Delaware
|
02-0733940
|
(State
or other jurisdiction of
|
(I.R.S.
Employer
|
incorporation
or organization)
|
Identification
Number)
|
One
Alpha Place, P.O. Box 2345
|
24212
|
(Address
of principal executive offices)
|
(Zip
Code)
|
|
|
Page
|
PART
I
|
||
Item
1.
|
|
|
3
|
||
4 | ||
5 | ||
7 | ||
Item
2.
|
20 | |
Item
3.
|
31 | |
Item
4.
|
32
|
|
PART
II
|
||
Item
1A.
|
33 | |
Item 5. | Other Information | 33 |
Item
6.
|
35 | |
EX-10.2: Letter Of Agreement | ||
Condensed
Consolidated Balance Sheets (Unaudited)
|
||||||||||
(In
thousands, except share and per share amounts)
|
||||||||||
September
30,
|
December
31,
|
|||||||||
2006
|
2005
|
|||||||||
Assets
|
||||||||||
Current
assets:
|
||||||||||
Cash
and cash equivalents
|
$
|
11,524
|
39,622
|
|||||||
Trade
accounts receivable, net
|
173,134
|
147,961
|
||||||||
Notes
and other receivables
|
4,324
|
10,330
|
||||||||
Inventories
|
73,588
|
84,885
|
||||||||
Prepaid
expenses and other current assets
|
34,977
|
36,117
|
||||||||
Total
current assets
|
297,547
|
318,915
|
||||||||
Property,
plant, and equipment, net
|
640,781
|
582,750
|
||||||||
Goodwill
|
18,641
|
18,641
|
||||||||
Other
intangibles, net
|
8,392
|
11,014
|
||||||||
Deferred
income taxes
|
37,917
|
38,967
|
||||||||
Other
assets
|
44,381
|
43,371
|
||||||||
Total
assets
|
$
|
1,047,659
|
1,013,658
|
|||||||
Liabilities
and Stockholders' Equity
|
||||||||||
Current
liabilities:
|
||||||||||
Current
portion of long-term debt
|
$
|
3,239
|
3,242
|
|||||||
Notes
payable
|
3,537
|
59,014
|
||||||||
Bank
overdraft
|
35,639
|
17,065
|
||||||||
Trade
accounts payable
|
69,096
|
99,746
|
||||||||
Deferred
income taxes
|
12,544
|
11,243
|
||||||||
Accrued
expenses and other current liabilities
|
85,114
|
93,531
|
||||||||
Total
current liabilities
|
209,169
|
283,841
|
||||||||
Long-term
debt, net of current portion
|
421,575
|
423,547
|
||||||||
Workers’
compensation benefits
|
6,939
|
5,901
|
||||||||
Postretirement
medical benefits
|
31,144
|
24,461
|
||||||||
Asset
retirement obligation
|
56,387
|
46,296
|
||||||||
Deferred
gains on sale of property interests
|
5,017
|
5,762
|
||||||||
Other
liabilities
|
30,364
|
11,085
|
||||||||
Total
liabilities
|
760,595
|
800,893
|
||||||||
Stockholder's
equity:
|
||||||||||
Preferred
stock-par value $0.01 10,000,000 shares authorized,
none issued
|
—
|
—
|
||||||||
Common
stock - par value $0.01, 100,000,000 shares authorized,
64,965,655and 64,420,414 shares issued and
outstanding
|
650
|
644
|
||||||||
Additional
paid-in capital
|
210,372
|
193,608
|
||||||||
Accumulated
other comprehensive (loss)
|
(7,354
|
)
|
—
|
|||||||
Retained
earnings
|
83,396
|
18,513
|
||||||||
Total
stockholder's equity
|
287,064
|
212,765
|
||||||||
Total
liabilities and stockholder's equity
|
$
|
1,047,659
|
1,013,658
|
|||||||
See
accompanying notes to condensed consolidated financial
statements.
|
Condensed
Consolidated Statements of Income (Unaudited)
|
|||||||||||||
(In
thousands, except share and per share amounts)
|
|||||||||||||
Three
months ended
|
Nine
months ended
|
||||||||||||
September
30,
|
September
30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
Revenues:
|
|||||||||||||
Coal
revenues
|
$
|
419,036
|
$
|
345,179
|
$
|
1,279,939
|
$
|
982,383
|
|||||
Freight
and handling revenues
|
45,805
|
46,659
|
143,132
|
126,650
|
|||||||||
Other
revenues
|
9,877
|
5,851
|
29,638
|
18,447
|
|||||||||
Total
revenues
|
474,718
|
397,689
|
1,452,709
|
1,127,480
|
|||||||||
Costs
and expenses:
|
|||||||||||||
Cost
of coal sales (exclusive of items shown
|
|||||||||||||
separately
below)
|
340,440
|
298,522
|
1,016,831
|
818,299
|
|||||||||
Freight
and handling costs
|
45,805
|
46,659
|
143,132
|
126,650
|
|||||||||
Cost
of other revenues
|
5,774
|
5,943
|
19,170
|
16,327
|
|||||||||
Depreciation,
depletion and amortization
|
36,422
|
16,277
|
104,263
|
45,521
|
|||||||||
Selling,
general and administrative expenses
|
|||||||||||||
(exclusive
of depreciation and amortization shown separately above)
|
16,837
|
12,147
|
52,229
|
74,924
|
|||||||||
Total
costs and expenses
|
445,278
|
379,548
|
1,335,625
|
1,081,721
|
|||||||||
Income
from operations
|
29,440
|
18,141
|
117,084
|
45,759
|
|||||||||
Other
income (expense):
|
|||||||||||||
Interest
expense
|
(10,735
|
)
|
(6,636
|
)
|
(31,798
|
)
|
(19,400
|
)
|
|||||
Interest
income
|
156
|
197
|
514
|
675
|
|||||||||
Miscellaneous
income (expense), net
|
427
|
50
|
2,123
|
40
|
|||||||||
Total
other income (expense), net
|
(10,152
|
)
|
(6,389
|
)
|
(29,161
|
)
|
(18,685
|
)
|
|||||
Income
from continuing operations before income taxes
|
|||||||||||||
and
minority interest
|
19,288
|
11,752
|
87,923
|
27,074
|
|||||||||
Income
tax expense
|
4,744
|
3,542
|
23,040
|
15,141
|
|||||||||
Minority
interest
|
—
|
—
|
—
|
2,918
|
|||||||||
Income
from continuing operations
|
14,544
|
8,210
|
64,883
|
9,015
|
|||||||||
Discontinued
operations:
|
|||||||||||||
Loss
from discontinued operations before income taxes and
|
|||||||||||||
minority
interest
|
—
|
—
|
—
|
(379
|
)
|
||||||||
Income
tax benefit
|
—
|
—
|
—
|
(93
|
)
|
||||||||
Minority
interest
|
—
|
—
|
—
|
(72
|
)
|
||||||||
Loss
from discontinued operations
|
—
|
—
|
—
|
(214
|
)
|
||||||||
Net
income
|
$
|
14,544
|
$
|
8,210
|
$
|
64,883
|
$
|
8,801
|
|||||
Net
income per basic and diluted share, as adjusted in 2005
|
|||||||||||||
Income
from continuing operations
|
$
|
0.23
|
0.13
|
$
|
1.01
|
0.17
|
|||||||
Loss
from discontinued operations
|
-
|
-
|
-
|
(0.01
|
)
|
||||||||
Net
income per basic and diluted share
|
$
|
0.23
|
$
|
0.13
|
$
|
1.01
|
$
|
0.16
|
|||||
See
accompanying notes to condensed consolidated financial
statements.
|
Condensed
Consolidated Statements of Cash Flows (Unaudited)
|
|||||||
(In
thousands)
|
|||||||
Nine
months ended
|
|||||||
September
30,
|
|||||||
2006
|
2005
|
||||||
Operating
activities:
|
|||||||
Net
income
|
$
|
64,883
|
8,801
|
||||
Adjustments
to reconcile net income to
net cash provided by operating activities:
|
|||||||
Depreciation,
depletion and amortization
|
104,263
|
45,805
|
|||||
Amortization
of debt issuance costs
|
1,712
|
1,325
|
|||||
Accretion
of asset retirement obligation
|
3,472
|
2,463
|
|||||
Virginia
tax credit
|
—
|
(343
|
)
|
||||
Stock-based
compensation - non-cash
|
15,815
|
35,694
|
|||||
Amortization
of deferred gains on sales of property interests
|
(745
|
)
|
(595
|
)
|
|||
Amortization
of deferred gain on railroad incentives
|
(154
|
)
|
(478
|
)
|
|||
Gain
on sale of fixed assets, net
|
(621
|
)
|
(11
|
)
|
|||
Gain
on sale of discontinued operations
|
—
|
(704
|
)
|
||||
Loss
on settlement of asset retirement obligation
|
322
|
490
|
|||||
Provision
for non-recoupable advance royalties
|
469
|
—
|
|||||
Minority
interest
|
—
|
2,846
|
|||||
Deferred
income taxes
|
7,189
|
2,668
|
|||||
Other
|
628
|
44
|
|||||
Changes
in operating assets and liabilities:
|
|||||||
Trade
accounts receivable
|
(25,307
|
)
|
(56,073
|
)
|
|||
Notes
and other receivables
|
3,664
|
(1,087
|
)
|
||||
Inventories
|
15,620
|
(48,294
|
)
|
||||
Prepaid expenses and other current assets
|
1,729
|
13,438
|
|||||
Other
assets
|
(3,162
|
)
|
(5,148
|
)
|
|||
Trade
accounts payable
|
(33,154
|
)
|
20,868
|
||||
Accrued
expenses and other current liabilities
|
(15,442
|
)
|
(4,691
|
)
|
|||
Workers’
compensation benefits
|
1,038
|
367
|
|||||
Postretirement
medical benefits
|
6,683
|
6,589
|
|||||
Asset
retirement obligation
|
(1,837
|
)
|
(2,919
|
)
|
|||
Other
liabilities
|
1,252
|
569
|
|||||
Net
cash provided by operating activities
|
148,317
|
21,624
|
|||||
ALPHA
NATURAL RESOURCES, INC. AND SUBSIDIARIES
|
|||||||
Condensed
Consolidated Statements of Cash Flows (Unaudited) -
(Continued)
|
|||||||
(In
thousands)
|
|||||||
Nine
months ended
|
|||||||
September
30,
|
|||||||
2006
|
2005
|
||||||
Investing
activities:
|
|||||||
Capital
expenditures
|
$
|
(110,538
|
)
|
(95,919
|
)
|
||
Proceeds from disposition of property, plant, and
equipment
|
1,060
|
5,282
|
|||||
Investment
in and advances to investee
|
(228
|
)
|
(1,234
|
)
|
|||
Purchase
of acquired companies
|
(28,273
|
)
|
(961
|
)
|
|||
Collections
on note receivable from coal supplier
|
3,000
|
4,442
|
|||||
Payment
of additional consideration on prior acquisition
|
—
|
(5,000
|
)
|
||||
Other
|
(501
|
)
|
—
|
||||
Net
cash used in investing activities
|
(135,480
|
)
|
(93,390
|
)
|
|||
Financing
activities:
|
|||||||
Repayments
of notes payable
|
(55,477
|
)
|
(12,413
|
)
|
|||
Proceeds
from issuance of long-term debt
|
287,000
|
73,000
|
|||||
Repayments
on long-term debt
|
(289,585
|
)
|
(1,323
|
)
|
|||
Increase
in bank overdraft
|
18,574
|
5,483
|
|||||
Proceeds
from initial public offering, net of offering costs
|
—
|
598,066
|
|||||
Repayment
of restructuring notes payable
|
—
|
(517,692
|
)
|
||||
Distributions
to prior members of ANR Holdings, LLC subsequent to Internal
Restructuring
|
(2,400
|
)
|
(72,335
|
)
|
|||
Distributions
to prior members of ANR Holdings, LLC prior to Internal
Restructuring
|
—
|
(7,732
|
)
|
||||
Debt
issuance costs
|
—
|
(568
|
)
|
||||
Proceeds
from exercise of stock options
|
953
|
—
|
|||||
|
|||||||
Net cash provided by (used in) financing
activities
|
(40,935
|
)
|
64,486
|
||||
|
|||||||
Net (decrease) in cash and
cash equivalents
|
(28,098
|
)
|
(7,280
|
)
|
|||
Cash
and cash equivalents at beginning of period
|
39,622
|
7,391
|
|||||
Cash
and cash equivalents at end of period
|
$
|
11,524
|
111
|
||||
See
accompanying notes to condensed consolidated financial
statements.
|
The
numerator for purposes of computing basic and diluted net income
(loss) per share, as adjusted for the nine months ended September 30,
2005, includes the reported net income (loss) and a pro forma
adjustment for income taxes to reflect the pro forma income taxes
for ANR
Fund IX Holdings, L.P.’s portion of reported pre-tax income (loss), which
would have been recorded if the issuance of the shares of common
stock
received by the FR Affiliates in exchange for their ownership in
ANR
Holdings in connection with the Internal Restructuring had occurred
as of
January 1, 2005. For purposes of the computation of basic and diluted
net income (loss) per share, as adjusted, the pro forma adjustment
for income taxes only applies to the percentage interest owned
by ANR Fund
IX Holding, L.P., the non-taxable FR Affiliate. No pro forma adjustment
for income taxes is required for the percentage interest owned
by Alpha NR
Holding, Inc., the taxable FR Affiliate, because income taxes have
already
been recorded in the historical results of operations. Furthermore,
no pro
forma adjustment to reported net income (loss) is necessary
subsequent to February 11, 2005 because Alpha is subject to income
taxes.
|
The
denominator for purposes of computing basic net income (loss) per
share, as adjusted for the three months ended September 30, 2005
and the
nine months ended September 30, 2005, reflects the retroactive
impact of
the common shares received by the FR Affiliates in exchange for
their
ownership in ANR Holdings in connection with the Internal Restructuring
on
a weighted-average outstanding share basis as being outstanding
as of
January 1, 2005. The common shares issued to the minority interest
owners of ANR Holdings in connection with the Internal Restructuring,
including the immediately vested shares granted to management,
have been
reflected as being outstanding as of February 11, 2005 for purposes
of computing the basic net income (loss) per share, as adjusted. The
unvested shares granted to management on February 11, 2005 that
vest
monthly over the two-year period from January 1, 2005 to
December 31, 2006 are included in the basic net income
(loss) per share, as adjusted, computation as they vest on a
weighted-average outstanding share basis starting on February 11,
2005. The 33,925,000 new shares issued in connection with the initial
public offering have been reflected as being outstanding since
February 14, 2005, the date of the initial public offering, for
purposes of computing the basic net income (loss) per share, as
adjusted.
|
The
unvested shares issued to management are considered options for
purposes
of computing diluted net income (loss) per share, as adjusted.
Therefore, for diluted purposes, all remaining unvested shares
granted to
management are added to the denominator subsequent to February 11,
2005 using the treasury stock method, if the effect is dilutive.
In
addition, the treasury stock method is used for outstanding stock
options,
if dilutive, beginning with the November 10, 2004 grant of options to
management to purchase units in ACM that were automatically converted
into
options to purchase up to 596,985 shares of Alpha Natural Resources,
Inc.
common stock at an exercise price of $12.73 per share.
|
Three
Months Ended
|
Nine
Months Ended
|
||||||||||||
September
30,
|
September
30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
Numerator:
|
|||||||||||||
Reported
income from continuing operations
|
$
|
14,544
|
$
|
8,210
|
$
|
64,883
|
$
|
9,015
|
|||||
Deduct:
Income tax effect of ANR Fund IX Holdings, L.P.
income
from continuing operations prior to Internal Restructuring
|
-
|
-
|
-
|
(91
|
)
|
||||||||
Income
from continuing operations, as adjusted
|
14,544
|
8,210
|
64,883
|
8,924
|
|||||||||
Reported
income (loss) from discontinued operations
|
—
|
—
|
—
|
(214
|
)
|
||||||||
Deduct:
Income tax effect of ANR fund IX Holdings, L.P.
loss
from discontinued operations prior to Internal Restructuring.
|
—
|
—
|
—
|
2
|
|||||||||
Loss
from discontinued operations, as adjusted
|
—
|
—
|
—
|
(212
|
)
|
||||||||
Net
income, as adjusted
|
$
|
14,544
|
$
|
8,210
|
$
|
64,883
|
$
|
8,712
|
|||||
Denominator:
|
|||||||||||||
Weighted
average shares - basic
|
64,191,811
|
61,259,314
|
64,003,215
|
53,184,066
|
|||||||||
Dilutive
effect
of stock options and restricted stock awards
|
22,921
|
648,706
|
105,551
|
382,403
|
|||||||||
Weighted
average shares - diluted
|
64,214,732
|
61,908,020
|
64,108,766
|
53,566,469
|
|||||||||
Net
income per basic and diluted share, as adjusted in 2005:
|
|||||||||||||
Income
from continuing operations
|
$
|
0.23
|
$
|
0.13
|
$
|
1.01
|
$
|
0.17
|
|||||
Income
(loss) from discontinued operations
|
—
|
—
|
—
|
(0.01
|
)
|
||||||||
Net
income per basic and diluted share
|
$
|
0.23
|
$
|
0.13
|
$
|
1.01
|
$
|
0.16
|
September
30,
|
December
31,
|
||||||
2006
|
2005
|
||||||
Raw
coal
|
$
|
5,876
|
$
|
6,401
|
|||
Saleable
coal
|
55,447
|
65,318
|
|||||
Materials
and supplies
|
12,265
|
13,166
|
|||||
Total
inventories
|
$
|
73,588
|
$
|
84,885
|
September
30,
|
December
31,
|
||||||
2006
|
2005
|
||||||
Term
loan
|
$
|
248,125
|
$
|
250,000
|
|||
10%
Senior Notes due 2012
|
175,000
|
175,000
|
|||||
Variable
rate term notes
|
—
|
293
|
|||||
Capital
lease obligations
|
1,689
|
1,496
|
|||||
Total
long-term debt
|
424,814
|
426,789
|
|||||
Less
current portion
|
3,239
|
3,242
|
|||||
Long-term
debt,
net of current portion
|
$
|
421,575
|
$
|
423,547
|
Total
asset retirement obligation at December 31, 2005
|
$
|
53,487
|
||
Accretion
|
3,472
|
|||
Sites
added
|
8,406
|
|||
Expenditures
|
(2,803
|
)
|
||
Changes
in estimates
|
117
|
|||
Settlement
of asset retirement obligation
|
322
|
|||
Total
asset retirement obligation at September 30, 2006
|
$
|
63,001
|
Three
months ended
|
Nine
months ended
|
||||||
September
30,
|
September
30,
|
||||||
2005
|
2005
|
||||||
Net
income, as adjusted (Note 2)
|
$
|
8,210
|
$
|
8,712
|
|||
Add:
loss from discontinued operations
|
—
|
214
|
|||||
Add:
share-based employee compensation cost, included
in net loss, as adjusted, net of income
taxes and minority interest
|
2,362
|
40,391
|
|||||
Deduct:
share-based employee compensation cost determined
under the fair value based method, net
of income taxes and minority interest
|
(2,572
|
)
|
(40,945
|
)
|
|||
Pro
forma net income, adjusted for effect of fair
value of stock options
|
$
|
8,000
|
$
|
8,372
|
|||
Net
income per share - basic and diluted, adjusted for stock based
compensation
|
$
|
0.13
|
$
|
0.16
|
Expected
life (years)
|
4.0
|
|||
Expected
volatility
|
38.0
|
%
|
||
Risk-free
interest rate
|
3.38
|
%
|
||
Expected
annual dividend
|
$
|
0.10
|
Weighted-
|
Weighted-
|
|||||||||
Average
|
Average
|
|||||||||
Number
of
|
Exercise
|
Remaining
|
||||||||
Shares
|
Price
|
Contract
Life
|
||||||||
Outstanding
at December 31, 2005
|
1,253,593
|
$
|
16.71
|
|||||||
Granted
|
—
|
—
|
||||||||
Exercised
|
(60,195
|
)
|
$
|
15.86
|
||||||
Forfeited/Canceled
|
(56,000
|
)
|
$
|
19.00
|
||||||
Outstanding
at September 30, 2006
|
1,137,398
|
$
|
16.64
|
8.28
|
||||||
Exercisable
at September 30, 2006
|
174,041
|
17.24
|
8.31
|
Number
of
|
Weighted
Average
Grant
Date
|
||||||
Shares
|
Fair
Value
|
||||||
Non-vested
shares outstanding at December 31, 2005
|
684,465
|
$
|
19.15
|
||||
Granted
|
519,242
|
21.26
|
|||||
Vested
|
(526,965
|
)
|
19.21
|
||||
Forfeited
|
(34,737
|
)
|
24.85
|
||||
Non-vested
shares outstanding at September 30, 2006
|
642,005
|
|
20.50
|
Three
Months Ended
|
Nine
Months Ended
|
||||||||||||
September
30,
|
September
30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
Service
cost
|
$
|
960
|
$
|
940
|
$
|
2,880
|
$
|
2,884
|
|||||
Interest
cost
|
706
|
601
|
2,119
|
1,856
|
|||||||||
Amortization
of net (gain) or loss
|
47
|
10
|
140
|
19
|
|||||||||
Amortization
of prior service cost
|
568
|
535
|
1,704
|
1,841
|
|||||||||
Net
periodic benefit cost
|
$
|
2,281
|
$
|
2,086
|
$
|
6,843
|
$
|
6,600
|
September
30,
|
December
31,
|
||||||
2006
|
2005
|
||||||
AMCI
|
$
|
48
|
$
|
10,390
|
|||
Robindale
Energy and subsidiary
|
21
|
63
|
|||||
Total
|
$
|
69
|
$
|
10,453
|
September
30,
|
December
31,
|
||||||
2006
|
2005
|
||||||
AMCI
|
$
|
3,012
|
$
|
13,735
|
|||
First
Reserve Fund IX, L.P.
|
—
|
4,500
|
|||||
Foundation
Energy
|
—
|
2,605
|
|||||
Robindale
Energy and subsidiary
|
—
|
51
|
|||||
Total
|
$
|
3,012
|
$
|
20,891
|
Corporate
|
|||||||||||||
Coal
|
All
|
and
|
|||||||||||
Operations
|
Other
|
Eliminations
|
Consolidated
|
||||||||||
Revenues
|
$
|
466,936
|
$
|
20,395
|
$
|
(12,613
|
)
|
$
|
474,718
|
||||
Depreciation,
depletion, and amortization
|
34,705
|
1,437
|
280
|
36,422
|
|||||||||
EBITDA
|
79,626
|
3,454
|
(16,791
|
)
|
66,289
|
||||||||
Capital
Expenditures
|
26,355
|
183
|
-
|
26,538
|
|||||||||
Total
assets
|
$
|
1,116,413
|
$
|
88,843
|
$
|
(157,596
|
)
|
$
|
1,047,659
|
Corporate
|
|||||||||||||
Coal
|
All
|
and
|
|||||||||||
Operations
|
Other
|
Eliminations
|
Consolidated
|
||||||||||
Revenues
|
$
|
1,428,450
|
$
|
55,220
|
$
|
(30,961
|
)
|
$
|
1,452,709
|
||||
Depreciation,
depletion, and amortization
|
97,837
|
4,851
|
1,575
|
104,263
|
|||||||||
EBITDA
|
267,337
|
8,348
|
(52,215
|
)
|
223,470
|
||||||||
Capital
Expenditures
|
103,227
|
6,208
|
1,103
|
110,538
|
|||||||||
Total
assets
|
$
|
1,116,413
|
$
|
88,843
|
$
|
(157,596
|
)
|
$
|
1,047,659
|
Corporate
|
|||||||||||||
Coal
|
All
|
and
|
|||||||||||
Operations
|
Other
|
Eliminations
|
Consolidated
|
||||||||||
Revenues
|
$
|
394,331
|
$
|
9,084
|
$
|
(5,726
|
)
|
$
|
397,689
|
||||
Depreciation,
depletion, and amortization
|
15,543
|
361
|
373
|
16,277
|
|||||||||
EBITDA
|
46,144
|
468
|
(12,144
|
)
|
34,468
|
||||||||
Capital
Expenditures
|
29,312
|
—
|
86
|
29,398
|
|||||||||
Total
assets
|
$
|
536,792
|
$
|
72,019
|
$
|
13,287
|
$
|
622,098
|
Corporate
|
|||||||||||||
Coal
|
All
|
and
|
|||||||||||
Operations
|
Other
|
Eliminations
|
Consolidated
|
||||||||||
Revenues
|
$
|
1,116,447
|
$
|
29,313
|
$
|
(18,280
|
)
|
$
|
1,127,480
|
||||
Depreciation,
depletion, and amortization
|
43,037
|
1,149
|
1,335
|
45,521
|
|||||||||
EBITDA,
as adjusted
|
162,519
|
2,809
|
(74,008
|
)
|
91,320
|
||||||||
Capital
Expenditures
|
94,770
|
322
|
517
|
95,609
|
|||||||||
Total
assets
|
$
|
536,792
|
$
|
72,019
|
$
|
13,287
|
$
|
622,098
|
Three
Months Ended
|
Nine
Months Ended
|
||||||||||||
September
30,
|
September
30,
|
||||||||||||
|
2006
|
2005
|
2006
|
2005
|
|||||||||
Total
segment EBITDA, as adjusted for 2005, for continuing
operations
|
$
|
66,289
|
$
|
34,468
|
$
|
223,470
|
$
|
91,320
|
|||||
Interest
expense
|
(10,735
|
)
|
(6,636
|
)
|
(31,798
|
)
|
(19,400
|
)
|
|||||
Interest
income
|
156
|
197
|
514
|
675
|
|||||||||
Income
tax expense from continuing operations
|
(4,744
|
)
|
(3,542
|
)
|
(23,040
|
)
|
(15,141
|
)
|
|||||
Depreciation,
depletion, and amortization from
continuing
operations
|
(36,422
|
)
|
(16,277
|
)
|
(104,263
|
)
|
(45,521
|
)
|
|||||
Minority
interest in income from continuing operations
|
—
|
—
|
—
|
(2,918
|
)
|
||||||||
Income
from continuing operations
|
$
|
14,544
|
$
|
8,210
|
$
|
64,883
|
$
|
9,015
|
Nine
Months Ended
|
||||
September
30,
|
||||
2005
|
||||
Total
revenues
|
$
|
4,523
|
||
Total
costs and expenses
|
5,607
|
|||
Gain
on sale of discontinued operations
|
704
|
|||
Loss
from operations
|
(380
|
)
|
||
Miscellaneous
income
|
1
|
|||
Income
tax benefit from discontinued operations
|
(93
|
)
|
||
Minority
interest in income (loss) from discontinued
operations
|
(72
|
)
|
||
Loss
from discontinued operations
|
$
|
(214
|
)
|
Three
Months
|
Nine
Months
|
||||||
Ended
|
Ended
|
||||||
2005
|
2005
|
||||||
Continuing
Operations
|
$
|
3,542
|
$
|
15,141
|
|||
Discontinued
Operations
|
0
|
(93
|
)
|
||||
$
|
3,542
|
$
|
15,048
|
Three
Months Ended
|
Nine
Months Ended
|
||||||||||||
September
30,
|
September
30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
Federal
statutory income tax expense
|
$
|
6,750
|
$
|
4,114
|
$
|
30,773
|
$
|
9,476
|
|||||
Increases
(reductions) in taxes due to:
|
|||||||||||||
Percentage
depletion allowance
|
(5,728
|
)
|
(1,137
|
)
|
(15,669
|
)
|
(7,700
|
)
|
|||||
Extraterritorial
income exclusion
|
(536
|
)
|
(541
|
)
|
(1,418
|
)
|
(1,246
|
)
|
|||||
Deduction
for
domestic production activities
|
133
|
(68
|
)
|
(133
|
)
|
(347
|
)
|
||||||
State
taxes, net of federal tax impact
|
840
|
342
|
2,611
|
1,398
|
|||||||||
Stock-based
compensation
|
1,369
|
1,031
|
3,598
|
14,385
|
|||||||||
Change
in valuation allowance
|
1,472
|
(260
|
)
|
2,461
|
137
|
||||||||
Taxes
not provided for minority interest
|
—
|
—
|
—
|
(1,001
|
)
|
||||||||
Taxes
not provided for pass-through entity
|
—
|
—
|
—
|
(133
|
)
|
||||||||
Other,
net
|
444
|
61
|
817
|
172
|
|||||||||
Actual
income tax expense
|
$
|
4,744
|
$
|
3,542
|
$
|
23,040
|
$
|
15,141
|
Three
Months Ended
|
Nine
Months Ended
|
||||||
September
30,
|
September
30,
|
||||||
2006
|
2006
|
||||||
Net
income
|
$
|
14,544
|
64,883
|
||||
Other
comprehensive income (loss)
|
(6,829
|
)
|
(7,354
|
)
|
|||
Total
comprehensive income
|
$
|
7,715
|
$
|
57,529
|
|
Three
months ended
September
30,
|
Nine
months ended
September
30,
|
|||||||||||
|
2006
|
2005
|
2006
|
2005
|
|||||||||
(in
thousands)
|
|||||||||||||
Net
income
|
$
|
14,544
|
$
|
8,210
|
$
|
64,883
|
$
|
8,801
|
|||||
Interest
expense
|
10,735
|
6,636
|
31,798
|
19,400
|
|||||||||
Interest
income
|
(156
|
)
|
(197
|
)
|
(514
|
)
|
(675
|
)
|
|||||
Income
tax expense
|
4,744
|
3,542
|
23,040
|
15,048
|
|||||||||
Depreciation,
depletion and amortization
|
36,422
|
16,277
|
104,263
|
45,804
|
|||||||||
EBITDA
(1)
|
66,289
|
34,468
|
223,470
|
88,378
|
|||||||||
Minority
interest
|
—
|
—
|
—
|
2,846
|
|||||||||
EBITDA,
as adjusted (1)
|
$
|
66,289
|
$
|
34,468
|
$
|
223,470
|
$
|
91,224
|
|
Three
months Ended
September
30,
|
Increase
(Decrease)
|
|||||||||||
|
2006
|
2005
|
$
or Tons
|
|
%
|
||||||||
(in
thousands, except per ton data)
|
|||||||||||||
Coal
revenues
|
$
|
419,036
|
$
|
345,179
|
$
|
73,857
|
21
|
%
|
|||||
Freight
and handling revenues
|
45,805
|
46,659
|
(854
|
)
|
(2
|
)%
|
|||||||
Other
revenues
|
9,877
|
5,851
|
4,026
|
69
|
%
|
||||||||
Total
revenues
|
$
|
474,718
|
$
|
397,689
|
$
|
77,029
|
19
|
%
|
|||||
Tons
Sold:
|
|||||||||||||
Steam
|
5,097
|
4,589
|
508
|
11
|
%
|
||||||||
Metallurgical
|
2,336
|
2,125
|
211
|
10
|
%
|
||||||||
Total
|
7,433
|
6,714
|
719
|
11
|
%
|
||||||||
Coal
sales realization per ton:
|
|||||||||||||
Steam
|
$
|
48.21
|
$
|
41.66
|
6.55
|
16
|
%
|
||||||
Metallurgical
|
74.19
|
72.49
|
1.70
|
2
|
%
|
||||||||
Total
|
$
|
56.37
|
$
|
51.41
|
$
|
4.96
|
10
|
%
|
|||||
|
Three
months ended
September
30.
|
Increase
(Decrease)
|
|||||||||||
|
2006
|
2005
|
$
|
%
|
|||||||||
(in
thousands, except per ton data)
|
|||||||||||||
Cost
of coal sales (exclusive of items shown separately below)
|
$
|
340,440
|
$
|
298,522
|
$
|
41,918
|
14
|
%
|
|||||
Freight
and handling costs
|
45,805
|
46,659
|
(854
|
)
|
(2
|
)%
|
|||||||
Cost
of other revenues
|
5,774
|
5,943
|
(169
|
)
|
(3
|
)%
|
|||||||
Depreciation,
depletion and amortization
|
36,422
|
16,277
|
20,145
|
124
|
%
|
||||||||
Selling,
general and administrative expenses (exclusive of depreciation
and
amortization shown separately above and including stock-based
compensation
expense
in the amount of $5,053 in 2006 and $3,381 in 2005)
|
16,837
|
12,147
|
4,690
|
39
|
%
|
||||||||
Total
costs and expenses
|
$
|
445,278
|
$
|
379,548
|
$
|
65,730
|
17
|
%
|
|||||
Cost
of coal sales per ton:
|
|||||||||||||
Company
mines
|
$
|
43.13
|
$
|
38.07
|
$
|
5.06
|
13
|
%
|
|||||
Contract
mines (including purchased and processed)
|
51.70
|
51.34
|
0.36
|
1
|
%
|
||||||||
Total
produced and processed
|
44.46
|
40.77
|
3.69
|
9
|
%
|
||||||||
Purchased
and sold without processing
|
54.54
|
56.14
|
(1.60
|
)
|
(3
|
)%
|
|||||||
Cost
of
coal sales per ton
|
$
|
45.80
|
$
|
44.46
|
$
|
1.34
|
3
|
%
|
|
Nine
months Ended
September
30,
|
Increase
(Decrease)
|
|||||||||||
|
2006
|
2005
|
$
or Tons
|
%
|
|||||||||
(in
thousands, except per ton data)
|
|||||||||||||
Coal
revenues
|
$
|
1,279,939
|
$
|
982,383
|
$
|
297,556
|
30
|
%
|
|||||
Freight
and handling revenues
|
143,132
|
126,650
|
16,482
|
13
|
%
|
||||||||
Other
revenues
|
29,638
|
18,447
|
11,191
|
61
|
%
|
||||||||
Total
revenues
|
$
|
1,452,709
|
$
|
1,127,480
|
$
|
325,229
|
29
|
%
|
|||||
Tons
Sold:
|
|||||||||||||
Steam
|
14,344
|
11,700
|
2,644
|
23
|
%
|
||||||||
Metallurgical
|
7,672
|
7,237
|
435
|
6
|
%
|
||||||||
Total
|
22,016
|
18,937
|
3,079
|
16
|
%
|
||||||||
Coal
sales realization per ton:
|
|||||||||||||
Steam
|
$
|
49.12
|
$
|
40.05
|
$
|
9.07
|
23
|
%
|
|||||
Metallurgical
|
75.00
|
70.99
|
4.01
|
6
|
%
|
||||||||
Total
|
$
|
58.14
|
$
|
51.88
|
$
|
6.26
|
12
|
%
|
|||||
|
Nine
months ended
September
30.
|
Increase
(Decrease)
|
|||||||||||
|
2006
|
2005
|
$
|
%
|
|||||||||
(in
thousands, except per ton data)
|
|||||||||||||
Cost
of coal sales (exclusive of items shown separately below)
|
$
|
1,016,831
|
$
|
818,299
|
$
|
198,532
|
24
|
%
|
|||||
Freight
and handling costs
|
143,132
|
126,650
|
16,482
|
13
|
%
|
||||||||
Cost
of other revenues
|
19,170
|
16,327
|
2,843
|
17
|
%
|
||||||||
Depreciation,
depletion and amortization
|
104,263
|
45,521
|
58,742
|
129
|
%
|
||||||||
Selling,
general and administrative expenses (exclusive of depreciation
and
amortization shown separately above and including stock-based
compensation
expense in the amount of $14,196 in 2006 and $43,169 in
2005)
|
52,229
|
74,924
|
(22,695
|
)
|
(30
|
)%
|
|||||||
Total
costs and expenses
|
$
|
1,335,625
|
$
|
1,081,721
|
$
|
253,904
|
23
|
%
|
|||||
Cost
of coal sales per ton:
|
|||||||||||||
Company
mines
|
$
|
42.11
|
$
|
36.49
|
$
|
5.62
|
15
|
%
|
|||||
Contract
mines (including purchased and processed)
|
52.69
|
50.54
|
2.15
|
4
|
%
|
||||||||
Total
produced and processed
|
43.82
|
39.46
|
4.36
|
11
|
%
|
||||||||
Purchased
and sold without processing
|
59.92
|
57.30
|
2.62
|
5
|
%
|
||||||||
Cost
of
coal sales per ton
|
$
|
46.19
|
$
|
43.21
|
$
|
2.98
|
7
|
%
|
|
September
30,
2006
|
|||
10%
Senior notes due 2012
|
$
|
175,000
|
||
Term
Loan
|
248,125
|
|||
Capital
lease obligation
|
1,689
|
|||
Total
long-term debt
|
424,814
|
|||
Less
current portion
|
3,239
|
|||
Long-term
debt, net of current portion
|
$
|
421,575
|
|
Three
Months
Ended
December
31,
2006
|
Three
Months
Ended
March
31,
2006
|
Three
Months
Ended
June
30,
2006
|
Three
Months
Ended
September
30,
2006
|
Twelve
Month
Ended
September
30,
2006
|
|||||||||||
(in
thousands)
|
||||||||||||||||
Net
income
|
$
|
12,413
|
$
|
27,212
|
$
|
23,128
|
$
|
14,544
|
$
|
77,297
|
||||||
Interest
expense, net of interest income
|
10,155
|
10,089
|
10,615
|
10,579
|
41,438
|
|||||||||||
Income
tax expense
|
3,812
|
9,620
|
8,676
|
4,744
|
26,852
|
|||||||||||
Depreciation,
depletion and amortization expenses
|
27,600
|
33,634
|
34,207
|
36,422
|
131,863
|
|||||||||||
EBITDA
|
53,980
|
80,555
|
76,626
|
66,289
|
277,450
|
|||||||||||
Stock-based
compensation charge(1)
|
3,350
|
3,833
|
6,112
|
5,814
|
19,109
|
|||||||||||
Other
EBITDA Charges (1)
|
930
|
1,213
|
1,451
|
590
|
4,184
|
|||||||||||
Callaway
EBITDA before integration (1)
|
4,832
|
—
|
—
|
—
|
4,832
|
|||||||||||
Adjusted
EBITDA
|
$
|
63,092
|
$
|
85,601
|
$
|
84,189
|
$
|
72,693
|
$
|
305,575
|
||||||
Leverage
ratio(2)
|
1.52
|
|||||||||||||||
Interest
coverage ratio(3)
|
8.17
|
Purchase
Contracts
|
Purchase
Price
Range
|
Tons
Outstanding
|
Delivery
Period
|
Mark-To-Market
Adjustment
(In Millions)
|
|||||||||
$
|
40.00-$50.00
|
630,000
|
10/01/06-12/31/07
|
$
|
(0.6
|
)
|
|||||||
$
|
51.00-$60.00
|
298,625
|
10/01/06-12/31/07
|
$
|
(1.2
|
)
|
|||||||
928,625
|
$
|
(1.8
|
)
|
Sales
Contracts
|
Selling
Price
Range
|
Tons
Outstanding
|
Delivery
Period
|
Mark-To-Market
Adjustment (In
Millions)
|
|||||||||
$
|
45.00-$50.00
|
240,000
|
01/01/07-12/31/07
|
$
|
(0.1
|
)
|
|||||||
$
|
51.00-60.00
|
590,000
|
10/01/06-12/31/07
|
$
|
4.2
|
||||||||
830,000
|
$
|
4.1
|
Exhibit
No
|
Description
of Exhibit
|
3.1
|
Restated
Certificate of Incorporation of Alpha Natural Resources, Inc.
(Incorporated by reference to Exhibit 3.1 to the Annual Report on
Form 10-K of Alpha Natural Resources, Inc. (File No. 1-32423)
filed on March 30, 2005).
|
|
|
3.2
|
Amended
and Restated Bylaws of Alpha Natural Resources, Inc. (Incorporated
by
reference to Exhibit 3.2 to the Annual Report on Form 10-K of
Alpha Natural Resources, Inc. (File No. 1-32423) filed on
March 30, 2005).
|
|
|
10.1
|
Letter
Agreement, dated September 1, 2006, between Alpha Natural Resources,
Inc.
and D. Scott Kroh (Incorporated by reference to Exhibit 10.1 to the
Current Report on Form 8-K of Alpha Natural Resources, Inc. (File
No. 1-32423) filed on September 1, 2006).
|
10.2* | |
31(a)*
|
|
|
|
31(b)*
|
|
|
|
32(a)*
|
|
|
|
32(b)*
|