Supplemental Guarantor/Non-Guarantor Financial Information (CPE Resources only)

12 Months Ended

Dec. 31, 2012

Supplemental Guarantor/Non-Guarantor Financial Information (CPE Resources only)

Supplemental Guarantor/Non-Guarantor Financial Information (CPE Resources only)

23. Supplemental Guarantor/Non-Guarantor Financial Information (CPE Resources only)

        In accordance with the indenture governing the senior notes, certain wholly-owned U.S. subsidiaries of CPE Resources (the "Guarantor Subsidiaries") have fully and unconditionally guaranteed these senior notes on a joint and several basis. These guarantees of either series of senior notes are subject to release in the following customary circumstances:

• •

  a sale or other disposition (including by way of consolidation or merger or otherwise) of the Guarantor Subsidiary or the sale or disposition of all or substantially all the assets of the Guarantor Subsidiary (other than to the CPE Resources or a Restricted Subsidiary (as defined in the indenture) of CPE Resources) otherwise permitted by the indenture,

  •

  a sale of the majority of the capital stock of a Guarantor Subsidiary to a third person otherwise permitted by the indenture, after which the applicable Guarantor Subsidiary is no longer a Restricted Subsidiary,

  •

  upon a liquidation or dissolution of a Guarantor Subsidiary so long as no default under the indenture occurs as a result thereof,

  •

  the designation by CPE Resources in accordance with the indenture of the Guarantor Subsidiary as an Unrestricted Subsidiary or the Guarantor Subsidiary otherwise ceases to be a Restricted Subsidiary of CPE Resources in accordance with the indenture,

  •

  defeasance or discharge of such series of senior notes or

  •

  the release, other than the discharge through payment by the Guarantor Subsidiary, of all other guarantees by such Restricted Subsidiary of Debt (as defined in the indenture) of CPE Resources or the co-issuer of the senior notes.

        Separate financial statements and other disclosures concerning the Guarantor Subsidiaries are not presented because management believes that such information is not material to the senior note holders. The following historical financial statement information is provided for the Guarantor/Non-Guarantor Subsidiaries:

Supplemental Condensed Consolidating Statement of Operations and
Comprehensive Income
(in thousands)

	Year Ended December 31, 2012
	Parent Company (CPE Resources)			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Revenue	$	—		$	1,494,597		$	22,176		$	—		$	1,516,772
Costs and expenses
Cost of product sold (exclusive of depreciation, depletion, amortization and accretion, shown separately)		(12	)		1,103,013			29,397			—			1,132,399
Depreciation and depletion		2,403			89,554			2,618			—			94,575
Accretion		—			9,852			3,336			—			13,189
Derivative financial instruments		(138	)		(22,616	)		—			—			(22,754	)
Selling, general and administrative expenses		51,420			3,130			—			—			54,548
Other operating costs		—			2,949			—			—			2,949
Total costs and expenses		53,673			1,185,881			35,352			—			1,274,906
Operating income (loss)		(53,673	)		308,715			(13,176	)		—			241,866
Other income (expense)
Interest income		1,086			—			—			—			1,086
Interest expense		(33,963	)		(1,991	)		(63	)		—			(36,016	)
Other		—			(847	)		—			—			(847	)
Total other expense		(32,877	)		(2,838	)		(62	)		—			(35,777	)
Income (loss) before income tax provision and earnings (losses) from affiliates		(86,550	)		305,877			(13,238	)		—			206,089
Income tax provision		32,134			(89,142	)		4,972			—			(52,036	)
Earnings from unconsolidated affiliates, net of tax		17			1,539			—			—			1,556
Earnings (losses) from consolidated affiliates, net of tax		210,008			(8,266	)		—			(201,742	)		—
Net income (loss)		155,609			210,008			(8,266	)		(201,742	)		155,609
Other comprehensive income
Retiree medical plan amortization of prior service costs		1,575			1,575			—			(1,575	)		1,575
Retiree medical plan adjustment		(4,665	)		(4,665	)		—			4,665			(4,665	)
Decker pension adjustment		204			204			204			(408	)		204
Income taxes on retiree medical plan adjustments		1,039			1,039			(73	)		(966	)		1,039
Other comprehensive income (loss)		(1,847	)		(1,847	)		131			1,716			(1,847	)
Total comprehensive income (loss)	$	153,762		$	208,161		$	(8,135	)	$	(200,026	)	$	153,762

Supplemental Condensed Consolidating Statement of Operations and
Comprehensive Income (Continued)
(in thousands)

	Year Ended December 31, 2011
	Parent Company (CPE Resources)			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Revenue	$	1		$	1,529,846		$	23,814		$	—		$	1,553,661
Costs and expenses
Cost of product sold (exclusive of depreciation, depletion, amortization and accretion, shown separately)		192			1,125,340			25,585			—			1,151,117
Depreciation and depletion		2,027			80,689			4,411			—			87,127
Accretion		—			8,539			3,930			—			12,469
Derivative financial instruments		—			(2,275	)		—			—			(2,275	)
Selling, general and administrative expenses		46,735			4,326			—			—			51,061
Other operating costs		—			1,419			—			—			1,419
Total costs and expenses		48,954			1,218,038			33,926			—			1,300,918
Operating income (loss)		(48,953	)		311,808			(10,112	)		—			252,743
Other income (expense)
Interest income		590			1			1			—			592
Interest expense		(32,772	)		(932	)		(58	)		—			(33,762	)
Other, net		—			(170	)		—			—			(170	)
Total other expense		(32,182	)		(1,101	)		(57	)		—			(33,340	)
Income (loss) before income tax provision and earnings (losses) from affiliates		(81,135	)		310,707			(10,169	)		—			219,403
Income tax provision		83,425			(106,956	)		3,548			—			(19,983	)
Earnings from unconsolidated affiliates, net of tax		21			1,780			—			—			1,801
Earnings (losses) from consolidated affiliates, net of tax		198,910			(6,621	)		—			(192,289	)		—
Net income (loss)		201,221			198,910			(6,621	)		(192,289	)		201,221
Other comprehensive income
Retiree medical plan amortization of prior service costs		1,305			1,305			—			(1,305	)		1,305
Retiree medical plan adjustment		(5,602	)		(5,602	)		—			5,602			(5,602	)
Decker pension adjustment		(1,885	)		(1,885	)		(1,885	)		3,770			(1,885	)
Income taxes on retiree medical plan adjustments		2,226			2,225			678			(2,903	)		2,226
Other comprehensive income (loss)		(3,956	)		(3,957	)		(1,207	)		5,164			(3,956	)
Total comprehensive income (loss)	$	197,265		$	194,953		$	(7,828	)	$	(187,125	)	$	197,265

Supplemental Condensed Consolidating Statement of Operations and
Comprehensive Income (Continued)
(in thousands)

	Year Ended December 31, 2010
	Parent Company (CPE Resources)			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Revenue	$	78		$	1,348,769		$	21,914		$	—		$	1,370,761
Costs and expenses
Cost of product sold (exclusive of depreciation, depletion, amortization and accretion, shown separately)		221			959,432			19,920			—			979,573
Depreciation and depletion		2,080			97,189			754			—			100,023
Amortization		—			3,197			—			—			3,197
Accretion		—			9,591			2,908			—			12,499
Selling, general and administrative expenses		29,187			33,577			782			—			63,546
Total costs and expenses		31,488			1,102,986			24,364			—			1,158,838
Operating income (loss)		(31,410	)		245,783			(2,450	)		—			211,923
Other income (expense)
Interest income		558			—			7			—			565
Interest expense		(45,629	)		(1,230	)		(58	)		—			(46,917	)
Other, net		42			115			—			—			157
Total other expense		(45,029	)		(1,115	)		(51	)		—			(46,195	)
Income (loss) before income tax provision and earnings (losses) from affiliates		(76,439	)		244,668			(2,501	)		—			165,728
Income tax provision		1,146			(430	)		64			—			780
Earnings from unconsolidated affiliates, net of tax		26			3,919			—			—			3,945
Earnings (losses) from consolidated affiliates, net of tax		245,720			(2,437	)		—			(243,283	)		—
Net income (loss)		170,453			245,720			(2,437	)		(243,283	)		170,453
Other comprehensive income
Retiree medical plan amortization of prior service costs		1,405			1,405			—			(1,405	)		1,405
Retiree medical plan adjustment		(3,587	)		(3,587	)		—			3,587			(3,587	)
Decker pension adjustment		295			295			295			(590	)		295
Other comprehensive income (loss)		(1,887	)		(1,887	)		295			1,592			(1,887	)
Total comprehensive income (loss)	$	168,566		$	243,833		$	(2,142	)	$	(241,691	)	$	168,566

Supplemental Condensed Consolidating Balance Sheet
(in thousands)

	December 31, 2012
	Parent Company (CPE Resources)		Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Eliminations			Consolidated
ASSETS
Current assets
Cash and cash equivalents	$	195,076	$	—	$	2,615		$	—		$	197,691
Investments in marketable securities		80,341		—		—			—			80,341
Restricted cash		—		—		—			—			—
Accounts receivable		—		74,008		2,108			—			76,117
Due from related parties		—		385,102		42			(385,144	)		—
Inventories, net		6,741		71,312		3,622			—			81,675
Deferred income taxes		—		21,124		—			(28	)		21,096
Derivative assets		138		13,647		—			—			13,785
Other assets		7		16,100		117			—			16,224
Total current assets		282,303		581,293		8,504			(385,171	)		486,929
Noncurrent assets
Property, plant and equipment, net		9,239		1,666,020		3,035			—			1,678,294
Goodwill		—		35,634		—			—			35,634
Deferred income taxes		22,807		24,650		18,679			—			66,136
Investments and other assets		1,682,267		—		4,470			(1,646,259	)		40,478
Total assets	$	1,996,616	$	2,307,597	$	34,688		$	(2,031,430	)	$	2,307,471
LIABILITIES AND MEMBER'S EQUITY
Current liabilities
Accounts payable	$	2,558	$	45,896	$	1,117		$	—		$	49,571
Royalties and production taxes		—		126,726		2,625			—			129,351
Accrued Expenses		2,087		41,529		292			—			43,908
Due to related parties		396,137		—		—			(385,144	)		10,993
Current portion of federal coal lease obligations		—		63,191		—			—			63,191
Other current liabilities		76		1,754		966			(27	)		2,769
Total current liabilities		400,858		279,096		5,001			(385,172	)		299,783
Noncurrent liabilities
Senior notes		596,506		—		—			—			596,506
Federal coal lease obligations, net of current portion		—		122,928		—			—			122,928
Asset retirement obligations, net of current portion		—		164,626		74,365			—			238,991
Deferred income taxes		—		—		—			—			—
Other liabilities		61		77,655		5,806			(33,449	)		50,073
Total liabilities		997,425		644,305		85,172			(418,621	)		1,308,281
Commitments and Contingencies (Note 15)
Total member's equity		999,190		1,663,293		(50,484	)		(1,612,809	)		999,190
Total liabilities and member's equity	$	1,996,615	$	2,307,598	$	34,688		$	(2,031,430	)	$	2,307,471

Supplemental Condensed Consolidating Balance Sheet (Continued)
(in thousands)

	December 31, 2011
	Parent Company (CPE Resources)		Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Eliminations			Consolidated
ASSETS
Current assets
Cash and cash equivalents	$	401,087	$	2	$	3,151		$	—		$	404,240
Investments in marketable securities		75,228		—		—			—			75,228
Restricted cash		71,245		—		—			—			71,245
Accounts receivable		130		92,936		2,181			—			95,247
Due from related parties		—		256,460		—			(256,460	)		—
Inventories, net		5,753		61,677		4,218			—			71,648
Deferred income taxes		—		30,648		—			—			30,648
Derivative financial instruments		—		2,275		—			—			2,275
Other assets		—		12,610		—			—			12,610
Total current assets		553,443		456,608		9,550			(256,460	)		763,141
Noncurrent assets
Property, plant and equipment, net		6,684		1,338,839		4,612			—			1,350,135
Goodwill		—		35,634		—			—			35,634
Deferred income taxes		34,307		28,931		15,042			—			78,280
Investments and other assets		1,134,791		—		—			(1,105,018	)		29,773
Total assets	$	1,729,225	$	1,860,012	$	29,204		$	(1,361,478	)	$	2,256,963
LIABILITIES AND MEMBER'S EQUITY
Current liabilities
Accounts payable and accrued expenses	$	2,801	$	66,850	$	1,726		$	—		$	71,377
Royalties and production taxes		—		133,349		2,723			—			136,072
Accrued expenses		2,094		44,677		5,028			—			51,799
Due to related parties		282,661		—		1,219			(256,460	)		27,420
Current portion of federal coal lease obligations		—		102,198		—			—			102,198
Other liabilities		45		3,960		966			—			4,971
Total current liabilities		287,601		351,034		11,662			(256,460	)		393,837
Noncurrent liabilities
Senior notes		596,077		—		—			—			596,077
Federal coal lease obligations, net of current portion		—		186,119		—			—			186,119
Asset retirement obligations, net of current portion		—		126,267		66,440			—			192,707
Other liabilities		119		84,201		6,021			(47,546	)		42,795
Total liabilities		883,797		747,622		84,123			(304,006	)		1,411,535
Total member's equity		845,428		1,112,390		(54,919	)		(1,057,472	)		845,428
Total liabilities and member's equity	$	1,729,225	$	1,860,012	$	29,204		$	(1,361,478	)	$	2,256,963

Supplemental Condensed Consolidated Statement of Cash Flows
(in thousands)

	Year Ended December 31, 2012
	Parent Company (CPE Resources)			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net cash provided by (used in) operating activities	$	36,458		$	219,458		$	(8,447	)	$	—		$	247,469
Investing activities
Acquisition of Youngs Creek project		—			(300,377	)		—			—			(300,377	)
Purchases of property, plant and equipment		(8,175	)		(45,185	)		(190	)		—			(53,550	)
Cash paid for capitalized interest		—			(50,119	)		—			—			(50,119	)
Investments in marketable securities		(67,576	)		—			—			—			(67,576	)
Maturity and redemption of investments		62,463			—			—			—			62,463
Investment in development projects		—			(7,389	)		—			—			(7,389	)
Return of restricted cash		71,244			—			—			—			71,244
Partnership escrow deposit		—			—			(4,470	)		—			(4,470	)
Contributions made to subsidiary		(300,377	)		(12,570	)		—			312,947			—
Other		(47	)		1,907			—			—			1,860
Net cash used in investing activities		(242,468	)		(413,733	)		(4,660	)		312,947			(347,914	)
Financing activities
Principal payments on federal coal leases		—			(102,198	)		—			—			(102,198	)
Contributions received from parent		—			300,377			12,570			(312,947	)		—
Other		—			(3,906	)		—			—			(3,906	)
Net cash provided by (used in) financing activities		—			194,273			12,570			(312,947	)		(106,104	)
Net decrease in cash and cash equivalents		(206,010	)		(2	)		(537	)		—			(206,549	)
Cash and cash equivalents at beginning of year		401,087			2			3,151			—			404,240
Cash and cash equivalents at the end of year	$	195,077		$	—		$	2,614		$	—		$	197,691

Supplemental Condensed Consolidating Statement of Cash Flows (Continued)
(in thousands)

	Year Ended December 31, 2011
	Parent Company (CPE Resources)			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net cash provided by (used in) operating activities	$	55,508		$	247,529		$	(6,090	)	$	—		$	296,947
Investing activities
Purchases of property, plant and equipment		(9,721	)		(98,804	)		(208	)		—			(108,733	)
Cash paid for capitalized interest		—			(33,989	)		—			—			(33,989	)
Purchases of marketable securities		(75,228	)		—			—			—			(75,228	)
Initial payment on federal coal leases		—			(69,407	)		—			—			(69,407	)
Return of restricted cash		110,972			—			—			—			110,972
Distributions received from subsidiary		—			8,637			—			(8,637	)		—
Other		—			713			—			—			713
Net cash used in investing activities		26,023			(192,850	)		(208	)		(8,637	)		(175,672	)
Financing activities
Principal payments on federal coal leases		—			(54,630	)		—			—			(54,630	)
Distributions		(162	)		—			(8,637	)		8,637			(162	)
Other		(2,292	)		(51	)		—			—			(2,343	)
Net cash used in financing activities		(2,454	)		(54,681	)		(8,637	)		8,637			(57,135	)
Net increase (decrease) in cash and cash equivalents		79,077			(2	)		(14,935	)		—			64,140
Cash and cash equivalents at end of period		322,010			4			18,086			—			340,100
Cash and cash equivalents at beginning of period	$	401,087		$	2		$	3,151		$	—		$	404,240

Supplemental Condensed Consolidating Statement of Cash Flows (Continued)
(in thousands)

	Year Ended December 31, 2010
	Parent Company (CPE Resources)			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations		Consolidated
Net cash provided by (used in) operating activities	$	202,843		$	136,543		$	(3,685	)	$	—	$	335,701
Investing activities
Purchases of property, plant and equipment		(4,282	)		(60,610	)		(149	)		—		(65,041	)
Cash paid for capitalized interest		—			(26,598	)		—			—		(26,598	)
Return of restricted cash		116,533			—			—			—		116,533
Restricted cash deposit		(218,425	)		—			—			—		(218,425	)
Other		—			1,437			74			—		1,511
Net cash used in investing activities		(106,174	)		(85,771	)		(75	)		—		(192,020	)
Financing activities
Principal payments on federal coal leases		—			(50,768	)		—			—		(50,768	)
Distributions		(21,129	)		—			—			—		(21,129	)
Net cash used in financing activities		(21,129	)		(50,768	)		—			—		(71,897	)
Net increase (decrease) in cash and cash equivalents		75,540			4			(3,760	)		—		71,784
Cash and cash equivalents at beginning of period		246,470			—			21,846			—		268,316
Cash and cash equivalents at the end of year	$	322,010		$	4		$	18,086		$	—	$	340,100