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Whether you're walking a tightrope or scribbling in your checkbook, balance is a good thing. And, one of the best ways to evaluate a company is to glance at its balance sheet to see what it owns with what it owes.
The balance sheet is a paragon of simplicity and is made up of three components: assets (the stuff it owns), liabilities (the money it owes), and shareholders' equity (the company's value to its shareholders).
Assets take two forms: short-term (or current) assets and long-term assets. Under short-term, there¿s good ol' hard cash. Then, there¿s something called "cash equivalents," which are assets like short-term bonds that can be sold so quickly, they might as well be cash. There you factor in inventory, which (if you're a reasonably competent business owner) you can sell to customers in return for--you guessed it--cash. (The raw materials a company owns to make that inventory also falls under this category.)
Long-term assets are things that are harder to convert into cash. (Think real estate and equipment.) Long-term assets depreciate, meaning they lose some value over time. Also under the long-term category are what's called intangible assets: things like patents and brands, that are important, but hard to quantify. Accountants earn their stripes figuring out the real overall value of these assets.
Once you know your assets, it's time for liabilities. As with assets, liabilities are separated into short-term or current, and long-term. Current liabilities are what a company owes in that year: Things like payments to employees or accounts payable to suppliers. Long-term liabilities are debts paid over several years.
Shareholders' equity is determined by subtracting the liabilities from the assets. That number represents the value of the company after all its bills are paid.
Obviously, investors should pay close attention to balance sheets. Spikes in the amount of debt carried, or a reduction in shareholders' equity, are usually red flags.
Home / Markets / Industries / Energy
Monday, June 30, 2008
International Coal Group Announces Triggering Event for Conversion of $225,000,000 9.00% Convertible Senior Notes Due 2012
Comtex
SCOTT DEPOT, W.Va., June 30, 2008 /PRNewswire-FirstCall via COMTEX/ ----International Coal Group, Inc. (NYSE: ICO) announced that pursuant to the terms of the indenture governing International Coal Group, Inc.'s (the "Company") $225,000,000 9.00% Convertible Senior Notes due 2012 (the "Notes"), the Notes will be convertible at the option of holders beginning July 1, 2008. The conversion right was triggered on June 16, 2008, when the closing sale price of the Company's common stock on the New York Stock Exchange exceeded $8.26 (130% of the conversion price in effect on March 31, 2008) for the 20th trading day in the 30 consecutive trading days ending on June 30, 2008. The last reported sale price of the Company's Common stock on the New York Stock Exchange on June 16, 2008 was $12.16.
Upon conversion, the Notes will be settled in cash for the principal amount of the bond, and any excess conversion value may be settled in cash or in shares of the Company's common stock, at the option of the Company, as provided by the terms of the indenture governing the Notes. The initial conversion rate of the Notes is 163.8136 shares of common stock per $1,000 principal amount of Notes. If the Company elects to settle any excess conversion value of the Notes in cash, the holder will receive, for each $1,000 principal amount, the conversion rate multiplied by a 20 day average closing price of the common stock as set forth in the indenture beginning on the third trading day after the Notes are surrendered.
In the event that a holder elects to convert its Note, the Company expects to fund the cash settlement of any such conversion from working capital and/or borrowings under its $100 million revolving credit agreement. However, given that the current market value of the securities substantially exceeds the parity value, the Company does not believe a significant number of conversions are likely at this time.
The triggering of the conversion right as described above is not expected to have a material effect on the Company's financial position.
For information regarding how to tender your Notes contact The Bank of New York Mellon at 2 North La Salle Street, Chicago, Illinois 60602, Telephone: (312) 827-8500, Facsimile: (312) 827-8542, Attention: Corporate Trust Administration.
ICG is a leading producer of coal in Northern and Central Appalachia and the Illinois Basin. The Company has 13 active mining complexes, of which 12 are located in Northern and Central Appalachia and one in Central Illinois. ICG's mining operations and reserves are strategically located to serve utility, metallurgical and industrial customers throughout the Eastern United States, as well as European export markets.
This press release contains certain statements that are forward-looking statements within the "safe harbor" provision of the Private Securities Litigation Reform Act of 1995. Because these forward-looking statements are subject to various risks and uncertainties, actual results may differ materially from those implied in the forward-looking statements. The following factors are among those that may cause actual results to differ materially from the forward-looking statements: market demand for coal, electricity and steel; availability of qualified workers; future economic or capital market conditions; weather conditions or catastrophic weather-related damage; ICG's production capabilities; the consummation of financing, acquisition or disposition transactions and the effect thereof on ICG's business; ICG's plans and objectives for future operations and expansion or consolidation; ICG's relationships with, and other conditions affecting, ICG's customers; the availability and cost of key supplies or commodities, such as diesel fuel, steel, explosives or tires; prices of fuels which compete with or impact coal usage, such as oil and natural gas; timing of reductions or increases in customer coal inventories; long-term coal supply arrangements; risks in or related to coal mining operations, including risks related to third-party suppliers, contractors and carriers operating at our mines or complexes; unexpected maintenance and equipment failure; environmental, safety and other laws and regulations, including those directly affecting ICG's coal mining and production, and those affecting ICG's customers' coal usage; the ability to obtain and maintain all necessary governmental permits and authorizations; competition; railroad, barge, trucking and other transportation availability, performance and costs; employee benefits costs and labor relations issues; replacement of ICG's reserves; ICG's assumptions concerning economically recoverable coal reserve estimates; availability and costs of credit, surety bonds and letters of credit; title defects or loss of leasehold interests in ICG's properties which could result in unanticipated costs or inability to mine these properties; future legislation and changes in regulations or governmental policies or changes in interpretations thereof, including with respect to safety enhancements and environmental initiatives relating to global warming; the impairment of the value of goodwill and long-lived assets; the ongoing effect of the Sago mine accident; ICG's liquidity, results of operations and financial condition; the adequacy and sufficiency of ICG's internal controls; and legal and administrative proceedings, settlements, investigations and claims. Forward-looking statements made by ICG in this press release or elsewhere speak only as of the date on which the statements were made. See also the "Risk Factors" of our 2007 Annual Report on Form 10-K and in our subsequent filings on Form 10-Q, all of which are currently available on our website at www.intlcoal.com . New risks and uncertainties arise from time-to-time, and it is impossible for ICG to predict these events or how they may affect ICG or its anticipated results. ICG has no duty to, and does not intend to, update or revise the forward-looking statements in this news release after the date of issue, except as may be required by law.
SOURCE International Coal Group, Inc.
http://www.intlcoal.com
Copyright (C) 2008 PR Newswire. All rights reserved ********************************************************************** As of Thursday, 06-26-2008 23:59, the latest Comtex SmarTrend� Alert, an automated pattern recognition system, indicated an UPTREND on 04-04-2008 for ICO @ $6.67. For more information on SmarTrend, contact your market data provider or go to www.mysmartrend.com SmarTrend is a registered trademark of Comtex News Network, Inc. Copyright � 2004-2008 Comtex News Network, Inc. All rights reserved.
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