Form 8-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report(Date of earliest event reported):
March 3, 2000
WESTMORELAND COAL COMPANY
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(Exact name of registrant as specified in its charter)
DELAWARE 0-752 23-1128670
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(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation or Number Identification No.)
organization)
2 North Cascade Avenue, 14th Floor, Colorado Springs, Colorado 80903
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number,
including area code: 719-442-2600
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Item 5. Other Events
The Company reported that, in an appeal by Virginia Power of an earlier
trial court decision in favor of Westmoreland regarding payments withheld by
Virginia Power, the Virginia Supreme Court has reversed that ruling insofar as
the trial court limited its inquiry to the intent of the parties at the time the
original contact was entered into in 1989, and remanded the case to trial court
for further proceedings.
Item 7. Financial Statements and Exhibits
(c) Exhibits
Exhibit 99.1 -- Press release dated March 3, 2000.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
WESTMORELAND COAL COMPANY
Date: March 6, 2000 /s/ Robert J. Jaeger
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By: Robert J. Jaeger
Senior Vice President-Finance
and Treasurer
<PAGE 1>
Exhibit 99.1
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Virginia Supreme Court
Reverses ROVA Contract Ruling And
Remands To Trial Court
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Colorado Springs, CO - March 3, 2000 -- Westmoreland Coal Company (AMEX: WLB)
reported today that, in an appeal by Virginia Power of an earlier trial court
decision in favor of Westmoreland regarding payments withheld by Virginia Power,
the Virginia Supreme Court has reversed that ruling insofar as the trial court
limited its inquiry to the intent of the parties at the time the original
contact was entered into in 1989, and remanded the case to trial court for
further proceedings. The remand indicates that the trial court should have taken
evidence on the parties' intent regarding Virginia Power's obligations under
1990 and 1991 Amendments and Restatements of the original Power Purchase
Agreement as well, even though the language of the disputed provisions never
changed. Any request for a rehearing must be filed within ten days.
The remand to the trial court will have no adverse effect on the Company's
financial results. The Company has not recognized any revenue in its financial
statements for its share of the withheld payments or projected such payments in
the future.
Virginia Power has withheld capacity payments for all Roanoke Valley Independent
Power Facility ("ROVA") Unit I forced outage days since commencement of
commercial operation in 1994. ROVA was developed and is owned by the
Westmoreland-LG&E Partnership ("WLP"), a 50/50 partnership between
Westmoreland's wholly owned subsidiary, Westmoreland Energy, Inc., and LG&E
Power Inc., a subsidiary of LG&E Energy Corp. Generally, a forced outage day is
a day when a generation facility is unable to generate a specified level of
electrical output due to unexpected operational constraints. All generating
facilities experience such forced outages, so planned availability in the
industry is less than 100%. WLP disputed Virginia Power's interpretation of the
power purchase contract and had sought payment of withheld capacity payments
plus interest. WLP obtained a ruling in its favor from the Circuit Court of the
City of Richmond, Virginia on December 2, 1998.
W. Michael Lepchitz, President of Westmoreland Energy, Inc., commented: "The
question before the trial court now will be whether the intent of the parties
changed between 1989 and 1991, even though the language of the disputed
provisions did not. The remand back to trial court is frustrating, but in no way
diminishes the correctness of our position or our resolve to see this matter
through."
<PAGE 2>
Christopher K. Seglem, Westmoreland's Chairman, President and CEO, stated:
"Since its inception, the ROVA project has been an exceptional project for us
and we are very proud of its performance. Throughout the period of the dispute,
the project has acted prudently and stepped up efforts to further reduce forced
outage days and the potential adverse financial impacts of Virginia Power's
interpretation of the contract. This delay in the final resolution of the
dispute with Virginia Power is disappointing, but due to the success of the
project's efforts, should have minimal impact on the project going forward and
will have no material adverse impact on the project's continued financial
performance. We believe the decision's principal financial impact will be to
require the Company to expend additional monies to obtain what is owed to it and
to delay the availability of the sums due which could be used for development
and other purposes. However, in February the Company obtained a distribution of
over $6 million from its overfunded Black Lung Trust, so that additional
infusion of cash is now available to support our efforts. We will be addressing
Westmoreland's growth plans and those efforts shortly in connection with our
Annual Report to Shareholders."
The ROVA facility, fueled by pulverized coal, has had an exceptional operating
history. Named a "Project of the Year" by Power Engineering and Power
Engineering International Magazines in 1997, it was honored as a "clean" project
due its innovative use of environmental controls and was also recognized by the
magazines for the significant positive economic and social impact it has had on
the local community. The facility is located in Weldon, North Carolina.
Westmoreland Coal Company is a diversified energy company headquartered in
Colorado Springs, Colorado. It is currently engaged in western Powder River
Basin coal mining through its 80%-owned subsidiary Westmoreland Resources, Inc.
and independent power production through its wholly owned subsidiary
Westmoreland Energy, Inc. The Company also holds a 20% interest in Dominion
Terminal Associates, a coal shipping and terminal facility in Newport News,
Virginia.
This press release contains "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. These statements are qualified
by important factors that could cause actual results to differ
materially from those in the forward-looking statements, including
without limitation: general economic and business conditions; the
ability of the Company to implement its business strategy; the
Company's access to financing; the Company's ability to successfully
identify new business opportunities; funding status of the UMWA
Combined Benefit Fund; the Company's ability to achieve anticipated
cost savings and profitability targets; changes in the industry;
competition; legislative developments; the Company's ability to
utilize its tax net operating losses; the ability to reinvest excess
cash at an acceptable rate of return; weather conditions; the
availability of transportation; price of alternative fuels; costs of
coal produced by other countries; and, the effect of regulatory and
legal proceedings. Other factors that could cause actual results to
differ materially from those in the forward-looking statements, or
that could contribute to such a difference, are identified in the
Company's 1998 Form 10-K/A and the third quarter 1999 Form 10-Q filed
with the SEC.
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For further information contact Diane Jones (719) 448-5814.
