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þ
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QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
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o
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TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
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Delaware
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02-0733940
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(State
or other jurisdiction of
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(I.R.S.
Employer
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incorporation
or organization)
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Identification
Number)
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One
Alpha Place, P.O. Box 2345, Abingdon, VA
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24212
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(Address
of principal executive offices)
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(Zip
Code)
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Page
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PART
I
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Item 1.
Financial Statements
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2
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3
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4
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6
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22
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32
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33
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PART
II
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33
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||||
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33
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||
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33
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||
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September
30,
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December
31,
|
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||
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2007
|
|
|
2006
|
|
||
Assets
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents
|
|
$
|
16,267
|
|
|
$
|
33,256
|
|
Trade
accounts receivable, net
|
|
|
194,599
|
|
|
|
171,195
|
|
Notes
and other receivables
|
|
|
5,959
|
|
|
|
6,466
|
|
Inventories
|
|
|
76,718
|
|
|
|
76,844
|
|
Prepaid
expenses and other current assets
|
|
|
29,843
|
|
|
|
50,893
|
|
Total
current assets
|
|
|
323,386
|
|
|
|
338,654
|
|
|
|
|
|
|
|
|
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|
Property,
plant, and equipment, net
|
|
|
665,034
|
|
|
|
637,136
|
|
Goodwill
|
|
|
20,547
|
|
|
|
20,547
|
|
Other
intangibles, net
|
|
|
9,882
|
|
|
|
11,720
|
|
Deferred
income taxes
|
|
|
95,555
|
|
|
|
94,897
|
|
Other
assets
|
|
|
57,147
|
|
|
|
42,839
|
|
Total
assets
|
|
$
|
1,171,551
|
|
|
$
|
1,145,793
|
|
|
|
|
|
|
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|
|
Liabilities
and Stockholders’ Equity
|
|
|
|
|
|
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|
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|
|
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|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Current
portion of long-term debt
|
|
$
|
3,154
|
|
|
$
|
3,254
|
|
Note
payable
|
|
|
—
|
|
|
|
20,941
|
|
Bank
overdraft
|
|
|
582
|
|
|
|
23,814
|
|
Trade
accounts payable
|
|
|
91,368
|
|
|
|
75,986
|
|
Deferred
income taxes
|
|
|
6,012
|
|
|
|
7,601
|
|
Accrued
expenses and other current liabilities
|
|
|
89,810
|
|
|
|
90,594
|
|
Total
current liabilities
|
|
|
190,926
|
|
|
|
222,190
|
|
|
|
|
|
|
|
|
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Long-term
debt, net of current portion
|
|
|
427,574
|
|
|
|
421,456
|
|
Workers’
compensation benefits
|
|
|
9,553
|
|
|
|
7,169
|
|
Postretirement
medical benefits
|
|
|
55,654
|
|
|
|
50,712
|
|
Asset
retirement obligation
|
|
|
84,058
|
|
|
|
69,495
|
|
Deferred
gains on sale of property interests
|
|
|
3,215
|
|
|
|
3,885
|
|
Other
liabilities
|
|
|
27,024
|
|
|
|
26,837
|
|
Total
liabilities
|
|
|
798,004
|
|
|
|
801,744
|
|
Minority
interest
|
|
|
1,255
|
|
|
|
—
|
|
Commitments
and contingencies
|
||||||||
Stockholders’
equity:
|
|
|
|
|
|
|
|
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Preferred
stock — par value $0.01, 10,000,000 shares authorized, none
issued
|
|
|
—
|
|
|
|
—
|
|
Common
stock — par value $0.01, 100,000,000 shares authorized, 65,537,896 and
64,964,287 shares issued and outstanding at September 30, 2007
and
December 31, 2006, respectively
|
|
|
655
|
|
|
|
650
|
|
Additional
paid-in capital
|
|
|
221,327
|
|
|
|
215,020
|
|
Accumulated
other comprehensive loss
|
|
|
(19,133
|
)
|
|
|
(19,019
|
)
|
Retained
earnings
|
|
|
169,443
|
|
|
|
147,398
|
|
Total
stockholders’ equity
|
|
|
372,292
|
|
|
|
344,049
|
|
|
|
|
|
|
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||
Total
liabilities and stockholders’ equity
|
|
$
|
1,171,551
|
|
|
$
|
1,145,793
|
|
|
|
|
|
|
||||||||||||
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Three
months ended
|
Nine
months ended
|
||||||||||||||
|
September
30,
|
September 30,
|
||||||||||||||
|
2007
|
2006
|
2007
|
2006
|
||||||||||||
Revenues:
|
|
|
|
|
||||||||||||
Coal
revenues
|
$ |
438,618
|
$ |
420,179
|
$ |
1,201,678
|
$ |
1,282,0332
|
||||||||
Freight
and handling revenues
|
58,384
|
45,805
|
143,183
|
143,132
|
||||||||||||
Other
revenues
|
10,137
|
9,134
|
23,915
|
28,604
|
||||||||||||
Total
revenues
|
507,139
|
475,118
|
1,368,776
|
1,453,769
|
||||||||||||
Costs
and expenses:
|
||||||||||||||||
Cost
of coal sales (exclusive of items shown separately below)
|
361,704
|
340,440
|
991,766
|
1,016,831
|
||||||||||||
Freight
and handling costs
|
58,384
|
45,805
|
143,183
|
143,132
|
||||||||||||
Cost
of other revenues
|
7,860
|
5,774
|
18,256
|
19,170
|
||||||||||||
Depreciation,
depletion and amortization
|
43,926
|
36,422
|
117,570
|
104,263
|
||||||||||||
Selling,
general and administrative expenses (exclusive of depreciation
and
amortization shown separately above)
|
14,466
|
16,837
|
41,687
|
51,489
|
||||||||||||
Total
costs and expenses
|
486,340
|
445,278
|
1,312,462
|
1,334,885
|
||||||||||||
|
||||||||||||||||
Income
from operations
|
20,799
|
29,840
|
56,314
|
118,884
|
||||||||||||
|
||||||||||||||||
Other
income (expense):
|
||||||||||||||||
Interest
expense
|
(10,101 | ) | (10,735 | ) | (30,124 | ) | (31,798 | ) | ||||||||
Interest
income
|
265
|
156
|
1,359
|
514
|
||||||||||||
Miscellaneous
income, net
|
281
|
27
|
835
|
323
|
||||||||||||
Total
other income (expense), net
|
(9,555 | ) | (10,552 | ) | (27,930 | ) | (30,961 | ) | ||||||||
Income
before income taxes and minority interest
|
11,244
|
19,288
|
28,384
|
87,923
|
||||||||||||
Income
tax expense
|
2,363
|
4,744
|
6,494
|
23,040
|
||||||||||||
Minority
interest
|
(68 | ) |
—
|
(155 | ) |
—
|
||||||||||
Net
Income
|
$ |
8,949
|
$ |
14,544
|
$ |
22,045
|
$ |
64,883
|
||||||||
|
||||||||||||||||
Net
income per share
|
||||||||||||||||
Basic
and diluted:
|
$ |
0.14
|
$ |
0.23
|
$ |
0.34
|
$ |
1.01
|
|
|
|
|
|
|
|
|
|
|
|
Nine
months ended
|
|
|||||
|
|
September 30,
|
|
|||||
|
|
2007
|
|
|
2006
|
|
||
Operating
activities:
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
|
22,045
|
|
|
$
|
64,883
|
|
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
||
Depreciation,
depletion and amortization
|
|
|
117,570
|
|
|
|
104,263
|
|
Amortization
of debt issuance costs
|
|
|
1,725
|
|
|
|
1,712
|
|
Accretion
of asset retirement obligation
|
|
|
4,960
|
|
|
|
3,472
|
|
Change
in fair value of derivative instruments
|
|
|
(2,253
|
)
|
|
|
(2,277
|
)
|
Share
based compensation
|
|
|
6,747
|
|
|
|
15,815
|
|
Amortization
of deferred gains on sales of property interests
|
|
|
(707
|
)
|
|
|
(745
|
)
|
Amortization
of deferred gain on railroad incentives
|
|
|
—
|
|
|
(154
|
)
|
|
Gain
on sale of fixed assets, net
|
|
|
(2,200
|
)
|
|
|
(621
|
)
|
Loss
on settlement of asset retirement obligation
|
|
|
634
|
|
|
|
322
|
|
Provision
for non-recoupable advance royalties
|
|
|
562
|
|
|
|
469
|
|
Minority
interest
|
|
|
(155
|
)
|
|
|
—
|
|
Deferred
income taxes
|
|
|
(2,211
|
)
|
|
|
7,189
|
|
Other
|
|
|
267
|
|
|
|
628
|
|
Changes
in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Trade
accounts receivable
|
|
|
(23,562
|
)
|
|
|
(25,307
|
)
|
Notes
and other receivables
|
|
|
(1,429
|
)
|
|
|
3,664
|
|
Inventories
|
|
|
9,605
|
|
|
|
15,620
|
|
Prepaid
expenses and other current assets
|
|
|
18,376
|
|
|
5,848
|
|
|
Other
assets
|
|
|
(15,787
|
)
|
|
|
(3,162
|
)
|
Trade
accounts payable
|
|
|
16,400
|
|
|
(33,154
|
)
|
|
Accrued
expenses and other current liabilities
|
|
|
5,215
|
|
|
(17,284
|
)
|
|
Workers’
compensation benefits
|
|
|
2,262
|
|
|
1,038
|
||
Postretirement
medical benefits
|
|
|
6,274
|
|
|
|
6,683
|
|
Asset
retirement obligation
|
|
|
(4,915
|
)
|
|
|
(1,837
|
)
|
Other
liabilities
|
|
|
3,829
|
|
|
|
1,252
|
|
Net
cash provided by operating activities
|
|
|
163,252
|
|
|
|
148,317
|
|
|
Nine
months ended
|
|
|||||
|
|
September 30,
|
|
|||||
|
|
2007
|
|
|
2006
|
|
||
Investing
activities:
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
$
|
(101,491
|
)
|
|
$
|
(110,538
|
)
|
Proceeds
from disposition of property, plant, and equipment
|
|
|
3,734
|
|
|
|
1,060
|
|
Purchase
of equity investment
|
|
|
(403
|
)
|
|
|
(228
|
)
|
Purchase
of net assets of acquired companies
|
|
|
(43,908
|
)
|
|
|
(28,273
|
)
|
Collections
on note receivable from coal supplier
|
|
|
—
|
|
|
|
3,000
|
|
Other
|
|
|
(612
|
)
|
|
|
(501
|
)
|
|
|
|
|
|
|
|
|
|
Net
cash used in investing activities
|
|
|
(142,680
|
)
|
|
|
(135,480
|
)
|
|
|
|
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
|
|
|
|
Repayments
of notes payable
|
|
|
(20,941
|
)
|
|
|
(55,477
|
)
|
Proceeds
from issuance of long-term debt
|
|
|
21,400
|
|
|
|
287,000
|
|
Repayments
on long-term debt
|
|
|
(15,382
|
)
|
|
|
(289,585
|
)
|
Increase
(decrease) in bank overdraft
|
|
|
(23,232
|
)
|
|
|
18,574
|
|
Distributions
to prior members of ANR Holdings, LLC subsequent to Internal
Restructuring
|
|
|
—
|
|
|
(2,400
|
)
|
|
Proceeds
from exercise of stock options
|
|
|
594
|
|
|
|
953
|
|
|
|
|
|
|
|
|
|
|
Net
cash used by financing activities
|
|
|
(37,561
|
)
|
|
|
(40,935
|
)
|
|
|
|
|
|
|
|
|
|
Net
decrease in cash and cash equivalents
|
|
|
(16,989
|
)
|
|
|
(28,098
|
)
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents at beginning of period
|
|
|
33,256
|
|
|
|
39,622
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents at end of period
|
|
$
|
16,267
|
|
|
$
|
11,524
|
|
|
|
Three
Months Ended September 30,
|
|
|
Nine
Months Ended September 30,
|
|
||||||||||
|
|
2007
|
|
|
2006
|
|
|
2007
|
|
|
2006
|
|
||||
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
|
8,949
|
|
|
$
|
14,544
|
|
|
$
|
22,045
|
|
|
$
|
64,883
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Weighted
average shares — basic
|
|
|
64,602,4144
|
|
|
|
64,191,811
|
|
|
|
64,590,052
|
|
|
|
64,003,215
|
|
Dilutive
effect of stock options and restricted stock awards
|
|
|
393,111
|
|
|
|
22,921
|
|
|
|
244,987
|
|
|
|
105,551
|
|
Weighted
average shares — diluted
|
|
|
64,995,525
|
|
|
|
64,214,732
|
|
|
|
64,835,039
|
|
|
|
64,108,766
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Net
income per basic and diluted share:
|
|
$
|
0.14
|
|
|
$
|
0.23
|
|
|
$
|
0.34
|
|
|
$
|
1.01
|
|
|
September
30,
|
December
31,
|
||||||
|
2007
|
2006
|
||||||
Raw
coal
|
$ |
8,917
|
$ |
8,868
|
||||
Saleable
coal
|
53,602
|
53,428
|
||||||
Equipment
for resale
|
1,719
|
1,774
|
||||||
Materials
and supplies
|
12,480
|
12,774
|
||||||
|
||||||||
Total
inventories
|
$ |
76,718
|
$ |
76,844
|
|
September 30,
|
December
31,
|
||||||
|
2007
|
2006
|
||||||
Term
loan
|
$ |
245,625
|
$ |
247,500
|
||||
10%
Senior notes due 2012
|
175,000
|
175,000
|
||||||
Capital
lease obligations
|
903
|
1,510
|
||||||
Gallatin
project financing
|
8,500
|
—
|
||||||
Other
|
700
|
700
|
||||||
Total
long-term debt
|
430,728
|
424,710
|
||||||
Less
current portion
|
3,154
|
3,254
|
||||||
Long-term
debt, net of current portion
|
$ |
427,574
|
$ |
421,456
|
|
|
|
|
|
Total
asset retirement obligation at December 31, 2006
|
|
$
|
77,292
|
|
Accretion
for the period
|
|
|
4,961
|
|
Sites
added during the period
|
|
|
1,828
|
|
Expenditures
for the period
|
|
|
(4,916
|
)
|
Change
in estimates during the period
|
|
|
598
|
|
Acquisition
during the period
|
|
|
12,107
|
|
Total
asset retirement obligation at September 30, 2007
|
|
$
|
91,870
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-
|
|
|
|
|
|
|
|
|
Weighted-
|
|
|
Average
|
|
||
|
|
|
|
|
|
Average
|
|
|
Remaining
|
|
||
|
|
Number
of
|
|
|
Exercise
|
|
|
Contract
|
|
|||
|
|
Shares
|
|
|
Price
|
|
|
Life
(Years)
|
|
|||
Outstanding
at December 31, 2006
|
|
|
1,137,398
|
|
|
$
|
16.64
|
|
|
|
|
|
Forfeited/Cancelled
|
|
|
(114,841
|
)
|
|
15.57
|
|
|
|
|
|
|
Exercised
|
(36,639
|
)
|
16.15
|
|||||||||
Outstanding
at September 30, 2007
|
|
|
985,918
|
|
|
$
|
16.78
|
|
|
|
7.30
|
|
Exercisable
at September 30, 2007
|
|
|
358,955
|
|
|
$
|
16.89
|
|
|
|
7.30
|
|
|
|
|
|
|
|
Weighted-
|
|
|
|
|
|
|
|
|
Average
|
|
|
|
|
Number
of
|
|
|
Grant
Date
|
|
||
|
|
Shares
|
|
|
Fair
Value
|
|
||
Non-vested
shares outstanding at December 31, 2006
|
|
|
471,341
|
|
|
$
|
21.34
|
|
Granted
|
|
|
610,102
|
|
|
|
12.79
|
|
Vested
|
|
|
(125,925
|
)
|
|
|
21.04
|
|
Forfeited
|
|
|
(73,387
|
)
|
|
|
15.60
|
|
Non-vested
shares outstanding at September 30, 2007
|
|
|
882,131
|
|
|
$
|
15.92
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
|
Nine
Months Ended
|
|
||||||||||
|
|
September
30,
|
|
|
September
30,
|
|
||||||||||
|
|
2007
|
|
|
2006
|
|
|
2007
|
|
|
2006
|
|
||||
Service
cost
|
|
$
|
835
|
|
|
$
|
960
|
|
|
$
|
2,331
|
|
|
$
|
2,880
|
|
Interest
cost
|
|
|
763
|
|
|
|
706
|
|
|
|
2,289
|
|
|
|
2,119
|
|
Amortization
of net actuarial (gain) or loss
|
|
|
—
|
|
|
|
47
|
|
|
|
—
|
|
|
|
140
|
|
Amortization
of prior service cost
|
|
|
583
|
|
|
|
568
|
|
|
|
1,750
|
|
|
|
1,704
|
|
Net
periodic benefit cost
|
|
$
|
2,181
|
|
|
$
|
2,281
|
|
|
$
|
6,370
|
|
|
$
|
6,843
|
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
|
|
|
|
2006
|
|
|
AMCI
|
|
|
$
|
5,097
|
|
Robindale
Energy & Subsidiary
|
|
|
|
11
|
|
Total
|
|
|
$
|
5,108
|
|
|
|
|
|
|
|
|
|
|
|
Corporate
|
|
|
||||
|
|
Coal
|
|
All
|
|
and
|
|
|
||||||||
|
|
Operations
|
|
Other
|
|
Eliminations
|
|
Consolidated
|
||||||||
Revenues
|
|
$
|
500,823
|
|
|
$
|
15,367
|
|
|
$
|
(9,051
|
)
|
|
$
|
507,139
|
|
Depreciation,
depletion, and amortization
|
|
|
42,175
|
|
|
|
1,337
|
|
|
|
414
|
|
|
|
43,926
|
|
EBITDA
|
|
|
76,931
|
|
|
|
2609
|
|
|
|
(14,466
|
)
|
|
|
65,074
|
|
Capital
expenditures
|
|
|
20,908
|
|
|
|
8,856
|
|
|
|
72
|
|
|
|
29,836
|
|
Total
assets
|
|
|
1,316,333
|
|
|
|
107,671
|
|
|
|
(252,453
|
)
|
|
|
1,171,551
|
|
|
|
|
|
|
|
|
|
|
|
Corporate
|
|
|
||||
|
|
Coal
|
|
All
|
|
and
|
|
|
||||||||
|
|
Operations
|
|
Other
|
|
Eliminations
|
|
Consolidated
|
||||||||
Revenues
|
|
$
|
1,353,143
|
|
|
$
|
43,913
|
|
|
$
|
(28,280
|
)
|
|
$
|
1,368,776
|
|
Depreciation,
depletion, and amortization
|
|
|
113,023
|
|
|
|
3,599
|
|
|
|
948
|
|
|
|
117,570
|
|
EBITDA
|
|
|
210,989
|
|
|
|
5,576
|
|
|
|
(41,691
|
)
|
|
|
174,874
|
|
Capital
expenditures
|
|
|
83,077
|
|
|
|
17,287
|
|
|
|
1,127
|
|
|
|
101,491
|
|
|
|
|
|
|
|
|
|
|
|
Corporate
|
|
|
||||
|
|
Coal
|
|
All
|
|
and
|
|
|
||||||||
|
|
Operations
|
|
Other
|
|
Eliminations
|
|
Consolidated
|
||||||||
Revenues
|
|
$
|
467,336
|
|
|
$
|
20,395
|
|
|
$
|
(12,613
|
)
|
|
$
|
475,118
|
|
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
|
|
|
1,116,412
|
|
|
|
88,843
|
|
|
|
(157,596
|
)
|
|
|
1,047,659
|
|
|
|
|
|
|
|
|
|
|
|
Corporate
|
|
|
||||
|
|
Coal
|
|
All
|
|
and
|
|
|
||||||||
|
|
Operations
|
|
Other
|
|
Eliminations
|
|
Consolidated
|
||||||||
Revenues
|
|
$
|
1,429,510
|
|
|
$
|
55,220
|
|
|
$
|
(30,961
|
)
|
|
$
|
1,453,769
|
|
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
|
|
|
Three
Months Ended
|
Nine
Months Ended
|
||||||||||||||
|
September
30,
|
September
30,
|
||||||||||||||
|
2007
|
2006
|
2007
|
2006
|
||||||||||||
Total
segment EBITDA
|
$ |
65,074
|
$ |
66,289
|
$ |
174,874
|
$ |
223,470
|
||||||||
Interest
expense
|
(10,101 | ) | (10,735 | ) | (30,124 | ) | (31,798 | ) | ||||||||
Interest
income
|
265
|
156
|
1,359
|
514
|
||||||||||||
Income
tax expense
|
(2,363 | ) | (4,744 | ) | (6,494 | ) | (23,040 | ) | ||||||||
Depreciation,
depletion and amortization
|
(43,926 | ) | (36,422 | ) | (117,570 | ) | (104,263 | ) | ||||||||
Net
income
|
$ |
8,949
|
$ |
14,544
|
$ |
22,045
|
$ |
64,883
|
|
|
Three
Months Ended
|
|
|
Nine
Months Ended
|
|
||||||||||
|
|
September
30,
|
|
|
September
30,
|
|
||||||||||
|
|
2007
|
|
|
2006
|
|
|
2007
|
|
|
2006
|
|
||||
Federal
statutory income tax expense
|
|
$
|
3,936
|
|
|
$
|
6,750
|
|
|
$
|
9,935
|
|
|
$
|
30,773
|
|
Increases
(reductions) in taxes due to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage
depletion allowance
|
|
|
(4,476
|
)
|
|
|
(5,728
|
)
|
|
|
(8,283
|
)
|
|
|
(15,669
|
)
|
Extraterritorial
income exclusion
|
|
|
—
|
|
|
(536
|
)
|
|
|
—
|
|
|
(1,418
|
)
|
||
Deduction
for domestic production activities
|
|
|
24
|
|
|
133
|
|
|
(4
|
)
|
|
|
(133
|
)
|
||
State
taxes, net of federal tax impact
|
|
|
(34
|
)
|
|
|
840
|
|
|
|
254
|
|
|
|
2,611
|
|
Non-deductible
share-based compensation
|
|
|
85
|
|
|
|
1,369
|
|
|
|
470
|
|
|
|
3,598
|
|
Change
in valuation allowance
|
|
|
2,623
|
|
|
|
1,472
|
|
|
|
3,765
|
|
|
|
2,461
|
|
Other,
net
|
|
|
205
|
|
|
|
444
|
|
|
|
357
|
|
|
|
817
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
tax expense
|
|
$
|
2,363
|
|
|
$
|
4,744
|
|
|
$
|
6,494
|
|
|
$
|
23,040
|
|
Net
Income
|
|
$
|
8,949
|
|
Change
in fair value of cash flow hedge, net of tax effect of $(1,606)
for the
period
|
|
|
(4,885
|
)
|
Change
in SFAS No. 158 adjustment related to postretirement medical and
black lung obligations, net of tax effect of $44 for the
period
|
|
|
133
|
|
Total
comprehensive income
|
|
$
|
4,197
|
|
Net
Income
|
|
$
|
22,045
|
|
Change
in fair value of cash flow hedge, net of tax effect of $(375) for
the
period
|
|
|
(1,142
|
)
|
Change
in SFAS No. 158 adjustment related to postretirement medical and
black
lung obligations, net of tax effect of $341 for the period
|
|
|
1,028
|
|
Total
comprehensive income
|
|
$
|
21,931
|
|
Fair
value of cash flow hedge, net of tax effect of $2,162
|
|
$
|
6,578
|
|
SFAS
No. 158 adjustment related to black lung obligations, net of tax
effect of $118
|
|
|
360
|
|
SFAS
No. 158 adjustment related to postretirement medical obligations, net
of tax effect of $4,006
|
|
|
12,195
|
|
Total
accumulated other comprehensive loss
|
|
$
|
19,133
|
|
Current
assets
|
$ |
9,555
|
||
Property,
plant, and equipment
|
42,324
|
|||
Intangible
assets
|
4,218
|
|||
Total
assets acquired
|
56,097
|
|||
Asset
retirement obligation
|
(12,107 | ) | ||
Other
liabilities
|
(100 | ) | ||
Total
liabilities assumed
|
(12,207 | ) | ||
Net
assets acquired
|
$ |
43,890
|
Parent
|
Co-Issuers
|
Guarantors
|
Non-Guarantor
|
Eliminations
|
Consolidated
|
|||||||||||||||||||
Revenues:
|
||||||||||||||||||||||||
Coal revenues
|
$ |
-
|
$ |
-
|
$ |
438,618
|
$ |
-
|
$ |
-
|
$ |
438,618
|
||||||||||||
Freight
and handling revenues
|
-
|
-
|
58,384
|
-
|
-
|
58,384
|
||||||||||||||||||
Other
revenues
|
-
|
-
|
10,137
|
-
|
-
|
10,137
|
||||||||||||||||||
Total
revenues
|
-
|
-
|
507,139
|
-
|
-
|
507,139
|
||||||||||||||||||
Cost
and expenses:
|
||||||||||||||||||||||||
Cost
of coal sales
|
-
|
-
|
361,704
|
-
|
-
|
361,704
|
||||||||||||||||||
Freight
and handling costs
|
-
|
-
|
58,384
|
-
|
-
|
58,384
|
||||||||||||||||||
Cost
of other revenues
|
-
|
-
|
7,132
|
728
|
-
|
7,860
|
||||||||||||||||||
Depreciation,
depletion and amortization
|
-
|
-
|
43,924
|
2
|
-
|
43,926
|
||||||||||||||||||
Selling,
general and administrative expenses
|
177
|
1,693
|
12,566
|
30
|
-
|
14,466
|
||||||||||||||||||
Total
costs and expenses
|
177
|
1,693
|
483,710
|
760
|
-
|
486,340
|
||||||||||||||||||
Income
(loss) from operations
|
(177 | ) | (1,693 | ) |
23,429
|
(760 | ) |
-
|
20,799
|
|||||||||||||||
Other
income (expenses):
|
||||||||||||||||||||||||
Interest
expense
|
-
|
(10,255 | ) | (41 | ) | (15 | ) |
210
|
(10,101 | ) | ||||||||||||||
Interest
income
|
38
|
130
|
291
|
16
|
(210 | ) |
265
|
|||||||||||||||||
Equity
earnings
|
11,451
|
23,269
|
(691 | ) |
-
|
(34,029 | ) |
-
|
||||||||||||||||
Miscellaneous
income, net
|
-
|
-
|
281
|
-
|
-
|
281
|
||||||||||||||||||
Total
other income (expense), net
|
11,489
|
13,144
|
(160 | ) |
1
|
(34,029 | ) | (9,555 | ) | |||||||||||||||
Income
(loss) before income taxes
and
minority interest
|
11,312
|
11,451
|
23,269
|
(759 | ) | (34,029 | ) |
11,244
|
||||||||||||||||
Income
tax expense
|
2,363
|
-
|
-
|
-
|
-
|
2,363
|
||||||||||||||||||
Minority
interest
|
-
|
-
|
-
|
(68 | ) |
-
|
(68 | ) | ||||||||||||||||
Net
income (loss)
|
$ |
8,949
|
$ |
11,451
|
$ |
23,269
|
$ | (691 | ) | $ | (34,029 | ) | $ |
8,949
|
Parent
|
Co-Issuers
|
Guarantors
|
Non-Guarantor
|
Eliminations
|
Consolidated
|
|||||||||||||||||||
Assets:
|
||||||||||||||||||||||||
Current
assets:
|
||||||||||||||||||||||||
Cash
and cash equivalents
|
$ |
-
|
$ |
43,669
|
$ | (30,847 | ) | $ |
3,445
|
$ |
-
|
$ |
16,267
|
|||||||||||
Trade
accounts receivable, net
|
-
|
-
|
194,599
|
-
|
-
|
194,599
|
||||||||||||||||||
Notes
and other receivables
|
2,568
|
67,494
|
16,300
|
-
|
(80,403 | ) |
5,959
|
|||||||||||||||||
Inventories
|
-
|
-
|
76,718
|
-
|
-
|
76,718
|
||||||||||||||||||
Due
from affiliates
|
-
|
-
|
405,394
|
17
|
(405,411 | ) |
-
|
|||||||||||||||||
Prepaid
expenses and other current assets
|
3,276
|
757
|
25,746
|
64
|
- |
29,843
|
||||||||||||||||||
Total
current assets
|
5,844
|
111,920
|
687,910
|
3,526
|
(485,814 | ) |
323,386
|
|||||||||||||||||
Property,
plant, and equipment, net
|
-
|
-
|
648,622
|
16,412
|
665,034
|
|||||||||||||||||||
Goodwill
|
-
|
-
|
20,547
|
-
|
-
|
20,547
|
||||||||||||||||||
Other
intangibles, net
|
-
|
-
|
6,638
|
3,244
|
-
|
9,882
|
||||||||||||||||||
Deferred
income taxes
|
89,269
|
6,286
|
-
|
-
|
-
|
95,555
|
||||||||||||||||||
Other
assets
|
365,776
|
1,016,385
|
34,779
|
899
|
(1,360,692 | ) |
57,147
|
|||||||||||||||||
Total
assets
|
$ |
460,889
|
$ |
1,134,591
|
$ |
1,398,496
|
$ |
24,081
|
$ | (1,846,506 | ) | $ |
1,171,551
|
|||||||||||
Liabilities
and Stockholder's/Member's Equity
|
||||||||||||||||||||||||
Current
liabilities:
|
||||||||||||||||||||||||
Current
portion of long-term debt
|
$ |
-
|
$ |
14,500
|
$ |
67,797
|
$ |
-
|
$ | (79,143 | ) | $ |
3,154
|
|||||||||||
Note
payable
|
-
|
-
|
- |
-
|
-
|
-
|
||||||||||||||||||
Bank
overdrafts
|
-
|
-
|
582
|
-
|
-
|
582
|
||||||||||||||||||
Due
to affiliates
|
77,798
|
327,613
|
-
|
-
|
(405,411 | ) |
-
|
|||||||||||||||||
Trade
accounts payable
|
-
|
39
|
90,407
|
922
|
-
|
91,368
|
||||||||||||||||||
Deferred
income tax
|
6,012
|
-
|
-
|
-
|
-
|
6,012
|
||||||||||||||||||
Accrued
expenses and other current liabilities
|
2,387
|
6,606
|
81,962
|
408
|
(1,553 | ) |
89,810
|
|||||||||||||||||
Total
current liabilities
|
86,197
|
348,758
|
240,748
|
1,330
|
(486,107 | ) |
190,926
|
|||||||||||||||||
Long-term
debt, net of current portion
|
-
|
418,125
|
249
|
13,033
|
(3,833 | ) |
427,574
|
|||||||||||||||||
Workers'
compensation benefits
|
-
|
-
|
9,553
|
-
|
-
|
9,553
|
||||||||||||||||||
Postretirement
medical benefits
|
-
|
-
|
55,654
|
-
|
-
|
55,654
|
||||||||||||||||||
Asset
retirement obligation
|
-
|
-
|
84,058
|
-
|
-
|
84,058
|
||||||||||||||||||
Deferred
gains on sales of property interest
|
-
|
-
|
3,215
|
-
|
-
|
3,215
|
||||||||||||||||||
Other
liabilities
|
2,400
|
8,750
|
15,794
|
186
|
(106 | ) |
27,024
|
|||||||||||||||||
Total
liabilities
|
88,597
|
775,633
|
409,271
|
14,549
|
(490,046 | ) |
798,004
|
|||||||||||||||||
Minority
interest
|
-
|
-
|
-
|
-
|
1,255
|
1,255
|
||||||||||||||||||
Stockholders/member's
equity
|
372,292
|
358,958
|
989,225
|
9,532
|
(1,357,715 | ) |
372,292
|
|||||||||||||||||
Total
liabilities and stockholders/members equity
|
$ |
460,889
|
$ |
1,134,591
|
$ |
1,398,496
|
$ |
24,081
|
$ | (1,846,506 | ) | $ |
1,171,551
|
Parent
|
Co-Issuers
|
Guarantors
|
Non-Guarantor
|
Eliminations
|
Consolidated
|
|||||||||||||||||||
Revenues:
|
||||||||||||||||||||||||
Coal revenues
|
$ |
-
|
$ |
-
|
$ |
420,179
|
$ |
-
|
$ |
-
|
$ |
420,179
|
||||||||||||
Freight
and handling revenues
|
-
|
-
|
45,805
|
-
|
-
|
45,805
|
||||||||||||||||||
Other
revenues
|
-
|
-
|
9,134
|
-
|
-
|
9,134
|
||||||||||||||||||
Total
revenues
|
-
|
-
|
475,118
|
-
|
-
|
475,118
|
||||||||||||||||||
Cost
and expenses:
|
||||||||||||||||||||||||
Cost
of coal sales
|
-
|
-
|
340,440
|
-
|
-
|
340,440
|
||||||||||||||||||
Freight
and handling costs
|
-
|
-
|
45,805
|
-
|
-
|
45,805
|
||||||||||||||||||
Cost
of other revenues
|
-
|
-
|
5,774
|
-
|
-
|
5,774
|
||||||||||||||||||
Depreciation,
depletion and amortization
|
-
|
-
|
36,422
|
-
|
-
|
36,422
|
||||||||||||||||||
Selling,
general and administrative expenses
|
154
|
5,551
|
11,132
|
-
|
-
|
16,837
|
||||||||||||||||||
Total
costs and expenses
|
154
|
5,551
|
439,573
|
-
|
-
|
445,278
|
||||||||||||||||||
Income
(loss) from operations
|
(154 | ) | (5,551 | ) |
35,545
|
-
|
-
|
29,840
|
||||||||||||||||
Other
income (expenses):
|
||||||||||||||||||||||||
Interest
expense
|
-
|
(10,756 | ) | (79 | ) |
-
|
100
|
(10,735 | ) | |||||||||||||||
Interest
income
|
48
|
69
|
139
|
-
|
(100 | ) |
156
|
|||||||||||||||||
Equity
earnings
|
19,394
|
35,751
|
-
|
-
|
(55,145 | ) |
-
|
|||||||||||||||||
Miscellaneous
income, net
|
-
|
(119 | ) |
146
|
-
|
-
|
27
|
|||||||||||||||||
Total
other income (expense), net
|
19,442
|
24,945
|
206
|
-
|
(55,145 | ) | (10,552 | ) | ||||||||||||||||
Income
(loss) before income taxes and minority interest
|
19,288
|
19,394
|
35,751
|
-
|
(55,145 | ) |
19,288
|
|||||||||||||||||
Income
tax expense
|
4,744
|
-
|
-
|
-
|
-
|
4,744
|
||||||||||||||||||
Net
income (loss)
|
$ |
14,544
|
$ |
19,394
|
$ |
35,751
|
$ |
-
|
$ | (55,145 | ) | $ |
14,544
|
Parent
|
Co-Issuers
|
Guarantors
|
Non-Guarantor
|
Eliminations
|
Consolidated
|
|||||||||||||||||||
Assets:
|
||||||||||||||||||||||||
Current
assets:
|
||||||||||||||||||||||||
Cash
and cash equivalents
|
$ |
-
|
$ |
27,101
|
$ |
5,414
|
$ |
741
|
$ |
-
|
$ |
33,256
|
||||||||||||
Trade
accounts receivable, net
|
-
|
-
|
171,195
|
-
|
-
|
171,195
|
||||||||||||||||||
Notes
and other receivables
|
2,568
|
67,498
|
13,702
|
20
|
(77,322 | ) |
6,466
|
|||||||||||||||||
Inventories
|
-
|
-
|
76,844
|
-
|
-
|
76,844
|
||||||||||||||||||
Due
from affiliates
|
-
|
-
|
276,063
|
-
|
(276,063 | ) |
-
|
|||||||||||||||||
Prepaid
expenses and other current assets
|
3,337
|
1,437
|
46,119
|
-
|
-
|
50,893
|
||||||||||||||||||
Total
current assets
|
5,905
|
96,036
|
589,337
|
761
|
(353,385 | ) |
338,654
|
|||||||||||||||||
Property,
plant, and equipment, net
|
-
|
-
|
637,136
|
-
|
-
|
637,136
|
||||||||||||||||||
Goodwill
|
-
|
-
|
20,547
|
-
|
-
|
20,547
|
||||||||||||||||||
Other
intangibles, net
|
-
|
-
|
7,803
|
3,917
|
-
|
11,720
|
||||||||||||||||||
Deferred
income taxes
|
88,644
|
6,253
|
-
|
-
|
-
|
94,897
|
||||||||||||||||||
Other
assets
|
330,983
|
897,664
|
21,625
|
-
|
(1,207,433 | ) |
42,839
|
|||||||||||||||||
Total
assets
|
$ |
425,532
|
$ |
999,953
|
$ |
1,276,448
|
$ |
4,678
|
$ |
(1,560,818
|
) | $ |
1,145,793
|
|||||||||||
Liabilities
and Stockholder's/Member's Equity
|
||||||||||||||||||||||||
Current
liabilities:
|
||||||||||||||||||||||||
Current
portion of long-term debt
|
$ |
-
|
$ |
12,300
|
$ |
68,254
|
$ |
-
|
$ | (77,300 | ) | $ |
3,254
|
|||||||||||
Note
payable
|
-
|
20,941
|
-
|
-
|
-
|
20,941
|
||||||||||||||||||
Bank
overdrafts
|
-
|
-
|
23,814
|
-
|
-
|
23,814
|
||||||||||||||||||
Due
to affiliates
|
69,087
|
206,976
|
-
|
-
|
(276,063 | ) |
-
|
|||||||||||||||||
Trade
accounts payable
|
-
|
144
|
75,534
|
308
|
-
|
75,986
|
||||||||||||||||||
Deferred
income tax
|
7,601
|
-
|
-
|
-
|
-
|
7,601
|
||||||||||||||||||
Accrued
expenses and other current liabilities
|
2,395
|
6,695
|
81,878
|
-
|
(374 | ) |
90,594
|
|||||||||||||||||
Total
current liabilities
|
79,083
|
247,056
|
249,480
|
308
|
(353,737 | ) |
222,190
|
|||||||||||||||||
Long-term
debt, net of current portion
|
-
|
420,000
|
756
|
700
|
-
|
421,456
|
||||||||||||||||||
Workers'
compensation benefits
|
-
|
-
|
7,169
|
-
|
-
|
7,169
|
||||||||||||||||||
Postretirement
medical benefits
|
-
|
-
|
50,712
|
-
|
-
|
50,712
|
||||||||||||||||||
Asset
retirement obligation
|
-
|
-
|
69,495
|
-
|
-
|
69,495
|
||||||||||||||||||
Deferred
gains on sales of property interest
|
-
|
-
|
3,885
|
-
|
-
|
3,885
|
||||||||||||||||||
Other
liabilities
|
2,400
|
8,676
|
15,811
|
(50 | ) |
26,837
|
||||||||||||||||||
Total
liabilities
|
81,483
|
675,732
|
397,308
|
958
|
(353,737 | ) |
801,744
|
|||||||||||||||||
Stockholders/member's
equity
|
344,049
|
324,221
|
879,140
|
3,720
|
(1,207,081 | ) |
344,049
|
|||||||||||||||||
Total
liabilities and stockholders/members equity
|
$ |
425,532
|
$ |
999,953
|
$ |
1,276,448
|
$ |
4,678
|
$ | (1,560,818 | ) | $ |
1,145,793
|
Parent
|
Co-Issuers
|
Guarantors
|
Non-Guarantor
|
Eliminations
|
Consolidated
|
|||||||||||||||||||
Revenues:
|
||||||||||||||||||||||||
Coal revenues
|
$ |
-
|
$ |
-
|
$ |
1,201,678
|
$ |
-
|
$ |
-
|
$ |
1,201,678
|
||||||||||||
Freight
and handling revenues
|
-
|
-
|
143,183
|
-
|
-
|
143,183
|
||||||||||||||||||
Other
revenues
|
-
|
-
|
23,915
|
-
|
-
|
23,915
|
||||||||||||||||||
Total
revenues
|
-
|
-
|
1,368,776
|
-
|
-
|
1,368,776
|
||||||||||||||||||
Cost
and expenses:
|
||||||||||||||||||||||||
Cost
of coal sales
|
-
|
-
|
991,766
|
-
|
-
|
991,766
|
||||||||||||||||||
Freight
and handling costs
|
-
|
-
|
143,183
|
-
|
-
|
143,183
|
||||||||||||||||||
Cost
of other revenues
|
-
|
-
|
16,189
|
2,067
|
-
|
18,256
|
||||||||||||||||||
Depreciation,
depletion and amortization
|
-
|
-
|
117,566
|
4
|
-
|
117,570
|
||||||||||||||||||
Selling,
general and administrative expenses
|
742
|
4,451
|
36,405
|
89
|
-
|
41,687
|
||||||||||||||||||
Total
costs and expenses
|
742
|
4,451
|
1,305,109
|
2,160
|
-
|
1,312,462
|
||||||||||||||||||
Income
(loss) from operations
|
(742 | ) | (4,451 | ) |
63,667
|
(2,160 | ) |
-
|
56,314
|
|||||||||||||||
Other
income (expenses):
|
||||||||||||||||||||||||
Interest
expense
|
-
|
(30,333 | ) | (222 | ) | (15 | ) |
446
|
(30,124 | ) | ||||||||||||||
Interest
income
|
112
|
1,017
|
660
|
16
|
(446
|
) |
1,359
|
|||||||||||||||||
Equity
earnings
|
29,169
|
62,934
|
(2,004 | ) |
-
|
(90,099 | ) |
-
|
||||||||||||||||
Miscellaneous
income, net
|
-
|
2
|
833
|
-
|
-
|
835
|
||||||||||||||||||
Total
other income (expense), net
|
29,281
|
33,620
|
(733 | ) |
1
|
(90,099 | ) | (27,930 | ) | |||||||||||||||
Income
(loss) before income taxes and minority interest
|
28,539
|
29,169
|
62,934
|
(2,159 | ) | (90,099 | ) |
28,384
|
||||||||||||||||
Income
tax expense
|
6,494
|
-
|
-
|
-
|
-
|
6,494
|
||||||||||||||||||
Minority
interest
|
-
|
-
|
-
|
(155 | ) |
-
|
(155 | ) | ||||||||||||||||
Net
income (loss)
|
$ |
22,045
|
$ |
29,169
|
$ |
62,934
|
$ | (2,004 | ) | $ | (90,099 | ) | $ |
22,045
|
Parent
|
Co-Issuers
|
Guarantors
|
Non-Guarantor
|
Eliminations
|
Consolidated
|
|||||||||||||||||||
Revenues:
|
||||||||||||||||||||||||
Coal revenues
|
$ |
-
|
$ |
-
|
$ |
1,282,033
|
$ |
-
|
$ |
-
|
$ |
1,282,033
|
||||||||||||
Freight
and handling revenues
|
-
|
-
|
143,132
|
-
|
-
|
143,132
|
||||||||||||||||||
Other
revenues
|
-
|
-
|
28,604
|
-
|
-
|
28,604
|
||||||||||||||||||
Total
revenues
|
-
|
-
|
1,453,769
|
-
|
-
|
1,453,769
|
||||||||||||||||||
Cost
and expenses:
|
||||||||||||||||||||||||
Cost
of coal sales
|
-
|
-
|
1,016,831
|
-
|
-
|
1,016,831
|
||||||||||||||||||
Freight
and handling costs
|
-
|
-
|
143,132
|
-
|
-
|
143,132
|
||||||||||||||||||
Cost
of other revenues
|
-
|
-
|
19,170
|
-
|
-
|
19,170
|
||||||||||||||||||
Depreciation,
depletion and amortization
|
-
|
-
|
104,263
|
-
|
-
|
104,263
|
||||||||||||||||||
Selling,
general and administrative expenses
|
706
|
15,523
|
35,260
|
-
|
-
|
51,489
|
||||||||||||||||||
Total
costs and expenses
|
706
|
15,523
|
1,318,656
|
-
|
-
|
1,334,885
|
||||||||||||||||||
Income
(loss) from operations
|
(706 | ) | (15,523 | ) |
135,113
|
-
|
-
|
118,884
|
||||||||||||||||
Other
income (expenses):
|
||||||||||||||||||||||||
Interest
expense
|
-
|
(31,801 | ) | (238 | ) |
-
|
241
|
(31,798 | ) | |||||||||||||||
Interest
income
|
144
|
274
|
337
|
-
|
(241 | ) |
514
|
|||||||||||||||||
Equity
earnings
|
88,485
|
135,694
|
-
|
-
|
(224,179 | ) |
-
|
|||||||||||||||||
Miscellaneous
income, net
|
-
|
(159 | ) |
482
|
-
|
-
|
323
|
|||||||||||||||||
Total
other income (expense), net
|
88,629
|
104,008
|
581
|
-
|
(224,179 | ) | (30,961 | ) | ||||||||||||||||
Income
(loss) before income taxes and minority interest
|
87,923
|
88,485
|
135,694
|
-
|
(224,179 | ) |
87,923
|
|||||||||||||||||
Income
tax expense
|
23,040
|
-
|
-
|
-
|
-
|
23,040
|
||||||||||||||||||
Net
income (loss)
|
$ |
64,883
|
$ |
88,485
|
$ |
135,694
|
$ |
-
|
$ | (224,179 | ) | $ |
64,883
|
Parent
|
|
Co-Issuers
|
|
Guarantors
|
|
Non-Guarantor |
|
Eliminations
|
|
Consolidated | ||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||||||
Net
cash flows from operating activities
|
$ |
(594
|
) | $ |
31,147
|
$ |
121,008
|
$ | (622 | ) | $ |
12,313
|
$ |
163,252
|
||||||||||
Cash
flows from investing activities:
|
||||||||||||||||||||||||
Capital
expenditures
|
-
|
-
|
(85,540 | ) | (15,951 | ) |
-
|
(101,491 | ) | |||||||||||||||
Proceeds
from disposition of property, plant, & equipment
|
-
|
-
|
3,734
|
-
|
-
|
3,734
|
||||||||||||||||||
Equity
investments
|
-
|
(263 | ) | (7,122 | ) |
-
|
6,982
|
(403 | ) | |||||||||||||||
Purchase
of acquired companies
|
-
|
-
|
(43,908 | ) |
-
|
-
|
(43,908 | ) | ||||||||||||||||
Other,
net
|
-
|
-
|
(594 | ) | (18 | ) |
-
|
(612 | ) | |||||||||||||||
Net
cash flows from investing activities
|
-
|
(263 | ) | (133,430 | ) | (15,969 | ) |
6,982
|
(142,680 | ) | ||||||||||||||
Cash
flows from financing activities:
|
||||||||||||||||||||||||
Repayments
of notes payable
|
-
|
(20,941 | ) |
-
|
-
|
-
|
(20,941 | ) | ||||||||||||||||
Proceeds
from issuance of long-term debt
|
-
|
21,400
|
-
|
12,313
|
(12,313 | ) |
21,400
|
|||||||||||||||||
Repayments
on long-term debt
|
-
|
(14,775 | ) |
(607
|
) |
-
|
-
|
(15,382 | ) | |||||||||||||||
Change
in bank overdraft
|
-
|
-
|
(23,232 | ) |
-
|
-
|
(23,232 | ) | ||||||||||||||||
Proceeds
from exercise of stock options
|
594
|
-
|
-
|
-
|
-
|
594
|
||||||||||||||||||
Distributions
to original shareholders of Alpha NR Holding
|
-
|
-
|
-
|
6,982
|
(6,982 | ) |
-
|
|||||||||||||||||
Net
cash flows from financing activities
|
594
|
(14,316 | ) | (23,839 | ) |
19,295
|
(19,295 | ) | (37,561 | ) | ||||||||||||||
Increase
(decrease) in cash and cash equivalents
|
-
|
16,568
|
(36,261 | ) |
2,704
|
-
|
(16,989 | ) | ||||||||||||||||
Cash
and cash equivalents at beginning of period
|
-
|
27,101
|
5,414
|
741
|
-
|
33,256
|
||||||||||||||||||
Cash
and cash equivalents at end of period
|
$ |
-
|
$ |
43,669
|
$ | (30,847 | ) | $ |
3,445
|
$ |
-
|
$ |
16,267
|
Parent
|
Co-Issuers
|
Guarantors
|
Non-Guarantor
|
Eliminations
|
Consolidated
|
|||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||||||
Net
cash flows from operating activities
|
$ |
1,447
|
$ | 11,681 | $ |
135,189
|
$ |
-
|
$ |
-
|
$ |
148,317
|
||||||||||||
Cash
flows from investing activities:
|
||||||||||||||||||||||||
Capital
expenditures
|
-
|
-
|
(110,538 | ) |
-
|
-
|
(110,538 | ) | ||||||||||||||||
Proceeds
from disposition of property, plant, & equipment
|
-
|
-
|
1,060
|
-
|
-
|
1,060
|
||||||||||||||||||
Equity
investments
|
-
|
(19 | ) | (209 | ) |
-
|
-
|
(228 | ) | |||||||||||||||
Purchase
of acquired companies
|
-
|
-
|
(28,273 | ) |
-
|
-
|
(28,273 | ) | ||||||||||||||||
Other,
net
|
-
|
-
|
2,499
|
-
|
-
|
2,499
|
||||||||||||||||||
Net
cash flows from investing activities
|
-
|
(19 | ) | (135,461 | ) |
-
|
-
|
(135,480 | ) | |||||||||||||||
Cash
flows from financing activities:
|
||||||||||||||||||||||||
Repayments
of notes payable
|
-
|
(55,671 | ) |
194
|
-
|
-
|
(55,477 | ) | ||||||||||||||||
Proceeds
from issuance of long-term debt
|
-
|
287,000
|
-
|
-
|
-
|
287,000
|
||||||||||||||||||
Repayments
on long-term debt
|
-
|
(289,585 | ) |
-
|
-
|
-
|
(289,585 | ) | ||||||||||||||||
Change
in bank overdraft
|
-
|
-
|
18,574
|
-
|
-
|
18,574
|
||||||||||||||||||
Proceeds
from exercise of stock options
|
953
|
-
|
-
|
-
|
-
|
953
|
||||||||||||||||||
Distributions
to original shareholders of Alpha NR Holding
|
(2,400 | ) |
-
|
-
|
-
|
-
|
(2,400 | ) | ||||||||||||||||
Net
cash flows from financing activities
|
(1,447 | ) | (58,256 | ) |
18,768
|
-
|
-
|
(40,935 | ) | |||||||||||||||
Increase
(decrease) in cash and cash equivalents
|
-
|
(46,594 | ) |
18,496
|
-
|
-
|
(28,098 | ) | ||||||||||||||||
Cash
and cash equivalents at beginning of period
|
-
|
46,669
|
(7,047 | ) |
-
|
-
|
39,622
|
|||||||||||||||||
Cash
and cash equivalents at end of period
|
$ |
-
|
$ |
75
|
$ |
11,449
|
$ |
-
|
$ |
-
|
$ |
11,524
|
|
·
|
market
demand for coal, electricity and
steel;
|
|
|
|
·
|
future
economic or capital market
conditions;
|
|
|
|
·
|
weather
conditions or catastrophic weather-related
damage;
|
|
|
|
·
|
our
production capabilities;
|
|
|
|
·
|
the
consummation of financing, acquisition or disposition transactions
and the
effect thereof on our business;
|
|
|
|
·
|
our
ability to successfully integrate the operations we have acquired
with our
existing operations, as well as our ability to successfully integrate
operations we may acquire in the
future;
|
|
|
|
·
|
our
plans and objectives for future operations and expansion or
consolidation;
|
|
|
|
·
|
our
relationships with, and other conditions affecting, our
customers;
|
|
·
|
the
progress of project construction plans and marketing agreements
relating
to Gallatin Materials LLC;
|
|
|
|
·
|
timing
of changes in customer coal
inventories;
|
|
|
|
·
|
changes
in, renewal of and acquiring new long-term coal supply
arrangements;
|
|
|
|
·
|
inherent
risks of coal mining beyond our
control;
|
|
|
|
·
|
environmental
laws, including those directly affecting our coal mining and production,
and those affecting our customers' coal
usage;
|
|
|
|
·
|
competition
in coal markets;
|
|
|
|
·
|
railroad,
barge, truck and other transportation performance and
costs;
|
|
|
|
·
|
the
geological characteristics of Central and Northern Appalachian
coal
reserves;
|
|
·
|
availability
of mining and processing equipment and
parts;
|
|
|
|
·
|
our
assumptions concerning economically recoverable coal reserve
estimates;
|
|
|
|
·
|
availability
of skilled employees and other employee workforce
factors;
|
|
|
|
·
|
regulatory
and court decisions;
|
|
·
|
future
legislation and changes in regulations, governmental policies or
taxes;
|
|
|
|
·
|
changes
in postretirement benefit
obligations;
|
|
|
|
·
|
our
liquidity, results of operations and financial
condition;
|
|
|
|
·
|
decline
in coal prices;
|
|
|
|
·
|
forward
sales and purchase contracts not accounted for as a
hedge;
|
|
|
|
·
|
indemnification
of certain obligations not being
met;
|
|
·
|
continued
funding of the road construction
business;
|
|
·
|
disruption
in coal supplies;
|
|
·
|
unfavorable
government intervention in, or nationalization of, foreign
investments;
|
|
·
|
other
factors, including the other factors discussed in “Overview - Coal Pricing
Trends and Uncertainties” and “Outlook” below, and the factors discussed
in Part I, Item 1A “Risk Factors” section of our annual report on Form
10-K for the year ended December 31,
2006.
|
·
|
The
Miner Act and various other state legislation continue to place
upward
cost pressure on mine operators as they attempt to comply with
the new
statutes.
|
·
|
The
recent ratification of the Bituminous Coal Operators and Associates
new
contract will increase the cost structures of mine operators who
have
United Mine Workers of America representation, which could impact
the cost
structures of non-represented workforces.
|
·
|
A
recent court decision, initially impacting surface mining operations
in
the Huntington District of the U.S. Corps of Engineers, threatens
to
further slow the issuance of mining permits and constrain production.
This
decision could spread to other districts, including ones where
we
operate.
|
·
|
New
technological advances in coal-to-gas and coal-to-liquids are increasing
the demand for coal usage and could cause upward pressure on the
demand
for coal and increase the price we pay for purchased
coal.
|
|
Three
months ended
|
Nine
months ended
|
||||||||||||||
|
September
30,
|
September
30,
|
||||||||||||||
|
2007
|
2006
|
2007
|
2006
|
||||||||||||
|
|
(in
thousands)
|
|
|||||||||||||
Net
income
|
$ |
8,949
|
$ |
14,544
|
$ |
22,045
|
$ |
64,883
|
||||||||
Interest
expense
|
10,101
|
10,735
|
30,124
|
31,798
|
||||||||||||
Interest
income
|
(265 | ) | (156 | ) | (1,359 | ) | (514 | ) | ||||||||
Income
tax expense
|
2,363
|
4,744
|
6,494
|
23,040
|
||||||||||||
Depreciation,
depletion and amortization
|
43,926
|
36,422
|
117,570
|
104,263
|
||||||||||||
EBITDA
(1)
|
$ |
65,074
|
$ |
66,289
|
$ |
174,874
|
$ |
223,470
|
|
|
|
(1)
|
|
EBITDA
is defined as net income plus interest expense, income tax expense,
depreciation, depletion and amortization, less interest income.
EBITDA is
a non-GAAP measure used by management to measure operating performance,
and management also believes it is a useful indicator of our ability
to
meet debt service and capital expenditure requirements. Because
EBITDA is
not calculated identically by all companies, our calculation may
not be
comparable to similarly titled measures of other companies. Adjusted
EBITDA, as it is used and defined in our debt covenants, is described
and
reconciled to net income in “Analysis of Material Debt Covenants”
below.
|
|
|
Three
months Ended
|
|
|
Increase
|
|
||||||||||
|
|
September
30,
|
|
|
(Decrease)
|
|
||||||||||
|
|
2007
|
|
|
2006
|
|
|
$
or Tons
|
|
|
%
|
|
||||
|
|
(in
thousands, except per ton data)
|
|
|||||||||||||
Coal
revenues
|
|
$
|
438,618
|
|
|
$
|
420,179
|
|
|
$
|
18,439
|
|
|
|
4%
|
|
Freight
and handling revenues
|
|
|
58,384
|
|
|
|
45,805
|
|
12,579
|
|
|
|
27%
|
|||
Other
revenues
|
|
|
10,137
|
|
|
|
9,134
|
|
|
|
1,003
|
|
|
11%
|
||
Total
revenues
|
|
$
|
507,139
|
|
|
$
|
475,118
|
|
|
$
|
32,021
|
|
|
7%
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Tons
Sold:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Steam
|
|
|
4,411
|
|
|
|
5,097
|
|
|
|
(686
|
)
|
|
|
(13%)
|
|
Metallurgical
|
|
|
3,178
|
|
|
|
2,336
|
|
|
|
842
|
|
|
36%
|
||
Total
|
|
|
7,589
|
|
|
|
7,433
|
|
|
|
156
|
|
|
|
2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Coal
sales realization per ton:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Steam
|
|
$
|
48.24
|
|
|
$
|
48.35
|
|
|
$
|
(0.11
|
)
|
|
|
0%
|
|
Metallurgical
|
|
|
71.05
|
|
|
|
74.36
|
|
|
|
(3.31
|
)
|
|
|
(4%)
|
|
Total
|
|
$
|
57.79
|
|
|
$
|
56. 53
|
|
|
$
|
1.26
|
|
|
|
2%
|
|
Three
months ended
|
Increase
|
||||||||||||||
|
September
30,
|
(Decrease)
|
||||||||||||||
|
2007
|
2006
|
$
|
%
|
||||||||||||
|
(in
thousands, except per ton data)
|
|||||||||||||||
Cost
of coal sales (exclusive of items shown separately below)
|
$ |
361,704
|
$ |
340,440
|
$ |
21,264
|
6% | |||||||||
Freight
and handling costs
|
58,384
|
45,805
|
12,579
|
27% | ||||||||||||
Cost
of other revenues
|
7,860
|
5,774
|
2,086
|
36% | ||||||||||||
Depreciation,
depletion and amortization
|
43,926
|
36,422
|
7,504
|
21% | ||||||||||||
Selling,
general and administrative expenses
|
14,466
|
16,837
|
(2,371 | ) | (14% | ) | ||||||||||
Total
costs and expenses
|
$ |
486,340
|
$ |
445,278
|
$ |
41,062
|
9% | |||||||||
|
||||||||||||||||
Cost
of coal sales per ton:
|
||||||||||||||||
Company
mines
|
$ |
46.52
|
$ |
43.19
|
$ |
3.33
|
8% | % | ||||||||
Contract
mines (including purchased and processed)
|
51.52
|
51.83
|
(0.31 | ) | (1% | ) | ||||||||||
Total
produced and processed
|
47.40
|
44.46
|
2.94
|
7 | % | |||||||||||
Purchased
and sold without processing
|
49.18
|
54.54
|
(5.36 | ) | (10 | %) | ||||||||||
Cost
of coal sales per ton
|
$ |
47.66
|
$ |
45.80
|
$ |
1.86
|
4 | % | ||||||||
|
Nine
months ended
|
Increase
|
||||||||||||||
|
September
30,
|
(Decrease)
|
||||||||||||||
|
2007
|
2006
|
$
or Tons
|
%
|
||||||||||||
|
(in
thousands, except per ton data)
|
|||||||||||||||
Coal
revenues
|
$ |
1,201,678
|
$ |
1,282,033
|
$ | (80,355 | ) | (6% | ) | |||||||
Freight
and handling revenues
|
143,183
|
143,132
|
51
|
0% | ||||||||||||
Other
revenues
|
23,915
|
28,604
|
(4,689 | ) | (16% | ) | ||||||||||
Total
revenues
|
$ |
1,368,776
|
$ |
1,453,769
|
$ | (84,993 | ) | (6% | ) | |||||||
|
||||||||||||||||
Tons
Sold:
|
||||||||||||||||
Steam
|
12,997
|
14,344
|
(1,347 | ) | (9% | ) | ||||||||||
Metallurgical
|
8,060
|
7,672
|
388
|
5% | ||||||||||||
Total
|
21,057
|
22,016
|
(959 | ) | (4% | ) | ||||||||||
|
||||||||||||||||
Coal
sales realization per ton:
|
||||||||||||||||
|
||||||||||||||||
Steam
|
$ |
48.03
|
$ |
49.14
|
$ | (1.11 | ) | (2% | ) | |||||||
Metallurgical
|
71.64
|
75.24
|
(3.60 | ) | (5% | ) | ||||||||||
Total
|
$ |
57.07
|
$ |
58.23
|
$ | (1.16 | ) | (2% | ) |
|
|
|
|
|
||||||||||||
|
Nine
months ended
|
Increase
|
||||||||||||||
|
September
30,
|
(Decrease)
|
||||||||||||||
|
2007
|
2006
|
$ |
%
|
||||||||||||
|
(in
thousands, except per ton data)
|
|||||||||||||||
Cost
of coal sales (exclusive of items shown separately below)
|
$ |
991,766
|
$ |
1,016,831
|
$ | (25,065 | ) | (2% | ) | |||||||
Freight
and handling costs
|
143,183
|
143,132
|
51
|
0% | ||||||||||||
Cost
of other revenues
|
18,256
|
19,170
|
(914 | ) | (5% | ) | ||||||||||
Depreciation,
depletion and amortization
|
117,570
|
104,263
|
13,307
|
13% | ||||||||||||
Selling,
general and administrative expenses
|
41,687
|
51,489
|
(9,802 | ) | (19% | ) | ||||||||||
Total
costs and expenses
|
$ |
1,312,462
|
$ |
1,334,885
|
$ | (22,423 | ) | (2% | ) | |||||||
|
||||||||||||||||
Cost
of coal sales per ton:
|
||||||||||||||||
Company
mines
|
$ |
46.02
|
$ |
42.19
|
$ |
3.83
|
9% | |||||||||
Contract
mines (including purchased and processed)
|
51.03
|
52.79
|
(1.76 | ) | (3% | ) | ||||||||||
Total
produced and processed
|
46.88
|
43.82
|
3.06
|
7% | ||||||||||||
Purchased
and sold without processing
|
48.59
|
59.92
|
(11.33 | ) | (19% | ) | ||||||||||
Cost
of coal sales per ton
|
$ |
47.10
|
$ |
46.19
|
$ |
0.91
|
2% |
|
|
September
30,
|
|
|
|
|
2007
|
|
|
Term
loan
|
|
$
|
245,625
|
|
10%
Senior notes due 2012
|
|
|
175,000
|
|
Capital
lease obligations
|
|
|
903
|
|
Gallatin
project financing
|
8,500
|
|||
Other
|
700
|
|||
Total
long-term debt
|
|
|
430,728
|
|
Less
current portion
|
|
|
3,154
|
|
Long-term
debt, net of current portion
|
|
$
|
427,574
|
|
·
|
The
Company must maintain a leverage ratio, defined as the ratio of
consolidated adjusted debt (consolidated debt less unrestricted
cash and
cash equivalents) to EBITDA (as defined in the Credit Agreement,
(“Adjusted EBITDA”)), of not more than 3.75 at June 30,
September 30 and December 31, 2007, and 3.50 at March 31, 2008
and each quarter end thereafter, with Adjusted EBITDA being computed
using
the most recent four quarters; and
|
·
|
The
Company must maintain an interest coverage ratio, defined as the
ratio of
Adjusted EBITDA to cash interest expense, of 2.50 or greater on
the last
day of any fiscal quarter.
|
|
|
Three
Months
|
|
|
Three
Months
|
|
|
Three
Months
|
|
|
Three
Months
|
|
|
Twelve
Months
|
|
|||||
|
|
Ended
|
|
|
Ended
|
|
|
Ended
|
|
|
Ended
|
|
|
Ended
|
|
|||||
|
|
December
31,
|
|
|
March
31,
|
|
|
June
30,
|
|
|
September
30,
|
|
|
September
30,
|
|
|||||
|
|
2006
|
|
|
2007
|
|
|
2007
|
|
|
2007
|
|
|
2007
|
|
|||||
|
|
(in
thousands)
|
|
|||||||||||||||||
Net
income
|
|
$
|
63,284
|
|
|
$
|
8,349
|
|
|
$
|
4,747
|
|
|
$
|
8,949
|
|
|
$
|
85,329
|
|
Interest
expense, net
|
|
|
9,652
|
|
|
|
9,356
|
|
|
|
9,573
|
|
|
|
9,836
|
|
|
|
38,417
|
|
Income
tax expense (benefit)
|
|
|
(53,559)
|
|
|
|
2,629
|
|
|
|
1,502
|
|
|
|
2,363
|
|
|
|
(47,065)
|
|
Depreciation,
depletion and amortization
|
|
|
36,588
|
|
|
|
35,789
|
|
|
|
37,855
|
|
|
|
43,926
|
|
|
|
154,158
|
|
EBITDA
|
|
|
55,965
|
|
|
|
56,123
|
|
|
|
53,677
|
|
|
|
65,074
|
|
|
|
230,839
|
|
Fair
value of forward purchase and sales contracts
|
2,126
|
(449
|
)
|
(391
|
)
|
(1,413
|
)
|
(127
|
)
|
|||||||||||
Other
allowable adjustments
|
(1,108
|
)
|
(71
|
)
|
(1,098
|
)
|
(31
|
)
|
(2,308
|
)
|
||||||||||
Accretion
expense
|
1,402
|
1,556
|
1,566
|
1,838
|
6,362
|
|||||||||||||||
Amortization
of deferred gains
|
|
|
(97
|
)
|
|
|
(228
|
)
|
|
|
(265
|
)
|
|
|
(214)
|
|
|
|
(804
|
)
|
Share-based
compensation charges
|
|
|
4,649
|
|
|
|
2,650
|
|
|
|
1,414
|
|
|
|
2,683
|
|
|
|
11,396
|
|
Adjusted
EBITDA
|
|
$
|
62,937
|
|
|
$
|
59,581
|
|
|
$
|
54,903
|
|
|
$
|
67, 937
|
|
|
$
|
245,358
|
|
Leverage
ratio(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.69
|
|
Interest
coverage ratio(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6.82
|
|
(1)
|
Leverage
ratio is defined in our credit agreement as total debt divided
by Adjusted
EBITDA.
|
(2)
|
Interest
coverage ratio is defined in our credit agreement as Adjusted EBITDA
divided by cash interest expense.
|
|
|
|
|
|
|
|
|||||||||
Purchase
Contracts
|
Purchase
Price Range
|
Tons
Outstanding
|
Delivery
Period
|
Mark-To-Market
Adjustment (In Millions) Asset/(Liability)
|
|||||||||||
|
$ |
35.00-47.75
|
720,000
|
|
10/01/07-12/31/08
|
$ |
1.8
|
||||||||
|
$ |
47.75-56.00
|
720,000
|
|
10/01/07-12/31/08
|
$ |
0.2
|
||||||||
|
1,440,000
|
|
|
$ |
2.0
|
||||||||||
|
|
|
|
||||||||||||
|
|
|
|||||||||||||
Sales
Contracts
|
Selling
Price Range
|
Tons
Outstanding
|
Delivery
Period
|
Mark-To-Market
Adjustment (In Millions) Asset/(Liability)
|
|||||||||||
|
$ |
50.00-60.00
|
60,000
|
|
10/01/07-12/31/07
|
$ |
0.4
|
||||||||
|
$ |
40.00-50.00
|
390,000
|
|
10/01/07-12/31/08
|
$ | (0.8 | ) | |||||||
|
450,000
|
|
|
$ | (0.4 | ) |
|
|
|
|
|
|
|
|
|
ALPHA
NATURAL RESOURCES, INC.
|
|
|
||
|
|
|
|
|
|
|
|
|
By:
|
/s/
David
C. Stuebe
|
|
|
|
Name:
|
David
C. Stuebe
|
|||||
|
|
Title:
|
|
Vice
President and Chief Financial Officer
|
|
|
|
|
|
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 1,
2007)
|
|
10.1*
|
|
|
|
|
|
31(a)*
|
|
|
|
|
|
31(b)*
|
|
|
|
|
|
32(a)*
|
|
|
|
|
|
32(b)*
|
|
|
|
|
*
|
|
Filed
herewith.
|