SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 1999
------------------------------------------------
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number 333-59073
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P&L COAL HOLDINGS CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-4004153
- ----------------------------------- -------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
701 Market Street, St. Louis, Missouri 63101-1826
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(314) 342-3400
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
N/A
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
X Yes No
----- ------
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
<TABLE>
P&L COAL HOLDINGS CORPORATION
UNAUDITED STATEMENT OF CONDENSED CONSOLIDATED OPERATIONS
(In thousands)
Predecessor
Company
-----------------
Quarter Ended Period Ended Period Ended
June 30, 1999 June 30, 1998 May 19, 1998
----------------- ----------------- -----------------
<S> <C> <C> <C>
REVENUES
Sales $ 602,365 $ 245,017 $ 278,930
Other revenues 28,311 17,650 13,478
----------------- ----------------- -----------------
Total revenues 630,676 262,667 292,408
OPERATING COSTS AND EXPENSES
Operating costs and expenses (511,349) (212,747) (246,801)
Depreciation, depletion and amortization (64,496) (25,691) (26,218)
Selling and administrative expenses (20,488) (8,958) (12,017)
----------------- ----------------- -----------------
OPERATING PROFIT 34,343 15,271 7,372
Interest expense (49,795) (23,154) (4,222)
Interest income 1,011 1,027 1,667
----------------- ----------------- -----------------
INCOME (LOSS) BEFORE INCOME TAXES (14,441) (6,856) 4,817
Income tax (provision) benefit 2,284 1,569 (4,341)
Minority interest (1,495) - -
----------------- ----------------- -----------------
NET INCOME (LOSS) $ (13,652) $ (5,287) $ 476
================= ================= =================
See accompanying notes to unaudited condensed consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
P&L COAL HOLDINGS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
June 30, 1999 March 31, 1999
----------------- -----------------
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 90,685 $ 194,078
Accounts receivable, less allowance for doubtful accounts of
$177 for both periods 319,504 312,748
Materials and supplies 53,770 53,978
Coal inventory 198,503 195,919
Assets from power trading activities 1,036,068 1,037,300
Other current assets 36,974 38,438
----------------- -----------------
Total current assets
1,735,504 1,832,461
Property, plant, equipment and mine development, net of accumulated
depreciation, depletion and amortization of $255,000 and $193,492,
respectively 4,793,063 4,797,945
Investments and other assets 393,994 393,525
----------------- -----------------
Total assets $ 6,922,561 7,023,931
================= =================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Short-term borrowings and current maturities of long-term debt $ 63,692 $ 72,404
Income taxes payable 8,322 7,308
Liabilities from power trading activities 628,892 638,062
Accounts payable and accrued expenses 549,320 627,734
----------------- -----------------
Total current liabilities 1,250,226 1,345,508
Long-term debt, less current maturities 2,465,341 2,469,975
Deferred income taxes 777,212 780,175
Accrued reclamation and other environmental liabilities 492,227 498,032
Workers' compensation obligations 209,239 207,544
Accrued postretirement benefit costs 961,794 956,714
Obligation to industry fund 62,577 63,107
Other noncurrent liabilities 185,267 183,736
----------------- -----------------
Total liabilities 6,403,883 6,504,791
Minority interest 25,405 23,910
Stockholders' equity:
Preferred Stock - $0.01 per share par value; 10,000,000 shares
authorized, 5,000,000 shares issued and outstanding 50 50
Common Stock - Class A, $0.01 per share par value; 30,000,000 shares
authorized, 19,000,000 shares issued and outstanding 190 190
Common Stock - Class B, $0.01 per share par value; 3,000,000
shares authorized, 708,767 shares issued and outstanding 7 7
Additional paid-in capital 484,772 484,772
Employee stock loans (3,104) (2,331)
Accumulated other comprehensive income 14,801 2,333
Retained earnings (accumulated deficit) (3,443) 10,209
----------------- -----------------
Total stockholders' equity 493,273 495,230
----------------- -----------------
Total liabilities and stockholders' equity $ 6,922,561 $ 7,023,931
================= =================
See accompanying notes to unaudited condensed consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
P&L COAL HOLDINGS CORPORATION
UNAUDITED STATEMENT OF CONDENSED CONSOLIDATED CASH FLOWS
(In thousands)
Predecessor
Company
-----------------
Quarter Ended Period Ended Period Ended
June 30, 1999 June 30, 1998 May 19, 1998
----------------- ----------------- -----------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (13,652) $ (5,287) $ 476
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation, depletion and amortization 64,496 25,691 26,218
Deferred income taxes (6,839) (2,520) 2,835
Amortization of debt discount and debt issuance costs 4,382 1,072 1,379
Net gain on property and equipment disposals (151) - (328)
Minority interest 1,495 - -
Changes in current assets and liabilities, excluding
effects of acquisitions:
Accounts receivable (6,664) 59,519 (132,065)
Materials and supplies 301 511 881
Coal inventory (991) 2,862 (2,807)
Other current assets (1,585) (1,507) (10,701)
Accounts payable and accrued expenses (80,655) (47,349) 87,814
Income taxes payable 1,672 6,678 1,234
Net assets from power trading activities (7,938) (13,341) 5,289
Accrued reclamation and related liabilities (6,247) (10,085) (1,622)
Workers' compensation obligations 1,695 218 (2,156)
Accrued postretirement benefit costs 5,080 (1,696) 6,092
Obligation to industry fund (530) (42) (2,379)
Other, net (5,970) 4,549 (10,619)
----------------- ----------------- -----------------
Net cash provided by (used in) operating activities (52,101) 19,273 (30,459)
----------------- ----------------- -----------------
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant, equipment
and mine development (39,571) (39,543) (20,950)
Acquisitions, net - (1,994,635) -
Proceeds from contract restructurings - 1,084 328
Proceeds from property and equipment disposals 64 61 1,374
Proceeds from sale-leaseback transactions 5,954 - -
----------------- ----------------- -----------------
Net cash used in investing activities (33,553) (2,033,033) (19,248)
----------------- ----------------- -----------------
CASH FLOWS FROM FINANCING ACTIVITIES
Decrease in short-term borrowings (17,529) (3,596) -
Proceeds from long-term debt 5,387 1,825,439 53,597
Payments of long-term debt (5,883) (76,193) (19,423)
Capital contribution - 480,000 -
Dividends paid - - (173,330)
Proceeds from affiliated loan - - 141,000
Advances from affiliates - - 21,693
----------------- ----------------- -----------------
Net cash provided by (used in) financing activities (18,025) 2,225,650 23,537
Effect of exchange rate changes on cash and
cash equivalents 286 (328) (292)
----------------- ----------------- -----------------
Net increase (decrease) in cash and cash equivalents (103,393) 211,562 (26,462)
Cash and cash equivalents at beginning of period 194,078 - 96,821
----------------- ----------------- -----------------
Cash and cash equivalents at end of period $ 90,685 $ 211,562 $ 70,359
================= ================= =================
See accompanying notes to unaudited condensed consolidated financial statements.
</TABLE>
<PAGE>
P&L COAL HOLDINGS CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(1) Basis of Presentation
The accompanying condensed consolidated financial statements include the
consolidated operations and balance sheets of P&L Coal Holdings Corporation (the
"Company"), also known as Peabody Group. These financial statements include the
subsidiaries of Peabody Holding Company, Inc. ("Peabody Holding Company"), Gold
Fields Mining Corporation ("Gold Fields") which owns Lee Ranch Coal Company
("Lee Ranch"), Citizens Power LLC ("Citizens Power") and Peabody Resources
Holdings Pty. Ltd. ("Peabody Resources"), an Australian company (collectively,
the "Predecessor Company" or "P&L Coal Group"). Through May 19, 1998, the
Predecessor Company was a wholly owned indirect subsidiary of The Energy Group,
PLC ("The Energy Group"). Effective May 20, 1998, the Predecessor Company was
acquired by the Company. P&L Coal Holdings Corporation, a holding company with
no direct operations and nominal assets other than its investment in its
subsidiaries, was formed by Lehman Merchant Banking on February 27, 1998 for the
purpose of acquiring the Predecessor Company and had no significant activity
until the acquisition.
The accompanying condensed consolidated financial statements as of and for the
quarter ended June 30, 1999 and for the periods ended June 30 and May 19, 1998,
and the notes thereto, are unaudited. However, in the opinion of management,
these financial statements reflect all adjustments necessary for a fair
presentation of the results of the periods presented. The results of operations
for the quarter ended June 30, 1999 are not necessarily indicative of the
results to be expected for the full year.
(2) Reclassifications
Certain amounts in the prior periods have been reclassified to conform with the
report classifications for the quarter ended June 30, 1999, with no effect on
previously reported operating results or stockholders' equity.
(3) Comprehensive Income
The following table sets forth the components of comprehensive loss for the
quarter and period ended June 30, 1999 and 1998 (in thousands):
<TABLE>
Quarter Ended Period Ended
June 30, 1999 June 30, 1998
----------------- -----------------
<S> <C> <C>
Net loss $ (13,652) $ (5,287)
Foreign currency translation adjustment 12,468 (7,707)
----------------- -----------------
Comprehensive loss $ (1,184) $ (12,994)
================= =================
</TABLE>
(4) Restructuring Liability
In conjunction with the acquisition of P&L Coal Group, the Company established a
$39.4 million liability for estimated costs associated with a restructuring plan
resulting from the business combination. The estimate was comprised of costs
associated with exiting certain activities ("exit plan") and consolidating and
restructuring certain management and administrative functions ("restructuring
plan") and includes costs resulting from a plan to involuntarily terminate or
relocate employees. As of March 31, 1999, the Company finalized its involuntary
termination and employee relocation plan as well as its plans to exit certain
business activities. Costs associated with the restructuring and exit plans are
being charged against the liability as incurred. The total cost charged against
the liability for the quarter ended June 30, 1999 is $2.9 million. The
cumulative net cash outlays and non-cash costs charged against the liability
through June 30, 1999 are as follows:
<TABLE>
Cash Outlays Non-cash Costs Total
----------------- ----------------- -----------------
<S> <C> <C> <C>
Restructuring plan $ 22,220 $ - $ 22,220
Exit plan 5,887 3,648 9,535
----------------- ----------------- -----------------
$ 28,107 $ 3,648 $ 31,755
================= ================= =================
</TABLE>
<PAGE>
If the ultimate amount of cost expended is less than the remaining liability of
$7.6 million ($3.9 million related to the restructuring plan and $3.7 million
related to the exit plan), the excess will further reduce the cost of the
acquisition. Any amount of cost exceeding the amount recorded as a liability
will be included as a charge to operations in the period in which the adjustment
is determined.
(5) Business Segments
The Company's industry and geographic data for continuing operations are as
follows:
<TABLE>
(In thousands)
Quarter Ended Period Ended
June 30, 1999 June 30, 1998
----------------- -----------------
<S> <C> <C>
Revenues:
U.S. Mining $ 585,898 $ 234,575
Non U.S. Mining 41,600 19,204
Other 3,178 8,888
----------------- -----------------
$ 630,676 $ 262,667
================= =================
Operating profit (loss):
U.S. Mining $ 28,985 $ 6,537
Non U.S. Mining 10,338 3,377
Other (4,980) 5,357
----------------- -----------------
$ 34,343 $ 15,271
================= =================
Revenues:
United States $ 589,076 $ 243,463
Foreign 41,600 19,204
----------------- -----------------
$ 630,676 $ 262,667
================= =================
Operating profit:
United States $ 24,005 $ 11,894
Foreign 10,338 3,377
----------------- -----------------
$ 34,343 $ 15,271
================= =================
</TABLE>
(6) Commitments and Contingencies
Environmental Claims
Environmental claims have been asserted against a subsidiary of the Company at
18 sites in the United States. Some of these claims are based on the
Comprehensive Environmental Response Compensation and Liability Act of 1980, as
amended, and on similar state statutes. The majority of these sites are related
to activities of former subsidiaries of the Company.
The Company's policy is to accrue environmental cleanup-related costs of a
noncapital nature when those costs are believed to be probable and can be
reasonably estimated. The quantification of environmental exposures requires an
assessment of many factors, including changing laws and regulations,
advancements in environmental technologies, the quality of information available
related to specific sites, the assessment stage of each site investigation,
preliminary findings and the length of time involved in remediation or
settlement. For certain sites, the Company also assesses the financial
capability of other potentially responsible parties and, where allegations are
based on tentative findings, the reasonableness of the Company's apportionment.
The Company has not anticipated any recoveries from insurance carriers or other
potentially responsible third parties in its Consolidated Balance Sheets. The
liabilities for environmental cleanup-related costs recorded in the Consolidated
Balance Sheet at June 30, 1999 were $57.9 million. This amount represents those
costs that the Company believes are probable and reasonably estimable. In the
event that future remediation expenditures are in excess of amounts accrued,
management does not anticipate that they will have a material adverse effect on
the financial position, results of operations or liquidity of the Company.
Other
In addition, the Company at times becomes a party to claims, lawsuits,
arbitration proceedings and administrative procedures in the ordinary course of
business. Management believes that the ultimate resolution of pending or
threatened proceedings will not have a material effect on the financial
position, results of operations or liquidity of the Company.
<PAGE>
(7) Supplemental Guarantor/Non-guarantor Financial Information
In accordance with the indentures governing the Senior Notes and Senior
Subordinated Notes, certain wholly owned U.S. subsidiaries of the Company have
fully and unconditionally guaranteed the debt associated with the purchase on a
joint and several basis. Separate financial statements and other disclosures
concerning the Guarantor Subsidiaries are not presented because management
believes that such information is not material to investors. The following
condensed historical financial statement information is provided for such
Guarantor/Non-guarantor Subsidiaries.
<TABLE>
P&L Coal Holdings Corporation
Unaudited Supplemental Condensed Statements of Consolidated Operations
For the Quarter Ended June 30, 1999
(In thousands)
Parent Guarantor Non-guarantor
Company Subsidiaries Subsidiaries Eliminations Consolidated
--------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Total revenues $ - $ 504,229 $ 127,953 $ (1,506) $ 630,676
Costs and expenses:
Operating costs and expenses - (420,172) (92,683) 1,506 (511,349)
Depreciation, depletion and amortization - (50,053) (14,443) - (64,496)
Selling and administrative expenses - (16,746) (3,742) - (20,488)
Interest expense (44,194) (2,316) (3,285) - (49,795)
Interest income - 929 82 - 1,011
--------------- --------------- --------------- --------------- ---------------
Income (loss) before income taxes (44,194) 15,871 13,882 - (14,441)
Income tax (provision) benefit 10,977 (3,898) (4,795) - 2,284
Minority interest - - (1,495) - (1,495)
--------------- --------------- --------------- --------------- ---------------
Net income (loss) $ (33,217) $ 11,973 $ 7,592 $ - $ (13,652)
=============== =============== =============== =============== ===============
</TABLE>
<TABLE>
P&L Coal Holdings Corporation
Unaudited Supplemental Condensed Statements of Consolidated Operations
For the Period Ended June 30, 1998
(In thousands)
Parent Guarantor Non-guarantor
Company Subsidiaries Subsidiaries Eliminations Consolidated
--------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Total revenues $ - $ 234,733 $ 27,934 $ - $ 262,667
Costs and expenses:
Operating costs and expenses - (197,429) (15,318) - (212,747)
Depreciation, depletion and amortization - (22,049) (3,642) - (25,691)
Selling and administrative expenses - (8,713) (245) - (8,958)
Interest expense (19,701) (3,157) (296) - (23,154)
Interest income 643 374 10 - 1,027
--------------- --------------- --------------- --------------- ---------------
Income (loss) before income taxes (19,058) 3,759 8,443 - (6,856)
Income tax (provision) benefit 5,010 (988) (2,453) - 1,569
--------------- --------------- --------------- --------------- ---------------
Net income (loss) $ (14,048) $ 2,771 $ 5,990 $ - $ (5,287)
=============== =============== =============== =============== ===============
</TABLE>
<PAGE>
<TABLE>
P&L Coal Holdings Corporation
Unaudited Supplemental Condensed Consolidated Balance Sheet
As of June 30, 1999
(In thousands)
Parent Guarantor Non-guarantor
Company Subsidiaries Subsidiaries Eliminations Consolidated
--------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 20 $ 43,377 $ 47,288 $ - $ 90,685
Accounts receivable 340 234,952 106,319 (22,107) 319,504
Inventories - 201,618 50,655 - 252,273
Assets from power trading activities - - 1,036,068 - 1,036,068
Other current assets 587 21,921 14,466 - 36,974
--------------- --------------- --------------- --------------- ---------------
Total current assets 947 501,868 1,254,796 (22,107) 1,735,504
Property, plant, equipment and mine
development - at cost - 4,326,110 721,953 - 5,048,063
Less accumulated depreciation, depletion - (207,090) (47,910) - (255,000)
--------------- --------------- --------------- --------------- ---------------
- 4,119,020 674,043 - 4,793,063
Investments and other assets 2,497,627 1,460,752 160,251 (3,724,636) 393,994
--------------- --------------- --------------- --------------- ---------------
Total assets $ 2,498,574 $ 6,081,640 $ 2,089,090 $ (3,746,743) $ 6,922,561
=============== =============== =============== =============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Short-term borrowings and current
maturities of long-term debt $ 19,784 $ 21,685 $ 22,223 $ - $ 63,692
Payable to affiliates, net 206,215 (204,528) (1,687) - -
Income taxes payable - - 8,322 - 8,322
Liabilities from power trading activities - - 628,892 - 628,892
Accounts payable and accrued expenses 41,491 385,727 144,209 (22,107) 549,320
--------------- --------------- --------------- --------------- ---------------
Total current liabilities 267,490 202,884 801,959 (22,107) 1,250,226
Long-term debt, less current maturities 1,737,811 175,169 552,361 - 2,465,341
Deferred income taxes - 706,485 70,727 - 777,212
Other noncurrent liabilities - 1,885,724 25,380 - 1,911,104
--------------- --------------- --------------- --------------- ---------------
Total liabilities 2,005,301 2,970,262 1,450,427 (22,107) 6,403,883
Minority interest - - 25,405 - 25,405
Stockholders' equity 493,273 3,111,378 613,258 (3,724,636) 493,273
--------------- --------------- --------------- --------------- ---------------
Total liabilities and stockholders'
equity $ 2,498,574 $ 6,081,640 $ 2,089,090 $ (3,746,743) $ 6,922,561
=============== =============== =============== =============== ===============
</TABLE>
<PAGE>
<TABLE>
P&L Coal Holdings Corporation
Unaudited Supplemental Condensed Consolidated Balance Sheets
As of March 31, 1999
(In thousands)
Parent Guarantor Non-guarantor
Company Subsidiaries Subsidiaries Eliminations Consolidated
--------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ - $ 130,861 $ 63,217 $ - $ 194,078
Accounts receivable - 220,287 107,770 (15,309) 312,748
Inventories - 202,749 47,148 - 249,897
Assets from power trading activities - - 1,037,300 - 1,037,300
Other current assets - 24,293 14,145 - 38,438
--------------- --------------- --------------- --------------- ---------------
Total current assets - 578,190 1,269,580 (15,309) 1,832,461
Property, plant, equipment and mine
development - at cost - 4,298,203 693,234 - 4,991,437
Less accumulated depreciation,
depletion and amortization - (158,295) (35,197) - (193,492)
--------------- --------------- --------------- --------------- ---------------
- 4,139,908 658,037 - 4,797,945
Investments and other assets 2,461,362 1,464,147 158,912 (3,690,896) 393,525
--------------- --------------- --------------- --------------- ---------------
Total assets $ 2,461,362 $ 6,182,245 $ 2,086,529 $ (3,706,205) $ 7,023,931
=============== =============== =============== =============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Short-term borrowings and current
maturities of long-term debt $ 19,670 $ 21,666 $ 31,068 $ - $ 72,404
Payable to affiliates, net 152,364 (151,199) (1,165) - -
Income taxes payable - 229 7,079 - 7,308
Liabilities from power trading activities - - 638,062 - 638,062
Accounts payable and accrued expenses 56,562 440,331 146,150 (15,309) 627,734
--------------- --------------- --------------- --------------- ---------------
Total current liabilities 228,596 311,027 821,194 (15,309) 1,345,508
Long-term debt, less current maturities 1,737,536 173,364 559,075 - 2,469,975
Deferred income taxes - 711,932 68,243 - 780,175
Other noncurrent liabilities - 1,886,337 22,796 - 1,909,133
--------------- --------------- --------------- --------------- ---------------
Total liabilities 1,966,132 3,082,660 1,471,308 (15,309) 6,504,791
Minority interest - - 23,910 - 23,910
Stockholders' equity 495,230 3,099,585 591,311 (3,690,896) 495,230
--------------- --------------- --------------- --------------- ---------------
Total liabilities and stockholders'
equity $ 2,461,362 $ 6,182,245 $ 2,086,529 $ (3,706,205) $ 7,023,931
=============== =============== =============== =============== ===============
</TABLE>
<PAGE>
<TABLE>
P&L Coal Holdings Corporation
Unaudited Supplemental Condensed Statements of Consolidated Cash Flows
For the Quarter Ended June 30, 1999
(In thousands)
Parent Guarantor Non-guarantor
Company Subsidiaries Subsidiaries Eliminations Consolidated
--------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Net cash provided by (used in)
operating activities $ (53,831) $ (8,529) $ 10,259 $ - $ (52,101)
--------------- --------------- --------------- --------------- ---------------
Additions to property, plant, equipment
and mine development - (31,032) (8,539) - (39,571)
Proceeds from property and equipment
disposals - 64 - - 64
Proceeds from sale-leaseback
transactions - 5,813 141 - 5,954
--------------- --------------- --------------- --------------- ---------------
Net cash used in investing
activities - (25,155) (8,398) - (33,553)
--------------- --------------- --------------- --------------- ---------------
Decrease in short-term borrowings - - (17,529) - (17,529)
Payments of long-term debt - (471) (5,412) - (5,883)
Proceeds from long term debt - - 5,387 - 5,387
Net change in due to/from affiliates 53,851 (53,329) (522) - -
--------------- --------------- --------------- --------------- ---------------
Net cash provided by (used in)
financing activities 53,851 (53,800) (18,076) - (18,025)
Effect of exchange rate changes on
cash and equivalents - - 286 - 286
--------------- --------------- --------------- --------------- ---------------
Net increase (decrease) in cash and
cash and equivalents 20 (87,484) (15,929) - (103,393)
Cash and cash equivalents at beginning
of period - 130,861 63,217 - 194,078
--------------- --------------- --------------- --------------- ---------------
Cash and cash equivalents at end
of period $ 20 $ 43,377 $ 47,288 $ - $ 90,685
=============== =============== =============== =============== ===============
</TABLE>
<TABLE>
P&L Coal Holdings Corporation
Unaudited Supplemental Condensed Statements of Consolidated Cash Flows
For the Period Ended June 30, 1998
(In thousands)
Parent Guarantor Non-guarantor
Company Subsidiaries Subsidiaries Eliminations Consolidated
--------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Net cash provided by (used in)
operating activities $ (18,777) $ 47,346 $ (9,296) $ - $ 19,273
--------------- --------------- --------------- --------------- ---------------
Additions to property, plant, equipment
and mine development - (31,819) (7,724) - (39,543)
Acquisitions, net (1,994,635) - - - (1,994,635)
Proceeds from contract restructurings - 1,084 - - 1,084
Proceeds from property and equipment
disposals - - 61 - 61
--------------- --------------- --------------- --------------- ---------------
Net cash used in investing activities (1,994,635) (30,735) (7,663) - (2,033,033)
--------------- --------------- --------------- --------------- ---------------
Decrease in short-term borrowings - - (3,596) - (3,596)
Payments of long-term debt - (73,143) (3,050) - (76,193)
Proceeds from long term debt 1,817,390 - 8,049 - 1,825,439
Capital contribution 480,000 - - - 480,000
Net change in due to/from affiliates (113,706) 83,583 30,123 - -
--------------- --------------- --------------- --------------- ---------------
Net cash provided by financing activities 2,183,684 10,440 31,526 - 2,225,650
Effect of exchange rate changes on
cash and equivalents - - (328) - (328)
--------------- --------------- --------------- --------------- ---------------
Net increase in cash and cash equivalents 170,272 27,051 14,239 - 211,562
Cash and cash equivalents at beginning - - - - -
--------------- --------------- --------------- --------------- ---------------
Cash and cash equivalents at end
of period $ 170,272 $ 27,051 $ 14,239 $ - $ 211,562
=============== =============== =============== =============== ===============
</TABLE>
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
For purposes of comparison to prior year operating results, the results of
operations and cash flows for the three months ended June 30, 1998 reflect the
results of the Company from April 1 to June 30, 1998 (the Company acquired the
Predecessor Company on May 19, 1998 and prior to such date had no separate
operations) and the results of the Predecessor Company for April 1 to May 19,
1998.
The table presented below summarizes the results of operations and cash flows
for the Company and the Predecessor Company (P&L Coal Group) for the periods
presented. The discussion is based on a comparison of the results of the Company
for the quarter ended June 30, 1999 versus the period ended June 30, 1998 and
results for the period from April 1, 1998 to May 19, 1998 of the Predecessor
Company.
The results of operations and cash flows for the period ended June 30, 1999 may
not be directly comparable to the other periods indicated as a result of the
effects of restatement of assets and liabilities to their estimated fair market
value in accordance with the application of purchase accounting pursuant to
Accounting Principles Board Opinion No. 16.
<TABLE>
Predecessor
Company Company
----------------- -----------------
Three Months Three Months For the Period For the Period
Ended Ended May 20, 1998 - April 1, 1998 -
June 30, 1999 June 30, 1998<F1> June 30, 1998 May 19, 1998
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Tons sold (In millions) 46.5 41.5 19.8 21.7
================= ================= ================= =================
(In thousands)
Revenues:
Sales $ 602,365 $ 523,947 $ 245,017 $ 278,930
Other revenues 28,311 31,128 17,650 13,478
----------------- ----------------- ----------------- -----------------
Total revenues 630,676 555,075 262,667 292,408
Operating costs and expenses (596,333) (532,432) (247,396) (285,036)
----------------- ----------------- ----------------- -----------------
Operating profit 34,343 22,643 15,271 7,372
Interest expense (49,795) (27,376) (23,154) (4,222)
Interest income 1,011 2,694 1,027 1,667
----------------- ----------------- ----------------- -----------------
Income (loss) before income taxes (14,441) (2,039) (6,856) 4,817
Income tax (provision) benefit 2,284 (2,772) 1,569 (4,341)
Minority interest (1,495) - - -
----------------- ----------------- ----------------- -----------------
Net income (loss) $ (13,652) $ (4,811) $ (5,287) $ 476
================= ================= ================= =================
Other Data:
EBITDA<F2> $ 98,839 $ 74,552 $ 40,962 $ 33,590
Cash provided by (used in):
Operating activities (52,101) (11,186) 19,273 (30,459)
Investing activities (33,553) (2,052,281) (2,033,033) (19,248)
Financing activities (18,025) 2,249,187 2,225,650 23,537
<FN>
<F1>Represents the combination of the results of operations for the period from
May 20, 1998 to June 30, 1998 with those of the
Predecessor Company for the period from April 1 to May 19, 1998.
<F2>EBITDA is defined as income before deducting net interest expense, income
taxes, minority interest and depreciation, depletion and amortization.
EBITDA has been reduced by costs associated with reclamation, retiree
health care and workers' compensation. EBITDA is not a substitute for
operating income, net income and cash flow from operating activities as
determined in accordance with generally accepted accounting principles as a
measure of profitability or liquidity. EBITDA is presented as additional
information because management believes it to be a useful indicator of the
Company's ability to meet debt service and capital expenditure
requirements. Because EBITDA is not calculated identically by all
companies, the presentation herein may not be comparable to other similarly
titled measures of other companies. The amounts presented include EBITDA
for Citizens Power of a $3.2 million loss, a $1.3 million loss and $6.0
million profit for the quarter ended June 30, 1999, the period from April 1
to May 19, 1998 and period ended June 30, 1998, respectively.
</FN>
</TABLE>
<PAGE>
Sales. Sales increased $78.5 million for the three months ended June 30, 1999 to
$602.4 million, an increase of 15.0%. The current year results include sales
from Black Beauty Coal Company (Black Beauty) of $80.6 million, which was
accounted for under the equity method (and included as "Other Revenues") in the
prior year. The Company increased its ownership interest in Black Beauty to
81.7% effective January 1, 1999.
Sales volume increased 12.0% to 46.5 million tons for the three months ended
June 30, 1999, primarily as a result of the inclusion of Black Beauty's 4.3
million tons in the current year, and higher broker activities, partially offset
by lower volumes due to soft market conditions and longwall production
difficulties in Southern Appalachia. Sales volume from brokered coal activities
increased 36.3%, based upon higher volumes under existing contracts and
shipments from the Big Sandy region under contracts that were entered into in
the latter half of fiscal year 1999.
In addition, the Company experienced price improvements of approximately 4.5% in
the Powder River region, where a concentration on ultra low sulfur coal
production has generated higher prices. These price improvements were partially
offset by a price decline in the Midwest of approximately 6%, where market
conditions have weakened.
Other Revenues. Other revenues decreased $2.8 million compared with the first
quarter of fiscal 1999, primarily as a result of lower income from trading
activities and lower asset restructuring transaction volume at Citizens Power,
partially offset by higher coal royalty income. During the first quarter of
fiscal 2000, the Company recognized $6.0 million of revenue under a new coal
royalty agreement signed in June 1999 that included an $8.0 million
non-refundable advance royalty payment. Partially offsetting this increase was a
$2.9 million reduction in coal royalty income due to the monetization of a
royalty stream in September 1998.
Depreciation, Depletion and Amortization. Depreciation, depletion and
amortization increased approximately $12.6 million, primarily as a result of the
inclusion of Black Beauty's consolidated results in the current fiscal year and
$6.0 million of additional depletion associated with the new coal royalty
agreement discussed above.
Operating Profit. Operating profit increased $11.7 million to $34.3 million, an
increase of 51.8%. At the U.S. mining locations operating profit improved $23.7
million, which includes an increase related to Black Beauty's consolidated
results of $5.5 million. The remaining increase in the U.S. is due to a $5.1
million reduction in reclamation costs as a result of receiving regulatory
approval for a less costly reclamation plan at a Midwestern mine, lower
operating costs in the Midwest, and higher profits due to improved pricing in
the Powder River region. In Australia, operating profit improved approximately
$4.0 million primarily due to higher volumes and lower repairs and maintenance
expenses. Offsetting these improvements was a reduction in operating profit of
$8.0 million at Citizens Power, which had higher trading gains in the prior
year, and also had closed an asset restructuring transaction in the first
quarter of fiscal 1999, approximately $3.0 million of lower profits from coal
royalty income and $3.1 million of higher expenses for employee-related
liabilities as compared to the prior year.
Interest Expense. Interest expense increased $22.4 million over the prior year,
due to the inclusion of interest expense associated with the acquisition of the
Predecessor Company for the entire current year quarter. The prior year period
only includes acquisition indebtedness from May 20, 1998 forward.
Income Taxes. The Company's effective book income tax rate for the quarter ended
June 30, 1999 was 15.8%. In the prior year, the Company recorded income tax
expense of $2.8 million versus a pretax loss of $2.0 million. The prior year
income tax provision reflects higher deferred tax expense as a result of the
reduction in the deferred tax asset related to employee liabilities (without a
corresponding current tax benefit), due to an accelerated pension funding
payment made by the Company and required by the Pension Benefit Guaranty
Corporation as a condition of the acquisition. The effective tax rate is
primarily impacted by two factors - the percentage depletion tax deduction
utilized by the Company and its U.S. subsidiaries that creates an alternative
minimum tax situation, and the level of contribution by the Australian business
to the consolidated results of operations, which is taxed at a higher rate than
the U.S. Based upon these factors, the Company anticipates that adjustments to
the effective tax rate will be necessary on a quarterly basis.
Liquidity and Capital Resources
Net cash used in operating activities was $52.1 million, and cash flow was
negative as a result of the net loss for the period and reduced current
liabilities, primarily due to several large payments, including the semiannual
interest payments on the high-yield bonds, made during the first quarter. Net
cash used in investing activities was $33.6 million, primarily consisting of
$39.6 million of capital expenditures partially offset by proceeds from asset
sale-leaseback transactions. The Company had $77.9 million of committed capital
expenditures (primarily related to coal reserves and mining machinery) at June
30, 1999. It is anticipated these capital expenditures will be funded through
available cash and credit facilities.
Net cash used in financing activities was $18.0 million, reflecting repayments
of short-term borrowings by Peabody Resources and Black Beauty.
<PAGE>
As of June 30, 1999, the Company had total indebtedness of $2,529.0 million,
consisting of the following:
(In millions)
Term loans under senior credit facilities $ 840.0
9.625% Senior Subordinated Notes due 2008 ("Senior
Subordinated Notes") 498.7
8.875% Senior Notes due 2008 ("Senior Notes") 398.9
Non-Recourse Debt (Citizens Power) 328.6
5.000% Subordinated Note (Peabody Holding Company) 192.8
Senior unsecured notes under various agreements (Black 107.1
Beauty Coal Company)
Project finance facility (Peabody Resources) 71.5
Bank loan facility (Black Beauty Coal Company) 37.6
Capital lease obligations 28.4
Other 25.4
===============
$ 2,529.0
===============
The Senior Credit Facilities include a Revolving Credit Facility that provides
for aggregate borrowings of up to $150.0 million and letters of credit of up to
$330.0 million. As of June 30, 1999, the Company had no borrowings outstanding
under the Revolving Credit Facility. Interest rates on the revolving loans under
the Revolving Credit Facility are based on the Base Rate (as defined in the
Senior Credit Facilities), or LIBOR (as defined in the Senior Credit Facilities)
at the Company's option. On October 1, 1998, the Company entered into two
interest rate swaps to fix the interest cost on $500 million of long-term debt
outstanding under the Term Loan Facility. The Company will pay a fixed rate of
approximately 7.0% on $300 million of such long-term debt for a period of three
years, and on $200 million of such long-term debt for two years. The Revolving
Credit Facility commitment matures in fiscal year 2005.
The following table sets forth the amortization schedule for the Senior Credit
Facilities:
(In millions)
Term Loan A Term Loan B
----------------- -----------------
Fiscal Year:
2000 $ - $ -
2001 10.00 -
2002 42.50 -
2003 68.75 -
2004 93.75 -
2005 25.00 64.00
2006 - 408.25
2007 - 127.75
----------------- -----------------
$ 240.00 $ 600.00
================= =================
The indentures governing the Senior Notes and Senior Subordinated Notes permit
the Company and its Restricted Subsidiaries (which include all subsidiaries of
the Company except Citizens Power and its subsidiaries) to incur additional
indebtedness, including secured indebtedness, subject to certain limitations. In
addition, among other customary restrictive covenants, the indentures prohibit
the Company and its Restricted Subsidiaries from creating or otherwise causing
any encumbrance or restriction on the ability of any Restricted Subsidiary that
is not a Guarantor to pay dividends or to make certain other upstream payments
to the Company or any of its Restricted Subsidiaries (subject to certain
exceptions). The Revolving Credit Facility and related Term Loan Facility also
contain certain restrictions and limitations including but not limited to
financial covenants that will require the Company to maintain and achieve
certain levels of financial performance and limit the payment of cash dividends
and similar restricted payments. In addition, the Senior Credit Facilities
prohibit the Company from allowing its Restricted Subsidiaries (which include
all Guarantors) to create or otherwise cause any encumbrance or restriction on
the ability of any such Restricted Subsidiary to pay any dividends or make
certain other upstream payments subject to certain exceptions. The Company was
in compliance with all of the restrictive covenants of its loan agreements as of
June 30, 1999.
Other
Mine Closure. In July 1999, the Company announced the closing of the Marissa
Operating Unit in Illinois effective October 1999. The Marissa Operating Unit,
which shipped 4.4 million tons of coal in fiscal year 1999, was unsuccessful in
attempts to secure additional business after its principal customer began
shifting its purchases to lower-sulfur coal from the Company's Powder River
operations. The Company does not anticipate a material impact on its results of
operations or financial condition from the mine closure since this closure had
been anticipated to take place within this time frame. The Company is evaluating
the possibility of closing other mines, primarily in the Midwest, due to market
conditions. Such closures are not expected to have a material impact on the
Company's results of operations or financial condition.
<PAGE>
Recent Accounting Pronouncements. In June 1998, the Financial Accounting
Standards Board issued SFAS No. 133, "Accounting for Derivative Instruments and
Hedging Activities." SFAS No. 133 requires the recognition of all derivatives as
assets or liabilities within the balance sheet, and requires both the
derivatives and the underlying exposure to be recorded at fair value. Any gain
or loss resulting from changes in fair value will be recorded as part of the
results of operations, or as a component of comprehensive income or loss,
depending upon the intended use of the derivative. The Financial Accounting
Standards Board recently issued SFAS No. 137, which defers the effective date of
SFAS No. 133 to all fiscal quarters of fiscal years beginning after June 15,
2000 (effective April 1, 2001 for the Company). The Company is evaluating the
requirements of this Statement and has not determined the impact of adoption on
the consolidated financial statements.
Impact of Year 2000 Issue. The Company is preparing for the impact of the
arrival of the Year 2000 on its business, as well as on the businesses of its
customers, suppliers and business partners. The "Year 2000 Issue" is a term used
to describe the problems created by systems that are unable to accurately
interpret dates after December 31, 1999. These problems are derived
predominantly from the fact that many software programs have historically
categorized the "year" in a two-digit format. The Year 2000 Issue creates
potential risks for the Company, including potential problems in the Company's
products as well as in the Information Technology ("IT") and non-IT systems that
the Company uses in its business operations. The Company may also be exposed to
risks from third parties with whom the Company interacts who fail to adequately
address their own Year 2000 Issues.
The Company's State of Readiness - In 1998, the Company organized a company-wide
Year 2000 compliance project, staffed with a diverse team of personnel
representing all levels of the organization and also retained an outside
consulting firm to assist in the year 2000 risk assessment and assist in
ensuring the proper project structure and methodology to address the Year 2000
issue. With respect to IT systems, an assessment was completed and the Company
is nearing the completion of the remediation, testing and implementation phases
of the project whereby it is updating or replacing existing applications. These
phases of the project began in calendar 1998 and will continue in calendar 1999.
Software modifications are estimated to be more than 90% complete and the goal
of management is to have all systems and equipment Year 2000 ready by October
1999.
Additionally, the Company also conducted an assessment of its non-IT technology
which consists primarily of embedded technology at the Company's mining
facilities (e.g., security systems, mine monitoring systems, plant operating
systems, coal loading and scale facilities, equipment, etc.). The Company is
also nearing the completion of the remediation, testing and implementation
phases of its non-IT technology and plans to have sites Year 2000 ready by
October 1999.
The Company believes that with modifications to existing software and conversion
to new software, the Year 2000 issue will not present significant operational
problems for its computer systems.
Finally, the Company is conducting an assessment of Year 2000 exposures related
to the Company's suppliers. The Company has identified its key suppliers and has
sent out a request for information on their Year 2000 compliance status. The
Company has dedicated resources to monitor these parties' progress as they
address the Year 2000 issue. Additional requests will be sent, responses will be
tracked and contingency plans will be developed as required to address potential
failures of these parties to be prepared for the Year 2000.
The Costs to Address the Company's Year 2000 Issues - The total cost of the
project associated with the Year 2000 issue is estimated at approximately $7.4
million, which includes $2.3 million for the purchase of new software and
hardware that will be capitalized and $5.1 million that will be expensed as
incurred. To date, the Company has incurred approximately $4.1 million primarily
for assessment of the Year 2000 issue, development of a modification plan, and
fixing noncompliant programs. The Company believes that the total costs
associated with modifying its current systems will not have a material adverse
effect on its results of operations or financial position.
The Risks of the Company's Year 2000 Issues - There can be no assurance that the
Company will be completely successful in its efforts to address Year 2000
Issues. If some of the Company's systems are not Year 2000 compliant, the
Company could suffer a disruption of operations (including delivery of coal
pursuant to sales contracts) or other negative consequences, including, but not
limited to, diversion of resources, damage to the Company's reputation and
increased litigation, any of which could materially adversely affect the
Company's results of operations or financial position.
The Company is also dependent on third parties such as its customers, suppliers,
service providers and other business partners. If these or other third parties
with whom the Company conducts business fail to adequately address Year 2000
Issues, the Company could experience a negative impact on its results of
operations or financial position. For example, the failure of carriers, power
generators and/or telecommunications companies to have Year 2000 compliant
internal systems could impact the Company's production and/or shipment of coal.
<PAGE>
The Company's Contingency Plans - The Company is in the process of developing a
comprehensive contingency plan to address situations that may result if the
Company or any of the third parties upon which the Company is dependent is
unable to achieve Year 2000 readiness. This effort is ongoing and will continue
to be evaluated as new information becomes available.
Year 2000 Cautionary Statement - Year 2000 issues are widespread and complex.
The costs of the project and the date on which the Company believes it will
complete the appropriate modifications to deal with the Year 2000 Issue are
based on management's best estimates, which were derived utilizing numerous
assumptions of future events. However, there can be no assurance that these
estimates will be achieved.
Forward Looking Statements. This quarterly report and certain press releases and
statements the Company makes from time to time include statements of the
Company's and management's expectations, intentions, plans and beliefs that
constitute "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
and are intended to come within the safe harbor protection provided by those
sections. Forward looking statements involve risks and uncertainties, and a
variety of factors could cause actual results to differ materially from the
Company's current expectations, including but not limited to: coal and power
market conditions and fluctuations in the demand for coal as an energy source,
weather conditions, the continued availability of long-term coal supply
contracts, railroad performance, foreign currency translation, changes in the
government regulation of the mining industry, risks inherent to mining, changes
in the Company's leverage position, the ability to successfully implement
operating strategies, the impact of Year 2000 compliance by the Company or those
entities with which the Company does business and other factors discussed in the
Company's filings with the Securities and Exchange Commission.
Readers are cautioned not to place undue reliance on these forward looking
statements, which speak only as of the date hereof. The Company undertakes no
obligation to publicly release the results of any revisions to such forward
looking statements that may be made to reflect events or circumstances after the
date hereof, or thereof, as the case may be, or to reflect the occurrence of
anticipated events.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
The Navajo Nation
On June 18, 1999, The Navajo Nation served the Company's subsidiaries, Peabody
Holding Company, Inc., Peabody Coal Company and Peabody Western Company, with a
complaint which had been filed in the U. S. District Court for the District of
Columbia. Other defendants in the litigation are two utilities, two current
employees and one former employee. The Navajo Nation has alleged sixteen claims
including civil Racketeers Influenced and Corrupt Organizations Act, or RICO,
claims, fraud and tortious interference with contractual relationships. The
plaintiff is seeking various remedies including actual damages of at least $600
million which could be trebled under the RICO counts, punitive damages of at
least $1 billion, a determination that Peabody Western Coal Company's two coal
leases for the Kayenta and Black Mesa mines have terminated due to the failure
of a condition and a reformation of the two coal leases to adjust the royalty
rate to 20%. The Company believes this matter will be resolved without a
material adverse effect on its financial condition or results of operations.
Minerals Management Service
The Minerals Management Service (MMS) issued a preliminary administrative
decision in August 1992, determining that a Company subsidiary, subsequently
merged into Powder River Coal Company, had underpaid royalties owed to the
federal government. If the preliminary decision is ultimately determined to be
correct, both as to the existence of the underpayment and the method of
calculating the underpayment, the total alleged royalty deficiency amounts to
approximately $7.5 million without interest. The subsidiary filed an
administrative appeal of the MMS decision and that appeal has not been decided.
Criminal and civil investigations were begun by the federal government in 1993
and 1996, respectively, to examine activities with respect to the transactions
at issue in the administrative matter. The federal government recently advised
that it decided not to bring criminal charges against the Company or its
subsidiaries. To date, no civil complaint has been brought against the Company.
If those claims, which may include claims for treble damages, are made and a
case is successfully argued against the Company, the financial condition and
results of operations of the Company may be adversely affected. The Company is
very close to reaching a settlement in principle with the federal government on
all civil claims related to the dispute. The Company believes that a settlement
will be completed without a material adverse effect on its financial condition
or results of operations.
Environmental Claims
Environmental claims have been asserted against a subsidiary of the Company at
18 sites in the United States. Some of these claims are based on the
Comprehensive Environmental Response Compensation and Liability Act of 1980, as
amended, and on similar state statutes. The majority of these sites are related
to activities of former subsidiaries of the Company.
The Company's policy is to accrue environmental cleanup-related costs of a
noncapital nature when those costs are believed to be probable and can be
reasonably estimated. The quantification of environmental exposures requires an
assessment of many factors, including changing laws and regulations,
advancements in environmental technologies, the quality of information available
related to specific sites, the assessment stage of each site investigation,
preliminary findings and the length of time involved in remediation or
settlement. For certain sites, the Company also assesses the financial
capability of other potentially responsible parties and, where allegations are
based on tentative findings, the reasonableness of the Company's apportionment.
The Company has not anticipated any recoveries from insurance carriers or other
potentially responsible third parties in its Consolidated Balance Sheets. The
liabilities for environmental cleanup-related costs recorded in the Consolidated
Balance Sheet at June 30, 1999 were $57.9 million. This amount represents those
costs that the Company believes are probable and reasonably estimable. In the
event that future remediation expenditures are in excess of amounts accrued,
management does not anticipate that they will have a material adverse effect on
the financial position, results of operations or liquidity of the Company.
Other
In addition, the Company at times becomes a party to claims, lawsuits,
arbitration proceedings and administrative procedures in the ordinary course of
business. Management believes that the ultimate resolution of pending or
threatened proceedings will not have a material effect on the financial
position, results of operations or liquidity of the Company.
<PAGE>
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
See the Exhibit Index at page 20 of this report.
(b) Reports on Form 8-K.
During the first quarter of fiscal year 2000, the Company filed one current
report on Form 8-K, dated June 24, 1999. The Form 8-K was filed to report,
under Item 5, a news release issued by the Company discussing recent
litigation involving the Navajo Nation.
<PAGE>
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.
P&L COAL HOLDINGS CORPORATION
Date: August 12, 1999 By: /s/ GEORGE J. HOLWAY
------------------------------------------
George J. Holway
Vice President and Chief Financial Officer
(Principal Financial Officer)
<PAGE>
EXHIBIT INDEX
The exhibits below are numbered in accordance with the Exhibit Table of Item 601
of Regulation S-K.
Exhibit
No. Description of Exhibit
3.1 Second Amended and Restated Certificate of Incorporation of
P&L Coal Holdings Corporation (Incorporated by reference to
Exhibit 3.1 of the Company's Form 10-Q for the third
quarter ended December 31, 1998).
3.2 By-Laws of P&L Coal Holdings Corporation (Incorporated by
reference to Exhibit 3.2 of the Company's Form S-4
Registration Statement No. 333-59073).
27 Financial Data Schedule (filed electronically with the SEC
only).
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated balance sheet and consolidated statement of operations as of June
30, 1999 and for the three months then ended, and is qualified in its entirety
by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-START> APR-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 90,685
<SECURITIES> 0
<RECEIVABLES> 319,681
<ALLOWANCES> 177
<INVENTORY> 252,273
<CURRENT-ASSETS> 1,735,504
<PP&E> 5,048,063
<DEPRECIATION> 255,000
<TOTAL-ASSETS> 6,922,561
<CURRENT-LIABILITIES> 1,250,226
<BONDS> 2,465,341
0
50
<COMMON> 197
<OTHER-SE> 493,026
<TOTAL-LIABILITY-AND-EQUITY> 6,922,561
<SALES> 602,365
<TOTAL-REVENUES> 630,676
<CGS> 511,349
<TOTAL-COSTS> 511,349
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 49,795
<INCOME-PRETAX> (14,441)
<INCOME-TAX> (2,284)
<INCOME-CONTINUING> (13,652)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (13,652)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
