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This excerpt taken from the ACI 10-K filed Mar 1, 2007. Triton
Acquisition |
On August 20, 2004, the Company acquired (1) Vulcan
Coal Holdings, L.L.C., which owned all of the common equity of
Triton Coal Company, LLC (“Triton”), and (2) all
of the preferred units of Triton for a purchase price of
$382.1 million, including transaction costs and working
capital adjustments. In 2003, Triton was the nation’s sixth
largest coal producer and operated two mines in the Powder River
Basin: North Rochelle and Buckskin. Following the consummation
of the transaction, the Company completed an agreement to sell
Triton’s Buckskin mine to Kiewit Mining Acquisition Company
(“Kiewit”). The net sales price for this second
transaction was $73.1 million. The total purchase price,
including related costs and fees, was funded with cash on hand,
including the proceeds from the Buckskin sale,
$22.0 million in borrowings under the Company’s
existing revolving credit facility and a $100.0 million
term loan at its Arch Western Resources subsidiary. Upon
acquisition, the Company integrated the North Rochelle mine into
its existing Black Thunder mine in the Powder River Basin.
The purchase accounting allocations related to the acquisition
have been recorded in the accompanying consolidated financial
statements as of, and for the periods subsequent to,
August 20, 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
|
$ | 14,233 | ||
|
Materials and supplies
|
4,161 | |||
|
Coal inventory
|
4,875 | |||
|
Other current assets
|
2,200 | |||
|
Property, plant, equipment and mine development
|
325,194 | |||
|
Coal supply agreements
|
8,486 | |||
|
Goodwill
|
40,032 | |||
|
Accounts payable and accrued expenses
|
(72,326 | ) | ||
|
Other noncurrent assets and liabilities, net
|
(22,135 | ) | ||
|
Total purchase price, net of cash received of $0.4 million
|
$ | 304,720 | ||
Amounts allocated to coal supply agreements noted in the table
above represent the value attributed to the net above-market
coal supply agreements to be amortized over the remaining terms
of the contracts. See Note 1, “Accounting
Policies” for amortization related to coal supply
agreements.
The goodwill amount above arose due to the delay in time between
the execution of the acquisition agreement and the date of
closing because of the Federal Trade Commission’s lawsuit
to block the acquisition and is attributable to the loss of
value from the tons mined during this period. Of the amount
allocated to goodwill above, $34.4 million was deductible
for income tax purposes.
F-19
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS —
(Continued)
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