þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware (State or other jurisdiction of incorporation or organization) |
02-0733940 (I.R.S. Employer Identification Number) |
|
406 West Main Street, Abingdon, Virginia (Address of principal executive offices) |
24210 (Zip Code) |
Registrants telephone number, including area code: | ||
(276) 619-4410 |
June 30, | December 31, | |||||||
2005 | 2004 | |||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 10,117 | $ | 7,391 | ||||
Trade accounts receivable, net |
151,241 | 95,828 | ||||||
Notes and other receivables |
10,645 | 9,936 | ||||||
Inventories |
92,515 | 54,569 | ||||||
Due from affiliate |
| 323 | ||||||
Deferred income taxes |
605 | 4,674 | ||||||
Prepaid expenses and other current assets |
17,692 | 29,814 | ||||||
Total current assets |
282,815 | 202,535 | ||||||
Property, plant, and equipment, net of accumulated depreciation, depletion and amortization of $112,528 and $83,848
as of June 30, 2005 and December 31, 2004, respectively |
250,931 | 217,964 | ||||||
Goodwill |
18,641 | 18,641 | ||||||
Other intangibles, net of accumulated amortization of $1,378 and $2,343 as of June 30, 2005 and December 31, 2004,
respectively |
725 | 1,155 | ||||||
Deferred income taxes |
20,492 | | ||||||
Other assets |
34,628 | 36,826 | ||||||
Total assets |
$ | 608,232 | $ | 477,121 | ||||
Liabilities and Stockholders Equity and Partners Capital |
||||||||
Current liabilities: |
||||||||
Current portion of long-term debt |
$ | 1,349 | $ | 1,693 | ||||
Note payable |
6,998 | 15,228 | ||||||
Bank overdraft |
18,263 | 10,024 | ||||||
Trade accounts payable |
65,666 | 51,050 | ||||||
Accrued expenses and other current liabilities |
64,924 | 68,283 | ||||||
Total current liabilities |
157,200 | 146,278 | ||||||
Long-term debt, net of current portion |
254,239 | 184,784 | ||||||
Workers compensation benefits |
4,780 | 4,678 | ||||||
Postretirement medical benefits |
20,140 | 15,637 | ||||||
Asset retirement obligation |
34,274 | 32,888 | ||||||
Deferred gains on sale of property interests |
5,366 | 5,516 | ||||||
Deferred income taxes |
| 7,718 | ||||||
Other liabilities |
9,352 | 4,911 | ||||||
Total liabilities |
485,351 | 402,410 | ||||||
Minority interest |
| 28,778 | ||||||
Stockholders equity and partners capital: |
||||||||
Alpha Natural Resources, Inc.: |
||||||||
Preferred stock par value $0.01, 10,000,000 shares authorized, none issued |
| | ||||||
Common stock par value $0.01, 100,000,000 shares authorized, 62,212,580 shares issued and
outstanding |
622 | | ||||||
Additional paid-in capital |
146,372 | | ||||||
Unearned stock-based compensation |
(22,004 | ) | ||||||
Accumulated deficit |
(2,109 | ) | | |||||
Total Alpha Natural Resources, Inc. stockholders equity |
122,881 | | ||||||
Alpha NR Holding, Inc.: |
||||||||
Preferred stock par value $0.01, 1,000 shares authorized, none issued |
| | ||||||
Common stock par value $0.01, 1,000 shares authorized, 100 shares issued and outstanding |
| | ||||||
Additional paid-in capital |
| 22,153 | ||||||
Retained earnings |
| 18,828 | ||||||
Total Alpha NR Holding, Inc. stockholders equity |
| 40,981 | ||||||
ANR Fund IX Holdings, L.P.: |
||||||||
Partners capital |
| 4,952 | ||||||
Total stockholders equity and partners capital |
122,881 | 45,933 | ||||||
Total liabilities and stockholders equity and partners capital |
$ | 608,232 | $ | 477,121 | ||||
Three months ended | Six months ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
Revenues: |
||||||||||||||||
Coal revenues |
$ | 364,070 | $ | 293,798 | $ | 637,204 | $ | 505,813 | ||||||||
Freight and handling revenues |
48,239 | 39,671 | 79,991 | 65,275 | ||||||||||||
Other revenues |
5,327 | 6,406 | 12,596 | 11,509 | ||||||||||||
Total revenues |
417,636 | 339,875 | 729,791 | 582,597 | ||||||||||||
Costs and expenses: |
||||||||||||||||
Cost of coal sales (exclusive of items shown
separately below) |
293,493 | 233,490 | 519,777 | 418,572 | ||||||||||||
Freight and handling costs |
48,239 | 39,671 | 79,991 | 65,275 | ||||||||||||
Cost of other revenues |
4,319 | 4,928 | 10,384 | 8,338 | ||||||||||||
Depreciation, depletion and amortization |
15,075 | 12,916 | 29,245 | 24,690 | ||||||||||||
Selling, general and administrative expenses (exclusive of depreciation
and amortization shown separately above and including stock-based
compensation of $3,381 and $39,788 for the three months and six months
ended June 30, 2005, respectively) |
14,870 | 13,861 | 62,776 | 25,666 | ||||||||||||
Total costs and expenses |
375,996 | 304,866 | 702,173 | 542,541 | ||||||||||||
Income from operations |
41,640 | 35,009 | 27,618 | 40,056 | ||||||||||||
Other income (expense): |
||||||||||||||||
Interest expense |
(6,647 | ) | (6,780 | ) | (12,764 | ) | (8,831 | ) | ||||||||
Interest income |
191 | 80 | 478 | 101 | ||||||||||||
Miscellaneous income (expense), net |
32 | 151 | (9 | ) | 364 | |||||||||||
Total other income (expense), net |
(6,424 | ) | (6,549 | ) | (12,295 | ) | (8,366 | ) | ||||||||
Income from continuing operations before income
taxes and minority interest |
35,216 | 28,460 | 15,323 | 31,690 | ||||||||||||
Income tax expense |
9,089 | 3,119 | 11,599 | 3,473 | ||||||||||||
Minority interest |
| 12,892 | 2,918 | 14,356 | ||||||||||||
Income from continuing operations |
26,127 | 12,449 | 806 | 13,861 | ||||||||||||
Discontinued operations (note 11): |
||||||||||||||||
Income
(loss) from discontinued operations before income taxes and minority interest (including gain on disposal in
April 2005 of $704) |
359 | (472 | ) | (379 | ) | (872 | ) | |||||||||
Income tax expense (benefit) |
93 | (52 | ) | (93 | ) | (96 | ) | |||||||||
Minority interest |
| (214 | ) | (72 | ) | (395 | ) | |||||||||
Income (loss) from discontinued operations |
266 | (206 | ) | (214 | ) | (381 | ) | |||||||||
Net income |
$ | 26,393 | $ | 12,243 | $ | 592 | $ | 13,480 | ||||||||
Net income per share, as adjusted (note 2): |
||||||||||||||||
Basic and diluted: |
||||||||||||||||
Income from continuing operations |
$ | 0.43 | $ | 0.84 | $ | 0.01 | $ | 0.94 | ||||||||
Income (loss) from discontinued operations |
| (0.01 | ) | | (0.03 | ) | ||||||||||
Net income, as adjusted |
$ | 0.43 | $ | 0.83 | $ | 0.01 | $ | 0.91 | ||||||||
Pro forma net income per share (note 2): |
||||||||||||||||
Basic: |
||||||||||||||||
Income from continuing operations |
$ | 0.43 | $ | 0.34 | $ | 0.04 | $ | 0.34 | ||||||||
Income (loss) from discontinued operations |
| (0.01 | ) | | (0.01 | ) | ||||||||||
Pro forma net income |
$ | 0.43 | $ | 0.33 | $ | 0.04 | $ | 0.33 | ||||||||
Diluted: |
||||||||||||||||
Income from continuing operations |
$ | 0.43 | $ | 0.34 | $ | 0.04 | $ | 0.33 | ||||||||
Income (loss) from discontinued operations |
| (0.01 | ) | | (0.01 | ) | ||||||||||
Pro forma net income |
$ | 0.43 | $ | 0.33 | $ | 0.04 | $ | 0.32 | ||||||||
ANR Fund | ||||||||||||||||||||||||||||||||||||||||||||||||
IX | ||||||||||||||||||||||||||||||||||||||||||||||||
Holdings, | ||||||||||||||||||||||||||||||||||||||||||||||||
Alpha Natural Resources, Inc. | Alpha NR Holding, Inc. | L.P. | ||||||||||||||||||||||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders | ||||||||||||||||||||||||||||||||||||||||||||||||
Additional | Unearned | Total | Additional | Total | Equity and | |||||||||||||||||||||||||||||||||||||||||||
Common Stock | Paid-in | Stock-based | Accumulated | Stockholders | Common | Paid-in | Retained | Stockholders | Partners | Partners | ||||||||||||||||||||||||||||||||||||||
Shares | Amount | Capital | Compensation | Deficit | Equity | Stock | Capital | Earnings | Equity | Capital | Capital | |||||||||||||||||||||||||||||||||||||
Balances, December 31, 2003 |
| $ | | $ | | $ | | $ | | $ | | $ | | $ | 75,710 | $ | 1,442 | $ | 77,152 | $ | 9,215 | $ | 86,367 | |||||||||||||||||||||||||
Net income |
| | | | | | | | 17,386 | 17,386 | 2,629 | 20,015 | ||||||||||||||||||||||||||||||||||||
Noncash distribution of Virginia Tax Credit |
| | | | | | | | | | (292 | ) | (292 | ) | ||||||||||||||||||||||||||||||||||
Distributions |
| | | | | | | (53,557 | ) | | (53,557 | ) | (6,600 | ) | (60,157 | ) | ||||||||||||||||||||||||||||||||
Balances, December 31, 2004 |
| | | | | | | 22,153 | 18,828 | 40,981 | 4,952 | 45,933 | ||||||||||||||||||||||||||||||||||||
Noncash distribution of Virginia Tax Credit |
| | | | | | | | | | (40 | ) | (40 | ) | ||||||||||||||||||||||||||||||||||
Net income prior to Internal Restructuring |
| | | | | | | | 2,320 | 2,320 | 379 | 2,699 | ||||||||||||||||||||||||||||||||||||
Distribution to First Reserve Fund IX, L.P. and
ANR Fund IX Holdings, L.P. prior to the
Internal Restructuring |
| | | | | | | | (8,160 | ) | (8,160 | ) | (1,243 | ) | (9,403 | ) | ||||||||||||||||||||||||||||||||
Contribution by First Reserve Fund IX, L.P. of
all of the outstanding common stock of
Alpha NR Holding, Inc. in exchange for
shares of Alpha Natural Resources, Inc.
common stock |
12,463 | 125 | 35,016 | | | 35,141 | | (22,153 | ) | (12,988 | ) | (35,141 | ) | | | |||||||||||||||||||||||||||||||||
Contribution by ANR Fund IX Holdings, L.P.
of its membership interest in ANR
Holdings, LLC in exchange for shares of
Alpha Natural Resources, Inc. common
stock upon completion of the Internal
Restructuring |
1,536 | 15 | 4,033 | | | 4,048 | | | | | (4,048 | ) | | |||||||||||||||||||||||||||||||||||
Contribution by minority interest holders,
including certain members of management,
of their membership interests in ANR
Holdings, LLC in exchange for shares of
Alpha Natural Resources, Inc. common
stock and recognition of unearned
stock-based compensation |
14,289 | 143 | 85,424 | (29,122 | ) | | 56,445 | | | | | | 56,445 | |||||||||||||||||||||||||||||||||||
Issuance of Restructuring Notes |
| | (517,692 | ) | | | (517,692 | ) | | | | | | (517,692 | ) | |||||||||||||||||||||||||||||||||
Tax Distributions payable recorded upon
the completion of the Internal
Restructuring |
| | (10,500 | ) | | | (10,500 | ) | | | | | | (10,500 | ) | |||||||||||||||||||||||||||||||||
Change in net deferred income taxes recognized
upon the completion of the Internal
Restructuring |
| | 25,729 | | | 25,729 | | | | | | 25,729 |
ANR Fund | ||||||||||||||||||||||||||||||||||||||||||||||||||
IX | ||||||||||||||||||||||||||||||||||||||||||||||||||
Holdings, | ||||||||||||||||||||||||||||||||||||||||||||||||||
Alpha Natural Resources, Inc. | Alpha NR Holding, Inc. | L.P. | ||||||||||||||||||||||||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders | ||||||||||||||||||||||||||||||||||||||||||||||||||
Additional | Unearned | Total | Additional | Total | Equity and | |||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Paid-in | Stock-based | Accumulated | Stockholders | Common | Paid-in | Retained | Stockholders | Partners | Partners | ||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Capital | Compensation | Deficit | Equity | Stock | Capital | Earnings | Equity | Capital | Capital | |||||||||||||||||||||||||||||||||||||||
Proceeds from initial public offering of
common shares ($19 per share), net of
offering costs of $48,296. |
33,925 | 339 | 595,940 | | | 596,279 | | | | | | 596,279 | ||||||||||||||||||||||||||||||||||||||
Distribution of net proceeds received from
underwriters exercise of over-allotment
option |
| | (71,135 | ) | | | (71,135 | ) | | | | | | (71,135 | ) | |||||||||||||||||||||||||||||||||||
Amortization of unearned stock-based
compensation |
| | | 6,675 | | 6,675 | | | | | | 6,675 | ||||||||||||||||||||||||||||||||||||||
Cancellation of nonvested stock options |
| | (443 | ) | 443 | | | | | | | | | |||||||||||||||||||||||||||||||||||||
Net loss subsequent to Internal Restructuring |
| | | | (2,109 | ) | (2,109 | ) | | | | | | (2,109 | ) | |||||||||||||||||||||||||||||||||||
Balances, June 30, 2005 |
62,213 | $ | 622 | $ | 146,372 | $ | (22,004 | ) | $ | (2,109 | ) | $ | 122,881 | $ | | $ | | $ | | $ | | $ | | $ | 122,881 | |||||||||||||||||||||||||
Six months ended | ||||||||
June 30, | ||||||||
2005 | 2004 | |||||||
Operating activities: |
||||||||
Net income |
$ | 592 | $ | 13,480 | ||||
Adjustments to reconcile net income
to net cash provided by (used in) operating activities: |
||||||||
Depreciation, depletion and amortization |
29,528 | 25,040 | ||||||
Amortization and write-off of debt issuance costs |
875 | 3,531 | ||||||
Minority interest |
2,846 | 13,961 | ||||||
Accretion of asset retirement obligation |
1,631 | 1,943 | ||||||
Virginia tax credit |
(343 | ) | (1,292 | ) | ||||
Stock-based compensation non-cash |
32,312 | | ||||||
Provision for bad debts |
44 | 46 | ||||||
Amortization of deferred gains on sales of property interests |
(395 | ) | (459 | ) | ||||
Amortization of deferred gain on railroad incentives |
(340 | ) | | |||||
Loss on settlement of asset retirement obligation |
490 | | ||||||
(Gain) loss on disposal of fixed assets, net |
113 | (376 | ) | |||||
Gain on sale of discontinued operations |
(704 | ) | | |||||
Deferred income taxes |
1,588 | 1,748 | ||||||
Changes in operating assets and liabilities: |
||||||||
Trade accounts receivable |
(55,382 | ) | (36,019 | ) | ||||
Notes and other receivables |
(477 | ) | (2,068 | ) | ||||
Inventories |
(37,953 | ) | (17,819 | ) | ||||
Prepaid expenses and other current assets |
10,261 | 7,127 | ||||||
Other assets |
(4,065 | ) | (1,411 | ) | ||||
Trade accounts payable |
16,275 | 23,668 | ||||||
Accrued expenses and other current liabilities |
(1,386 | ) | 12,481 | |||||
Workers compensation benefits |
(266 | ) | 2,517 | |||||
Postretirement medical benefits |
4,503 | 697 | ||||||
Asset retirement obligation |
(1,772 | ) | (1,464 | ) | ||||
Other liabilities |
605 | 1,743 | ||||||
Net cash provided by (used in)
operating activities |
(1,420 | ) | 47,074 | |||||
Investing activities: |
||||||||
Capital expenditures |
$ | (66,521 | ) | $ | (33,842 | ) | ||
Proceeds from disposal of property, plant, and equipment |
5,148 | 793 | ||||||
Purchase of net assets of acquired companies |
(389 | ) | (2,891 | ) | ||||
Purchase of equity investment |
(654 | ) | | |||||
Payment of additional consideration on prior acquisition |
(5,000 | ) | | |||||
Issuance of note receivable to coal supplier |
| (10,000 | ) | |||||
Collections on note receivable from coal supplier |
2,612 | | ||||||
Increase in due from affiliate |
| (209 | ) | |||||
Net cash used in investing activities |
(64,804 | ) | (46,149 | ) | ||||
Financing activities: |
||||||||
Repayments of notes payable |
(8,230 | ) | (7,841 | ) | ||||
Proceeds from issuance of long-term debt |
70,000 | 175,000 | ||||||
Repayments on long-term debt |
(944 | ) | (45,410 | ) | ||||
Increase in bank overdraft |
8,239 | 4,064 | ||||||
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 |
(72,335 | ) | | |||||
Distributions to prior members of ANR Holdings, LLC
prior to Internal Restructuring |
(7,732 | ) | (113,169 | ) | ||||
Debt issuance costs |
(422 | ) | (10,500 | ) | ||||
Net cash provided by financing activities |
68,950 | 2,144 | ||||||
Net increase in cash
and cash equivalents |
2,726 | 3,069 | ||||||
Cash and cash equivalents at beginning of period |
7,391 | 11,246 | ||||||
Cash and cash equivalents at end of period |
$ | 10,117 | $ | 14,315 | ||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
Numerator: |
||||||||||||||||
Income from continuing operations |
$ | 26,127 | $ | 12,449 | $ | 806 | $ | 13,861 | ||||||||
Deduct: Income tax effect of ANR Fund IX Holdings, L.P. income
from continuing operations prior to Internal Restructuring |
| (649 | ) | (91 | ) | (722 | ) | |||||||||
Income from continuing operations, as adjusted |
26,127 | 11,800 | 715 | 13,139 | ||||||||||||
Income (loss) from discontinued operations |
266 | (206 | ) | (214 | ) | (381 | ) | |||||||||
Add: Income tax effect of ANR Fund IX Holdings, L.P. loss
from discontinued operations prior to Internal Restructuring |
| 11 | 2 | 20 | ||||||||||||
Income (loss) from discontinued operations, as adjusted |
266 | (195 | ) | (212 | ) | (361 | ) | |||||||||
Net income, as adjusted |
$ | 26,393 | $ | 11,605 | $ | 503 | $ | 12,778 | ||||||||
Denominator: |
||||||||||||||||
Weighted average shares denominator for basic |
61,091,806 | 13,998,911 | 50,220,404 | 13,998,911 | ||||||||||||
Dilutive effect of stock options and restricted stock grants |
471,167 | | 218,607 | | ||||||||||||
Adjusted weighted average shares for diluted |
61,562,973 | 13,998,911 | 50,439,011 | 13,998,911 | ||||||||||||
Net income per basic share, as adjusted: |
||||||||||||||||
Income from continuing operations, as adjusted |
$ | 0.43 | $ | 0.84 | $ | 0.01 | $ | 0.94 | ||||||||
Income (loss) from discontinued operations, as adjusted |
| (0.01 | ) | | (0.03 | ) | ||||||||||
Net income per basic share, as adjusted |
$ | 0.43 | $ | 0.83 | $ | 0.01 | $ | 0.91 | ||||||||
Net income per diluted share, as adjusted: |
||||||||||||||||
Income from continuing operations, as adjusted |
$ | 0.43 | $ | 0.84 | $ | 0.01 | $ | 0.94 | ||||||||
Income (loss) from discontinued operations, as adjusted |
| (0.01 | ) | | (0.03 | ) | ||||||||||
Net income per diluted share, as adjusted |
$ | 0.43 | $ | 0.83 | $ | 0.01 | $ | 0.91 | ||||||||
(i) | the additional income taxes on the portion of reported pre-tax income (loss) attributable to the portion owned by ANR Fund IX Holdings, L.P. for the periods from January 1, 2005 to February 11, 2005, and from January 1, 2004 to June 30, 2004; | ||
(ii) | the add back of minority interest for the periods from January 1, 2005 to February 11, 2005, and from January 1, 2004 to June 30, 2004 because the ownership held by the minority interest owners of ANR Holdings were exchanged for shares of Alpha National Resources, Inc. as part of the Internal Restructuring; | ||
(iii) | the additional income taxes that would have been incurred by the Company on the minority interest added back for the periods from January 1, 2005 to February 11, 2005, and from January 1, 2004 to June 30, 2004; and | ||
(iv) | the issuance of $175,000 principle amount of 10% senior notes due 2012 by our subsidiaries Alpha Natural Resources, LLC and Alpha Natural Resources Capital Corp. and the entry by Alpha Natural Resources, LLC into a $175,000 credit facility in May 2004, which we refer to as the 2004 Financings, as if these transactions had occurred on January 1, 2004. |
(i) | 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, 2004; | ||
(ii) | the retroactive impact of 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, on a weighted-average outstanding share basis as being outstanding as of January 1, 2004; | ||
(iii) | the unvested shares granted to management that vest over the two-year period from January 1, 2005 to December 31, 2006 have been included in the basic computation on a weighted-average outstanding share basis which is based on the monthly vesting beginning as of January 1, 2005; and | ||
(iv) | the retroactive impact of the 33,925,000 new shares issued in connection with the initial public offering on a weighted-average outstanding share basis as being outstanding as of January 1, 2004 since 100 percent of the net proceeds from the initial public offering was distributed to the previous owners of ANR Holdings. |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
Pro forma revenues |
$ | 417,636 | $ | 339,875 | $ | 729,791 | $ | 582,597 | ||||||||
Pro forma net income |
26,393 | 20,137 | 2,679 | 19,820 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
Numerator: |
||||||||||||||||
Reported income from continuing operations |
$ | 26,127 | $ | 12,449 | $ | 806 | $ | 13,861 | ||||||||
Deduct: Income tax effect of ANR Fund IX Holdings, L.P. income
from continuing operations prior to Internal Restructuring |
| (649 | ) | (91 | ) | (722 | ) | |||||||||
Deduct: Pro forma effects of the 2004 Financings, net of income taxes |
| 672 | | (1,614 | ) | |||||||||||
Add: Minority interest in income from continuing operations, net of
income tax effect |
| 7,993 | 2,231 | 8,901 | ||||||||||||
Pro forma income from continuing operations |
26,127 | 20,465 | 2,946 | 20,426 | ||||||||||||
Reported income (loss) from discontinued operations |
266 | (206 | ) | (214 | ) | (381 | ) | |||||||||
Add: Income tax effect of ANR Fund IX Holdings, L.P. loss
from discontinued operations prior to Internal Restructuring |
| 11 | 2 | 20 | ||||||||||||
Add: Minority interest in income (loss) from discontinued operations, net of
income tax effect |
| (133 | ) | (55 | ) | (245 | ) | |||||||||
Pro forma income (loss) from discontinued operations |
266 | (328 | ) | (267 | ) | (606 | ) | |||||||||
Pro forma net income |
$ | 26,393 | $ | 20,137 | $ | 2,679 | $ | 19,820 | ||||||||
Pro forma denominator: |
||||||||||||||||
Weighted average shares denominator for basic |
61,091,806 | 60,867,650 | 61,008,212 | 60,867,650 | ||||||||||||
Dilutive effect of stock options and restricted stock grants |
471,167 | 292,472 | 523,260 | 330,090 | ||||||||||||
Adjusted weighted average shares for diluted |
61,562,973 | 61,160,122 | 61,531,472 | 61,197,740 | ||||||||||||
Pro forma net income per basic share: |
||||||||||||||||
Pro forma income from continuing operations |
$ | 0.43 | $ | 0.34 | $ | 0.04 | $ | 0.34 | ||||||||
Pro forma income (loss) from discontinued operations |
| (0.01 | ) | | (0.01 | ) | ||||||||||
Pro forma net income per basic share |
$ | 0.43 | $ | 0.33 | $ | 0.04 | $ | 0.33 | ||||||||
Pro forma net income per diluted share: |
||||||||||||||||
Pro forma income from continuing operations |
$ | 0.43 | $ | 0.34 | $ | 0.04 | $ | 0.33 | ||||||||
Pro forma income (loss) from discontinued operations |
| (0.01 | ) | | (0.01 | ) | ||||||||||
Pro forma net income per diluted share |
$ | 0.43 | $ | 0.33 | $ | 0.04 | $ | 0.32 | ||||||||
Three months ended | Six months ended | |||||||
June 30, 2005 | June 30, 2005 | |||||||
Pro forma net income (see above) |
$ | 26,393 | $ | 2,679 | ||||
Add: Stock-based compensation expense
included in pro forma net income, net of income taxes |
2,508 | 38,029 | ||||||
Deduct: Total stock-based compensation expense
determined under fair-value based method, net of income
taxes |
(2,709 | ) | (38,375 | ) | ||||
Pro forma net income, adjusted for effect of fair value of stock options |
$ | 26,192 | $ | 2,333 | ||||
Income per share: |
||||||||
Basic and diluted pro forma (see above) |
$ | 0.43 | $ | 0.04 | ||||
Basic and diluted pro forma, adjusted |
$ | 0.43 | $ | 0.04 |
Expected life (years) |
4.0 | |||
Expected volatility |
38.0 | % | ||
Risk-free interest rate |
3.38 | % | ||
Expected annual dividend |
$ | 0.10 |
June 30, | December 31, | |||||||
2005 | 2004 | |||||||
Raw coal |
$ | 5,050 | $ | 3,888 | ||||
Saleable coal |
80,615 | 42,899 | ||||||
Materials and supplies |
6,850 | 7,782 | ||||||
Total inventories |
$ | 92,515 | $ | 54,569 | ||||
June 30, | December 31, | |||||||
2005 | 2004 | |||||||
10% Senior notes due 2012 |
$ | 175,000 | $ | 175,000 | ||||
Revolving credit facility |
78,000 | 8,000 | ||||||
Variable rate term notes |
879 | 1,466 | ||||||
Capital lease obligation |
1,709 | 1,995 | ||||||
Other |
| 16 | ||||||
Total long-term debt |
255,588 | 186,477 | ||||||
Less current portion |
1,349 | 1,693 | ||||||
Long-term debt, net of current
portion |
$ | 254,239 | $ | 184,784 | ||||
Total asset retirement obligation at December 31, 2004 |
$ | 39,579 | ||
Accretion for the six months ended June 30, 2005 |
1,631 | |||
Sites added in first six months of 2005 |
1,156 | |||
Expenditures for the six months ended June 30, 2005 |
(1,772 | ) | ||
Loss on
settlement of asset retirement obligation |
371 | |||
Total asset retirement obligation at June 30, 2005 |
$ | 40,965 | ||
Weighted | ||||||||||||
Average | ||||||||||||
Number of | Exercise | Remaining | ||||||||||
Options | Price | Life at 6-30-05 | ||||||||||
Outstanding at January 1, 2005 |
596,985 | $ | 12.73 | 4.4 | ||||||||
Granted at initial public offering |
692,905 | $ | 19.00 | 4.6 | ||||||||
Exercised |
| | ||||||||||
Forfeited |
(90,696 | ) | $ | 14.11 | ||||||||
Issued during period |
10,000 | $ | 24.85 | 4.8 | ||||||||
Outstanding at June 30, 2005 |
1,209,194 | $ | 16.32 | 4.5 | ||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
Service cost |
$ | 1,000 | $ | 199 | $ | 1,944 | $ | 398 | ||||||||
Interest cost |
717 | 156 | 1,255 | 312 | ||||||||||||
Amortization of net (gain) or loss |
15 | (6 | ) | 9 | (12 | ) | ||||||||||
Amortization of prior service cost |
608 | | 1,306 | | ||||||||||||
Net periodic benefit cost |
$ | 2,340 | $ | 349 | $ | 4,514 | $ | 698 | ||||||||
June 30, | December 31, | |||||||
2005 | 2004 | |||||||
AMCI |
$ | 28,019 | $ | 7,121 | ||||
Robindale Energy & Subsidiary |
| 6 | ||||||
Total |
$ | 28,019 | $ | 7,127 | ||||
June 30, | December 31, | |||||||
2005 | 2004 | |||||||
AMCI |
$ | 3,600 | $ | 262 | ||||
Robindale Energy & Subsidiary |
| 42 | ||||||
First Reserve Fund IX, L.P. |
4,500 | | ||||||
Total |
$ | 8,100 | $ | 304 | ||||
Corporate | ||||||||||||||||
Coal | All | and | ||||||||||||||
Operations | Other | Eliminations | Consolidated | |||||||||||||
Revenues |
$ | 414,660 | $ | 10,517 | $ | (7,541 | ) | $ | 417,636 | |||||||
Depreciation, depletion, and amortization |
14,344 | 369 | 362 | 15,075 | ||||||||||||
EBITDA, as adjusted |
70,502 | 1,112 | (14,867 | ) | 56,747 | |||||||||||
Capital expenditures |
35,924 | 40 | 235 | 36,199 | ||||||||||||
Total assets |
505,097 | 72,329 | 30,806 | 608,232 |
Corporate | ||||||||||||||||
Coal | All | and | ||||||||||||||
Operations | Other | Eliminations | Consolidated | |||||||||||||
Revenues |
$ | 722,116 | $ | 20,229 | $ | (12,554 | ) | $ | 729,791 | |||||||
Depreciation, depletion, and amortization |
27,494 | 788 | 963 | 29,245 | ||||||||||||
EBITDA, as adjusted |
116,377 | 2,341 | (61,864 | ) | 56,854 | |||||||||||
Capital expenditures |
65,458 | 322 | 431 | 66,211 |
Corporate | ||||||||||||||||
Coal | All | and | ||||||||||||||
Operations | Other | Eliminations | Consolidated | |||||||||||||
Revenues |
$ | 335,237 | $ | 7,289 | $ | (2,651 | ) | $ | 339,875 | |||||||
Depreciation, depletion, and amortization |
12,190 | 244 | 482 | 12,916 | ||||||||||||
EBITDA, as adjusted |
60,782 | 1,159 | (13,865 | ) | 48,076 | |||||||||||
Capital expenditures |
17,006 | 39 | 31 | 17,076 | ||||||||||||
Total assets |
366,991 | 74,554 | 19,658 | 461,203 |
Corporate | ||||||||||||||||
Coal | All | and | ||||||||||||||
Operations | Other | Eliminations | Consolidated | |||||||||||||
Revenues |
$ | 574,860 | $ | 13,340 | $ | (5,603 | ) | $ | 582,597 | |||||||
Depreciation, depletion, and amortization |
23,205 | 494 | 991 | 24,690 | ||||||||||||
EBITDA, as adjusted |
88,904 | 1,840 | (25,634 | ) | 65,110 | |||||||||||
Capital expenditures |
32,869 | 143 | 333 | 33,345 |
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
Total segment EBITDA, as adjusted, from
continuing operations |
$ | 56,747 | $ | 48,076 | $ | 56,854 | $ | 65,110 | ||||||||
Interest expense |
(6,647 | ) | (6,780 | ) | (12,764 | ) | (8,831 | ) | ||||||||
Interest income |
191 | 80 | 478 | 101 | ||||||||||||
Income tax expense from continuing operations |
(9,089 | ) | (3,119 | ) | (11,599 | ) | (3,473 | ) | ||||||||
Depreciation, depletion and amortization from
continuing operations |
(15,075 | ) | (12,916 | ) | (29,245 | ) | (24,690 | ) | ||||||||
Minority interest in income from continuing
operations |
| (12,892 | ) | (2,918 | ) | (14,356 | ) | |||||||||
Income from continuing operations |
$ | 26,127 | $ | 12,449 | $ | 806 | $ | 13,861 | ||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
Total revenues |
$ | 906 | $ | 3,484 | $ | 4,523 | $ | 7,501 | ||||||||
Total costs and expenses |
1,251 | 3,960 | 5,607 | 8,377 | ||||||||||||
Gain on sale of discontinued operations |
704 | 0 | 704 | 0 | ||||||||||||
Income (loss) from operations |
359 | (476 | ) | (380 | ) | (876 | ) | |||||||||
Miscellaneous income |
0 | 4 | 1 | 4 | ||||||||||||
Income tax
expense (benefit) from discontinued
operations |
93 | (52 | ) | (93 | ) | (96 | ) | |||||||||
Minority interest in income (loss) from
discontinued operations |
0 | (214 | ) | (72 | ) | (395 | ) | |||||||||
Income (loss) from discontinued operations |
$ | 266 | $ | (206 | ) | $ | (214 | ) | $ | (381 | ) | |||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
Current tax expense: |
||||||||||||||||
Federal |
$ | 6,639 | $ | 1,461 | $ | 8,684 | $ | 1,629 | ||||||||
State |
935 | 43 | 1,315 | 47 | ||||||||||||
7,574 | 1,504 | 9,999 | 1,676 | |||||||||||||
Deferred tax expense: |
||||||||||||||||
Federal |
1,218 | 1,191 | 1,287 | 1,324 | ||||||||||||
State |
297 | 424 | 313 | 473 | ||||||||||||
1,515 | 1,615 | 1,600 | 1,797 | |||||||||||||
Total income tax expense: |
||||||||||||||||
Federal |
7,857 | 2,652 | 9,971 | 2,953 | ||||||||||||
State |
1,232 | 467 | 1,628 | 520 | ||||||||||||
$ | 9,089 | $ | 3,119 | $ | 11,599 | $ | 3,473 | |||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
Federal statutory income tax expense |
$ | 12,325 | $ | 9,961 | $ | 5,362 | $ | 11,092 | ||||||||
Increases (reductions) in taxes due to: |
||||||||||||||||
Percentage depletion allowance |
(4,895 | ) | (1,979 | ) | (6,563 | ) | (2,205 | ) | ||||||||
Extraterritorial income exclusion |
(521 | ) | | (705 | ) | | ||||||||||
Deduction for domestic production activities |
(202 | ) | | (279 | ) | | ||||||||||
State taxes, net of federal tax impact |
757 | 304 | 1,056 | 338 | ||||||||||||
Stock-based compensation |
1,300 | 13,354 | | |||||||||||||
Change in valuation allowance |
268 | (134 | ) | 397 | (149 | ) | ||||||||||
Taxes not provided for minority interest |
| (4,644 | ) | (1,001 | ) | (5,171 | ) | |||||||||
Taxes not provided for pass-through entity |
| (469 | ) | (133 | ) | (522 | ) | |||||||||
Other, net |
57 | 80 | 111 | 90 | ||||||||||||
Actual income tax expense |
$ | 9,089 | $ | 3,119 | $ | 11,599 | $ | 3,473 | ||||||||
June 30, | December 31, | |||||||
2005 | 2004 | |||||||
Deferred tax assets: |
||||||||
Investment in limited liability company subsidiary |
$ | 124,701 | $ | | ||||
Net operating loss carryforwards |
3,238 | 5,598 | ||||||
Charitable contribution carryforwards |
136 | 207 | ||||||
Alternative minimum tax credit carryforward |
4,364 | 1,249 | ||||||
Gross deferred tax assets |
132,439 | 7,054 | ||||||
Less valuation allowance |
(108,677 | ) | (1,374 | ) | ||||
Total net deferred tax assets |
23,762 | 5,680 | ||||||
Deferred tax liabilities: |
||||||||
Investment in limited liability company subsidiary |
| (6,869 | ) | |||||
Virginia tax credit |
(2,665 | ) | (1,855 | ) | ||||
Total deferred tax liabilities |
(2,665 | ) | (8,724 | ) | ||||
Net deferred tax asset(liability) |
$ | 21,097 | $ | (3,044 | ) | |||
ANR Fund IX Holdings, L.P. and Alpha NR Holding, Inc. and Subsidiaries: |
||||
Deferred tax liability balance at December 31, 2004 |
$ | (3,044 | ) | |
Deferred tax benefit recorded in period from January 1, 2005 to February 11, 2005
for continuing and discontinued operations |
192 | |||
Deferred tax liability balance at February 11, 2005 |
$ | (2,852 | ) | |
Alpha
Natural Resources, Inc.: |
||||
Deferred tax liability balance on February 12, 2005 |
$ | (2,852 | ) | |
Estimated deferred tax asset generated from the Internal Restructuring |
132,637 | |||
Valuation allowance established at the time of the Internal Restructuring |
(106,908 | ) | ||
Net deferred taxes recorded as part of Internal Restructuring, with offsetting
increase to additional paid-in capital |
25,729 | |||
Deferred tax expense recorded in period from February 12, 2005 to June 30, 2005
for continuing and discontinued operations |
(1,780 | ) | ||
Net deferred tax asset at June 30, 2005 |
$ | 21,097 | ||
June 30, | December 31, | |||||||
2005 | 2004 | |||||||
Current asset |
$ | 605 | $ | 4,674 | ||||
Current liability |
| | ||||||
Net current asset |
605 | 4,674 | ||||||
Noncurrent asset |
23,157 | 1,006 | ||||||
Noncurrent liability |
(2,665 | ) | (8,724 | ) | ||||
Net noncurrent asset (liability) |
20,492 | (7,718 | ) | |||||
Total net deferred tax asset (liability) |
$ | 21,097 | $ | (3,044 | ) | |||
| 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 plans and objectives for future operations and expansion or consolidation; | ||
| our relationships with, and other conditions affecting, our customers; | ||
| timing of reductions in customer coal inventories; | ||
| 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 and other transportation performance and costs; | ||
| 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; and | ||
| other factors, including the other factors discussed in Overview Coal Pricing Trends and Uncertainties and Outlook below, and the Risks Related to our Company section of Managements Discussion and Analysis of Financial Condition and Results of Operations, set forth in our annual report on Form 10-K for the year ended December 31, 2004. |
Three months ended | Six months ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
(in thousands) | ||||||||||||||||
Net income |
$ | 26,393 | $ | 12,243 | $ | 592 | $ | 13,480 | ||||||||
Interest expense |
6,647 | 6,780 | 12,764 | 8,831 | ||||||||||||
Interest income |
(191 | ) | (80 | ) | (478 | ) | (101 | ) | ||||||||
Income tax expense |
9,182 | 3,067 | 11,506 | 3,377 | ||||||||||||
Depreciation, depletion and amortization |
15,048 | 13,111 | 29,528 | 25,040 | ||||||||||||
EBITDA (1) |
57,079 | 35,121 | 53,912 | 50,627 | ||||||||||||
Minority interest |
| 12,678 | 2,846 | 13,961 | ||||||||||||
EBITDA, as adjusted (1) |
$ | 57,079 | $ | 47,799 | $ | 56,758 | $ | 64,588 | ||||||||
Three months Ended | Increase | |||||||||||||||
June 30, | (Decrease) | |||||||||||||||
2005 | 2004 | $ or Tons | % | |||||||||||||
(in thousands, except per ton data) | ||||||||||||||||
Coal revenues |
$ | 364,070 | $ | 293,798 | $ | 70,272 | 24 | % | ||||||||
Freight and handling revenues |
48,239 | 39,671 | 8,568 | 22 | % | |||||||||||
Other revenues |
5,327 | 6,406 | (1,079 | ) | (17 | %) | ||||||||||
Total revenues |
$ | 417,636 | $ | 339,875 | $ | 77,761 | 23 | % | ||||||||
Tons Sold: |
||||||||||||||||
Steam |
3,906 | 4,037 | (131 | ) | (3 | %) | ||||||||||
Metallurgical |
2,784 | 2,593 | 191 | 7 | % | |||||||||||
Total |
6,690 | 6,630 | 60 | 1 | % | |||||||||||
Coal sales realization per ton: |
||||||||||||||||
Steam |
$ | 40.97 | $ | 31.58 | $ | 9.39 | 30 | % | ||||||||
Metallurgical |
73.29 | 64.13 | 9.16 | 14 | % | |||||||||||
Total |
$ | 54.42 | $ | 44.31 | $ | 10.11 | 23 | % | ||||||||
Three months ended | Increase | |||||||||||||||
June 30. | (Decrease) | |||||||||||||||
2005 | 2004 | $ | % | |||||||||||||
(in thousands, except per ton data) | ||||||||||||||||
Cost of coal sales (exclusive of items shown separately below) |
$ | 293,493 | $ | 233,490 | $ | 60,003 | 26 | % | ||||||||
Freight and handling costs |
48,239 | 39,671 | 8,568 | 22 | % | |||||||||||
Cost of other revenues |
4,319 | 4,928 | (609 | ) | (12 | %) | ||||||||||
Depreciation, depletion and amortization |
15,075 | 12,916 | 2,159 | 17 | % | |||||||||||
Selling, general and administrative expenses (exclusive of
depreciation and amortization shown separately above and including
stock-based compensation
expense in the amount of $3,381 in 2005) |
14,870 | 13,861 | 1,009 | 7 | % | |||||||||||
Total costs and expenses |
$ | 375,996 | $ | 304,866 | $ | 71,130 | 23 | % | ||||||||
Three months ended | Increase | |||||||||||||||
June 30. | (Decrease) | |||||||||||||||
2005 | 2004 | $ | % | |||||||||||||
(in thousands, except per ton data) | ||||||||||||||||
Cost of coal sales per ton: |
||||||||||||||||
Company mines |
$ | 36.65 | $ | 30.51 | $ | 6.14 | 20 | % | ||||||||
Contract mines (including purchased and processed) |
53.12 | 41.39 | 11.73 | 28 | % | |||||||||||
Total produced and processed |
40.40 | 32.97 | 7.43 | 23 | % | |||||||||||
Purchased and sold without processing |
56.46 | 41.80 | 14.66 | 35 | % | |||||||||||
Cost of coal sales per ton |
$ | 43.87 | $ | 35.22 | $ | 8.65 | 25 | % | ||||||||
Six months Ended | Increase | |||||||||||||||
June 30, | (Decrease) | |||||||||||||||
2005 | 2004 | $ or Tons | % | |||||||||||||
(in thousands, except per ton data) | ||||||||||||||||
Coal revenues |
$ | 637,204 | $ | 505,813 | $ | 131,391 | 26 | % | ||||||||
Freight and handling revenues |
79,991 | 65,275 | 14,716 | 23 | % | |||||||||||
Other revenues |
12,596 | 11,509 | 1,087 | 9 | % | |||||||||||
Total revenues |
$ | 729,791 | $ | 582,597 | $ | 147,194 | 25 | % | ||||||||
Tons Sold: |
||||||||||||||||
Steam |
7,111 | 7,806 | (695 | ) | (9 | %) | ||||||||||
Metallurgical |
5,112 | 4,773 | 339 | 7 | % | |||||||||||
Total |
12,223 | 12,579 | (356 | ) | (3 | %) | ||||||||||
Coal sales realization per ton: |
||||||||||||||||
Steam |
$ | 39.01 | $ | 31.01 | $ | 8.00 | 26 | % | ||||||||
Metallurgical |
70.37 | 55.27 | 15.10 | 27 | % | |||||||||||
Total |
$ | 52.13 | $ | 40.21 | $ | 11.92 | 30 | % | ||||||||
Six months ended | Increase | |||||||||||||||
June 30. | (Decrease) | |||||||||||||||
2005 | 2004 | $ | % | |||||||||||||
(in thousands, except per ton data) | ||||||||||||||||
Cost of coal sales (exclusive of items shown separately below) |
$ | 519,777 | $ | 418,572 | $ | 101,205 | 24 | % | ||||||||
Freight and handling costs |
79,991 | 65,275 | 14,716 | 23 | % | |||||||||||
Cost of other revenues |
10,384 | 8,338 | 2,046 | 25 | % | |||||||||||
Depreciation, depletion and amortization |
29,245 | 24,690 | 4,555 | 18 | % | |||||||||||
Selling, general and administrative expenses (exclusive of
depreciation and amortization shown separately above and including
stock-based compensation
expense in the amount of $39,788 in 2005) |
62,776 | 25,666 | 37,110 | 145 | % | |||||||||||
Total costs and expenses |
$ | 702,173 | $ | 542,541 | $ | 159,632 | 29 | % | ||||||||
Cost of coal sales per ton: |
||||||||||||||||
Company mines |
$ | 35.65 | $ | 28.99 | $ | 6.66 | 23 | % | ||||||||
Contract mines (including purchased and processed) |
50.14 | 38.32 | 11.82 | 31 | % | |||||||||||
Total produced and processed |
38.78 | 31.12 | 7.66 | 25 | % | |||||||||||
Purchased and sold without processing |
58.09 | 40.43 | 17.66 | 44 | % | |||||||||||
Cost of coal sales per ton |
$ | 42.52 | $ | 33.28 | $ | 9.24 | 28 | % | ||||||||
§ Our trade accounts receivable used $19.4 million more cash in the first six months of 2005 than in the comparable period last year, due to the 25% increase in our total revenues in the six months ended June 30, 2005 compared to the prior year period. There has been no change in our credit terms and over 93% of our receivables were current in both periods. |
§ The cash required to carry inventories increased by $20.1 million in the current six
month period over the corresponding period last year mainly due to an increase in tons in
inventory and an increase in the associated cost per ton. |
||
§ Accounts payable and other current accrued liabilities provided cash in the six months ended June 30, 2005 in the amount of $14.9 million while these liabilities provided cash in the amount of $36.2 million in the year ago period, an additional $21.3 million use of cash in the current period. |
June 30, | ||||
2005 | ||||
10% Senior notes due 2012 |
$ | 175,000 | ||
Revolving credit facility |
78,000 | |||
Variable rate term notes |
879 | |||
Capital lease obligation |
1,709 | |||
Total long-term debt |
255,588 | |||
Less current portion |
(1,349 | ) | ||
Long-term debt, net of current portion |
$ | 254,239 | ||
| Alpha Natural Resources, LLC must maintain a leverage ratio, defined as the ratio of total debt to Adjusted EBITDA (as defined in the credit agreement), of less than 3.75 at December 31, 2004, 3.50 at March 31 and June 30, 2005, 3.25 at September 30 and December 31, 2005, 3.15 at March 31, June 30, September 30 and December 31, 2006 and 3.00 at March 31, 2007 (and thereafter), respectively, with Adjusted EBITDA being computed using the most recent four quarters; and | ||
| Alpha Natural Resources, LLC must maintain an interest coverage ratio, defined as the ratio of Adjusted EBITDA (as defined in the credit agreement), to cash interest expense (defined as the sum of cash interest expense plus cash letter of credit fees and commissions), of greater than 2.50 at September 30, 2004 and at each quarter end thereafter. |
Three Months | Three Months | Three Months | Three Months | Twelve Months | ||||||||||||||||
Ended | Ended | Ended | Ended | Ended | ||||||||||||||||
September 30, | December 31, | March 31, | June 30, | June 30, | ||||||||||||||||
2004 | 2004 | 2005 | 2005 | 2005 | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Net income (loss) |
$ | 5,342 | $ | 1,115 | $ | (25,801 | ) | $ | 26,393 | $ | 7,049 | |||||||||
Interest expense, net |
5,449 | 5,344 | 5,830 | 6,456 | 23,079 | |||||||||||||||
Income tax expense (benefit) |
1,335 | (772 | ) | 2,324 | 9,182 | 12,069 | ||||||||||||||
Depreciation, depletion and amortization
expenses |
14,312 | 16,660 | 14,480 | 15,048 | 60,500 | |||||||||||||||
EBITDA |
26,438 | 22,347 | (3,167 | ) | 57,079 | 102,697 | ||||||||||||||
Minority
interest(1) |
5,688 | 268 | 2,846 | | 8,802 | |||||||||||||||
Stock-based
compensation charge(2) |
| | 36,407 | 3,381 | 39,788 | |||||||||||||||
Asset impairment charge and write-offs (2) |
5,100 | | | 683 | 5,783 | Alpha
Natural Resources, Inc. (income) expense (2) |
| | 209 | (505 | ) | (296 | ) | |||||||
Adjusted EBITDA |
$ | 37,226 | $ | 22,615 | $ | 36,295 | $ | 60,638 | $ | 156,774 | ||||||||||
Leverage ratio(3) |
1.67 | |||||||||||||||||||
Interest coverage ratio(4) |
7.44 |
(1) | Because our credit facility and our senior notes are issued by our subsidiaries, we are required to adjust our EBITDA for our minority interest which does not exist at the subsidiary level. | |
(2) | Adjusted EBITDA as defined in our credit facility is adjusted to add back for the non-cash portion of the stock-based compensation charge related to our Internal Restructuring and initial public offering as recorded by Alpha Natural Resources, LLC, for the asset impairment charge related to our NKC operations, for other asset write-offs and amounts of income or expense related to the parent of Alpha Natural Resources, LLC. Income or expenses related solely to Alpha Natural Resources, Inc. are excluded from the calculation of Adjusted EBITDA under our credit agreement. | |
(3) | Leverage ratio is defined in our credit facility as total debt divided by Adjusted EBITDA. | |
(4) | Interest coverage ratio is defined in our credit facility as Adjusted EBITDA divided by cash interest expense. |
Nominee | Total Votes For | Total Votes Withheld | ||||||
E. Linn Draper, Jr. |
58,614,273 | 1,500,695 | ||||||
Glenn A. Eisenberg |
58,615,673 | 1,499,295 | ||||||
John W. Fox, Jr. |
58,614,173 | 1,500,795 | ||||||
Alex T. Krueger |
51,638,124 | 8,476,844 | ||||||
Fritz R. Kundrun |
51,667,586 | 8,447,382 | ||||||
William E. Macaulay |
52,061,951 | 8,053,017 | ||||||
Hans J. Mende |
52,078,586 | 8,036,382 | ||||||
Michael J. Quillen |
52,322,904 | 7,792,064 |
Vote totals: | ||||
For:
|
59,902,994 | |||
Against:
|
182,031 | |||
Abstained:
|
29,943 |
Exhibit No | Description of Exhibit | |
10.1*
|
Amended and Restated Alpha Natural Resources, Inc. and Subsidiaries Deferred Compensation Plan | |
10.2*
|
First Amendment to Stockholder Agreement | |
10.3
|
Form of Alpha Natural Resources, Inc. Restricted Stock Agreement for Alpha Natural Resources, Inc. 2005 Long-Term Incentive Plan (Incorporated by reference to Exhibit 4.7 to the Registration Statement on Form S-8 of Alpha Natural Resources, Inc. (File No. 333-127528) filed on August 15, 2005.) | |
31(a)*
|
Certification Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to § 302 of the Sarbanes-Oxley Act of 2002 | |
31(b)*
|
Certification Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to § 302 of the Sarbanes-Oxley Act of 2002 | |
32(a)*
|
Certification Pursuant to 18 U.S.C. § 1350, As Adopted Pursuant to § 906 of the Sarbanes-Oxley Act of 2002 | |
32(b)*
|
Certification Pursuant to 18 U.S.C. § 1350, As Adopted Pursuant to § 906 of the Sarbanes-Oxley Act of 2002 |
* | Filed herewith. | |
| Management contract or compensatory plan or arrangement. |
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 | |
10.1*
|
Amended and Restated Alpha Natural Resources, Inc. and Subsidiaries Deferred Compensation Plan | |
10.2*
|
First Amendment to Stockholder Agreement | |
10.3
|
Form of Alpha Natural Resources, Inc. Restricted Stock Agreement for Alpha Natural Resources, Inc. 2005 Long-Term Incentive Plan (Incorporated by reference to Exhibit 4.7 to the Registration Statement on Form S-8 of Alpha Natural Resources, Inc. (File No. 333-127528) filed on August 15, 2005.) | |
31(a)*
|
Certification Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to § 302 of the Sarbanes-Oxley Act of 2002 | |
31(b)*
|
Certification Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to § 302 of the Sarbanes-Oxley Act of 2002 | |
32(a)*
|
Certification Pursuant to 18 U.S.C. § 1350, As Adopted Pursuant to § 906 of the Sarbanes-Oxley Act of 2002 | |
32(b)*
|
Certification Pursuant to 18 U.S.C. § 1350, As Adopted Pursuant to § 906 of the Sarbanes-Oxley Act of 2002 |
* | Filed herewith. | |
| Management contract or compensatory plan or arrangement. |