SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
December 13, 2002
THE PITTSTON COMPANY
(Exact Name of registrant as specified in its charter)
Virginia 1-9148 54-1317776
(State or other (Commission (I.R.S. Employer
jurisdiction File Number) Identification No.)
of Incorporation)
1801 Bayberry Court
P. O. Box 18100
Richmond, VA 23226-8100
(Address of principal (Zip Code)
executive offices)
(804)289-9600
(Registrant's telephone number, including area code)
Item 2 Acquisition or Disposition of Assets
On December 13, 2002, subsidiaries of The Pittston Company consummated the sale
of substantially all of their remaining coal assets in Virginia to subsidiaries
of Alpha Natural Resources, LLC, an affiliate of First Reserve Corporation, for
an aggregate purchase price of approximately $76 million, including $36 million
in cash, $24 million in notes and the present value of minimum royalty payments
on coal production and an estimated $16 million of assumed liabilities. The
purchase price was determined through arm's-length negotiations.
The $24 million fair value of future payments includes an $8 million note for
the sale of coal inventory and $16 million for the present value of minimum
future royalties to be received within five years. Liabilities assumed by
subsidiaries of Alpha Natural Resources, LLC were primarily for the reclamation
of Virginia coal mining properties.
Assets sold in the transaction included primarily real property, productive coal
mining assets (machinery and equipment) and coal inventory and supplies.
Item 7 Financial Statements, Pro Forma Financial Information and Exhibits
a) Financial Statements of Businesses Acquired
Not applicable
b) Pro Forma Financial Information
Pro forma effects of the sale of the remaining coal assets in Virginia
The objective of pro forma financial information is to present information
about the continuing impact of a transaction by showing how it might have
affected historical financial statements if the transaction had been
consummated at an earlier period. The pro forma adjustments below should be
read in conjunction with The Pittston Company's historical financial
statements included in its Annual Report on Form 10-K for the year ended
December 31, 2001, and quarterly report on Form 10-Q for the three and nine
months ended September 30, 2002.
As described in Item 2, subsidiaries of The Pittston Company consummated
the sale of substantially all of their remaining coal assets in Virginia to
subsidiaries of Alpha Natural Resources, LLC, an affiliate of First Reserve
Corporation, for an aggregate purchase price of approximately $76 million.
A pro forma statement of operations is based on a company's historical
results from continuing operations adjusted to reflect the sale transaction
as if it had occurred at the beginning of the reporting period. As the
disposed business has been classified within discontinued operations in The
Pittston Company's previously filed consolidated financial statements, a
pro forma statement of operations will not be filed.
For purposes of reporting a pro forma balance sheet, it is assumed that the
sales transaction occurred on the balance sheet date. As the remaining
assets and liabilities in Virginia were segregated on the face of the
balance sheet within net assets and liabilities of discontinued operations,
a limited number of pro forma adjustments are required to The Pittston
Company's historical balance sheet on September 30, 2002. Pro forma amounts
reported are based on preliminary estimates.
Pro forma
Consolidated Consolidated
September 30 Pro forma September 30
Unaudited 2002 Adjustments 2002
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Assets
Current assets:
Cash and cash equivalents 122.9 36.0 1
(4.6) 3
(31.4) 4 122.9
Note receivable - inventory - 8.3 1 8.3
Accounts receivable, net 528.3 - 528.3
Prepaid expenses and other 65.7 4.0 1 69.7
Deferred income taxes 90.9 - 90.9
Discontinued operations 35.1 (27.9) 2 7.2
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Total current assets 842.9 (15.6) 827.3
Property and equipment, net 828.9 - 828.9
Goodwill, net 224.3 - 224.3
Prepaid pension assets 140.6 - 140.6
Deferred income taxes 234.9 - 234.9
Other assets 159.8 11.7 1 171.5
Discontinued operations 101.2 (51.4) 2 49.8
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Total assets 2,532.6 (55.3) 2,477.3
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Liabilities and shareholders' equity
Current liabilities:
Short-term borrowings 37.4 - 37.4
Current maturities of long-term debt 13.8 - 13.8
Accounts payable 264.5 - 264.5
Accrued liabilities 537.1 - 537.1
Discontinued operations 13.3 (3.0) 1,2
(4.6) 3 5.7
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Total current liabilities 866.1 (7.6) 858.5
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Long-term debt 313.9 (31.4) 4 282.5
Postretirement benefits
other than pensions 402.4 - 402.4
Workers' compensation
and other claims 91.1 - 91.1
Deferred revenue 128.6 - 128.6
Deferred income taxes 21.3 - 21.3
Other liabilities 152.1 - 152.1
Discontinued operations 31.3 (16.3) 1,2 15.0
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Total liabilities 2,006.8 (55.3) 1,951.5
Shareholders' equity 525.8 - 525.8
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Total liabilities and
shareholders' equity 2,532.6 (55.3) 2,477.3
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On December 23, 2002, The Pittston Company announced that its previously
announced agreement to dispose of certain of its subsidiaries' coal mining
assets in West Virginia had been terminated. As a result, the remaining
Company-operated active mining operations will cease by the end of 2002. The pro
forma adjustments presented do not reflect the cessation of operations in West
Virginia.
Pro forma adjustments:
1. To record proceeds of sale, including cash, note receivable, the
present value of future minimum royalties to be received and
liabilities assumed by purchaser.
2. To remove the net assets of the sold Virginia coal mining
business
3. To reflect repayment of capital lease.
4. To reflect repayment of debt with remaining cash proceeds.
c) Exhibits
See Exhibit Index
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE PITTSTON COMPANY
(Registrant)
By /s/ Robert T. Ritter
------------------------------------------
Robert T. Ritter
Vice President and Chief Financial Officer
Dated: December 30, 2002
EXHIBIT INDEX
We omitted the schedules and exhibits referenced in the attached Agreements in
accordance with Item 601(b)(2) of regulation S-K. In accordance with Item
601(b)(2) of regulation S-K, we will furnish a copy of any omitted schedule
and/or exhibit supplementally to the Securities and Exchange Commission upon
request.
2.1 Asset Purchase Agreement, dated as of October 29, 2002, by and between
Pittston Coal Company and Dickenson-Russell Coal Company, LLC ("APA
No. 1")
2.2 Amendment to APA No. 1, dated as of December 13, 2002, by and between
Pittston Coal Company and Dickenson-Russell Coal Company, LLC
2.3 Indemnification and Guaranty Agreement, dated as of December 13, 2002,
by and among Pittston Coal Company, The Pittston Company, Alpha
Natural Resources, LLC and Dickenson-Russell Coal Company, LLC
2.4 Cooperation Agreement, dated as of December 13, 2002, by and between
Pittston Coal Company and Dickenson-Russell Coal Company, LLC
2.5 Asset Purchase Agreement, dated as of October 29, 2002, by and between
Pittston Coal Company and Paramont Coal Company Virginia, LLC ("APA
No. 2")
2.6 Amendment to APA No. 2, dated as of December 13, 2002, by and between
Pittston Coal Company and Paramont Coal Company Virginia, LLC
2.7 Indemnification and Guaranty Agreement, dated as of December 13, 2002,
by and among Pittston Coal Company, The Pittston Company, Alpha
Natural Resources, LLC and Paramont Coal Company Virginia, LLC
2.8 Cooperation Agreement, dated December 13, 2002, by and between
Pittston Coal Company and Paramont Coal Company Virginia, LLC
2.9 Asset Purchase Agreement, dated as of October 29, 2002, by and between
Pittston Coal Company and Alpha Land and Reserves, LLC ("APA No. 3")
2.10 Amendment to APA No. 3, dated as of December 13, 2002, by and between
Pittston Coal Company and Alpha Land and Reserves, LLC
2.11 Indemnification and Guaranty Agreement, dated as of December 13, 2002,
by and among Pittston Coal Company, The Pittston Company, Alpha
Natural Resources, LLC and Alpha Land and Reserves, LLC
2.12 Asset Purchase Agreement, dated as of October 29, 2002, by and between
Pittston Coal Company and Alpha Coal Sales Co., LLC ("APA No. 4")
2.13 Amendment to APA No. 4, dated as of December 13, 2002, by and between
Pittston Coal Company and Alpha Coal Sales Co., LLC
2.14 Indemnification and Guaranty Agreement, dated as of December 13, 2002,
by and among Pittston Coal Company, The Pittston Company, Alpha
Natural Resources, LLC and Alpha Coal Sales Co., LLC
2.15 Asset Purchase Agreement, dated as of October 29, 2002, by and between
Pittston Coal Company and Alpha Terminal Company, LLC ("APA No. 5")
2.16 Amendment to APA No. 5, dated as of December 13, 2002, by and between
Pittston Coal Company and Alpha Terminal Company, LLC
2.17 Indemnification and Guaranty Agreement, dated as of December 13, 2002,
by and among Pittston Coal Company, The Pittston Company, Alpha
Natural Resources, LLC and Alpha Terminal Company, LLC
2.18 Asset Purchase Agreement, dated as of October 29, 2002, by and between
Pittston Coal Company and Maxxim Rebuild Co., LLC ("APA No. 6")
2.19 Amendment to APA No. 6, dated as of December 13, 2002, by and between
Pittston Coal Company and Maxxim Rebuild Co., LLC
2.20 Indemnification and Guaranty Agreement, dated as of December 13, 2002,
by and among Pittston Coal Company, The Pittston Company, Alpha
Natural Resources, LLC and Maxxim Rebuild Co., LLC
2.21 Cooperation Agreement, dated as of December 13, 2002, by and between
Pittston Coal Company and Maxxim Rebuild Co., LLC