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Alpha Natural Resources Announces Results for Fourth Quarter and Full Year 2012

- Fourth quarter and full year 2012 revenue and adjusted EBITDA of $1.6 billion and $7.0 billion, respectively, and $217 million and $792 million, respectively
- Restructuring and cost control measures begin to reduce Alpha's cost of coal sales per ton in Q4
- Total liquidity at year-end of approximately $2.1 billion, including approximately $1.0 billion in cash and marketable securities
- Guidance provided for 2013

BRISTOL, Va., Feb. 14, 2013 /PRNewswire/ -- Alpha Natural Resources, Inc. (NYSE: ANR), a leading U.S. coal producer, reported a fourth quarter 2012 net loss of $128 million or $0.58 per diluted share compared with a net loss of $793 million or $3.62 per diluted share in the fourth quarter of 2011.  Excluding impairment and restructuring charges, and other adjustments described in our "Reconciliation of Adjusted Net Income (Loss) to Net Loss," the fourth quarter 2012 adjusted net loss was $41 million or $0.19 per diluted share compared with an adjusted net loss of $19 million or $0.09 per diluted share in the fourth quarter of 2011.

The Company recorded $228 million of impairment and restructuring charges in the fourth quarter of 2012, which are largely non-cash.  These charges include $188 million arising from Alpha's annual goodwill impairment testing, which reflects projected coal market conditions and lower expected future production and shipments particularly for thermal coal, as well as a $40 million impact of charges and asset impairments arising from our recent restructuring initiatives.  The restructuring plan announced in September 2012 is now substantially complete.  Alpha will continue to assess market conditions and may further adjust its operational footprint and marketing strategy as dictated by evolving industry conditions.

Earnings before interest, taxes, depreciation, depletion and amortization (EBITDA) for the fourth quarter of 2012 was $193 million, compared with a loss of $550 million in the year ago period.  Excluding impairment and restructuring charges and other adjustments described in our "Reconciliation of EBITDA and Adjusted EBITDA to Net Loss," the fourth quarter 2012 Adjusted EBITDA was $217 million

Quarterly Financial & Operating Highlights

(millions, except per-share and per-ton amounts)

 



Q4

2012

Q3

2012

Q4

2011(2)

 

Coal revenues

$1,355.2

$1,455.7

$1,793.6





Net loss

($127.6)

($46.1)

($792.9)





Net loss per diluted share

($0.58)

($0.21)

($3.62)





Adjusted net loss1

($41.4)

($35.7)

($18.9)





Adjusted net loss per diluted share1

($0.19)

($0.16)

($0.09)





EBITDA1

$192.6

$143.9

($550.0)





Adjusted EBITDA1

$217.2

$178.5

$261.4





Tons of coal sold

25.9

27.9

31.1





Weighted average coal margin per ton

$17.45

$7.73

$8.46





Adjusted weighted average coal margin per ton1

$10.14

$7.68

$9.92










1.       These are non-GAAP financial measures.  A reconciliation of adjusted net loss to net loss, a reconciliation of both EBITDA and adjusted EBITDA to net loss, and a reconciliation of adjusted cost of coal sales per ton to cost of coal sales per ton are included in tables accompanying the financial schedules.

2.       Adjusted to reflect certain immaterial corrections and the impact of retrospective adjustments made as a result of applying acquisition accounting for Massey.

"This was a pivotal quarter for Alpha and concluded a year in which we made tremendous strides across our strategic priorities.  Alpha posted strong results in the fourth quarter, reporting adjusted EBITDA of $217 million primarily driven by our ability to control costs in both our Eastern and our Western operations," said Kevin Crutchfield, Alpha's chief executive officer.  "We have also been executing well against our internal objectives, and the extensive restructuring initiative we announced in September is largely behind us.  And while we do not expect the unit costs reported in the fourth quarter to be sustainable, we do expect to at least hold the line or slightly reduce our unit costs in the East this year compared with full year 2012, and we are guiding to a substantial reduction in SG&A expense for full year 2013."

"Once again Alpha improved its safety performance on several fronts," Kevin continued.  "Compared with the prior quarter, both our incident rate and our days-lost declined by 20 percent in the fourth quarter.  Looking at the full year 2012, Alpha achieved a 20 percent improvement in its incident rate and a 32 percent reduction in serious and substantial MSHA citations.  No matter what market headwinds or other challenges we face, we can never lose our focus on 'Running Right.'  The year 2012 was no exception.  I would like to congratulate our entire workforce on their successful efforts.  While I am pleased with the efforts all of our employees are making on accident reduction, the loss of three of our fellow employees in 2012 is a somber reminder that there remains much work to be done, and we must remain vigilant at all times."

Market conditions in 2012 were challenging for all coal producers, with reduced demand and over-supply in both the global metallurgical market and U.S. thermal market.  In this environment, Alpha moved swiftly and decisively to reposition the Company for success.  Specifically, Alpha:

While the restructuring efforts announced in 2012 are largely complete, Alpha will continue to evaluate market conditions and remains poised to adjust as necessary as the industry continues to evolve.  Now that market conditions for metallurgical coal are beginning to point toward gradual improvement, Alpha expects to be well-positioned to emerge from the recent market headwinds as an industry leader and take advantage of opportunities in the market as they arise.

Financial Performance



Fourth quarter 2012 net loss adjustments

($ in millions)

 

Goodwill impairment

$188.2

Asset impairment and restructuring

40.3

UBB expenses

5.8

Change in fair value and settlement of derivative instruments

7.1

Merger-related benefit

(12.7)

Gain on early extinguishment of debt

(0.8)

Change in estimated future costs of asset retirement obligations

(154.4)

Impact of benefits-related accrual reversal

(45.9)

Impacts on accrual for legal matters

(3.1)

Amortization of acquired intangibles, net

(5.9)

Income tax effect of above items

67.9

Discrete tax charge from valuation allowance adjustment

20.1

Discrete tax charge from state statutory tax rate and apportionment change, net of federal tax impact

(20.4)

After-tax total of above items

$86.2



Note: Adjustments pertaining to the comparable year-ago period are detailed in the Reconciliation of Adjusted Net Income (Loss) to Net Loss.

Excluding these items, the adjusted net loss was $41 million, or $0.19 per diluted share, compared with an adjusted net loss of $19 million, or $0.09 per diluted share, in the fourth quarter of 2011.

Full Year 2012 Results

Liquidity and Capital Resources

Cash provided by operating activities for the quarter ended December 31, 2012 was $213 million, compared with $149 million for the fourth quarter of 2011.  For the full year 2012, cash provided by operating activities was $518 million, compared with $687 million in 2011. 

Capital expenditures, exclusive of Lease by Application payments, for the fourth quarter and full year 2012 were $70 million and $402 million, respectively, compared with $214 million and $529 million in the fourth quarter and full year 2011, respectively. 

At the end of the fourth quarter of 2012, Alpha had available liquidity of approximately $2.05 billion, consisting of cash, cash equivalents and marketable securities of $1.03 billion, plus $1.02 billion available under the company's secured credit facility and accounts receivable securitization facility.  Total long-term debt, including the current portion of long-term debt at December 31, 2012, was $3.4 billion, compared with $3.0 billion at December 31, 2011. 

Market Overview

After a period of cyclical weakness in the global metallurgical coal market in the second half of 2012 during which approximately 30 million tons of uneconomic production was removed from the seaborne market, developments are beginning to point to gradual improvement.  Chinese coking coal imports rose 30 percent from November to December 2012, reaching a record 7.6 million metric tonnes in the last month of the year, and full year 2012 coking coal imports were a record 53.6 million metric tonnes, a 20 percent increase over 2011.  China's purchasing managers' index (PMI) has been rising for several months and now stands at a 9-month high.  Recently, tropical storms have hampered activity at Australian ports and disrupted rail shipments, although the impact is not as severe as the extreme weather events witnessed in early 2011. 

In the Atlantic basin, European demand has been muted by economic headwinds, Brazil slowed its importation of coking coal somewhat in 2012, and U.S. demand has been generally stable.  As a result, for the last several quarters, the Atlantic market has been characterized by market weakness and over-supply, particularly for lower quality metallurgical coals.  Currently the Atlantic basin remains disconnected from Asia where the impact of production cuts and strengthening demand have begun to spark gradual improvement in the met market.  Spot transactions of Australian met coal in Asia have reportedly risen above the recent benchmark price, and are some 20 percent higher than the low point in the spot market in September of 2012.  As the leading U.S. producer of metallurgical coal, Alpha expects to be well-positioned to benefit from an eventual recovery in the global metallurgical coal market, particularly in the Atlantic.

Throughout 2012, the market for domestic steam coal remained challenging due in part to the fourth warmest winter ever recorded, low natural gas prices and the long-term secular trend of coal-fired plant retirements all of which contributed to reduced coal usage and led to record-high inventory levels that peaked at an estimated 213 million tons in the spring of the year.  As natural gas prices have increased from their lows below $2 per MCF to a level in the low $3s and with forward pricing hovering around the $4 mark, coal has recovered some of its market share which bottomed at 32 percent of U.S. electricity generation and reached approximately 38 percent by year-end.  As a result of the increased usage of coal in the second half of the year, along with production cuts estimated at around 100 million tons during 2012, utility inventories have started to retreat but remain elevated at approximately 197 million tons as of the end of the year. 

In light of the continuing weakness in the U.S. steam coal market, Alpha adjusted its shipment levels and implemented a restructuring plan to right-size its operating footprint.  With respect to the PRB, Alpha has reduced its planned shipments in the near-term until elevated inventories eventually correct, allowing acceptable profit levels.  In the East, Alpha's Pittsburgh seam longwalls, with high heat content and relatively lower costs, are expected to produce an estimated 9 million to 10 million tons in 2013.  In Central Appalachia, Alpha has idled or closed a number of higher production cost steam coal operations in order to control costs and match supply with structurally diminished demand that has decreased markedly over the course of the last year.  At the same time, Alpha more than doubled its Eastern thermal coal exports in 2012 to nearly six million tons, and the Company plans to continue to build its export thermal franchise in 2013, and beyond.

2013 Outlook

Alpha expects to ship between 81 and 92 million tons during 2013, including 19 to 22 million tons of Eastern metallurgical coal, 25 to 30 million tons of Eastern steam coal, and 37 to 40 million tons of Western steam coal out of the PRB.  As of January 25, 2013, 47 percent of the midpoint of anticipated metallurgical coal shipments were committed and priced at an average per ton realization of $113.25; 94 percent of the midpoint of anticipated Eastern steam coal shipments were committed and priced at an average per ton realization of $62.71; and 97 percent of the midpoint of anticipated PRB shipments were committed and priced at an average per ton realization of $12.84.  The Company's 2013 cost of coal sales is expected to range between $71 and $75 per ton in the East and between $10.00 and $11.00 per ton in the West.  Selling, general and administrative expenses are anticipated to range from $140 million to $160 million for 2013.  Interest expense and DD&A expense are anticipated to be in the ranges of $230 million to $240 million and $875 million to $975 million, respectively.  And capital expenditures for 2013 are expected to fall within the range of $300 million to $350 million.

Guidance

(in millions, except per-ton and percentage amounts)




2013

Average per Ton Sales Realization on Committed and Priced Coal Shipments1,2


    West

$12.84

    Eastern Steam

$62.71

    Eastern Metallurgical

$113.25

Coal Shipments (tons)3

81 — 92

    West

37 — 40

    Eastern Steam

25 — 30

    Eastern Metallurgical

19 — 22

Committed and Priced (%)4

85%

    West

97%

    Eastern Steam

94%

    Eastern Metallurgical

47%

Committed and Unpriced (%)4,5

9%

    West

0%

    Eastern Steam

2%

    Eastern Metallurgical

33%

West — Cost of Coal Sales per Ton

$10.00$11.00

East — Cost of Coal Sales per Ton6

$71.00$75.00

Selling, General & Administrative Expense7

(excluding merger-related expenses)

$140$160

Depletion, Depreciation & Amortization

$875$975

Interest Expense

$230$240

Capital Expenditures8

$300$350

Notes:                                                                                                                                                                                                                

  1. Based on committed and priced coal shipments as of January 25, 2013.
  2. Actual average per ton realizations on committed and priced tons recognized in future periods may vary based on actual freight expense in future periods relative to assumed freight expense embedded in projected average per ton realizations.
  3. Eastern shipments in 2013 include an estimated 0.5 to 1.0 million tons of brokered coal.
  4. As of January 25, 2013, compared with the midpoint of shipment guidance range.
  5. In 2013, committed and unpriced Eastern tons include approximately 6.7 million tons of metallurgical coal subject to market pricing, approximately 0.3 million tons of steam coal tons subject to market pricing, approximately 0.2 million tons of steam coal subject to collared pricing with an average pricing range of approximately $83 to $103 per ton, and approximately 0.2 million tons of steam coal subject to average indexed pricing estimated at approximately $74 per ton.
  6. Excludes merger-related expenses and UBB charges.  Alpha has not reconciled the adjusted Eastern cost of coal sales per ton to Eastern cost of coal sales per ton because merger-related expenses and UBB charges, necessary reconciling items, cannot be reasonably predicted, and Alpha is unable to provide guidance for such expenses.
  7. Alpha has not reconciled the adjusted selling, general & administrative expense to selling, general & administrative expense because merger-related expenses, a necessary reconciling item, cannot be reasonably predicted, and Alpha is unable to provide guidance for such expenses.
  8. Includes the annual bonus bid payment on the Federal Lease by Application for the Belle Ayr mine of $42 million.

About Alpha Natural Resources
With $7.0 billion in total revenue in 2012, Alpha Natural Resources ranks as America's third-largest coal producer by revenue and third-largest by production.  Alpha is the nation's largest supplier of metallurgical coal used in the steel-making process and is a major supplier of thermal coal to electric utilities and manufacturing industries.  In 2012, the Company had more than 200 customers on five continents.  More information about Alpha can be found on the company's Web site at www.alphanr.com.  

Forward Looking Statements
This news release includes forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on Alpha's expectations and beliefs concerning future events and involve risks and uncertainties that may cause actual results to differ materially from current expectations. These factors are difficult to predict accurately and may be beyond Alpha's control. The following factors are among those that may cause actual results to differ materially from our forward-looking statements:

These and other risks and uncertainties are discussed in greater detail in Alpha's Annual Reports on Form 10-K and other documents filed with the Securities and Exchange Commission.  Forward-looking statements in this news release or elsewhere speak only as of the date made.  New uncertainties and risks come up from time to time, and it is impossible for Alpha to predict these events or how they may affect the Company.  Alpha has no duty to, and does not intend to, update or revise the forward-looking statements in this news release after the date it is issued.  In light of these risks and uncertainties, investors should keep in mind that the results, events or developments disclosed in any forward-looking statement made in this news release may not occur. 

FINANCIAL TABLES FOLLOW

Use of Non-GAAP Measures
In addition to the results prepared in accordance with generally accepted accounting principles in the United States (GAAP) provided throughout this press release, Alpha has presented the following non-GAAP financial measures, which management uses to gauge operating performance: EBITDA, adjusted EBITDA, adjusted net loss, adjusted diluted loss per common share, adjusted cost of coal sales per ton, adjusted coal margin per ton and adjusted weighted average coal margin per ton.   These non-GAAP financial measures exclude various items detailed in the attached "Reconciliation of EBITDA and Adjusted EBITDA to Net Loss" and "Reconciliation of Adjusted Net Loss to Net Loss."

The definition of these non-GAAP measures may be changed periodically by management to adjust for significant items important to an understanding of operating trends.  These measures are not intended to replace financial performance measures determined in accordance with GAAP. Rather, they are presented as supplemental measures of the Company's performance that management believes are useful to securities analysts, investors and others in assessing the Company's performance over time.  Moreover, these measures are not calculated identically by all companies and therefore may not be comparable to similarly titled measures used by other companies.  A reconciliation of each of these measures to its most directly comparable GAAP measure is provided in the tables below.

Alpha Natural Resources, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(In Thousands Except Shares and Per Share Data)

(Unaudited)













Three Months Ended December 31,



Twelve Months Ended December 31,



2012


2011(1)



2012


2011(1)











Revenues:










   Coal revenues

$

1,355,155

$

1,793,631


$

6,015,696

$

6,189,434

   Freight and handling revenues


164,771


181,478



761,928


662,238

   Other revenues


38,427


95,043



197,260


256,009

      Total revenues


1,558,353


2,070,152



6,974,884


7,107,681











Costs and expenses:










   Cost of coal sales (exclusive of items shown separately below)


923,552


1,555,035



5,004,516


5,080,921

   Freight and handling costs


164,771


181,478



761,928


662,238

   Other expenses


2,238


31,664



45,432


142,709

   Depreciation, depletion and amortization


240,059


285,767



1,037,575


770,769

   Amortization of acquired intangibles, net


(5,858)


(50,859)



(70,338)


(114,422)

   Selling, general and administrative expenses (exclusive of depreciation,









      depletion and amortization shown separately above)


49,162


49,652



209,788


382,250

   Asset impairment and restructuring


40,296


-



1,068,906


-

   Goodwill impairment


188,194


802,337



1,713,526


802,337

      Total costs and expenses


1,602,414


2,855,074



9,771,333


7,726,802











Loss from operations


(44,061)


(784,922)



(2,796,449)


(619,121)











Other income (expense):










   Interest expense


(58,834)


(47,188)



(198,147)


(141,914)

   Interest income


(376)


991



3,373


3,978

   Gain (loss) on early extinguishment of debt


773


(258)



773


(10,026)

   Miscellaneous income, net


1,689


301



3,306


635

      Total other expense, net


(56,748)


(46,154)



(190,695)


(147,327)











Loss before income taxes 


(100,809)


(831,076)



(2,987,144)


(766,448)

Income tax (expense) benefit 


(26,769)


38,150



549,996


35,906

Net loss

$

(127,578)

$

(792,926)


$

(2,437,148)

$

(730,542)





















Loss per common share:










   Basic loss per common share:

$

(0.58)

$

(3.62)


$

(11.06)

$

(4.06)

   Diluted loss per common share:

$

(0.58)

$

(3.62)


$

(11.06)

$

(4.06)











Weighted average shares outstanding:










   Weighted average shares--basic


220,542,577


219,280,297



220,261,555


180,126,226

   Weighted average shares--diluted


220,542,577


219,280,297



220,261,555


180,126,226





















(1) The results for the three and twelve months ended December 31, 2011 have been restated to reflect the impact of certain  






adjustments made to the provisional opening balance sheet of Massey and certain immaterial corrections recorded






in the first six months of 2012.






























This information is intended to be reviewed in conjunction with the company's filings with the U.S. Securities and Exchange Commission.




Alpha Natural Resources, Inc. and Subsidiaries

Supplemental Sales, Operations and Financial Data

(In Thousands, Except Per Ton and Percentage Data)

(Unaudited)
















Three Months Ended



Twelve Months Ended December 31,



December 31,

2012


September 30,

2012



December 31,

2011



2012


2011














Tons sold (1):













   Powder River Basin


11,580


13,219



13,895



46,732


49,949

   Eastern steam


9,429


9,849



11,937



41,797


37,192

   Eastern metallurgical


4,914


4,860



5,294



20,267


19,177

       Total


25,923


27,928



31,126



108,796


106,318



























Average realized price per ton sold (2)(9):













   Powder River Basin

$

13.00

$

12.87


$

11.96


$

12.94

$

11.95

   Eastern steam

$

64.55

$

66.40


$

66.93


$

65.92

$

66.92

   Eastern metallurgical

$

121.27

$

129.96


$

156.48


$

131.02

$

161.85

      Weighted average total

$

52.28

$

52.12


$

57.63


$

55.29

$

58.22














Coal revenues:













   Powder River Basin

$

150,546

$

170,160


$

166,238


$

604,880

$

596,724

   Eastern steam


608,686


653,948



798,927



2,755,474


2,488,729

   Eastern metallurgical


595,923


631,594



828,465



2,655,342


3,103,981

      Total coal revenues

$

1,355,155

$

1,455,702


$

1,793,630


$

6,015,696

$

6,189,434



























Adjusted cost of coal sales per ton (3)(7)(8)(11)(12)(13):













   Powder River Basin

$

9.43

$

9.40


$

9.44


$

10.15

$

9.99

   East (4)

$

68.55

$

75.93


$

78.57


$

73.77

$

75.19

      Adjusted weighted average total

$

42.14

$

44.44


$

47.71


$

46.45

$

44.56














Adjusted weighted average coal margin per ton (9)

$

10.14

$

7.68


$

9.92


$

8.84

$

13.66

Adjusted weighted average coal margin percentage (10)


19.4%


14.7%



17.2%



16.0%


23.5%














Cost of coal sales per ton (3)(7)(11)(12):













   Powder River Basin

$

9.21

$

9.40


$

9.44


$

10.10

$

9.99

   East (4)

$

55.51

$

75.84


$

81.21


$

71.76

$

80.06

      Weighted average total

$

34.83

$

44.39


$

49.17


$

45.28

$

47.14














Weighted average coal margin per ton (5)

$

17.45

$

7.73


$

8.46


$

10.01

$

11.08

Weighted average coal margin percentage (6)


33.4%


14.8%



14.7%



18.1%


19.0%














Net cash provided by operating activities 

$

212,772

$

170,298


$

149,409


$

518,419

$

686,641

Capital expenditures 

$

69,785

$

87,348


$

213,657


$

402,377

$

528,586

(1) Stated in thousands of short tons.


(2) Coal revenues divided by tons sold.  This statistic is stated as free on board (FOB) at the processing plant.

(3) Cost of coal sales divided by tons sold.  The cost of coal sales per ton only includes costs in our Eastern and Western Coal Operations. 

(4) East includes the Company's operations in Central Appalachia (CAPP) and Northern Appalachia (NAPP).

(5) Weighted average total sales realization per ton less weighted average total cost of coal sales per ton.

(6) Weighted average coal margin per ton divided by weighted average total sales realization per ton.

(7) Amounts per ton calculated based on unrounded revenues, cost of coal sales and tons sold.

(8) For the three and twelve months ended December 31, 2012 and December 31, 2011 and the three months ended September 30, 2012, adjusted cost of coal sales per ton for East 

includes adjustments to exclude the impact of certain non-cash charges set forth in the table below.

(9) Weighted average total sales realization per ton less adjusted weighted average total cost of coal sales per ton.

(10) Adjusted weighted average coal margin per ton divided by weighted average total sales realization per ton.

(11) Adjusted cost of coal sales per ton, adjusted weighted average coal margin per ton and adjusted weighted average coal margin percentage

for our Eastern Operations are reconciled to their unadjusted amounts as follows:

 



Three months ended



Twelve months ended



December 31,

2012


September 30,

2012



December 31,

2011



December 31,

2012


December 31,

2011

Adjusted cost of coal sales per ton-East

$

68.55

$

75.93


$

78.57


$

73.77

$

75.19

Impact of merger-related expenses


0.04


0.01



0.76



0.56


3.34

Impact of UBB expenses


0.41


(0.10)



1.42



0.51


0.73

Impact of mineral lease terminations


-


-



0.46



-


0.14

Impact of changes in future costs of asset retirement obligations


(10.73)


-



-



(2.48)


0.66

Impact of benefits-related accrual reversal


(2.76)


-



-



(0.64)


-

Impact of write-off of weather-related property damage


-


-



-



0.04


-

Cost of coal sales per ton-East

$

55.51

$

75.84


$

81.21


$

71.76

$

80.06

 

(12) The results for the three and twelve months ended December 31, 2011 have been restated to reflect the impact of certain  

adjustments made to the provisional opening balance sheet of Massey and certain immaterial corrections recorded

in the first six months of 2012.

(13) For the three and twelve months ended December 31, 2012, adjusted cost of coal sales per ton for the Powder River Basin was $9.43 and $10.15, respectively, 

which excludes the impact of $0.22 and $0.05 for a benefits-related accrual reversal from cost of coal sales per ton of $9.21 and $10.10.


This information is intended to be reviewed in conjunction with the company's filings with the U.S. Securities and Exchange Commission.

Alpha Natural Resources, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets and Supplemental Liquidity Data

(In Thousands)

(Unaudited)










December 31, 2012


December 31, 2011 (1)







Cash and cash equivalents

$

730,723

$

585,882

Trade accounts receivable, net


418,166


641,975

Inventories, net


398,060


492,022

Short-term marketable securities


297,452


80,342

Prepaid expenses and other current assets


488,821


747,854

Total current assets


2,333,222


2,548,075

Property, equipment and mine development costs, net


2,219,016


2,812,069

Owned and leased mineral rights and land, net


7,428,192


8,284,328

Goodwill, net


567,664


2,281,191

Long-term marketable securities


755


20,489

Other non-current assets


540,957


647,893

Total assets

$

13,089,806

$

16,594,045







Current portion of long-term debt

$

95,015

$

46,029

Trade accounts payable


255,191


504,059

Accrued expenses and other current liabilities


872,402


1,359,160

Total current liabilities


1,222,608


1,909,248

Long-term debt


3,291,037


2,922,052

Pension and postretirement medical benefit obligations


1,195,187


1,214,724

Asset retirement obligations


763,482


743,613

Deferred income taxes


971,001


1,507,923

Other non-current liabilities


678,676


921,441

Total liabilities


8,121,991


9,219,001







Total stockholders' equity


4,967,815


7,375,044

Total liabilities and stockholders' equity

$

13,089,806

$

16,594,045










As of




December 31, 2012


December 31, 2011

Liquidity ($ in 000's):





Cash and cash equivalents

$

730,723

$

585,882

Marketable securities with maturities of less than one year


297,452


80,342

Marketable securities with maturities of greater than one year


755


20,489

Total cash, cash equivalents and marketable securities


1,028,930


686,713

Unused revolving credit and A/R securitization facilities (2)


1,023,300


1,114,700

Total liquidity

$

2,052,230

$

1,801,413







(1) During the six months ended June 30, 2012, the Company recorded certain adjustments to the provisional opening balance sheet of Massey. Accordingly, the December 31, 2011 balance sheet was adjusted to reflect these changes as if they were recorded on the acquisition date in accordance with generally accepted accounting principles related to acquisition accounting. The Company also recorded the effects of certain immaterial corrections which are also reflected in the December 31, 2011 balance sheet.


(2) The revolving credit facility is subject to a minimum liquidity requirement of $500 million.


This information is intended to be reviewed in conjunction with the company's filings with the U.S. Securities and Exchange Commission.

 

Alpha Natural Resources, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(In Thousands)

(Unaudited)








Twelve Months Ended December 31,



2012


2011(1)






Operating activities:





   Net loss

$

(2,437,148)

$

(730,542)

   Adjustments to reconcile net loss to net cash provided by





      operating activities:





      Depreciation, depletion, and amortization


1,037,575


770,769

      Amortization of acquired intangibles, net


(70,338)


(114,422)

      Amortization of debt issue costs and accretion of debt discount


43,745


30,263

      Mark-to-market adjustments for derivatives 


(2,795)


(125,391)

      Accretion of asset retirement obligations


65,548


43,062

      Stock-based compensation


9,881


53,685

      Employee benefit plans, net


72,465


68,157

      (Gain) loss on early extinguishment of debt


(773)


10,026

      Changes in future costs of asset retirement obligations


(154,377)


37,137

      Deferred income taxes


(554,575)


(17,084)

      Asset impairment and restructuring


1,068,906


-

      Goodwill impairment


1,713,526


802,337

      Other, net


(39,984)


(22,694)

   Changes in operating assets and liabilities:





      Trade accounts receivable, net


229,882


(178,704)

      Inventories, net


93,962


120,460

      Prepaid expenses and other current assets


230,259


28,199

      Other non-current assets


(7,549)


(30,191)

      Trade accounts payable


(246,228)


84,784

      Accrued expenses and other current liabilities


(407,128)


(41,763)

      Pension and postretirement medical benefit obligations


(53,008)


(105,584)

      Asset retirement obligations


(50,313)


(22,833)

      Other non-current liabilities


(23,114)


26,970

Net cash provided by operating activities


518,419


686,641






Investing activities:





   Cash paid for acquisition, net of cash acquired


-


(711,387)

   Capital expenditures


(402,377)


(528,586)

   Acquisition of mineral rights under federal leases


(95,765)


(64,900)

   Purchases of marketable securities


(555,096)


(374,048)

   Sales of marketable securities


352,112


547,249

   Purchase of equity-method investments


(10,100)


(14,800)

   Proceeds from disposition of property and equipment


38,250


8,470

   Other, net


-


(9,005)

Net cash used in investing activities


(672,976)


(1,147,007)






Financing activities:





   Proceeds from borrowings on long-term debt


494,795


2,100,000

   Principal repayments of long-term debt


(160,157)


(1,315,357)

   Principal repayments of capital lease obligations and other long-term debt


(10,548)


-

   Debt issuance costs


(16,361)


(85,226)

   Common stock repurchases


(7,507)


(212,257)

   Proceeds from exercise of stock options


176


4,316

   Other


(1,000)


-

Net cash provided by financing activities


299,398


491,476






Net increase in cash and cash equivalents

$

144,841

$

31,110

Cash and cash equivalents at beginning of period

$

585,882

$

554,772

Cash and cash equivalents at end of period

$

730,723

$

585,882






(1) The results for the twelve months ended December 31, 2011 have been restated to reflect the impact of certain  

adjustments made to the provisional opening balance sheet of Massey and certain immaterial corrections recorded

in the first six months of 2012.

 





This information is intended to be reviewed in conjunction with the company's filings with the U. S. Securities and Exchange Commission.

Alpha Natural Resources, Inc. and Subsidiaries

Reconciliation of EBITDA and Adjusted EBITDA to Net Loss

(In Thousands)

(Unaudited)
















Three Months Ended



Twelve Months Ended December 31,



December 31,

2012


September 30,

2012



December 31,

2011



2012


2011














Net loss

$

(127,578)

$

(46,146)


$

(792,926)


$

(2,437,148)

$

(730,542)

Interest expense


58,834


47,345



47,188



198,147


141,914

Interest income


376


(1,328)



(991)



(3,373)


(3,978)

Income tax expense (benefit) 


26,769


(83,182)



(38,150)



(549,996)


(35,906)

Depreciation, depletion and amortization


240,059


238,894



285,767



1,037,575


770,769

Amortization of acquired intangibles, net


(5,858)


(11,682)



(50,859)



(70,338)


(114,422)

   EBITDA


192,602


143,901



(549,971)



(1,825,133)


27,835

Goodwill impairment


188,194


-



802,337



1,713,526


802,337

Asset impairment and restructuring


40,296


13,676



-



1,068,906


-

UBB expenses


5,810


(1,539)



24,503



31,508


40,920

Change in fair value and settlement of derivative instruments


7,110


28,581



(53,617)



(8,275)


(107,573)

Merger related expense (benefit)


(12,747)


(6,101)



29,912



13,741


402,099

(Gain) loss on early extinguishment of debt


(773)


-



258



(773)


10,026

Changes in future costs of asset retirement obligations


(154,377)


-



-



(154,377)


37,137

Mineral lease terminations


-


-



7,955



-


7,955

Impact of benefits-related accrual reversal


(45,865)


-



-



(45,865)


-

Impacts on accrual for legal matters


(3,067)


-



-



(3,067)


-

Impact of write-off of weather-related property damage


-


-



-



2,300


-

   Adjusted EBITDA 

$

217,183

$

178,518


$

261,377


$

792,491

$

1,220,736














This information is intended to be reviewed in conjunction with the company's filings with the U.S. Securities and Exchange Commission.






 

Alpha Natural Resources, Inc. and Subsidiaries

Reconciliation of Adjusted Net Income (Loss) to Net Loss

(In Thousands Except Shares and Per Share Data)

(Unaudited)





























Three Months Ended



Twelve Months Ended December 31,



December 31,

2012


September 30,

2012



December 31,

2011



2012


2011














Net loss

$

(127,578)

$

(46,146)


$

(792,926)


$

(2,437,148)

$

(730,542)

Goodwill impairment


188,194


-



802,337



1,713,526


802,337

Asset impairment and restructuring


40,296


13,676



-



1,068,906


-

UBB expenses


5,810


(1,539)



24,503



31,508


40,920

Change in fair value and settlement of derivative instruments


7,110


28,581



(53,617)



(8,275)


(107,573)

Merger related expense (benefit)


(12,747)


(6,101)



29,912



13,741


402,099

(Gain) loss on early extinguishment of debt


(773)


-



258



(773)


10,026

Changes in future costs of asset retirement obligations


(154,377)


-



-



(154,377)


37,137

Mineral lease terminations


-


-



7,955



-


7,955

Impact of benefits-related accrual reversal


(45,865)


-



-



(45,865)


-

Impacts on accrual for legal matters


(3,067)


-



-



(3,067)


-

Impact of write-off of weather-related property damage


-


-



-



2,300


-

Amortization of acquired intangibles, net


(5,858)


(11,682)



(50,859)



(70,338)


(114,422)

Estimated income tax effect of above adjustments


67,850


(10,401)



12,345



(330,668)


(66,274)

Discrete tax charge from valuation allowance adjustment


20,051


(2,048)



-



40,757


-

Discrete tax charge from state statutory tax rate and apportionment change, net of federal tax impact


(20,437)


-



-



(26,834)


-

Discrete tax charge from non-deductible transaction costs


-


-



2,268



-


8,230

Reversal of certain tax reserves


-


-



(1,057)



-


(1,057)

   Adjusted net income (loss) 

$

(41,391)

$

(35,660)


$

(18,881)


$

(206,607)

$

288,836














   Weighted average shares--diluted


220,542,577


220,417,448



219,280,297



220,261,555


182,012,022














   Adjusted diluted earnings (loss) per common share 

$

(0.19)

$

(0.16)


$

(0.09)


$

(0.94)

$

1.59














This information is intended to be reviewed in conjunction with the company's filings with the U.S. Securities and Exchange Commission.


 

SOURCE Alpha Natural Resources

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