Delaware | 1-16463 | 13-4004153 | ||
(State or other jurisdiction of | (Commission File Number) | (I.R.S. Employer Identification No.) | ||
incorporation or organization) |
701 Market Street, St. Louis, Missouri | 63101 | |
(Address of principal executive offices) | (Zip Code) |
Item 8.01. Other Events | ||||||||
SIGNATURE |
2
3
Peabody | Excel Coal | |||||||||||||||||||
Energy | Limited | Pro Forma | Pro Forma | |||||||||||||||||
Historical | Historical | Adjustments | as Adjusted | |||||||||||||||||
REVENUES |
||||||||||||||||||||
Sales |
$ | 4,545,323 | $ | 326,208 | $ | 4,871,531 | ||||||||||||||
Other revenues |
99,130 | 2,130 | 101,260 | |||||||||||||||||
Total revenues |
4,644,453 | 328,338 | | 4,972,791 | ||||||||||||||||
COSTS AND EXPENSES |
||||||||||||||||||||
Operating costs and expenses |
3,715,836 | 221,509 | 3,937,345 | |||||||||||||||||
Depreciation, depletion and amortization |
316,114 | 17,864 | 18,575 | (a | ) | 352,553 | ||||||||||||||
Asset retirement obligation expense |
35,901 | 4,279 | 40,180 | |||||||||||||||||
Selling and administrative expenses |
189,802 | 16,914 | 206,716 | |||||||||||||||||
Net (gain) loss on disposal or exchange of assets |
(101,487 | ) | 1 | (101,486 | ) | |||||||||||||||
Income from equity affiliates |
(30,096 | ) | (3,445 | ) | (33,541 | ) | ||||||||||||||
OPERATING PROFIT |
518,383 | 71,216 | (18,575 | ) | 571,024 | |||||||||||||||
Interest expense |
102,939 | 7,997 | (7,997 | ) | (b | ) | 102,939 | |||||||||||||
126,478 | (c | ) | 126,478 | |||||||||||||||||
Interest income |
(10,641 | ) | (4,261 | ) | 4,261 | (b | ) | (10,641 | ) | |||||||||||
INCOME (LOSS) BEFORE INCOME TAXES
AND MINORITY INTERESTS |
426,085 | 67,480 | (141,317 | ) | 352,248 | |||||||||||||||
Income tax provision (benefit) |
960 | 18,695 | (39,822 | ) | (d | ) | (20,167 | ) | ||||||||||||
Minority interests |
2,472 | 4,755 | 7,227 | |||||||||||||||||
NET INCOME |
$ | 422,653 | $ | 44,030 | $ | (101,495 | ) | $ | 365,188 | |||||||||||
Basic earnings per share |
$ | 1.62 | $ | 0.17 | $ | (0.39 | ) | $ | 1.40 | |||||||||||
Diluted earnings per share |
$ | 1.58 | $ | 0.16 | $ | (0.38 | ) | $ | 1.36 | |||||||||||
Weighted average shares outstanding basic |
261,519,424 | 261,519,424 | 261,519,424 | 261,519,424 | ||||||||||||||||
Weighted average shares outstanding diluted |
268,013,476 | 268,013,476 | 268,013,476 | 268,013,476 |
4
Peabody | Excel Coal | |||||||||||||||||||
Energy | Limited | Pro Forma | Pro Forma | |||||||||||||||||
Historical | Historical | Adjustments | as Adjusted | |||||||||||||||||
REVENUES |
||||||||||||||||||||
Sales |
$ | 2,152,338 | $ | 144,004 | $ | 2,296,342 | ||||||||||||||
Other revenues |
33,928 | 470 | 34,398 | |||||||||||||||||
Total revenues |
2,186,266 | 144,474 | | 2,330,740 | ||||||||||||||||
COSTS AND EXPENSES |
||||||||||||||||||||
Operating costs and expenses |
1,791,986 | 91,013 | 1,882,999 | |||||||||||||||||
Depreciation, depletion and amortization |
155,262 | 9,681 | 8,850 | (a | ) | 173,793 | ||||||||||||||
Asset retirement obligation expense |
16,357 | 2,468 | 18,825 | |||||||||||||||||
Selling and administrative expenses |
78,431 | 7,462 | 85,893 | |||||||||||||||||
Net (gain) loss on disposal or exchange of assets |
(47,574 | ) | 1 | (47,573 | ) | |||||||||||||||
Income from equity affiliates |
(18,308 | ) | (3,166 | ) | (21,474 | ) | ||||||||||||||
OPERATING PROFIT |
210,112 | 37,015 | (8,850 | ) | 238,277 | |||||||||||||||
Interest expense |
50,761 | 4,492 | (4,492 | ) | (b | ) | 50,761 | |||||||||||||
63,239 | (c | ) | 63,239 | |||||||||||||||||
Interest income |
(3,183 | ) | (2,417 | ) | 2,417 | (b | ) | (3,183 | ) | |||||||||||
INCOME (LOSS) BEFORE INCOME TAXES
AND MINORITY INTERESTS |
162,534 | 34,940 | (70,014) | ) | 127,460 | |||||||||||||||
Income tax provision (benefit) |
14,586 | 8,832 | (19,849 | ) | (d | ) | 3,569 | |||||||||||||
Minority interests |
804 | 4,159 | 4,963 | |||||||||||||||||
NET INCOME |
$ | 147,144 | $ | 21,949 | $ | (50,165 | ) | $ | 118,928 | |||||||||||
Basic earnings per share |
$ | 0.56 | $ | 0.08 | $ | (0.19 | ) | $ | 0.46 | |||||||||||
Diluted earnings per share |
$ | 0.55 | $ | 0.08 | $ | (0.19 | ) | $ | 0.44 | |||||||||||
Weighted average shares outstanding basic |
261,164,418 | 261,164,418 | 261,164,418 | 261,164,418 | ||||||||||||||||
Weighted average shares outstanding diluted |
267,367,248 | 267,367,248 | 267,367,248 | 267,367,248 |
5
Peabody | Excel Coal | |||||||||||||||||||
Energy | Limited | Pro Forma | Pro Forma | |||||||||||||||||
Historical | Historical | Adjustments | as Adjusted | |||||||||||||||||
REVENUES |
||||||||||||||||||||
Sales |
$ | 2,582,564 | $ | 201,176 | $ | 2,783,740 | ||||||||||||||
Other revenues |
45,634 | 2,561 | 48,195 | |||||||||||||||||
Total revenues |
2,628,198 | 203,737 | | 2,831,935 | ||||||||||||||||
COSTS AND EXPENSES |
||||||||||||||||||||
Operating costs and expenses |
2,075,876 | 123,017 | 2,198,893 | |||||||||||||||||
Depreciation, depletion and amortization |
172,439 | 10,972 | 10,075 | (a | ) | 193,486 | ||||||||||||||
Asset retirement obligation expense |
18,843 | 1,462 | 20,305 | |||||||||||||||||
Selling and administrative expenses |
87,305 | 10,562 | 97,867 | |||||||||||||||||
Net gain on disposal or exchange of assets |
(59,269 | ) | (450 | ) | (59,719 | ) | ||||||||||||||
Income from equity affiliates |
(13,932 | ) | (15 | ) | (13,947 | ) | ||||||||||||||
OPERATING PROFIT |
346,936 | 58,189 | (10,075 | ) | 395,050 | |||||||||||||||
Interest expense |
52,738 | 5,534 | (5,534 | ) | (b | ) | 52,738 | |||||||||||||
63,239 | (c | ) | 63,239 | |||||||||||||||||
Interest income |
(4,140 | ) | (1,578 | ) | 1,578 | (b | ) | (4,140 | ) | |||||||||||
INCOME (LOSS) BEFORE INCOME TAXES
AND MINORITY INTERESTS |
298,338 | 54,233 | (69,358 | ) | 283,213 | |||||||||||||||
Income tax provision (benefit) |
8,248 | 16,216 | (19,285 | ) | (d | ) | 5,179 | |||||||||||||
Minority interests |
6,434 | 3,003 | 9,437 | |||||||||||||||||
NET INCOME |
$ | 283,656 | $ | 35,014 | $ | (50,073 | ) | $ | 268,597 | |||||||||||
Basic earnings per share |
$ | 1.08 | $ | 0.13 | $ | (0.19 | ) | $ | 1.02 | |||||||||||
Diluted earnings per share |
$ | 1.05 | $ | 0.13 | $ | (0.19 | ) | $ | 1.00 | |||||||||||
Weighted average shares outstanding basic |
263,726,123 | 263,726,123 | 263,726,123 | 263,726,123 | ||||||||||||||||
Weighted average shares outstanding diluted |
269,597,156 | 269,597,156 | 269,597,156 | 269,597,156 |
6
Peabody | Excel Coal | Pro Forma | ||||||||||||||
Energy | Limited | Adjustments | ||||||||||||||
Historical | Historical | (e) | Total | |||||||||||||
ASSETS |
||||||||||||||||
Cash and cash equivalents |
$ | 318,736 | $ | 29,585 | $ | (29,585 | ) | $ | 318,736 | |||||||
Accounts receivable, less allowance |
261,997 | 33,816 | | 295,813 | ||||||||||||
Inventories |
167,116 | 80,465 | (6,353 | ) (g) | 241,228 | |||||||||||
Assets from coal trading activities |
84,692 | | | 84,692 | ||||||||||||
Deferred income taxes |
94,124 | | | 94,124 | ||||||||||||
Other current assets |
78,682 | 33,493 | | 112,175 | ||||||||||||
Total current assets |
1,005,347 | 177,359 | (35,938 | ) | 1,146,768 | |||||||||||
Property, plant, equipment and mine development, net |
5,511,559 | 493,688 | 1,475,000 | 7,480,247 | ||||||||||||
Deferred income taxes |
| 35,985 | | 35,985 | ||||||||||||
Goodwill |
| 251 | 79,382 | (g) | 79,633 | |||||||||||
Investments and other assets |
324,696 | 71,267 | 17,001 | 412,964 | ||||||||||||
Total assets |
$ | 6,841,602 | $ | 778,550 | $ | 1,535,445 | $ | 9,155,597 | ||||||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||||||||||
Current liabilities |
||||||||||||||||
Current maturities of long-term debt |
$ | 72,088 | $ | 18,034 | $ | (18,034 | ) | $ | 72,088 | |||||||
Liabilities from coal trading activities |
74,271 | | | 74,271 | ||||||||||||
Accounts payable and accrued expenses |
778,669 | 123,094 | | 901,763 | ||||||||||||
Total current liabilities |
925,028 | 141,128 | (18,034 | ) | 1,048,122 | |||||||||||
Long-term debt, less current maturities |
1,308,565 | 204,785 | 1,577,329 | (f) | 3,090,679 | |||||||||||
Deferred income taxes |
289,083 | 45,489 | | 334,572 | ||||||||||||
Asset retirement obligations |
410,566 | 13,092 | | 423,658 | ||||||||||||
Workers compensation obligations |
239,822 | | | 239,822 | ||||||||||||
Accrued postretirement benefit costs |
971,493 | 3,689 | | 975,182 | ||||||||||||
Other noncurrent liabilities |
350,940 | 29,263 | 300,000 | 680,203 | ||||||||||||
Total liabilities |
4,495,497 | 437,446 | 1,859,295 | 6,792,238 | ||||||||||||
Minority interests |
12,828 | 17,254 | | 30,082 | ||||||||||||
Stockholders equity |
||||||||||||||||
Common stock |
2,661 | 272,891 | (272,891 | ) | 2,661 | |||||||||||
Additional paid-in capital |
1,546,985 | | | 1,546,985 | ||||||||||||
Retained earnings |
830,648 | 50,856 | (50,856 | ) | 830,648 | |||||||||||
Accumulated other comprehensive loss |
(31,625 | ) | 103 | (103 | ) | (31,625 | ) | |||||||||
Treasury stock |
(15,392 | ) | | | (15,392 | ) | ||||||||||
Total stockholders equity |
2,333,277 | 323,850 | (323,850 | ) | 2,333,277 | |||||||||||
Total liabilities and stockholders
equity |
$ | 6,841,602 | $ | 778,550 | $ | 1,535,445 | $ | 9,155,597 | ||||||||
7
(a) | To adjust depreciation, depletion and amortization based on the portion of the acquisition cost allocated to long-lived assets. | |
(b) | To reverse historical interest expense incurred by Excel, as well as historical interest income earned by Excel. | |
(c) | Represents pro forma interest expense resulting from our new capital structure using, in the case of revolving and term loan borrowings, an assumed LIBOR rate of 5.38% (dollars in thousands): |
Year Ended | Six Months | Six Months | ||||||||||
December 31, | Ended June 30, | Ended June 30, | ||||||||||
2005 | 2005 | 2006 | ||||||||||
Revolving credit facility (1) |
$ | 24,981 | $ | 12,492 | $ | 12,492 | ||||||
Term loan facility (2) |
52,089 | 25,335 | 28,650 | |||||||||
2026 Senior
notes (3) |
20,139 | 10,069 | 10,069 | |||||||||
2016 Senior
notes (4) |
48,660 | 24,330 | 24,330 | |||||||||
6 7/8%
Senior notes (5) |
47,746 | 23,815 | 23,815 | |||||||||
5 7/8%
Senior notes (6) |
14,879 | 7,440 | 7,355 | |||||||||
Subordinated
note (7) |
6,656 | 3,423 | 3,026 | |||||||||
Surety bond
expense (8) |
11,095 | 5,292 | 4,165 | |||||||||
Other
long-term debt (9) |
3,172 | 1,804 | 2,075 | |||||||||
Total pro forma interest expense |
$ | 229,417 | $ | 114,000 | $ | 115,977 | ||||||
Less historical interest expense |
102,939 | 50,761 | 52,738 | |||||||||
Net adjustment to interest expense |
$ | 126,478 | $ | 63,239 | $ | 63,239 | ||||||
(1) | Reflects pro forma interest expense on our revolving unsecured credit facility at an assumed LIBOR plus 1% interest rate of 6.38%. A portion of the revolving credit facility is expected to be drawn at closing of the acquisition of Excel. | ||
(2) | Reflects pro forma interest expense on our term loan facility at an assumed LIBOR plus 1% interest rate of 6.38%. A portion of the term loan facility is expected to be drawn at closing of the acquisition of Excel. | ||
(3) | Reflects pro forma interest expense on the 2026 senior notes at an interest rate of 7.88%. | ||
(4) | Reflects pro forma interest expense on the 2016 senior notes offered hereby at an interest rate of 7.38%. | ||
(5) | Reflects historical interest expense on our 6 7/8% senior notes. | ||
(6) | Reflects historical interest expense on our 5 7/8% senior notes. | ||
(7) | Reflects historical interest expense on our subordinated note. | ||
(8) | Reflects historical fees for surety bonds outstanding. | ||
(9) | Reflects historical letter of credit fees, interest on capital leases and the effect of interest rate swaps. | ||
(d) | To record income tax expense (benefit) on the pro forma adjustments to results of operations using the statutory rate in effect in Australia. |
8
(e) | To record the purchase transaction and allocate the $1,540 million purchase price (and $49 million of transaction costs) to the assets acquired and the liabilities assumed based on the estimated fair values of each item as follows (dollars in thousands): |
Estimated | ||||
Fair Value | ||||
Current assets |
$ | 171,006 | ||
Property, plant, equipment and mine development, net |
1,968,688 | |||
Goodwill |
79,633 | |||
Investments and other assets |
124,253 | |||
Current liabilities |
(123,094 | ) | ||
Long-term debt |
(222,819 | ) | ||
Asset retirement obligations |
(13,092 | ) | ||
Accrued postretirement benefit costs |
(3,689 | ) | ||
Other noncurrent liabilities |
(374,752 | ) | ||
Minority interest |
(17,254 | ) | ||
Total |
$ | 1,588,880 | ||
(f) | Reflects indebtedness incurred to finance the acquisition of Excel consisting of $512.5 million of the Term Loan Facility, $369.6 million of borrowings under our Revolving Credit Facility and $900.0 million of Senior Notes. |
(g) | To record the effects of Emerging Issues Task Force (EITF) Issue No. 04-6, Accounting for Stripping Costs in the Mining Industry (EITF Issue No. 04-6), which states that stripping costs incurred during the production phase of a mine are variable production costs that should be included in the costs of the inventory produced during the period that the stripping costs are incurred. EITF Issue No. 04-6 is effective for the first reporting period in fiscal years beginning after December 15, 2005 (January 1, 2006 for Peabody and July 1, 2006 for Excel). On January 1, 2006, Peabody implemented EITF Issue No. 04-6 using its modified transition provisions which allow companies adopting in periods beginning after June 29, 2005 to utilize a cumulative effect adjustment approach where the cumulative effect adjustment is recorded directly to retained earnings in the year of adoption. The adjustment to recognize the impact of EITF Issue No. 04-6 as of June 30, 2006 for Excel resulted in a reduction of Inventories by $6.4 million. |
9
PEABODY ENERGY CORPORATION |
||||
Date: October 6, 2006 | ||||
/s/ RICHARD A. NAVARRE | ||||
Richard A. Navarre | ||||
Chief Financial Officer and Executive Vice President of Corporate Development |
||||
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