UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-0405
DIVISION OF
CORPORATION FINANCE
October 29, 2004
via U.S. mail via facsimile
Greg A. Walker, Esq. Edward P. Tolley III, Esq.
General Counsel Simpson Thacher & Bartlett LLP
Foundation Coal Holdings, Inc. (F) (212) 455-2502
999 Corporate Boulevard
Suite 300
Linthicum Heights, Maryland 21090-2227
Re: Foundation Coal Holdings, Inc.
Form S-1/A#2 filed on October 22, 2004
File No. 333-118427
Dear Mr. Walker:
We have reviewed your filing and have the following comments. Where
indicated, we think you should revise your document in response to
these comments. If you disagree, we will consider your explanation
as to why our comment is inapplicable or a revision is unnecessary.
Please be as detailed as necessary in your explanation. In some of
our comments, we may ask you to provide us with supplemental
information so we may better understand your disclosure. After
reviewing this information, we may or may not raise additional
comments.
Please understand that the purpose of our review process is to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or on any other aspect
of our review. Feel free to call us at the telephone numbers listed
at the end of this letter.
Form S-1
General
1. We note your response to prior comments 1 and 5. You also omit
quantitative information from the new "dividend policy" disclosure.
As you prepare your response and create an updated internal
timetable, factor in a reasonable amount of time for the staff`s
review. We may have further comments upon reviewing the additional
disclosure and new information you intend to provide.
Dividend Policy, page 32
2. You indicate that you expect to declare regular cash dividends
following the offering, although you have not yet determined the
amount of the dividends. Disclose the criteria that the board
intends to consider in determining whether to declare a dividend.
Also tell us on a supplemental basis the estimated initial dividend
rate, or provide us with a range if the rate is not yet known. We
may have further comment.
Financial Statements of RAG
Note 2 - Summary of Significant Accounting Policies
Property, Plant, Equipment, Mine Development Costs..., page
F-10
3. Please remove the reference to coal reserves in the title of this
subpart of Note 2. Refer to comment 56 in our letter dated September
17, 2004.
4. We have reviewed your response to prior comment number 9 in our
letter dated October 15, 2004, along with prior comment number 55 in
our letter dated September 17, 2004, and continue to be unclear as to
your accounting policies with regard to coal assets. We note your
disclosure: "Costs of developing new mines or significantly expanding
the capacity of existing mines are capitalized and principally
amortized over the estimated useful lives of the mines using the
straight-line method." With regard to this policy, tell us the
specific nature of the expenditures involved. Also tell us why you
believe that amortization on a straight-line basis is more
appropriate than the units-of-production basis. At your option, you
may wish to arrange a telephone conference with us to discuss your
response to this comment, at which time we will determine whether a
written response continues to be necessary.
Closing Comments
Please amend your registration statement in response to these
comments. You may wish to provide us with a marked copy of the
amendment to expedite our review. Please furnish a cover letter with
your amendment that keys your responses to our comments and provides
any requested supplemental information. Detailed cover letters
greatly facilitate our review. Please understand that we may have
additional comments after reviewing your amendment and responses to
our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to be
certain that they have provided all information investors require for
an informed decision. Since the company and its management are in
possession of all facts relating to a company`s disclosure, they are
responsible for the accuracy and adequacy of the disclosures they
have made.
Notwithstanding our comments, in the event the company requests
acceleration of the effective date of the pending registration
statement, it should furnish a letter, at the time of such request,
acknowledging that
* should the Commission or the staff, acting pursuant to delegated
authority, declare the filing effective, it does not foreclose the
Commission from taking any action with respect to the filing;
* the action of the Commission or the staff, acting pursuant to
delegated authority, in declaring the filing effective, does not
relieve the company from its full responsibility for the adequacy and
accuracy of the disclosure in the filing; and
* the company may not assert this action as defense in any proceeding
initiated by the Commission or any person under the federal
securities laws of the United States.
In addition, please be advised that the Division of Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in connection with our review of your
filing or in response to our comments on your filing.
We will consider a written request for acceleration of the effective
date of the registration statement as a confirmation of the fact that
those requesting acceleration are aware of their respective
responsibilities under the Securities Act of 1933 and the Securities
Exchange Act of 1934 as they relate to the proposed public offering
of the securities specified in the above registration statement. We
will act on the request and, pursuant to delegated authority, grant
acceleration of the effective date.
We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement. Please allow
adequate time after the filing of any amendment for further review
before submitting a request for acceleration. Please provide this
request at least two business days in advance of the requested
effective date.
Please direct questions regarding accounting issues and related
disclosures to Sandra Eisen at (202) 824-1805, or in her absence to
Kim Calder, Assistant Chief Accountant, at (202) 942-1879. You may
contact Roger Baer, Mining Engineer, at (202) 942-2965 if you have
questions regarding the engineering comments. Direct all other
questions to Perry Hindin at (202) 942-2822 or, in his absence, to
Timothy Levenberg, Special Counsel, at (202) 942-1896. Please send
all correspondence to us at the following ZIP code: 20549-0405.
Sincerely,
H. Roger Schwall
Assistant Director
cc: P. Hindin
T. Levenberg
R. Baer
G. Schuler
S. Eisen
K. Calder
via facsimile
Edward P. Tolley III, Esq.
Foundation Coal Holdings, Inc.
October 29, 2004
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