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This excerpt taken from the ACI 10-K filed Mar 1, 2007. Canyon Fuel 35%
Acquisition |
On July 31, 2004, the Company purchased the 35% interest in
Canyon Fuel that it did not own from ITOCHU Corporation. The
purchase price, including related costs and fees, of
$112.2 million was funded with cash of $90.2 million
and a five-year, $22.0 million non-interest bearing note.
Net of cash acquired, the fair value of the transaction totaled
$97.4 million. As a result of the acquisition, the Company
owns all of the ownership interests of Canyon Fuel and
consolidates Canyon Fuel in its financial statements. The
results of operations of the Canyon Fuel mines are included in
the Company’s Western Bituminous segment.
The purchase accounting allocation related to the acquisition
has been recorded in the accompanying consolidated financial
statements as of, and for the period subsequent to,
July 31, 2004. The following table summarizes the estimated
fair values of the assets acquired and the liabilities assumed
at the date of acquisition (in thousands):
|
Accounts receivable
|
$ | 7,432 | ||
|
Materials and supplies
|
3,751 | |||
|
Coal inventory
|
7,434 | |||
|
Other current assets
|
6,466 | |||
|
Property, plant, equipment and mine development
|
125,881 | |||
|
Accounts payable and accrued expenses
|
(10,379 | ) | ||
|
Coal supply agreements
|
(33,378 | ) | ||
|
Other noncurrent assets and liabilities, net
|
(9,823 | ) | ||
|
Total purchase price, net of cash received of $11.0 million
|
$ | 97,384 | ||
Amounts allocated to coal supply agreements noted in the table
above represent the liability established for the net
below-market coal supply agreements to be amortized over the
remaining terms of the contracts. The liability is classified as
an other noncurrent liability on the accompanying Consolidated
Balance Sheets. See Note 1, “Accounting Policies”
for amortization related to coal supply agreements.
F-18
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS —
(Continued)
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