We focus on building long-term relationships with customers through our reliable
performance and commitment to customer service. We supply coal to 48 domestic
and foreign electric utilities and over 72% of our sales were to customers with
an investment grade credit rating.
We generally enter into binding contracts that are fixed-price, fixed-volume
supply contracts with our domestic logistics customers. Contracts with these
logistics customers generally have terms of one to three years. The terms of
our sales agreements result from competitive bidding and extensive negotiations
with customers. Consequently, the terms of these contracts vary by customer,
including base price adjustment features, price re-opener terms, logistics and
coal quality requirements, quantity parameters, permitted sources of supply,
impact of future regulatory changes, extension options, force majeure, termination,
assignment and other provisions.
As is customary in the coal industry, we generally enter into fixed price,
fixed volume supply contracts with our mine customers. Contracts with our mine
customers historically featured terms of one to five years, although recent
trends have been toward sales with shorter terms, including monthly and quarterly
contracts. This has led to greater variability and less long-term predictability
of our sales.
