UNITED STATES
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): June 17, 2011
CONSOL Energy Inc.
(Exact name of registrant as specified in its charter)
Delaware | 001-14901 | 51-0337383 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
CNX Center
1000 CONSOL Energy Drive
Canonsburg, Pennsylvania 15317
(Address of principal executive offices)
(Zip code)
Registrants telephone number, including area code:
(724) 485-4000
Not applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 7.01 Regulation FD Disclosure.
The Bituminous Coal Operators Association (BCOA) and the United Mine Workers of America (UMWA) have reached a tentative labor agreement which will run from July 1, 2011 to December 31, 2016.
CONSOL Energy Inc. (CONSOL Energy) subsidiary companies that are members of the BCOA operate the following mines in West Virginia: McElroy Mine, Shoemaker Mine, Robinson Run Mine, Loveridge Mine, and Blacksville Mine. CONSOL Energys Emery Mine in Utah and Mine 84 in Pennsylvania are also operated through subsidiary companies that are members of the BCOA, but those mines are currently idle.
The total incremental cost of the revised terms of the contract over 2010 operating costs at CONSOL Energys represented operations is projected to average approximately 3.5% per ton, per year over the term of the contract. CONSOL Energy expects a similar increase to impact all of CONSOL Energys tons due to cost inflation that typically occurs at CONSOL Energys non-represented mines.
The UMWA has announced that the contract was ratified by its members on June 17, 2011. The effectiveness of the agreement is subject to the execution of the agreement by the UMWA and BCOA member companies.
Forward-Looking Statements
We are including the following cautionary statement in this Current Report on Form 8-K to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for any forward-looking statements made by, or on behalf, of us. With the exception of historical matters, the matters discussed in this Current Report on Form 8-K are forward-looking statements (as defined in Section 21E of the Exchange Act) that involve risks and uncertainties that could cause actual results to differ materially from projected results. Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results. The forward-looking statements may include projections and estimates concerning the timing and success of specific projects and our future production, revenues, income and capital spending. When we use the words believe, intend, expect, may, should, anticipate, could, estimate, plan, predict, project, or their negatives, or other similar expressions, the statements which include those words are usually forward-looking statements. When we describe strategy that involves risks or uncertainties, we are making forward-looking statements. The forward-looking statements in this Current Report on Form 8-K speak only as of the date of this Current Report on Form 8-K; we disclaim any obligation to update these statements unless required by securities law, and we caution you not to rely on them unduly. We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks, contingencies and uncertainties relate to, among other matters, the following:
| deterioration in economic conditions in any of the industries in which our customers operate, or sustained uncertainty in financial markets cause conditions we cannot predict; |
| an extended decline in prices we receive for our coal and gas affecting our operating results and cash flows; |
| our customers extending existing contracts or entering into new long-term contracts for coal; |
| our reliance on major customers; |
| our inability to collect payments from customers if their creditworthiness declines; |
| the disruption of rail, barge, gathering, processing and transportation facilities and other systems that deliver our coal and gas to market; |
| a loss of our competitive position because of the competitive nature of the coal and gas industries, or a loss of our competitive position because of overcapacity in these industries impairing our profitability; |
| our ability to negotiate a new agreement with the United Mine Workers of America and our inability to maintain satisfactory labor relations; |
| coal users switching to other fuels in order to comply with various environmental standards related to coal combustion emissions; |
| the impact of potential, as well as any adopted regulations relating to greenhouse gas emissions on the demand for coal and natural gas, as well as the impact of any adopted regulations on our coal mining operations due to the venting of coalbed methane which occurs during mining; |
| foreign currency fluctuations could adversely affect the competitiveness of our coal abroad; |
| the risks inherent in coal and gas operations being subject to unexpected disruptions, including geological conditions, equipment failure, timing of completion of significant construction or repair of equipment, fires, explosions, accidents and weather conditions which could impact financial results; |
| our focus on new gas development projects and exploration for gas in areas where we have little or no proven gas reserves; |
| decreases in the availability of, or increases in, the price of commodities and services used in our mining and gas operations, as well as our exposure under take or pay contracts we entered into with well service providers to obtain services of which if not used could impact our cost of production; |
| obtaining and renewing governmental permits and approvals for our coal and gas operations; |
| the effects of government regulation on the discharge into the water or air, and the disposal and clean-up of, hazardous substances and wastes generated during our coal and gas operations; |
| the effects of stringent federal and state employee health and safety regulations, including the ability of regulators to shut down a mine or well; |
| the potential for liabilities arising from environmental contamination or alleged environmental contamination in connection with our past or current coal and gas operations; |
| the effects of mine closing, reclamation, gas well closing and certain other liabilities; |
| uncertainties in estimating our economically recoverable coal and gas reserves; |
| costs associated with perfecting title for coal or gas rights on some of our properties; |
| the outcomes of various legal proceedings, which are more fully described in our reports filed under the Securities Exchange Act of 1934; |
| the impacts of various asbestos litigation claims; |
| increased exposure to employee related long-term liabilities; |
| increased exposure to multi-employer pension plan liabilities; |
| minimum funding requirements by the Pension Protection Act of 2006 (the Pension Act) coupled with the significant investment and plan asset losses suffered during the recent economic decline has exposed us to making additional required cash contributions to fund the pension benefit plans which we sponsor and the multi-employer pension benefit plans in which we participate; |
| lump sum payments made to retiring salaried employees pursuant to our defined benefit pension plan exceeding total service and interest cost in a plan year; |
| acquisitions that we recently have completed or may make in the future including the accuracy of our assessment of the acquired businesses and their risks, achieving any anticipated synergies, integrating the acquisitions and unanticipated changes that could affect assumptions we may have made and divestitures we anticipate may not occur or produce anticipated proceeds; |
| the anti-takeover effects of our rights plan could prevent a change of control; |
| increased exposure on our financial performance due to the degree we are leveraged; |
| replacing our natural gas reserves, which if not replaced, will cause our gas reserves and gas production to decline; |
| our ability to acquire water supplies needed for gas drilling, or our ability to dispose of water used or removed from strata in connection with our gas operations at a reasonable cost and within applicable environmental rules; |
| our hedging activities may prevent us from benefiting from price increases and may expose us to other risks; |
| other factors discussed in our 2010 Form 10-K under Risk Factors, as updated by any subsequent Form 10-Qs, which are on file at the Securities and Exchange Commission. |
SIGNATURES
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.
CONSOL ENERGY INC. | ||
By: | /s/ Stephen W. Johnson | |
Stephen W. Johnson, | ||
Senior Vice President and General Counsel |
Dated: June 20, 2011