Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (USD $) | ||
In Thousands, except Per Share data | 3 Months Ended
Mar. 31, 2010 | 3 Months Ended
Mar. 31, 2009 |
Revenues | ||
Produced coal revenue | $571,802 | $681,027 |
Freight and handling revenue | 74,289 | 57,782 |
Purchased coal revenue | 19,465 | 9,940 |
Other revenue | 23,083 | 19,339 |
Total revenues | 688,639 | 768,088 |
Costs and Expenses | ||
Cost of produced coal revenue | 469,936 | 545,925 |
Freight and handling costs | 74,289 | 57,782 |
Cost of purchased coal revenue | 20,623 | 5,206 |
Depreciation, depletion and amortization, applicable to: | ||
Depreciation, depletion and amortization, applicable to: Cost of produced coal revenue | 64,207 | 71,618 |
Depreciation, depletion and amortization, applicable to: Selling, general and administrative | 262 | 1,021 |
Selling, general and administrative | 28,109 | 21,870 |
Other expense | 871 | 783 |
Gain on derivative instruments | (36,453) | (8,867) |
Total costs and expenses | 621,844 | 695,338 |
Income before interest and taxes | 66,795 | 72,750 |
Interest income | 1,463 | 8,877 |
Interest expense | 25,216 | 25,236 |
Gain on short-term investment | 3,780 | 0 |
Income before taxes | 46,822 | 56,391 |
Income tax expense | (13,196) | (12,965) |
Net income | $33,626 | $43,426 |
Net income per share | ||
Net income per share - Basic | 0.39 | 0.51 |
Net income per share - Diluted | 0.39 | 0.51 |
Shares used to calculate income per share | ||
Shares used to calculate Net income per share - Basic | 86,137 | 84,859 |
Shares used to calculate Net income per share - Diluted | 87,393 | 85,182 |
Dividends per share | 0.06 | 0.06 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (USD $) | ||
In Thousands | Mar. 31, 2010
| Dec. 31, 2009
|
Current Assets | ||
Cash and cash equivalents | $1,162,937 | $665,762 |
Short-term investment | 0 | 10,864 |
Trade and other accounts receivable, less allowance for doubtful accounts | 212,005 | 121,577 |
Inventories | 273,682 | 269,826 |
Income taxes receivable | 2,815 | 10,546 |
Other current assets | 179,905 | 235,990 |
Total current assets | 1,831,344 | 1,314,565 |
Property, plant and equipment, net | 2,342,499 | 2,344,770 |
Other Noncurrent Assets [Abstract] | ||
Other noncurrent assets | 162,986 | 140,336 |
Total assets | 4,336,829 | 3,799,671 |
Current Liabilities | ||
Accounts payable, principally trade and bank overdrafts | 185,069 | 164,979 |
Short-term debt | 3,855 | 23,531 |
Payroll and employee benefits | 62,365 | 63,590 |
Other current liabilities | 206,308 | 192,835 |
Total current liabilities | 457,597 | 444,935 |
Noncurrent Liabilities | ||
Long-term debt | 1,297,913 | 1,295,555 |
Deferred income taxes | 215,783 | 209,230 |
Pension obligation | 53,547 | 55,610 |
Other noncurrent liabilities | 542,963 | 538,058 |
Total noncurrent liabilities | 2,110,206 | 2,098,453 |
Total liabilities | 2,567,803 | 2,543,388 |
Capital Stock | ||
Preferred stock - value | 0 | 0 |
Commom stock - value | 60,273 | 53,868 |
Additional capital | 1,044,173 | 568,995 |
Retained earnings | 744,548 | 716,089 |
Accumulated other comprehensive loss | (79,968) | (82,669) |
Total shareholders' equity | 1,769,026 | 1,256,283 |
Total liabilities and shareholders' equity | $4,336,829 | $3,799,671 |
Parenthetical Data to Condensed
Parenthetical Data to Condensed Consolidated Balance Sheets (USD $) | ||
In Thousands, except Share data | Mar. 31, 2010
| Dec. 31, 2009
|
Current Assets | ||
Allowance for doubtful accounts | $1,303 | $1,303 |
Capital Stock | ||
Preferred stock - autorized shares without par value | 20,000,000 | 20,000,000 |
Preferred stock - none issued | 0 | 0 |
Common stock - autorized | 150,000,000 | 150,000,000 |
Commom stock - par value | 0.625 | 0.625 |
Common stock - shares issued | 96,454,056 | 86,213,582 |
1_Condensed Consolidated Statem
Condensed Consolidated Statements of Cash Flows (USD $) | ||
In Thousands | 3 Months Ended
Mar. 31, 2010 | 3 Months Ended
Mar. 31, 2009 |
Cash Flows from Operating Activities | ||
Net income | $33,626 | $43,426 |
Adjustment to reconcile Net Income to Cash provided by operating activities: | ||
Depreciation, depletion and amortization | 64,469 | 72,639 |
Share-based compensation expense | 2,709 | 3,290 |
Amortization of bond discount | 5,013 | 4,713 |
Deferred income taxes | 3,089 | 3,129 |
Gain on disposal of assets | (1,019) | (9,318) |
Gain on reserve exchange | (2,313) | 0 |
Gain on insurance recovery | (5,810) | 0 |
Net change in fair value of derivative instruments | (28,017) | (20,688) |
Realized gain on short-term investment | (3,780) | 0 |
Asset retirement obligations accretion | 4,131 | 3,502 |
Changes in operating asset and liabilities: | ||
Increase in accounts receivable | (93,743) | (61,086) |
Increase in inventories | (3,856) | (22,893) |
Decrease in other current assets | 66,572 | 11,157 |
(Increase) decrease in other assets | (9,204) | 11,238 |
Increase (decrease) in accounts payable and bank overdrafts | 20,090 | (41,956) |
Increase in accrued income taxes | 9,468 | 9,835 |
Increase in other accrued liabilities | 12,685 | 25,395 |
Increase in other noncurrent liabilities | 2,708 | 3,007 |
Increase in pension obligation | 1,429 | 6,442 |
Asset retirement obligations payments | (1,090) | (950) |
Cash provided by operating activities | 77,157 | 40,882 |
Cash Flows from Investing Activities | ||
Capital expenditures | (56,146) | (103,704) |
Proceeds from redemption of short-term investment | 14,644 | 14,470 |
Proceeds from sale of assets | 1,019 | 13,635 |
Proceeds from insurance recovery | 9,125 | 0 |
Cash utilized by investing activities | (31,358) | (75,599) |
Cash Flows from Financing Activities | ||
Issuance of common stock | 466,759 | 0 |
Repayments of capital lease obligations | (382) | (471) |
Repayment for 6.625% senior notes | (21,949) | 0 |
Cash dividends paid | (5,167) | (5,092) |
Proceeds from stock options exercised | 11,490 | 0 |
Income tax benefit from stock option exercises | 625 | 0 |
Cash provided (utilized) by financing activities | 451,376 | (5,563) |
Increase (decrease) in cash and cash equivalents | 497,175 | (40,280) |
Cash and cash equivalents at beginning of period | 665,762 | 606,997 |
Cash and cash equivalents at end of period | $1,162,937 | $566,717 |
Significant Accounting Policies
Significant Accounting Policies | |
3 Months Ended
Mar. 31, 2010 | |
Notes To Financial Statements [Abstract] | |
Significant Accounting Policies | (1)Significant Accounting Policies Basis of Presentation The condensed consolidated financial statements do not include footnotes and certain financial information normally presented annually under accounting principles generally accepted in the United States and, therefore, should be read in conjunction with the Annual Report on Form 10-K of Massey Energy Company (we, our, us or the Company) for the year ended December 31, 2009.Accounting measurements at interim dates inherently involve greater reliance on estimates than at year-end.The results of operations for the quarterly period ended March 31, 2010 are not necessarily indicative of results that can be expected for the fiscal year ending December 31, 2010. The condensed consolidated financial statements included herein are unaudited; however, the financial statements contain all adjustments (consisting of normal recurring accruals), which, in our opinion, are necessary to present fairly our consolidated financial position at March 31, 2010, our consolidated results of operations for the three months ended March 31, 2010 and 2009, and cash flows for the three months ended March 31, 2010 and 2009, in conformity with accounting principles generally accepted in the United States (GAAP). The condensed consolidated financial statements include our accounts and the accounts of our wholly owned and sole, direct operating subsidiary, A.T. Massey Coal Company, Inc. (A.T. Massey), and A.T. Masseys wholly and majority owned direct and indirect subsidiaries.Significant intercompany transactions and accounts are eliminated in consolidation.We have no independent assets or operations.We do not have a controlling interest in any separate independent operations.Investments in business entities in which we do not have control, but have the ability to exercise significant influence over the operating and financial policies, are accounted for under the equity method. A.T. Massey and substantially all of our indirect operating subsidiaries, each such subsidiary being indirectly 100% owned by us, fully and unconditionally, jointly and severally, guarantee our obligations under the 6.875% senior notes due 2013 (6.875% Notes), the 3.25% convertible senior notes due 2015 (3.25% Notes) and the 2.25% convertible senior notes due 2024 (2.25% Notes).The subsidiaries not providing a guarantee of the 6.875% Notes, the 3.25% Notes and the 2.25% Notes are minor (as defined under Securities and Exchange Commission (SEC) Rule 3-10(h)(6) of Regulation S-X).See Note 5 to the Notes to Condensed Consolidated Financial Statements for a more complete discussion of debt. We have evaluated subsequent events through the date the financial statements were issued. Recent Accounting Pronouncements In January 2010, the FASB issued an accounting standard update, amending disclosure requirements related to Fair Value Measurements and Disclosures, as follows: 1. Significant transfers between Level 1 and 2 shall be disclosed separately, including the reasons for the transfers; and 2. Information about purchases, sales, issuances and settlements shall be disclosed separately in the reconciliation |
Inventories
Inventories | |
3 Months Ended
Mar. 31, 2010 | |
Notes To Financial Statements [Abstract] | |
Inventories | (2)Inventories Inventories consisted of the following: March 31, 2010 December 31, 2009 (In Thousands) Saleable coal $ 180,848 $ 179,081 Raw coal 40,936 36,254 Coal inventory 221,784 215,335 Supplies inventory 51,898 54,491 Total inventory $ 273,682 $ 269,826 Saleable coal represents coal ready for sale, including inventories designated for customer facilities under consignment arrangements of $29.5 million and $43.7 million at March 31, 2010 and December 31, 2009, respectively.Raw coal represents coal that generally requires further processing prior to shipment to the customer. |
Other Current Assets
Other Current Assets | |
3 Months Ended
Mar. 31, 2010 | |
Notes To Financial Statements [Abstract] | |
Other Current Assets | (3)Other Current Assets Other current assets are comprised of the following: March 31, 2010 December 31, 2009 (In Thousands) Longwall panel costs $ 5,369 $ 12,041 Deposits 71,676 133,794 Other 102,860 90,155 Total other current assets $ 179,905 $ 235,990 Deposits consist primarily of funds placed in restricted accounts with financial institutions to collateralize letters of credit that support workers compensation requirements, insurance and other obligations.As of March 31, 2010 and December 31, 2009, Deposits includes $46.0 million of funds pledged as collateral to support $45.1 million of outstanding letters of credit.In addition, Deposits at March 31, 2010 and December 31, 2009, includes $10.9 and $12.1 million of United States Treasury securities supporting various regulatory obligations, respectively.As of December 31, 2009, Deposits included a $72.0 million appeal bond we had been required to post related to the Harman litigation, which was released by the West Virginia Supreme Court of Appeals during the first quarter of 2010, as the final appeal of the case at the state level was resolved in our favor. We have committed to the divestiture of certain mining equipment assets which are not part of our short-term mining plan.At March 31, 2010, the carrying amount of assets held for sale totaled $18.9 million and is included in Other current assets. |
Property, Plant and Equipment
Property, Plant and Equipment | |
3 Months Ended
Mar. 31, 2010 | |
Notes To Financial Statements [Abstract] | |
Property, Plant and Equipment | (4)Property, Plant and Equipment Property, plant and equipment is comprised of the following: March 31, 2010 December 31, 2009 (In Thousands) Property, plant and equipment, at cost $ 4,646,728 $ 4,615,297 Accumulated depreciation, depletion and amortization (2,304,229 ) (2,270,527 ) Property, plant and equipment, net $ 2,342,499 $ 2,344,770 Property, plant and equipment includes gross assets under capital leases of $12.9 million at March 31, 2010 and December 31, 2009. During the first quarter of 2010, we exchanged certain coal reserves to third parties, recognizing a pre-tax gain of $2.3 million in Other revenue. During the first quarter of 2009, we sold our interest in certain coal reserves to a third party, recognizing a pre-tax gain of $7.1 million in Other revenue. |
Debt
Debt | |
3 Months Ended
Mar. 31, 2010 | |
Notes To Financial Statements [Abstract] | |
Debt | (5)Debt Debt is comprised of the following: March 31, 2010 December 31, 2009 (In Thousands) 6.875% senior notes due 2013, net of discount of $3,094 and $3,273, respectively $ 756,906 $ 756,727 3.25% convertible senior notes due 2015, net of discount of $127,794 and $132,628, respectively 531,269 526,435 6.625% senior notes due 2010 - 21,949 2.25% convertible senior notes due 2024 9,647 9,647 Capital lease obligations 3,946 4,328 Total debt 1,301,768 1,319,086 Amounts due within one year (3,855 ) (23,531 ) Total long-term debt $ 1,297,913 $ 1,295,555 The weighted average effective interest rate of the outstanding borrowings was 7.3% at March 31, 2010 and December 31, 2009. Convertible Debt Securities The discount associated with the 3.25% Notes is being amortized via the effective-interest method increasing the reported liability until the notes are carried at par value on their maturity date.We recognized $4.8 million and $4.5 million of pre-tax non-cash interest expense for the amortization of the discount for the three months ended March 31, 2010 and 2009, respectively. 6.625% Notes During January 2010, we redeemed at par the remaining $21.9 million of our 6.625% senior notes due 2010. |
Pension Expense
Pension Expense | |
3 Months Ended
Mar. 31, 2010 | |
Notes To Financial Statements [Abstract] | |
Pension Expense | (6) Pension Expense Net periodic pension expense for both our qualified defined benefit pension plan and nonqualified supplemental benefit pension plan is comprised of the following components: Three Months Ended March 31, 2010 2009 (In Thousands) Service cost $ 2,642 $ 2,382 Interest cost 4,444 4,172 Expected return on plan assets (4,605 ) (4,026 ) Recognized loss 3,491 4,238 Amortization of prior service cost 1 10 Net periodic pension expense $ 5,973 $ 6,776 We paid benefits to participants of the nonqualified supplemental benefit pension plan of $0.02 million for both the three month periods ended March 31, 2010 and 2009.We expect to voluntarily contribute approximately $0.3 million for benefit payments to participants for the nonqualified supplemental benefit pension plan in 2010.During the first quarter of 2010, we voluntarily contributed $4.6 million to the qualified defined benefit pension plan.No contributions were made to the qualified defined benefit pension plan in the first quarter of 2009.We expect to make voluntary contributions of approximately $20 million to the qualified defined benefit pension plan in 2010. |
Other Noncurrent Liabilities
Other Noncurrent Liabilities | |
3 Months Ended
Mar. 31, 2010 | |
Notes To Financial Statements [Abstract] | |
Other Noncurrent Liabilities | (7)Other Noncurrent Liabilities Other noncurrent liabilities is comprised of the following: March 31, 2010 December 31, 2009 (In Thousands) Reclamation $ 201,689 $ 193,361 Workers' compensation and black lung 96,332 98,227 Other postretirement benefits 156,621 155,024 Other 88,321 91,446 Total other noncurrent liabilities $ 542,963 $ 538,058 |
Black Lung and Workers' Compens
Black Lung and Workers' Compensation Expense | |
3 Months Ended
Mar. 31, 2010 | |
Notes To Financial Statements [Abstract] | |
Workers' Compensation and Black Lung Benefits | (8)Black Lung and Workers Compensation Expense Expenses for black lung benefits and workers compensation related benefits include the following components: Three Months Ended March 31, 2010 2009 (In Thousands) Self-insured black lung benefits: Service cost $ 1,000 $ 700 Interest cost 775 750 Amortization of actuarial gain (875 ) (1,025 ) Subtotal black lung benefits expense 900 425 Other workers' compensation benefits 7,473 9,369 Total black lung and workers' compensation benefits expense $ 8,373 $ 9,794 Payments for benefits, premiums and other costs related to black lung and workers compensation liabilities were $8.4 million and $11.9 million for the three months ended March 31, 2010 and 2009, respectively. The PPACA also amended previous legislation related to coal workers pneumoconiosis (black lung), providing automatic extension of awarded lifetime benefits to surviving spouses and providing changes to the legal criteria used to assess and award claims.We are currently evaluating the impact of these changes to our current population of beneficiaries and claimants and the effect on potential future claims. |
Earnings Per Share
Earnings Per Share | |
3 Months Ended
Mar. 31, 2010 | |
Notes To Financial Statements [Abstract] | |
Earnings Per Share | (11)Earnings Per Share The number of shares of our Common Stock used to calculate basic earnings per share for the three months ended March 31, 2010 and 2009, is based on the weighted average of outstanding shares of Common Stock during the respective periods.The number of shares of Common Stock used to calculate diluted earnings per share is based on the number of shares of Common Stock used to calculate basic earnings per share plus the dilutive effect of stock options and other stock-based instruments held by our employees and directors during each period and debt securities currently convertible into shares of Common Stock during each period.The effect of dilutive securities issuances in the amount of 0.1 million and 3.0 million shares of Common Stock for the three months ended March 31, 2010 and 2009, respectively, and were excluded from the calculation of diluted income per share of Common Stock, as such inclusion would result in antidilution. The computations for basic and diluted income per share are based on the following per share information: Three Months Ended March 31, 2010 2009 (In Thousands, Except Per Share Amounts) Numerator: Net income - numerator for basic $ 33,626 $ 43,426 Effect of convertible notes 44 44 Adjusted net income - numerator for diluted $ 33,670 $ 43,470 Denominator: Weighted average shares - denominator for basic 86,137 84,859 Effect of stock options/restricted stock 969 32 Effect of convertible notes 287 291 Adjusted weighted average shares - denominator for diluted 87,393 85,182 Net income per share: Basic $ 0.39 $ 0.51 Diluted $ 0.39 $ 0.51 The 2.25% Notes are convertible by holders into shares of Common Stock during certain periods under certain circumstances.As of March 31, 2010, the price per share of Common Stock had reached the specified threshold for conversion.Consequently, the 2.25% Notes are convertible until June 30, 2010, the last day of our second quarter.The 2.25% Notes may be convertible beyond this date if the specified threshold for conversion is met in subsequent quarters.If all of the 2.25% Notes outstanding at March 31, 2010 had been eligible for conversion and were converted at that date, we would have issued 287,113 shares of Common Stock. The 3.25% Notes are convertible under certain circumstances and during certain periods into (i) cash, up to the aggregate principal amount of the 3.25% Notes subject to conversion and (ii) cash, Common Stock or a combination thereof, at our election in respect to the remainder (if any) of our conversion obligation.As of March 31, 2010, the 3.25% Notes had not reached the specified threshold for conversion. Subsequent to the first quarter of 2010, we issued 6,519,034 shares of our Common Stock as partial consideration for our acquisition of Cumberland.See Note 15 to Condensed Consolidated Financial Statements for a more complete discussion. |
Derivative Instruments
Derivative Instruments | |
3 Months Ended
Mar. 31, 2010 | |
Notes To Financial Statements [Abstract] | |
Derivative Instruments | (12)Derivative Instruments Upon entering into each coal sales and coal purchase contract, we evaluate each of our contracts to determine if they qualify for the normal purchase normal sale (NPNS) exception prescribed by current accounting guidance.We use coal purchase contracts to supplement our produced and processed coal in order to provide coal to meet customer requirements under sales contracts.We are exposed to certain risks related to coal price volatility.The purchases and sales contracts we enter into allow us to mitigate a portion of the underlying risk associated with coal price volatility.The majority of our contracts qualify for the NPNS exception and therefore are not accounted for at fair value.For those contracts that do not qualify for the NPNS exception at inception or lose their designation at some point during the duration of the contract, the contracts are required to be accounted for as derivative instruments and must be recognized as assets or liabilities and measured at fair value.Those contracts that do not qualify for the NPNS exception have not been designated as cash flow or fair value hedges and, accordingly, the net change in fair value is recorded in current period earnings.Our coal sales and coal purchase contracts that do not qualify for the NPNS exception as prescribed by current accounting guidance are offset on a counterparty-by-counterparty basis for derivative instruments executed with the same counterparty under a master netting arrangement. Tons outstanding under coal purchase and coal sales contracts that do not qualify for the NPNS exception are as follows: March 31, December 31, 2010 2009 (In Thousands) Purchase contracts 1,380 980 Sales contracts 2,655 1,120 The increase in tons outstanding under coal purchase and coal sales contracts that do not qualify for the NPNS exception as of March 31, 2010, is primarily due to certain contracts identified in the first quarter of 2010 that no longer qualified for the NPNS exception, which are now accounted for at fair value. The fair values of our purchase and sales derivative contracts have been aggregated in the Condensed Consolidated Balance Sheet as of March 31, 2010 and December 31, 2009, as follows: March 31, December 31, 2010 2009 (In Thousands) Other current assets $ 44,944 $ 30,564 Other noncurrent assets 13,637 - Total aggregated derivative balance $ 58,581 $ 30,564 We have recorded net gains related to coal sales and purchase contracts that did not qualify for the NPNS exception in the Condensed Consolidated Statements of Income under the caption Gain on derivative instruments. For the three months ended March 31, 2010 2009 (In Thousands) Unrealized gains on outstanding contracts $ 28,017 $ 20,688 Realized gains/(losses) due to settlements on existing contracts 8,436 (11,821 ) Gain on derivative instruments $ 36,453 $ 8,867 |
Fair Value
Fair Value | |
3 Months Ended
Mar. 31, 2010 | |
Notes To Financial Statements [Abstract] | |
Fair Value of Financial Instruments | (13)Fair Value Financial and non-financial assets and liabilities that are required to be measured at fair value must be categorized based upon the levels of judgment associated with the inputs used to measure their fair value.Hierarchical levels directly related to the amount of subjectivity associated with the inputs used to determine the fair value of financial assets and liabilities are as follows: Level 1 Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. Level 2 Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the assets or liability through correlation with market data at the measurement date and for the duration of the instruments anticipated life. Level 3 Inputs reflect managements best estimate of what market participants would use in pricing the asset or liability at the measurement date.Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. Each major category of financial assets and liabilities measured at fair value on a recurring basis are categorized in the tables below based upon the lowest level of significant input to the valuations. March 31, 2010 (In Thousands) Level 1 Level 2 Level 3 Total Fixed income securities U.S. Treasury securities $ 10,885 $ - $ - $ 10,885 Money market funds U.S. Treasury money market fund 122,105 - - 122,105 Other money market funds 1,057,824 - - 1,057,824 Derivative instruments - 58,581 - 58,581 Short-term investment - - - - Total securities $ 1,190,814 $ 58,581 $ - $ 1,249,395 December 31, 2009 (In Thousands) Level 1 Level 2 Level 3 Total Fixed income securities U.S. Treasury securities $ 12,147 $ - $ - $ 12,147 Money market funds U.S. Treasury money market fund 74,103 - - 74,103 Other money market funds 689,470 - - 689,470 Derivative instruments - 30,564 - 30,564 Short-term investment - - 10,864 10,864 Total securities $ 775,720 $ 30,564 $ 10,864 $ 817,148 Fixed income securities and money market funds All fixed income securities are deposits, consisting of obligations of the U.S. Treasury, supporting various regulatory obligations.All investments in money market funds are cash equivalents or deposits pledged as collateral and are invested in prime money market funds and Treasury-backed funds.Included in the money market funds are $46.0 million of funds pledged as collateral to support $45.1 million of outstanding letters of credit.See Note 3 to the Notes to Condensed Consolidated Financial Statements for more information on deposits. Derivative Instruments Certain of our coal sales and coal purcha |
Contingencies
Contingencies | |
3 Months Ended
Mar. 31, 2010 | |
Notes To Financial Statements [Abstract] | |
Contingencies | (14)Contingencies Harman In December 1997, A.T. Masseys then subsidiary, Wellmore Coal Corporation (Wellmore), declared force majeure under its coal supply agreement with Harman Mining Corporation (Harman) and reduced the amount of coal to be purchased from Harman.On October 29, 1998, Harman and its sole shareholder sued A.T. Massey and five of its other subsidiaries (the Massey Defendants) in the Circuit Court of Boone County, West Virginia, alleging that the Massey Defendants tortiously interfered with Wellmores agreement with Harman, causing Harman to go out of business.On August 1, 2002, the jury awarded the plaintiffs $50 million in compensatory and punitive damages. On October 24, 2006, the Massey Defendants timely filed their Petition for Appeal to the Supreme Court of Appeals of West Virginia (WV Supreme Court).On November 21, 2007, the WV Supreme Court issued a 3-2 majority opinion reversing the judgment against the Massey Defendants and remanding the case to the Circuit Court of Boone County with directions to enter an order dismissing the case, with prejudice, in its entirety.The Harman plaintiffs filed motions asking the WV Supreme Court to conduct a rehearing in the case.On January 24, 2008, the WV Supreme Court decided to rehear the case, which was re-argued on March 12, 2008.On April 3, 2008, the WV Supreme Court again reversed the judgment against the Massey Defendants and remanded the case with direction to enter an order dismissing the case, with prejudice, in its entirety. In July 2008, the Harman plaintiffs petitioned the United States Supreme Court (the U.S. Supreme Court) to review the WV Supreme Courts dismissal of their claims. In December 2008, the U.S. Supreme Court agreed to review the case.The U.S. Supreme Court granted review based on the question of whether a justice of the WV Supreme Court should have recused himself from the appeal. The U.S. Supreme Court found that the justice should have recused himself and ruled on June 8, 2009 that the matter should be reheard by the WV Supreme Court.The WV Supreme Court heard oral arguments on the matter on September 8, 2009, and reversed the lower courts decision on November 12, 2009.The Harman plaintiffs subsequently requested that the WV Supreme Court reconsider its decision; the WV Supreme Court denied that request on March 11, 2010.The $72 million of cash we were required to post as collateral for an appeal bond was returned to us in March 2010. West Virginia Flooding Since August 2004, five of our subsidiaries have been sued in six civil actions filed in the Circuit Courts of Boone, McDowell, Mingo, Raleigh, Summers and Wyoming Counties, West Virginia, for alleged property damages and personal injuries arising out of flooding on or about May 2, 2002.These complaints cover approximately 350 plaintiffs seeking unquantified compensatory and punitive damages from approximately 35 defendants.Two of these cases have been dismissed without prejudice for failure to prosecute. The other four cases are active. Since May 2006, we and twelve of our subsidiaries have been sued in three civil actions filed in the Circuit Courts of Logan and Mingo Counties |
Subsequent Events
Subsequent Events | |
3 Months Ended
Mar. 31, 2010 | |
Notes To Financial Statements [Abstract] | |
Subsequent Events | (15)Subsequent Events Upper Big Branch Mine On April 5, 2010, an explosion occurred at the Upper Big Branch mine of our Performance resource group, tragically resulting in the deaths of 29 members.The Federal Mine Safety and Health Administration and the State of West Virginia have begun a joint investigation into the cause of the explosion.We also have commenced our own investigation.We believe these investigations will continue for the foreseeable future, and we cannot assure you as to their outcome, including whether we become subject to possible civil penalties or enforcement actions.The mine will be closed for an extended period of time, the length of which we cannot predict at this time. While further analysis will be required, we estimate the range of loss to be $80 million to $150 million for charges related to the benefits being provided to the families of the fallen miners, costs associated with the rescue and recovery efforts, insurance deductibles, and possible legal and other contingencies.It is possible that the total costs incurred related to this tragedy could exceed these estimates.In addition, the book value of equipment, mine and longwall panel development and mineral rights at the mine potentially impacted by the disaster is approximately $62 million.We will assess these assets for possible impairment once full access to the mine is restored but we do expect to recover much of the equipment.We expect that certain of these charges will be recorded in the second quarter of 2010; however, we will continue to review the amount of any necessary accruals, potential asset impairments, or other related expenses and record the charges in the period in which the determination is made and an adjustment is required. We self-insure our underground mining equipment, including our longwalls.At the Upper Big Branch mine we were operating a longwall and four underground miner sections. We do not currently carry business interruption insurance for the Upper Big Branch mine.We have third-party insurance coverage that applies to litigation risk, which coverage we believe will apply to litigation stemming from the Upper Big Branch mine explosion. Our sales plan for the balance of 2010 was to ship approximately 1.6million tons of metallurgical coal from the Upper Big Branch mine.In order to offset some of the production lost from the Upper Big Branch mine, we developed plans to increase production at other locations.These plans include more Saturday production (six days a week versus five) at all currently operating metallurgical coal mines and the addition of three continuous miner sections at existing mines within our Elk Run resource group.In total, we estimate these efforts will result in approximately 1.3 million tons of annualized metallurgical coal production.Some of the coal produced through these efforts may not be of similar enough qualities to meet the quality specifications our metallurgical coal sales contracts previously fulfilled with coal from the Upper Big Branch mine. Following the Upper Big Branch mine tragedy, several stockholder derivative suit proceedings have been filed naming us as a nominal defendant.Ea |
Common Stock Issuance
Common Stock Issuance | |
3 Months Ended
Mar. 31, 2010 | |
Notes To Financial Statements [Abstract] | |
Common Stock Issuance | (10)Common Stock Issuance On March 23, 2010, we completed a registered underwritten public offering of 9,775,000 shares of our common stock, $0.625 par value per share (Common Stock) at a public offering price of $49.75 per share, resulting in proceeds to us of $466.8 million, net of fees.In April 2010, we used the net proceeds of this offering to fund a portion of the cash consideration for the acquisition of Cumberland Resources Corporation and certain affiliated companies (Cumberland).See Note 15 to the Notes to Condensed Consolidated Financial Statements for a more complete discussion of the acquisition of Cumberland. |
Document Information
Document Information | |
3 Months Ended
Mar. 31, 2010 | |
Document Information [Text Block] | |
Document Type | 10-Q |
Document Period End Date | 2010-03-31 |
Amendment Flag | false |
Entity Information
Entity Information (USD $) | ||
3 Months Ended
Mar. 31, 2010 | Jun. 30, 2009
| |
Entity [Text Block] | ||
Entity Registrant Name | Massey Energy Co | |
Entity Central Index Key | 0000037748 | |
Current Fiscal Year End Date | --12-31 | |
Entity Well Known Seasoned Issuer | Yes | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | No | |
Entity Filer Category | Large Accelerated Filer | |
Entity Public Float | $1,670,076,824 | |
Entity Common Stock Shares Outstanding | 96,454,056 | |
Document Fiscal Year Focus | 2,010 | |
Document Fiscal Period Focus | Q1 |