2005 Financial Review

MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION

The following table includes the contractual obligations of the Company as of December 31, 2005.


	Estimated Payments Due by Period
(In millions)		2006	2007	2008	2009	2010	Later Years	Total
Contractual obligations
Long-term debt obligations:
Senior notes (a)	$	76.7	-	-	-	-	-	76.7
Other		2.9	11.2	1.8	124.4	0.8	45.5	186.6
Capital lease obligations		7.6	5.3	3.9	3.5	2.2	1.6	24.1
Operating lease obligations		66.7	54.1	41.0	28.7	20.1	47.2	257.8
Purchase obligations:
Service contracts		11.9	1.1	0.9	0.7	0.5	0.2	15.3
Other		7.5	0.1	0.1	-	-	-	7.7
Other long-term liabilities reflected on the Company’s balance sheet under GAAP - non-coal related workers compensation and other claims		28.1	15.0	8.2	4.9	3.4	8.2	67.8
Subtotal		201.4	86.8	55.9	162.2	27.0	102.7	636.0
Legacy liabilities (b)		92.0	64.0	65.0	66.0	66.0	1,337.0	1,690.0
Total	$	293.4	150.8	120.9	228.2	93.0	1,439.7	2,326.0
Contractual obligations of BAX Global (c)	$	123.9	57.5	42.9	29.8	21.2	96.1	371.4

(a): The Company expects to prepay the Senior Notes in 2006 with the proceeds of the sale of BAX Global.
(b): The projected payments for liabilities related to former coal operations (legacy liabilities) are discussed in “Results of Operations – Retained Liabilities and Assets of Former Operations.” A portion of the projected payments may ultimately be paid by the VEBA. The Company may elect at any time to use either these assets or its cash from operations to pay benefits for its retiree medical plans. Estimated payments above exclude administration and other payments.
(c): Contractual obligations related to BAX Global of $371.4 million have been segregated in the above table. These obligations were assumed by a third party in early 2006 as a result of the sale of BAX Global described in note 5 to the consolidated financial statements.