Massey Energy Q1 2009 Earnings Call Transcript

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2009-04-29 17:32:20.0

Tags: Production, Call Transcript, Earnings, UBS AG, Litigation, Personal Finance, Workforce Management, Business Operations, Human Resources, Seeking Alpha, Massey Energy Co.

Question-and-Answer Session

Operator

: Thank you. (Operator Instructions). Thank you. Our first question is from the line of Shneur Gershuni with UBS. Please go ahead with your questions.

Shneur Gershuni - UBS

My first question is just with respect to the process and how you are achieving the production cuts you had mentioned that you were taking Saturday shift so forth. I was wondering, if you could give some color on some complexes whether they're going to be idled and your flexibility to be able to adjust if the market was to return the other way how fast you can bring the production back on line. And, possibly also comment on some of the small and micro producers, whether you've seen some bankruptcies or some closings as well here?

Don Blankenship

Yeah, we have in mine, as far as been able to come back et cetera, exactly what you said as we've made the reductions. That's the reason we've taken some mines to 4-10 hour days and therefore kept the mines hot and the workforce in place. So, that we could very easily come back to a more normal schedule and of course when you've cut out Saturdays, it's easy to bring them back.

We have added a few mines partially, so that we can reorganize and then do some work on ventilation and to meet some of the new EMSHA (East Midlands Strategic Health Autho) requirements more freely without having to do it in a sporadic manner in order to keep the full mine ventilated. So, by adding a couple of mines and getting the production down, it gives us an opportunity to more efficiently and cost effectively do some of the EMSHA required work.

So, we've got a combination of things going on, but we haven't taken anything offline at this stage that couldn't be put back on very quickly and by that I would mean within 2 to 4 weeks.

As far as bankruptcy is nearing, now we see evidences struggling and shutdowns and what's in the press pretty much, we do know that there have been several hundred more layoffs this week. So, we can expect that continue to happen as we see the high inventories and the decreased electricity generation and steel production.

Shneur Gershuni - UBS

Okay. And if I can shortly follow-up a question with respect to the coming side and may be Eric, I was wondering if you can just give us a little bit color on the mark-to-market gain on the derivatives, just understand how it's been designated that way and also if you can talk about the non-cash interest expense as well to that creep in there sort of thing to be declassifying some of the debt integrities so far if you can just give us color, that'd be great.

 

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