Attached files
file | filename |
---|---|
8-K - FORM 8-K - ARCH RESOURCES, INC. | c62238e8vk.htm |
Exhibit 99.1
News from Arch Coal, Inc. |
For Further Information:
Deck S. Slone
Vice President, Government, Investor and Public Affairs
314/994-2717
Deck S. Slone
Vice President, Government, Investor and Public Affairs
314/994-2717
FOR IMMEDIATE RELEASE
Arch Coal Revises Earnings Guidance for Full Year 2010,
Announces Fourth Quarter 2010 Earnings Conference Call
Announces Fourth Quarter 2010 Earnings Conference Call
ST. LOUIS (January 11, 2011) Arch Coal, Inc. (NYSE:ACI) today announced that it
expects its 2010 earnings per diluted share on a GAAP basis to be between $0.94 per share and $0.98
per share, including amortization of coal supply agreements and early debt extinguishment costs.
Excluding these charges, adjusted earnings per diluted share (EPS) for full year 2010 would be in
the range of $1.11 per share to $1.15 per share, which is below the adjusted EPS annual guidance
range of $1.25 per share to $1.40 per share given on Oct. 29, 2010.
The company also now expects its adjusted earnings before interest, taxes, depreciation,
depletion and amortization (EBITDA) to be in the $718 million to $726 million range for full year
2010, which would be the second highest in company history.
Lower shipment levels, partially driven by poor Eastern rail service, contributed to the
guidance revision for 2010, said Steven F. Leer, Archs chairman and chief executive officer. In
addition, the Mountain Laurel operation was impacted in December by geologic challenges, which
marginally affected our planned production during the quarter.
Moreover, geologic challenges are now expected to force the longwall at Mountain Laurel to be
idle for most of the first quarter of 2011 while additional development work is completed on the
next longwall panel. The longwall is scheduled to restart in mid- to late-April. During the
outage, Mountain Laurel will supply coal to customers from its five continuous miner operations as
well as from existing inventories.
While the idling of the longwall at Mountain Laurel will have an impact on Archs financial
performance during the first quarter of 2011, the company expects to make up some portion of the
delayed production as the year progresses. Despite the temporary longwall outage, Arch expects to
achieve record-setting coking and pulverized coal injection (PCI) shipments of at least 7 million
tons from its Central Appalachian operations during 2011. The company has committed roughly 3
million tons of coal into metallurgical markets for 2011 delivery.
Archs fourth quarter 2010 earnings release will be distributed via PR Newswire before the
market opens on Friday, Jan. 28, and will be posted to the companys Web site at that time. The
company also will discuss its fourth quarter and full year 2010 financial results in a conference
call that will be broadcast live over the Internet at 11:00 a.m. E.S.T. The webcast will be
accessible via the investor section of the Arch Coal Web site at
http://investor.archcoal.com.
St. Louis-based Arch Coal, Inc. is the second largest U.S. coal producer. Through its
national network of mines, Arch supplies cleaner-burning, low-sulfur coal to fuel roughly 8 percent
of the nations electricity. The company also ships coal to domestic and international steel
manufacturers as well as international power producers.
# # #
Forward-Looking Statements: This press release contains forward-looking statements that
is, statements related to future, not past, events. In this context, forward-looking statements
often address our expected future business and financial performance, and often contain words such
as expects, anticipates, intends, plans, believes, seeks, or will. Forward-looking
statements by their nature address matters that are, to different degrees, uncertain. For us,
particular uncertainties arise from changes in the demand for our coal by the domestic electric
generation industry; from legislation and regulations relating to the Clean Air Act and other
environmental initiatives; from operational, geological, permit, labor and weather-related factors;
from fluctuations in the amount of cash we generate from operations; from future integration of
acquired businesses; and from numerous other matters of national, regional and global scale,
including those of a political, economic, business, competitive or regulatory nature. These
uncertainties may cause our actual future results to be materially different than those expressed
in our forward-looking statements. We do not undertake to update our forward-looking statements,
whether as a result of new information, future events or otherwise, except as may be required by
law. For a description of some of the risks and uncertainties that may affect our future results,
you should see the risk factors described from time to time in the reports we file with the
Securities and Exchange Commission.
Arch Coal, Inc. and Subsidiaries
Reconciliation of Non-GAAP Measures
(In thousands)
Reconciliation of Non-GAAP Measures
(In thousands)
Included in the accompanying release, we have disclosed certain non-GAAP measures as defined by
Regulation G. The following reconciles these items to results as reported under GAAP.
Reconciliation of 2010 Targets
Adjusted EBITDA
Adjusted EBITDA is defined as net income attributable to the Company before the effect of net interest expense, income taxes, depreciation, depletion and amortization and the amortization of acquired sales contracts. Adjusted EBITDA may also be adjusted for items that may not reflect the trend of future results. | ||
Adjusted EBITDA is not a measure of financial performance in accordance with generally accepted accounting principles, and items excluded to calculate Adjusted EBITDA are significant in understanding and assessing our financial condition. Therefore, Adjusted EBITDA should not be considered in isolation nor as an alternative to net income, income from operations, cash flows from operations or as a measure of our profitability, liquidity or performance under generally accepted accounting principles. We believe that Adjusted EBITDA presents a useful measure of our ability to service and incur debt based on ongoing operations. Furthermore, analogous measures are used by industry analysts to evaluate operating performance. In addition, acquisition and financing related expenses are excluded to make results more comparable between periods. Investors should be aware that our presentation of Adjusted EBITDA may not be comparable to similarly titled measures used by other companies. The table below shows how we calculate Adjusted EBITDA. |
Targeted Results | ||||||||
Year Ended December 31, 2010 | ||||||||
Low | High | |||||||
(Unaudited) | ||||||||
Net income attributable to Arch Coal, Inc. |
$ | 153,700 | $ | 160,100 | ||||
Income tax expense |
16,800 | 18,300 | ||||||
Interest expense, net |
140,300 | 139,900 | ||||||
Depreciation, depletion and amortization |
364,800 | 365,300 | ||||||
Amortization of acquired sales contracts, net |
35,600 | 35,600 | ||||||
Loss on early extinguishment of debt |
6,800 | 6,800 | ||||||
Adjusted EBITDA |
$ | 718,000 | $ | 726,000 | ||||
Adjusted net income and adjusted diluted earnings per common share
Adjusted net income and adjusted diluted earnings per common share are adjusted for the after-tax impact of acquisition and financing related costs and are not measures of financial performance in accordance with generally accepted accounting principles. We believe that adjusted net income and adjusted diluted earnings per common share better reflect the trend of our future results by excluding items relating to significant transactions. The adjustments made to arrive at these measures are significant in understanding and assessing our financial condition. Therefore, adjusted net income and adjusted diluted earnings per share should not be considered in isolation, nor as an alternative to net income or diluted earnings per common share under generally accepted accounting principles. |
Targeted Results | ||||||||
Year Ended December 31, 2010 | ||||||||
Low | High | |||||||
(Unaudited) | ||||||||
Net income attributable to Arch Coal |
$ | 153,700 | $ | 160,100 | ||||
Amortization of acquired sales contracts, net |
35,600 | 35,600 | ||||||
Loss on early extinguishment of debt |
6,800 | 6,800 | ||||||
Tax impact of adjustments |
(15,476 | ) | (15,476 | ) | ||||
Adjusted net income attributable to Arch Coal |
$ | 180,624 | $ | 187,024 | ||||
Diluted weighted average shares outstanding |
163,200 | 163,200 | ||||||
Adjusted diluted earnings per share |
$ | 1.11 | $ | 1.15 | ||||