratio of Earnings to Fixed Charges Calculation.
31.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
(b) Reports on Form 8-K
On July 20, 2004, the Partnership furnished a Fork 8-K announcing the acquisition from affiliates of Massey Energy Company or a 50 percent interest in a joint venture formed to own and operate end-user coal handling facilities. The purchase price was approximately $28.5 million and was funded through the Partnership's credit facility.
On May 6, 2004, the Partnership furnished Form 8-K announcing its financial results for the three months ended March 31, 2004.
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SIGNATURES | | | | | | | | |
| | | | | | | | | |
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report |
to be signed on its behalf by the undersigned, thereunto duly authorized. |
| | | | | | | | | |
| | | | | | | | | |
PENN VIRGINIA RESOURCE PARTNERS, L.P. | | | | | | |
| | | | | | | | | |
Date: | August 5, 2004 | | By: | /s/ Frank A. Pici | |
| | | | | | Frank A. Pici, Vice President and | |
| | | | | | Chief Financial Officer | | |
| | | | | | | | | |
| | | | | | | | | |
Date: | August 5, 2004 | | By: | /s/ Forrest W. McNair | |
| | | | | | Forrest W. McNair, Vice President and Controller | |
| | | | | | | |
