1376812--3/2/2009--Patriot_Coal

related topics

{gas, price, oil}

{cost, regulation, environmental}

{cost, contract, operation}

{cost, operation, labor}

{investment, property, distribution}

{debt, indebtedness, cash}

{loss, insurance, financial}

{stock, price, share}

{condition, economic, financial}

{customer, product, revenue}

{operation, natural, condition}

{financial, litigation, operation}

{personnel, key, retain}

{capital, credit, financial}

A decline in coal prices could reduce our revenues and the value of our coal reserves. The recent downturn in the domestic and international financial markets, and the risk of prolonged global recessionary conditions, could adversely affect our financial condition and results of operations. Our operations may depend on the availability of additional financing and access to funds under our credit facility. As our coal supply agreements expire, our revenues and operating profits could be negatively impacted if we are unable to extend existing agreements or enter new long-term supply agreements due to competition, changing coal purchasing patterns or other variables. Any change in coal consumption patterns, in particular by United States electric power generators or steel producers, could result in a decrease in the use of coal by those consumers, which could result in lower prices for our coal, a reduction in our revenues and an adverse impact on our earnings and the value of our coal reserves. Failures of contractor-operated sources to fulfill the delivery terms of their contracts with us could reduce our profitability. A shortage of skilled labor and qualified managers in our operating regions could pose a risk to labor productivity and competitive costs and could adversely affect our profitability. A decrease in the availability or increase in costs of key supplies, capital equipment or commodities used in our mining operations could decrease our profitability. Increased competition both within the coal industry, and outside of it, such as competition from alternative fuel providers, may adversely affect our ability to sell coal, and any excess production capacity in the industry could put downward pressure on coal prices. We could be negatively affected if we fail to maintain satisfactory labor relations. Our future success depends upon our ability to develop our existing coal reserves and to acquire additional reserves that are economically recoverable. Fluctuations in transportation costs, the availability or reliability of transportation facilities and our dependence on a single rail carrier for transport from certain of our mining complexes could affect the demand for our coal or temporarily impair our ability to supply coal to our customers. Failure to obtain or renew surety bonds in a timely manner and on acceptable terms could affect our ability to secure reclamation and employee-related obligations, which could adversely affect our ability to mine coal. If our business does not generate sufficient cash for operations, we may not be able to repay borrowings under our credit facility or fund other liquidity needs, and the amount of our indebtedness could affect our ability to grow and compete. The acquisition of Magnum presents integration challenges and incremental costs. The covenants in our credit facility and other debt indentures impose restrictions that could limit our operational and financial flexibility. Inaccuracies in our estimates of economically recoverable coal reserves could result in lower than expected revenues, higher than expected costs or decreased profitability. Our ability to operate our company effectively could be impaired if we lose key personnel or fail to attract qualified personnel. We could be adversely affected by a decline in the creditworthiness or financial condition of our customers. Any defects in title of leasehold interests in our properties could limit our ability to mine these properties or could result in significant unanticipated costs. The ownership and voting interest of Patriot stockholders could be diluted as a result of the issuance of shares of our common stock to the holders of convertible notes upon conversion. The net share settlement feature of our convertible notes may have adverse consequences on our liquidity. Peabody and its shareholders who received Patriot shares at the time of the spin-off could be subject to material amounts of taxes if the spin-off is determined to be a taxable transaction. Patriot could be liable to Peabody for adverse tax consequences resulting from certain change in control transactions and therefore could be prevented from engaging in strategic or capital raising transactions. Terrorist attacks and threats, escalation of military activity in response to such attacks or acts of war may negatively affect our business, financial condition and results of operations. Risks Related to Environmental and Other Regulation Concerns about the environmental impacts of air emissions relating to coal mining and coal combustion, particularly the impact of greenhouse gas emissions on global climate change, are resulting in increased regulation of our industry and could significantly affect demand for our products and adversely affect our results of operations, cash flows and financial condition. We may be unable to obtain, renew or comply with permits necessary for our operation, which could reduce our production, cash flows and profitability. Like many of our competitors, we cannot always completely comply with permit restrictions relating to the discharge of selenium into surface water, which has led to court challenges and related orders and settlements, has required us to pay fines and penalties, is requiring us to incur other significant costs and may be difficult to resolve in a timely basis given current technology. Any restrictions on the disposal of mining spoil material could significantly increase our operating costs and materially harm our financial condition and operating results. Our operations may impact the environment or cause exposure to hazardous substances, and our properties may have environmental contamination, which could result in material liabilities to us. Our mining operations are extensively regulated, which imposes significant costs on us, and future regulations or violations of regulations could increase those costs or limit our ability to produce coal. We are involved in legal proceedings that if determined adversely to us, could significantly impact our profitability, financial position or liquidity. We have significant reclamation and mine closure obligations. If the assumptions underlying our accruals are inaccurate, we could be required to expend greater amounts than anticipated. If our assumptions regarding our likely future expenses related to employee benefit plans are incorrect, then expenditures for these benefits could be materially higher than we have assumed. Due to our participation in multi-employer pension plans and statutory retiree healthcare plans, we may have exposure that extends beyond what our obligations would be with respect to our employees.

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1376812--3/2/2009--Patriot_Coal_CORP