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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(MARK ONE)

For the quarterly period ended September 30, 2004

OR

Commission File Number: 1-7775

MASSEY ENERGY COMPANY

(Name of Registrant as Specified In Its Charter)

(804) 788-1800

(Registrant’s telephone number, including area code)

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 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.    Yes  x    No  ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).    Yes  x    No  ¨

As of October 29, 2004, there were 76,044,156 shares of common stock, $0.625 par value, outstanding.

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MASSEY ENERGY COMPANY

FORM 10-Q

For the Quarterly Period Ended September 30, 2004

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PART I: FINANCIAL INFORMATION

Item 1: CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MASSEY ENERGY COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

UNAUDITED

See Notes to Condensed Consolidated Financial Statements.

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MASSEY ENERGY COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

UNAUDITED

(Continued On Next Page)

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MASSEY ENERGY COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

UNAUDITED

See Notes to Condensed Consolidated Financial Statements.

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MASSEY ENERGY COMPANY

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

UNAUDITED

See Notes to Condensed Consolidated Financial Statements.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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 (“Massey” or the “Company”) for the year ended December 31, 2003. Accounting measurements at interim dates inherently involve greater reliance on estimates than at year-end. The results of operations for the quarterly period ended September 30, 2004 are not necessarily indicative of results that can be expected for the fiscal year ending December 31, 2004.

The condensed consolidated financial statements included herein are unaudited; however, they contain all adjustments (consisting of normal recurring accruals), which, in the opinion of the Company, are necessary to present fairly its consolidated financial position at September 30, 2004 and December 31, 2003, and its consolidated results of operations and cash flows for the nine months ended September 30, 2004 and 2003, in conformity with accounting principles generally accepted in the United States.

The condensed consolidated financial statements include the accounts of Massey, its wholly owned and sole, direct operating subsidiary A.T. Massey Coal Company, Inc. (“A.T. Massey”) and A.T. Massey’s wholly owned subsidiaries. Massey has no separate independent operations. A.T. Massey fully and unconditionally guarantees the Company’s obligations under the 6.95% senior notes due 2007 (the “6.95% Senior Notes”), the 6.625% senior notes due 2010 (the “6.625% Senior Notes”), the 4.75% convertible senior notes due 2023 (the “4.75% Convertible Senior Notes”) and the 2.25% convertible senior notes due 2024 (the “2.25% Convertible Senior Notes”). In addition, the 6.625% Senior Notes and the 2.25% Convertible Notes are guaranteed by substantially all of the Company’s indirect operating subsidiaries. The subsidiaries not providing a guarantee of the 6.625% Senior Notes and the 2.25% Convertible Notes are minor (as defined under SEC Rule 3-10(h)(6) of Regulation S-X). See Note 6 for a more complete discussion of debt.

Certain 2003 amounts have been reclassified to conform to the 2004 presentation.

Effective January 1, 2003, the Company changed its method of accounting for reclamation liabilities in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 143, “Accounting for Asset Retirement Obligations” (“Statement 143”). Statement 143 requires that an asset retirement obligation be recorded as a liability based on fair value, which is calculated as the present value of the future cash flows, in the period in which it is incurred. When the liability is initially recorded, the offset is capitalized by increasing the carrying amount of the related long-lived asset. Over time, the liability is accreted to its present value each period, and the capitalized cost is depreciated over the useful life of the related asset. Accretion expense is included in cost of produced coal revenue. To settle the liability, the obligation is paid, and to the extent there is a difference between the liability and the amount of cash paid, a gain or loss upon settlement is incurred.

The cumulative effect of the change on prior years resulted in a charge to income in 2003 of $7.9 million, net of income taxes of $5.0 million ($0.11 per share). The pro forma effect of the application of Statement 143 as if Statement 143 had been applied retroactively is presented below:

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

The following table describes all changes to the Company’s reclamation liability:

Liability incurred for the nine months ended September 30, 2004, includes approximately $29 million of reclamation associated with an acquisition made in the third quarter of 2004 (see Note 5 for further discussion).

Inventories are comprised of:

Saleable coal represents coal ready for sale, including inventories designated for customer facilities under consignment arrangements of $40.3 million and $44.8 million at September 30, 2004 and December 31, 2003, respectively. Raw coal represents coal that generally requires further processing prior to shipment to the customer. Work in process consists of the costs incurred to remove overburden above an unmined coal seam as part of the surface mining process.

Other current assets are comprised of the following:

Deposits at September 30, 2004 and December 31, 2003, include $105.0 million and $141.6 million, respectively, of funds pledged as collateral to support outstanding letters of credit (see Note 6 for further discussion).

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Property, plant and equipment, net is comprised of:

On July 14, 2004, the Company entered into a joint venture agreement with Penn Virginia Resource Partners, L.P. to own and operate end user coal handling facilities. Penn Virginia Resource Partners, L.P. purchased a 50% interest in the joint venture from Massey for approximately $28.5 million, from which Massey realized a pre-tax gain of approximately $13 million. Approximately $1.7 million of this gain was recognized in the third quarter. The remaining gain will be recognized over the terms of the related coal handling facility agreements.

On September 30, 2004, the Company purchased selected assets associated with two Horizon Natural Resources Company operations, Starfire, located in Perry County, Kentucky, and Cannelton, located in Kanawha County, West Virginia. The Company paid $10 million in cash, plus the assumption of related property reclamation liabilities of approximately $29 million. The assets acquired include an estimated 15 to 20 million tons of low sulfur coal reserves, two preparation plants, a barge loading facility, related infrastructure and selected mining equipment. The acquisition was recorded in the third quarter of 2004 using the Company’s best estimates based on available information and will be finalized in the fourth quarter of 2004.

During the third quarter of 2004, the Company recorded a charge to depreciation, depletion and amortization in the amount of $6.1 million (pre-tax) related to the write off of certain capitalized development costs and an investment in an active gas well:

The Upper Cedar Grove mine of the Independence resource group was idled in August 2001 due to poor mining conditions. The mine entries were planned to be used for future transportation of coal from adjacent coal mines. During the third quarter of 2004, management determined that the conditions of the mine entries had deteriorated and were no longer usable for transportation of coal. Unamortized development costs of approximately $2.7 million were written off during the third quarter of 2004 as a result of the Upper Cedar Grove mine closure.

The Company owns a 25% working interest in the LeJeune No. 1 gas well in Pointe Coupee, Louisiana. During the third quarter of 2004, the Company was informed by the operator of the gas well that the current production zone had ceased producing gas earlier than expected, significantly reducing the estimated remaining reserves in the well. Unamortized development and initial drilling costs of $3.4 million were written off during the third quarter of 2004 as a result of the reduction in projected production from the LeJeune No. 1 gas well.

The Company’s debt is comprised of the following:

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

The weighted average effective interest rate of the outstanding borrowings was 4.78% and 5.4% at September 30, 2004 and December 31, 2003, respectively, after giving effect to the interest rate swap (see discussion of fair value hedge below). At September 30, 2004, the Company’s available liquidity was $260.0 million, including cash and cash equivalents of $188.1 million and $71.9 million availability on its asset-based revolving credit facility.

Senior Note Repurchases

During the first nine months of 2004, the Company made several open-market purchases, retiring a total principal amount of $43.8 million of the 6.95% Senior Notes and $25.0 million of the 6.625% Senior Notes at a cost of $45.1 million and $25.0 million, respectively, including accrued interest. A net loss of $1.3 million related to these repurchases was recognized in the first nine months of 2004 and is shown in the Condensed Consolidated Financial Statements of Income in Other expense.

Capital Leases

During the first nine months of 2004, the Company generated $15.0 million of cash from a sale-leaseback (capital lease) transaction of certain mining equipment, compared to $18.0 million of cash from sale-leasebacks (operating leases) in the first nine months of 2003. During the first nine months of 2004, the Company also entered into an additional $27.3 million of capital leases for mining equipment. The leases are for periods ranging from approximately 2 to 6 years with no residual value guarantee.

Fair Value Hedge

On November 10, 2003, the Company entered into a fixed interest rate to floating interest rate swap agreement with a highly rated financial institution covering a notional amount of debt of $240 million. The Company designated this swap as a fair value hedge of a portion of its 6.625% Senior Notes. The fair value estimate is based on the cost that would be incurred to terminate the contract. The Company would have paid $0.4 million and $3.2 million to terminate the interest rate swap contract in place as of September 30, 2004 and December 31, 2003, respectively. The fair value of the swap is recorded in Other noncurrent liabilities. To the extent the fair value of the swap obligation is above a $20 million threshold, the Company will be required to post collateral to cover the amount of liability that exceeds the threshold. The threshold amount will vary depending on the Company’s unsecured debt credit rating as determined by Moody’s Investors Service, Inc. and Standard & Poor’s Ratings Services.

Off-Balance Sheet Arrangements

In the normal course of business, the Company is a party to certain off-balance sheet arrangements including guarantees, indemnifications, and financial instruments with off-balance sheet risk, such as bank letters of credit and performance or surety bonds. We do not expect any material adverse effects on our financial condition, results of operations or cash flows to result from these off-balance sheet arrangements.

The Company uses surety bonds to secure reclamation, workers’ compensation, wage payments, and other miscellaneous obligations. As of September 30, 2004, the Company had $322.3 million of outstanding surety bonds with third parties, including $40.4 million of post-mining reclamation bonds assumed in an acquisition made during the third quarter of 2004 (See Note 5 for further discussion). These bonds were in place to secure obligations as follows: post-mining reclamation bonds of $294.0 million, workers’ compensation bonds of $9.9 million, wage payment and collection bonds of $8.1 million, and other miscellaneous obligation bonds of $10.3 million. To the extent that surety bonds become unavailable or uneconomic, the Company will seek to secure obligations with letters of credit, cash deposits, or other suitable forms of collateral.

From time to time the Company uses bank letters of credit to secure its obligations for worker’s compensation programs, various insurance contracts and other obligations. Issuing banks currently require that such letters of credit be secured by funds deposited into restricted accounts pledged to the banks under reimbursement agreements or be issued under the Company’s asset-based revolving credit facility. At September 30, 2004, the Company had $142.9 million of letters of credit outstanding, of which $100.0 million was collateralized by $105.0 million of cash deposited in restricted, interest bearing accounts pledged to issuing banks, and $41.9 million was issued under the Company’s asset-based lending arrangement. No claims were outstanding against those letters of credit as of September 30, 2004.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Net periodic pension expense for both the Company’s qualified defined benefit pension plan and nonqualified supplemental benefit pension plan includes the following components:

No company contributions were made in the three months and nine months ended September 30, 2004 or in the three months and nine months ended September 30, 2003 for the qualified defined benefit pension plan as all benefits were paid through plan assets; however, the Company paid benefit payments to participants for the nonqualified supplemental benefit pension plan of $0.01 million for the three months ended September 30, 2004 and 2003, and $0.03 million for the nine months ended September 30, 2004 and 2003. No company contributions are required to be made into the qualified defined benefit pension plan during 2004. The Company may elect to make contributions to the plan at its discretion.

Expenses for black lung benefits and workers’ compensation related benefits include the following components:

Payments for benefits, premiums and other costs related to black lung and workers’ compensation liabilities were $8.9 million for the three months ended September 30, 2004 and 2003, and were $27.0 million and $25.4 million for the nine months ended September 30, 2004 and 2003, respectively.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Net periodic postretirement benefit cost includes the following components:

Payments for benefits related to postretirement benefit cost were $1.1 million and $0.7 million, for the three months ended September 30, 2004 and 2003, respectively, and were $3.9 million and $2.3 million, for the nine months ended September 30, 2004 and 2003, respectively.

On December 8, 2003, the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (“the Act”) was enacted. The Act introduces a prescription drug benefit under Medicare (Medicare Part D) as well as a federal subsidy to sponsors of retiree health care benefit plans that provide a benefit that is at least actuarially equivalent to Medicare Part D. The Company has included the effects of the Act in its financial statements for the quarter ended September 30, 2004 in accordance with FASB Staff Position No. FAS 106-2 “Accounting and Disclosure Requirements related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003” (“FSP 106-2”). Incorporation of the provisions of the Act resulted in a reduction to the Company’s postretirement benefit obligation as of July 1, 2004 of $27.2 million. The impact of the Act resulted in a reduction in the net periodic postretirement benefit cost of $2.1 million for the second half of 2004. Net periodic postretirement benefit cost for the quarter ended September 30, 2004 reflects $1.1 million of this benefit. Certain definitions and interpretations, yet to be issued by the federal government, could require the Company to adjustment future estimates.

During the third quarter of 2004, the Company recognized a gain of $3.0 million (pre-tax) related to a refund of black lung excise taxes paid on coal export sales tonnage. The payment of black lung excise taxes on exported coal was determined to be unconstitutional by a 1998 federal district court decision. During the quarter, the Internal Revenue Service substantially completed its audit of the Company’s requested refund of black lung excise tax payments. Approximately $1.7 million (pre-tax) of this refund is reflected as a reduction of Cost of produced coal revenue for the three and nine months ended September 30, 2004, with the remaining portion reflected in Interest income.

During the third quarter of 2004, the Company released $5.6 million of a federal income tax reserve due to the closing of a statutory period, which is reflected in Income tax benefit for the three and nine months ended September 30, 2004.

During the third quarter of 2003, the Company received $21.0 million for the settlement of a property and business interruption claim, which, after adjusting for a previously booked receivable and claim settlement expenses, resulted in a gain of $17.7 million (pre-tax) and is reflected in Insurance settlement for the three and nine months ended September 30, 2003.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

The number of shares used to calculate basic earnings per share for the three months and nine months ended September 30, 2004 and 2003 is based on the weighted average outstanding shares of Massey during the respective periods. The number of shares used to calculate diluted earnings per share is based on the number of shares used to calculate basic earnings per share plus the dilutive effect of stock options and other stock-based instruments held by Massey employees and directors during each period and debt securities currently convertible into common stock during each period. In accordance with accounting principles generally accepted in the United States, the effect of dilutive securities in the amount of 6.8 million and 0.4 million shares was excluded from the calculation of the diluted earnings (loss) per common share in the three months ended September 30, 2004 and 2003, respectively, and in the amount of 4.5 million and 0.4 million shares was excluded from the calculation of the diluted earnings (loss) per common share in the nine months ended September 30, 2004 and 2003, respectively, as such inclusion would result in antidilution.

The computations for basic and diluted income (loss) per share are based on the following per share information:

The Company’s 4.75% Convertible Senior Notes are convertible by holders into shares of Massey’s common stock during certain periods under certain circumstances. As of September 30, 2004, the price of Massey’s common stock had reached the specified threshold for conversion. Consequently, the 4.75% Convertible Senior Notes are convertible until December 31, 2004, the last day of the Company’s fourth quarter. The 4.75% Convertible Senior Notes may be convertible beyond this date if the specified threshold for conversion is met in subsequent quarters.

The Company’s 2.25% Convertible Senior Notes are convertible by holders into shares of Massey’s common stock during certain periods under certain circumstances. None of the 2.25% Convertible Senior Notes were eligible for conversion at September 30, 2004. If all of the 2.25% Convertible Senior Notes outstanding at September 30, 2004 had been eligible and were converted, the Company would have been required to issue 5.2 million shares of common stock.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

The Company accounts for stock-based compensation using the intrinsic value method prescribed by Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees,” and related interpretations. Accordingly, compensation cost for stock options granted to employees is measured as the excess, if any, of the quoted market price of the stock at the date of grant over the amount an employee must pay to acquire the stock. Compensation cost for stock appreciation rights and performance equity units is recorded based on the quoted market price of the Company’s stock at the end of the period. The Company has implemented the disclosure-only provisions of SFAS No. 123, “Accounting for Stock-Based Compensation” (“Statement 123”). The Company has recognized no stock-based compensation expense related to stock options in the three months and nine months ended September 30, 2004 and 2003, as all options granted had an exercise price equal to market value of the underlying common stock on the date of the grant. If the Company had followed the fair value method under Statement 123 to account for stock based compensation for stock options, the amount of stock based compensation cost for stock options, net of related tax, which would have been recognized for each period and pro-forma net income for each period would have been as follows: