BRISTOL, Va., Feb. 12, 2015 /PRNewswire/ -- Alpha Natural
Resources, Inc. (NYSE: ANR), a leading U.S. coal supplier, reported
a fourth quarter 2014 net loss of $122
million or $0.55 per diluted
share, compared with a net loss of $359
million or $1.62 per diluted
share in the fourth quarter of 2013. Excluding the items
described in "Reconciliation of Net Loss to Adjusted Net Loss," the
fourth quarter 2014 adjusted net loss was $112 million or $0.50 per diluted share compared with adjusted
net loss of $115 million or
$0.52 per diluted share in the fourth
quarter of 2013.
Excluding the items described in "Reconciliation of Net Loss to
Adjusted EBITDA," the fourth quarter 2014 Adjusted EBITDA was
$103 million compared with
$71 million in the fourth quarter of
2013.
Quarterly
Financial & Operating Highlights (millions, except
per-share and per-ton amounts)
|
|
|
|
|
|
|
|
Q4
2014
|
Q3
2014
|
Q4
2013
|
Coal
revenues
|
$931.5
|
$920.8
|
$965.6
|
|
|
|
|
Net
loss
|
($121.7)
|
($185.0)
|
($358.8)
|
|
|
|
|
Net loss per
diluted share
|
($0.55)
|
($0.84)
|
($1.62)
|
|
|
|
|
Adjusted net
loss1
|
($111.6)
|
($118.3)
|
($115.2)
|
|
|
|
|
Adjusted net loss
per diluted share1
|
($0.50)
|
($0.53)
|
($0.52)
|
|
|
|
|
Adjusted
EBITDA1
|
$102.6
|
$53.7
|
$71.4
|
|
|
|
|
Tons of coal
sold
|
22.0
|
21.2
|
20.6
|
|
|
|
|
Weighted average
coal margin per ton
|
$6.59
|
$3.33
|
$4.57
|
|
|
|
|
Adjusted weighted
average coal margin per ton1
|
$5.48
|
$3.69
|
$5.59
|
|
|
|
|
|
|
|
|
|
|
1. These are non-GAAP financial
measures. A reconciliation of net loss to adjusted net loss,
adjusted EBITDA, and cost of coal sales per ton to adjusted cost of
coal sales per ton are included in tables accompanying the
financial schedules. Adjusted weighted average coal margin
per ton is defined as the weighted average total sales realization
per ton, less the adjusted weighted average total cost of coal
sales per ton.
|
"2014 was yet again a challenging year for the coal industry.
Against this backdrop, we continue to adjust our production base
and cost structure to align with current market conditions," said
Kevin Crutchfield, chairman and
CEO. "These actions are yielding results as shown by our
strong 2014 cost performance in the East. Importantly, we
expect to achieve additional cost savings in 2015, and we will
continue to take aggressive actions to preserve flexibility and
respond quickly to changing and challenging market conditions,
including a reduction of SG&A and overhead costs in the range
of $60 million to $75 million
annually throughout the organization to adjust both the operational
footprint and support services to our 2015 production
guidance. "
Crutchfield continued, "While our business has benefitted from
our prudent approach to portfolio rationalization during this
prolonged coal market downturn, these have been tough decisions to
make and the impact they have had on many Alpha employees is not
lost on us. I'm very proud of the Alpha organization and want
to commend everyone on their dedication to achieving these
objectives, while also maintaining an unwavering commitment to best
in class safety and sustainability. As we have said on many
occasions, despite such difficult market conditions, we will not
lose focus on Running Right."
Financial Performance
- Total revenues in the fourth quarter of 2014 were $1.1 billion compared with $1.1 billion in the fourth quarter of 2013, and
coal revenues were $0.9 billion, down
from $1.0 billion in the year-ago
period. The decrease in coal revenues was attributable to
lower average realizations in all regions partly offset by
increased tons sold. Freight and handling revenues and other
revenues were $118 million and
$21 million, respectively, during the
fourth quarter of 2014, versus $110
million and $19 million,
respectively, in the fourth quarter of 2013.
During the fourth quarter of 2014, metallurgical coal shipments
were 4.9 million tons, compared with 4.4 million tons in the fourth
quarter of 2013 and 4.8 million tons in the prior quarter of
2014. Alpha shipped 9.8 million tons of Powder River Basin
(PRB) coal during the quarter, compared with 9.3 million tons in
the year-ago period and 9.3 million tons in the prior
quarter. Eastern steam coal shipments were 7.3 million tons,
compared with 6.8 million tons in the year-ago period and 7.2
million tons in the prior quarter. The average per ton
realization on metallurgical coal shipments in the fourth quarter
was $83.43, down from $96.53 in the fourth quarter last year and up
from $82.45 in the prior
quarter. The average per-ton realization for PRB shipments
was $12.02, compared with
$12.48 in the fourth quarter last
year and $11.81 in the prior
quarter. The per-ton average realization for Eastern steam
coal shipments was $55.47, compared
with $61.66 in the year-ago period
and $58.16 in the prior quarter.
- Total costs and expenses during the fourth quarter of 2014 were
$1.2 billion, compared with
$1.3 billion in the fourth quarter of
2013 and $1.2 billion in the prior
quarter. Cost of coal sales was $0.8
billion, compared with $0.9
billion in the year-ago period and $0.9 billion in the prior quarter. The cost
of coal sales in the East averaged $55.55 per ton, compared with $68.85 in the fourth quarter last year and
$62.32 in the prior quarter.
Excluding the $2.71 per ton benefit
from immaterial correction of prior period asset retirement
obligation calculations, $0.63 per
ton merger-related expenses and $0.08
per ton employee benefit related expenses, the adjusted cost of
coal sales in the East averaged $57.55 per ton, compared with $66.97 in the fourth quarter last year, which
excluded $1.66 per ton of
merger-related expenses and $0.22 per
ton provision for regulatory costs, and $61.69 in the third quarter of 2014, which
excluded $0.47 per ton of employee
benefit related expenses and $0.16
per ton of merger-related expenses. Fourth quarter 2014
Eastern adjusted cost of coal sales per ton benefitted
approximately $5 per ton from gains
on asset disposals and the net benefit from various liability
adjustments. The cost of coal sales per ton for Alpha Coal
West's PRB mines was $11.16 during
the fourth quarter of 2014, compared with $10.29 in the fourth quarter of 2013 and
$11.32 in the prior quarter.
- Selling, general and administrative (SG&A) expense in the
fourth quarter of 2014 was $32
million, compared with SG&A expense of $38 million in the fourth quarter of 2013.
Depreciation, depletion and amortization decreased to
$189 million during the fourth
quarter of 2014 from $215 million in
the year-ago period.
- Alpha recorded a net loss of $122
million, or $0.55 per diluted
share, during the fourth quarter of 2014, compared with a net loss
of $359 million, or $1.62 per diluted share, during the fourth
quarter of 2013.
Excluding the items described in our "Reconciliation of Net Loss to
Adjusted Net Loss," the fourth quarter 2014 adjusted net loss was
$112 million, or $0.50 per diluted share, compared with adjusted
net loss of $115 million, or
$0.52 per diluted share, in the
fourth quarter of 2013.
- Excluding the items described in the "Reconciliation of Net
Loss to Adjusted EBITDA," adjusted EBITDA was $103 million in the fourth quarter of 2014,
compared with $71 million in the
fourth quarter of 2013. Fourth quarter 2014 adjusted EBITDA
includes approximately $60 million
from gains on asset disposals and the net benefit of various
liability adjustments.
Full Year 2014 Results
- For the full year 2014, Alpha reported total revenues of
$4.3 billion, including $3.7 billion in coal revenues, compared with
total revenues of $5.0 billion and
coal revenues of $4.3 billion in
2013. The year-over-year decreases in both total and coal
revenues are primarily attributable to lower average realizations
and lower shipments of metallurgical and PRB steam coal.
- During 2014, Alpha's coal shipments totaled 84.5 million tons,
compared with 86.9 million tons in the year-ago period.
Metallurgical coal shipments were 18.6 million tons for 2014,
compared with 20.1 million tons shipped during the same period a
year ago. Shipments of PRB and Eastern steam coal were 36.5
million tons and 29.5 million tons, respectively, during 2014,
compared with 38.2 million tons and 28.6 million tons,
respectively, in 2013. The year-over-year decrease in
shipments of PRB coal principally reflects poor rail performance,
while the year-over year decrease in metallurgical coal shipments
is primarily driven by weak market conditions and production
curtailments.
- For 2014, the company-wide average realization was $44.05 per ton and the adjusted average cost of
coal sales was $39.88 per ton,
resulting in a $4.17 per ton, or 9.5
percent, adjusted coal margin. By comparison, company-wide
average realization in 2013 was $48.99 per ton and the adjusted average cost of
coal sales was $44.40 per ton,
resulting in a $4.59 per ton, or 9.4
percent, adjusted coal margin. The decrease in adjusted coal
margin per ton was primarily attributable to lower per ton
realizations for metallurgical coal, Eastern steam coal and PRB
coal, largely offset by lower Eastern adjusted costs of coal sales
per ton. Full year 2014 weighted average coal margin per ton
was $4.52 or 10.3 percent, with an
average cost of coal sales of $39.53
per ton. Cost of coal sales was $3.4
billion for 2014, compared with $4.0
billion in the year-ago period, primarily due to production
curtailments and cost reductions.
- For full year 2014, Alpha recorded a net loss of $875 million or $3.95 per diluted share, compared with a net loss
of $1.1 billion or $5.04 per diluted share during the same period a
year ago. Excluding the various items detailed in the
attached "Reconciliation of Net Loss to Adjusted Loss," Alpha's
adjusted net loss was $334 million or
$1.51 per diluted share for 2014,
compared with an adjusted net loss of $475
million or $2.15 per diluted
share for 2013. Adjusted EBITDA, which excludes the various
items detailed in the attached "Reconciliation of Net Loss to
Adjusted EBITDA," was $498 million,
compared with Adjusted EBITDA of $299
million during 2013.
Liquidity and Capital Resources
Cash used in operating activities for the quarter ended
December 31, 2014 was $31 million, compared with cash used in operating
activities of $70 million for the
fourth quarter of 2013. Capital expenditures for the fourth
quarter of 2014 were $99 million,
compared with $95 million in the
fourth quarter of 2013. For the full year 2014, cash used in
operating activities totaled $284
million, including $195
million in payments related to the shareholder class action
settlement, net of insurance recoveries of $70 million, compared to cash provided by
operating activities of $109 million
in the same period a year ago.
During the fourth quarter Alpha received approximately
$75 million in cash from the sale of
AMFIRE assets and $15 million from
the sale of its joint venture interest in Coal Handling
Solutions.
As of the end of the fourth quarter of 2014, Alpha had total
liquidity of approximately $2.2
billion, consisting of cash, cash equivalents and marketable
securities of nearly $1.3 billion,
which includes approximately 6.0 million shares of Rice Energy
valued at approximately $127 million,
and nearly $0.9 billion available
under the Company's secured credit and accounts receivable
securitization facilities. Total long-term debt, net of debt
discounts, and including the current portion of long-term debt as
of December 31, 2014, was
approximately $3.9 billion, including
approximately $154 million of senior
convertible notes maturing in 2015.
Market Overview
Metallurgical Coal
The global seaborne metallurgical coal market appears to have
stabilized over the last several months, with the mid-volatile
segment showing relative strength. In fact, the first quarter
Australian mid-volatile benchmark increased by $1.50 per tonne to $116.50, while the Australian low volatile hard
coking coal benchmark declined $2.00
per tonne to $117.00. Spot
assessments have ranged from $110 to
$115 per tonne over the past several months.
As a result of significant production increases during 2013 and
2014, Australian export volumes increased by more than 41 million
tonnes during those years to 186 million tonnes in 2014, leading to
an oversupplied market amid slower growth in the Chinese steel
industry. However, it appears that nearly all production
expansion in Australia is
completed, with expectation of only modest export growth over the
next two years. Combined with announced global met production
cuts in the 25 million tonne range, and additional production cuts
likely, the market seems to be nearing more balanced supply and
demand as long as at least modest steel production growth
continues.
Alpha recently priced approximately five million tons of
domestic metallurgical coal at a substantial premium to the average
global price levels. Our 2015 domestic metallurgical coal
pricing declined approximately $7 per
ton compared to average domestic realizations in 2014. AMFIRE
assets, which Alpha sold at the end of 2014, accounted for
approximately 800,000 tons of domestic met shipments during
2014.
Thermal Coal
Recent price trends suggest that the thermal coal market will
remain challenging for 2015, and the trajectory thereafter will be
significantly influenced by the price of natural gas, the pace of
economic growth, ongoing regulatory pressures on the domestic
coal-fired utility fleet and the weather. Domestic utility
inventory levels have approached normal levels from historic lows
reached a few months ago. In addition, softer natural gas
prices and muted demand for coal, as evidenced by lackluster RFP
activity, have contributed to a continued weak pricing environment.
Rail service in the west has improved meaningfully since
October last year.
After remaining reasonably stable for most of 2014, Northern Appalachia (NAPP) pricing has
softened over the last three months, while the Central Appalachia (CAPP) and PRB regions
experienced price declines throughout 2014.
Lastly, the seaborne thermal market declined significantly after
the collapse in oil prices, with API2 spot pricing weakening from
the low $70s per tonne in October to the lower $60s per tonne
currently, below the break-even point for many suppliers.
2015 Outlook
We expect to ship between 69 and 80 million tons, including 14
to 17 million tons of Eastern metallurgical coal, 19 to 23 million
tons of Eastern steam coal, and 36 to 40 million tons of Western
steam coal. As of January 30,
2015, 52 percent of the midpoint of anticipated 2015
metallurgical coal shipments was committed and priced at an average
expected per ton realization of $82.88. Based on the midpoint of guidance,
85 percent of anticipated 2015 Eastern steam coal shipments were
committed and priced at an average expected per ton realization of
$55.62, and 82 percent of the
midpoint of anticipated 2015 PRB shipments was committed and priced
at an average expected per ton realization of $11.53. Alpha's 2015 guidance for its
Eastern adjusted cost of coal sales per ton is $58.00 to $64.00, while Western adjusted cost of
coal sales per ton is expected to be between $10.00 and $11.00. Capital expenditures for
2015 are expected to be $225 million to $275
million, while SG&A guidance, which excludes merger
related expenses, is $100 million to $120
million. Depreciation, depletion and amortization for
2015 is expected to be between $650 and $750
million. We expect 2015 interest expense and cash paid
for interest to be between $290 million and
$310 million and $245 million and
$255 million, respectively.
Guidance (in millions, except per ton and
percentage amounts)
|
|
|
2015
|
Average per Ton
Sales Realization on Committed
and Priced Coal Shipments1,2,3
|
|
West
|
$11.53
|
Eastern Steam
|
$55.62
|
Eastern Metallurgical
|
$82.88
|
Coal Shipments
(tons)3
|
69 – 80
|
West
|
36 – 40
|
Eastern Steam
|
19 – 23
|
Eastern Metallurgical
|
14 – 17
|
Committed and
Priced (%)3,4
|
76%
|
West
|
82%
|
Eastern Steam
|
85%
|
Eastern Metallurgical
|
52%
|
Committed and
Unpriced (%)3,4
|
14%
|
West
|
18%
|
Eastern Steam
|
6%
|
Eastern Metallurgical
|
11%
|
West – Adjusted
Cost of Coal Sales per Ton5
|
$10.00 –
$11.00
|
East – Adjusted
Cost of Coal Sales per Ton5
|
$58.00 –
$64.00
|
Selling, General
& Administrative Expense5
|
$100 –
$120
|
Depletion,
Depreciation & Amortization
|
$650 –
$750
|
Interest
Expense
|
$290 –
$310
|
Cash Paid for
Interest
|
$245 –
$255
|
Capital
Expenditures6
|
$225 –
$275
|
Notes:
- Based on committed and priced coal shipments as of January 30, 2015.
- 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.
- Contain estimates of future coal shipments based upon contract
terms and anticipated delivery schedules. Actual coal
shipments may vary from these estimates.
- As of January 30, 2015, compared
with the midpoint of shipment guidance range.
- Actual results may be adjusted for various items, such as
merger-related expenses, that cannot reasonably be predicted.
- Includes the last of five annual bonus bid payments on the
Federal Lease by Application for the Belle Ayr mine of $42 million.
About Alpha Natural Resources
Alpha Natural Resources is one of the largest and most
regionally diversified coal suppliers in the United States. With affiliate mining
operations in Virginia,
West Virginia, Kentucky, Pennsylvania and Wyoming, Alpha supplies metallurgical coal to
the steel industry and thermal coal to generate power to customers
on five continents. Consistent with its Running Right
process, Alpha is committed to being a leader in mine safety and an
environmental steward in the communities where its affiliates
operate. For more information, visit Alpha's website 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:
- our liquidity, results of operations and financial
condition;
- sustained depressed levels or further declines in coal
prices;
- worldwide market demand for coal, electricity and steel,
including demand for U.S. coal exports;
- utilities switching to alternative energy sources such as
natural gas, renewables and coal from basins where we do not
operate;
- reductions or increases in customer coal inventories and the
timing of those changes;
- our production capabilities and costs;
- inherent risks of coal mining beyond our control, and our
ability to utilize our coal assets fully and replace reserves as
they are depleted;
- changes in environmental laws and regulations, including those
directly affecting our coal mining and production, and those
affecting our customers' coal usage, including potential climate
change initiatives;
- changes in safety and health laws and regulations and their
implementation, and the ability to comply with those changes;
- competition in coal markets;
- future legislation, regulatory and court decisions and changes
in regulations, governmental policies or taxes or changes in
interpretation thereof;
- global economic, capital market or political conditions,
including a prolonged economic downturn in the markets in which we
operate and disruptions in worldwide financial markets;
- the outcome of pending or potential litigation or governmental
investigations;
- our relationships with, and other conditions affecting, our
customers, including the inability to collect payments from our
customers if their creditworthiness declines;
- changes in, renewal or acquisition of, terms of and performance
of customers under coal supply arrangements and the refusal by our
customers to receive coal under agreed contract terms;
- our ability to obtain, maintain or renew any necessary permits
or rights, and our ability to mine properties due to defects in
title on leasehold interests;
- attracting and retaining key personnel and other employee
workforce factors, such as labor relations;
- the geological characteristics of the Powder River Basin,
Central and Northern Appalachian coal reserves;
- funding for and changes in postretirement benefit obligations,
pension obligations, including multi-employer pension plans, and
federal and state black lung obligations;
- cybersecurity attacks or failures, threats to physical
security, extreme weather conditions or other natural
disasters;
- increased costs and obligations potentially arising from the
Patient Protection and Affordable Care Act;
- reclamation and mine closure obligations;
- our assumptions concerning economically recoverable coal
reserve estimates;
- our ability to negotiate new United Mine Workers of America
("UMWA") wage agreements on terms acceptable to us, increased
unionization of our workforce in the future, and any strikes by our
workforce;
- disruptions in delivery or changes in pricing from third party
vendors of key equipment and materials that are necessary for our
operations, such as diesel fuel, steel products, explosives and
tires;
- inflationary pressures on supplies and labor and significant or
rapid increases in commodity prices;
- railroad, barge, truck and other transportation availability,
performance and costs;
- disruption in third party coal supplies;
- our ability to integrate successfully operations that we may
acquire or develop in the future, or the risk that any such
integration could be more difficult, time-consuming or costly than
expected;
- the consummation of financing transactions, acquisitions or
dispositions and the related effects on our business and financial
position;
- indemnification of certain obligations not being met;
- long-lived asset impairment charges;
- fair value of derivative instruments not accounted for as
hedges that are being marked to market;
- our substantial indebtedness and potential future
indebtedness;
- restrictive covenants and other terms in our secured credit
facility and the indentures governing our outstanding debt
securities;
- our ability to obtain or renew surety bonds on acceptable terms
or maintain self-bonding status;
- certain terms of our outstanding debt securities, including
conversions of some of our convertible senior debt securities, that
may adversely impact our liquidity; and
- other factors, including the other factors discussed in the
"Management's Discussion and Analysis of Financial Condition and
Results of Operations", and "Risk Factors" sections of our Annual
Report on Form 10-K for the year ended December 31, 2013 and Quarterly Reports on Form
10-Q for the quarters ended March 31,
2014, June 30, 2014 and
September 30, 2014.
These and other risks and uncertainties are discussed in greater
detail in Alpha's Annual Reports on Form 10-K, Quarterly Reports on
Form 10-Q, 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 arise 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: Adjusted
EBITDA, adjusted net income (loss), adjusted diluted income (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 Net Loss
to Adjusted EBITDA" and "Reconciliation of Net Loss to Adjusted 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
finds useful in assessing the company's financial performance and
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.
Alpha Natural
Resources, Inc. and Subsidiaries
|
Condensed
Consolidated Statements of Operations
|
(In Thousands
Except Share and Per Share Data)
|
(Unaudited)
|
|
|
|
|
|
|
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
|
2014
|
2013
|
|
2014
|
2013
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
Coal
revenues
|
$ 931,535
|
$ 965,569
|
|
$ 3,724,441
|
$ 4,257,981
|
Freight
and handling revenues
|
118,485
|
109,530
|
|
480,841
|
557,846
|
Other
revenues
|
20,595
|
18,601
|
|
81,796
|
137,681
|
Total
revenues
|
1,070,615
|
1,093,700
|
|
4,287,078
|
4,953,508
|
|
|
|
|
|
|
Costs and
expenses:
|
|
|
|
|
|
Cost of
coal sales (exclusive of items
shown separately below)
|
791,545
|
898,414
|
|
3,381,075
|
3,980,744
|
Freight
and handling costs
|
118,485
|
109,530
|
|
480,841
|
557,846
|
Other
expenses
|
27,539
|
10,006
|
|
67,412
|
165,485
|
Depreciation, depletion and amortization
|
188,514
|
215,000
|
|
750,776
|
865,021
|
Amortization of acquired intangibles, net
|
11,297
|
4,148
|
|
39,206
|
5,056
|
Selling,
general and administrative expenses
(exclusive of depreciation,
depletion and
amortization shown separately above)
|
32,354
|
38,323
|
|
152,106
|
158,987
|
Asset
impairment and restructuring
|
1,239
|
12,915
|
|
24,872
|
37,273
|
Goodwill
impairment
|
-
|
-
|
|
308,651
|
253,102
|
|
|
|
|
|
|
Total costs and
expenses
|
1,170,973
|
1,288,336
|
|
5,204,939
|
6,023,514
|
|
|
|
|
|
|
Loss from
operations
|
(100,358)
|
(194,636)
|
|
(917,861)
|
(1,070,006)
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
Interest
expense
|
(76,804)
|
(64,001)
|
|
(288,466)
|
(246,588)
|
Interest
income
|
535
|
384
|
|
2,265
|
3,517
|
Gain on sales of
marketable equity securities
|
1,448
|
-
|
|
17,883
|
-
|
Loss on early
extinguishment of debt
|
-
|
(7,425)
|
|
(2,022)
|
(40,464)
|
Gain on
sales of equity method investments
|
5,999
|
-
|
|
256,330
|
-
|
Miscellaneous income (expense), net
|
(874)
|
(638)
|
|
1,619
|
23,493
|
Total other expense,
net
|
(69,696)
|
(71,680)
|
|
(12,391)
|
(260,042)
|
|
|
|
|
|
|
Loss before income
taxes
|
(170,054)
|
(266,316)
|
|
(930,252)
|
(1,330,048)
|
Income tax benefit
(expense)
|
48,393
|
(92,472)
|
|
55,291
|
216,550
|
Net loss
|
$
(121,661)
|
$
(358,788)
|
|
$
(874,961)
|
$
(1,113,498)
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per common
share:
|
|
|
|
|
|
Basic
loss per common share:
|
$
(0.55)
|
$
(1.62)
|
|
$
(3.95)
|
$
(5.04)
|
Diluted
loss per common share:
|
$
(0.55)
|
$
(1.62)
|
|
$
(3.95)
|
$
(5.04)
|
|
|
|
|
|
|
Weighted average
shares outstanding:
|
|
|
|
|
|
Weighted
average shares--basic
|
221,574,489
|
220,981,272
|
|
221,400,658
|
220,883,103
|
Weighted
average shares--diluted
|
221,574,489
|
220,981,272
|
|
221,400,658
|
220,883,103
|
|
|
|
|
|
|
|
|
|
|
|
|
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, 2014
|
September
30, 2014
|
December
31, 2013
|
|
2014
|
2013
|
|
|
|
|
|
|
|
Tons sold
(1):
|
|
|
|
|
|
|
Powder
River Basin
|
9,829
|
9,280
|
9,339
|
|
36,464
|
38,164
|
Eastern
steam
|
7,256
|
7,183
|
6,834
|
|
29,510
|
28,613
|
Eastern
metallurgical
|
4,925
|
4,773
|
4,430
|
|
18,581
|
20,135
|
Total
|
22,010
|
21,236
|
20,603
|
|
84,555
|
86,912
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average realized
price per ton sold (2)(7):
|
|
|
|
|
|
|
Powder
River Basin
|
$ 12.02
|
$ 11.81
|
$ 12.48
|
|
$ 11.98
|
$ 12.62
|
Eastern
steam
|
$ 55.47
|
$ 58.16
|
$ 61.66
|
|
$ 57.62
|
$ 62.31
|
Eastern
metallurgical
|
$ 83.43
|
$ 82.45
|
$ 96.53
|
|
$ 85.42
|
$ 99.01
|
Weighted average
total
|
$ 42.32
|
$ 43.36
|
$ 46.87
|
|
$ 44.05
|
$ 48.99
|
|
|
|
|
|
|
|
Coal
revenues:
|
|
|
|
|
|
|
Powder
River Basin
|
$ 118,152
|
$ 109,602
|
$ 116,559
|
|
$ 436,930
|
$ 481,747
|
Eastern
steam
|
402,531
|
417,759
|
421,394
|
|
1,700,295
|
1,782,781
|
Eastern
metallurgical
|
410,852
|
393,472
|
427,616
|
|
1,587,216
|
1,993,453
|
Total coal
revenues
|
$
931,535
|
$
920,833
|
$
965,569
|
|
$
3,724,441
|
$
4,257,981
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted cost of coal
sales per ton (3)(7)(8)(11):
|
|
|
|
|
|
|
Powder
River Basin
|
$ 11.16
|
$ 11.32
|
$ 10.29
|
|
$ 11.15
|
$ 9.91
|
East
(4)
|
$ 57.55
|
$ 61.69
|
$ 66.97
|
|
$ 61.66
|
$ 71.40
|
Adjusted weighted
average total
|
$ 36.84
|
$ 39.67
|
$ 41.28
|
|
$ 39.88
|
$ 44.40
|
|
|
|
|
|
|
|
Adjusted weighted
average coal margin per ton (9)
|
$ 5.48
|
$ 3.69
|
$ 5.59
|
|
$ 4.17
|
$ 4.59
|
Adjusted weighted
average coal margin percentage (10)
|
12.9%
|
8.5%
|
11.9%
|
|
9.5%
|
9.4%
|
|
|
|
|
|
|
|
Cost of coal sales
per ton (3)(7)(11):
|
|
|
|
|
|
|
Powder
River Basin
|
$ 11.16
|
$ 11.32
|
$ 10.29
|
|
$ 11.15
|
$ 9.91
|
East
(4)
|
$ 55.55
|
$ 62.32
|
$ 68.85
|
|
$ 61.05
|
$ 72.51
|
Weighted average
total
|
$ 35.73
|
$ 40.03
|
$ 42.30
|
|
$ 39.53
|
$ 45.02
|
|
|
|
|
|
|
|
Weighted average coal
margin per ton (5)
|
$ 6.59
|
$ 3.33
|
$ 4.57
|
|
$ 4.52
|
$ 3.97
|
Weighted average coal
margin percentage (6)
|
15.6%
|
7.7%
|
9.8%
|
|
10.3%
|
8.1%
|
|
|
|
|
|
|
|
Net cash provided by
(used in) operating activities
|
$ (30,711)
|
$ 17,861
|
$ (69,561)
|
|
$ (283,859)
|
$ 109,018
|
Capital
expenditures(12)
|
$ 98,994
|
$ 45,341
|
$ 94,662
|
|
$ 227,168
|
$ 257,791
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
months ended December 31, 2014, September 30, 2014, and December
31, 2013, and for the twelve months ended December 31, 2014 and
December 31, 2013, adjusted cost of coal sales per ton for East
includes adjustments to exclude the impact of certain 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 for our Eastern Operations reconciled to their
unadjusted amounts is as follows:
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Twelve months
ended
|
|
December 31,
2014
|
September 30,
2014
|
December 31,
2013
|
|
December 31,
2014
|
December 31,
2013
|
Cost of coal sales
per ton-East
|
$ 55.55
|
$ 62.32
|
$ 68.85
|
|
$ 61.05
|
$ 72.51
|
Impact of asset
retirement obligation correction
|
2.71
|
-
|
-
|
|
0.62
|
-
|
Impact of provision
for regulatory costs
|
-
|
-
|
(0.22)
|
|
-
|
(0.53)
|
Impact of employee
benefit related expenses
|
(0.08)
|
(0.47)
|
-
|
|
(0.14)
|
-
|
Impact of
merger-related expenses
|
(0.63)
|
(0.16)
|
(1.66)
|
|
0.13
|
(0.58)
|
Adjusted cost of coal
sales per ton-East
|
$ 57.55
|
$ 61.69
|
$ 66.97
|
|
$ 61.66
|
$ 71.40
|
|
|
|
|
|
|
|
(12) For the three
and twelve months ended December 31, 2014 and 2013, capital
expenditures includes the annual bonus bid payment(s) on the
Federal Lease by Application.
|
|
|
|
|
|
|
|
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,
2014
|
December 31,
2013
|
|
|
|
|
Cash and cash
equivalents
|
$
741,186
|
$
619,644
|
Trade accounts
receivable, net
|
314,015
|
287,655
|
Inventories,
net
|
237,945
|
304,863
|
Short-term marketable
securities
|
405,169
|
337,069
|
Prepaid expenses and
other current assets
|
176,452
|
439,193
|
Total current
assets
|
1,874,767
|
1,988,424
|
Property, equipment
and mine development costs, net
|
1,425,667
|
1,798,648
|
Owned and leased
mineral rights and land, net
|
6,916,307
|
7,157,506
|
Goodwill,
net
|
-
|
308,651
|
Long-term marketable
securities
|
126,820
|
-
|
Other non-current
assets
|
391,040
|
546,029
|
Total
assets
|
$
10,734,601
|
$
11,799,258
|
|
|
|
|
Current portion of
long-term debt
|
$
178,251
|
$
29,169
|
Trade accounts
payable
|
216,098
|
234,951
|
Accrued expenses and
other current liabilities
|
597,626
|
978,695
|
Total current
liabilities
|
991,975
|
1,242,815
|
Long-term
debt
|
3,719,519
|
3,398,434
|
Pension and
postretirement medical benefit obligations
|
1,236,986
|
990,124
|
Asset retirement
obligations
|
538,008
|
728,575
|
Deferred income
taxes
|
771,919
|
901,552
|
Other non-current
liabilities
|
489,394
|
465,892
|
Total
liabilities
|
7,747,801
|
7,727,392
|
|
|
|
|
Total stockholders'
equity
|
2,986,800
|
4,071,866
|
Total liabilities and
stockholders' equity
|
$
10,734,601
|
$
11,799,258
|
|
|
|
|
|
|
As
of
|
|
|
December 31,
2014
|
December 31,
2013
|
Liquidity ($ in
000's):
|
|
|
Cash and
cash equivalents
|
$
741,186
|
$
619,644
|
Short-term marketable securities
|
405,169
|
337,069
|
Long-term marketable securities
|
126,820
|
-
|
Total cash, cash
equivalents and
marketable
securities
|
1,273,175
|
956,713
|
Unused
revolving credit and A/R
securitization facilities(1)
|
881,800
|
966,000
|
Total
liquidity
|
$
2,154,975
|
$
1,922,713
|
|
|
|
|
(1) The revolving
credit facility under our credit agreement is subject to a minimum
liquidity requirement of $300 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,
|
|
2014
|
2013
|
|
|
|
Operating
activities:
|
|
|
Net
loss
|
$(874,961)
|
$(1,113,498)
|
Adjustments to reconcile net loss to net cash (used in)
provided
by operating activities:
|
|
|
Depreciation,
depletion and amortization
|
750,776
|
865,021
|
Amortization of
acquired intangibles, net
|
39,206
|
5,056
|
Amortization of debt
issue costs and accretion of debt discount
|
54,285
|
51,217
|
Mark-to-market
adjustments for derivatives
|
25,752
|
6,213
|
Accretion of asset
retirement obligations
|
47,698
|
60,274
|
Stock-based
compensation
|
27,371
|
25,873
|
Employee benefit
plans, net
|
57,972
|
56,982
|
Loss on early
extinguishment of debt
|
2,022
|
40,464
|
Change in future costs
of asset retirement obligations
|
(107,263)
|
(66,521)
|
Deferred income
taxes
|
(40,477)
|
(212,361)
|
(Gain) loss on
disposal of property, plant and equipment
|
(19,339)
|
7,851
|
Gain on sale of equity
method investments
|
(256,330)
|
-
|
Gain on sales of
marketable equity securities
|
(17,883)
|
-
|
Asset impairment and
restructuring
|
24,872
|
37,273
|
Goodwill
impairment
|
308,651
|
253,102
|
Other, net
|
10,300
|
(4,497)
|
Changes
in operating assets and liabilities:
|
|
|
Trade accounts
receivable, net
|
(26,360)
|
130,511
|
Inventories,
net
|
66,589
|
89,364
|
Prepaid expenses and
other current assets
|
98,344
|
48,717
|
Other non-current
assets
|
4,281
|
3,233
|
Trade accounts
payable
|
(11,540)
|
(30,430)
|
Accrued expenses and
other current liabilities
|
(359,310)
|
105,199
|
Pension and
postretirement medical benefit obligations
|
(41,774)
|
(53,527)
|
Asset retirement
obligations
|
(55,520)
|
(44,862)
|
Other non-current
liabilities
|
8,779
|
(151,636)
|
Net cash (used in)
provided by operating activities
|
(283,859)
|
109,018
|
|
|
|
Investing
activities:
|
|
|
Capital
expenditures
|
(185,038)
|
(215,661)
|
Acquisition of mineral rights under federal lease
|
(42,130)
|
(42,130)
|
Purchases of marketable securities
|
(679,394)
|
(900,471)
|
Sales of
marketable securities
|
697,929
|
857,000
|
Proceeds
from sale of property, plant and equipment
|
93,033
|
10,605
|
Proceeds
from sales of equity method investments, net
|
112,232
|
-
|
Other,
net
|
1,717
|
-
|
Net cash used in
investing activities
|
(1,651)
|
(290,657)
|
|
|
|
Financing
activities:
|
|
|
Proceeds from
borrowings on long-term debt
|
500,000
|
1,306,677
|
Principal repayments of long-term debt
|
(37,554)
|
(1,176,332)
|
Principal repayments of capital lease obligations
|
(19,475)
|
(16,136)
|
Debt issuance and
modification costs
|
(28,938)
|
(36,659)
|
Common
stock repurchases
|
(1,461)
|
(1,435)
|
Other
|
(5,520)
|
(5,555)
|
Net cash provided by
financing activities
|
407,052
|
70,560
|
|
|
|
Net increase
(decrease) in cash and cash equivalents
|
$ 121,542
|
$ (111,079)
|
Cash and cash
equivalents at beginning of period
|
$ 619,644
|
$ 730,723
|
Cash and cash
equivalents at end of period
|
$
741,186
|
$
619,644
|
|
|
|
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
Net Loss to Adjusted EBITDA
|
(In
Thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended December 31,
|
|
December 31,
2014
|
September 30,
2014
|
December 31,
2013
|
|
2014
|
2013
|
|
|
|
|
|
|
|
Net loss
(1)
|
$ (121,661)
|
$ (184,975)
|
$ (358,788)
|
|
$(874,961)
|
$(1,113,498)
|
Interest
expense
|
76,804
|
75,688
|
64,001
|
|
288,466
|
246,588
|
Interest
income
|
(535)
|
(574)
|
(384)
|
|
(2,265)
|
(3,517)
|
Income tax (benefit)
expense
|
(48,393)
|
(43,938)
|
92,472
|
|
(55,291)
|
(216,550)
|
Depreciation,
depletion and amortization
|
188,514
|
170,895
|
215,000
|
|
750,776
|
865,021
|
Amortization of
acquired intangibles, net
|
11,297
|
9,166
|
4,148
|
|
39,206
|
5,056
|
Impact of asset
retirement obligation correction
|
(33,000)
|
-
|
-
|
|
(29,987)
|
-
|
Goodwill
impairment
|
-
|
-
|
-
|
|
308,651
|
253,102
|
Asset impairment and
restructuring
|
1,239
|
11,544
|
12,915
|
|
24,872
|
37,273
|
Change in fair value
and settlement of derivative instruments
|
19,618
|
8,987
|
13,466
|
|
30,676
|
5,795
|
Merger related
expense
|
7,639
|
1,087
|
18,661
|
|
9,234
|
141,386
|
Provision for
regulatory costs
|
-
|
-
|
2,500
|
|
-
|
27,500
|
Employee benefit
related expense
|
1,050
|
5,792
|
-
|
|
6,842
|
-
|
Loss on assets
contributed to equity affiliate
|
-
|
-
|
-
|
|
-
|
10,117
|
Loss on early
extinguishment of debt
|
-
|
-
|
7,425
|
|
2,022
|
40,464
|
Adjusted
EBITDA
|
$
102,572
|
$
53,672
|
$
71,416
|
|
$
498,241
|
$
298,737
|
|
|
|
|
|
|
|
(1) For the
twelve months ended December 31, 2014, net loss includes a gain of
$250.3 million from the sale of the Alpha Shale joint venture to
Rice Energy.
|
|
|
|
|
|
|
|
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
Net Loss to Adjusted Net Loss
|
(In Thousands
Except Shares and Per Share Data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended December 31,
|
|
December 31,
2014
|
September 30,
2014
|
December 31,
2013
|
|
2014
|
2013
|
|
|
|
|
|
|
|
Net loss
(1)
|
$ (121,661)
|
$ (184,975)
|
$ (358,788)
|
|
$ (874,961)
|
$ (1,113,498)
|
Impact of asset
retirement obligation correction
|
(49,666)
|
-
|
-
|
|
(43,570)
|
-
|
Goodwill
impairment
|
-
|
-
|
-
|
|
308,651
|
253,102
|
Asset impairment and
restructuring
|
1,239
|
11,544
|
12,915
|
|
24,872
|
37,273
|
Change in fair value
and settlement of derivative instruments
|
19,618
|
8,987
|
13,466
|
|
30,676
|
5,795
|
Merger related
expense
|
7,639
|
1,087
|
18,661
|
|
9,234
|
141,386
|
Provision for
regulatory costs
|
-
|
-
|
2,500
|
|
-
|
27,500
|
Employee benefit
related expense
|
1,050
|
5,792
|
-
|
|
6,842
|
-
|
Loss on assets
contributed to equity affiliate
|
-
|
-
|
-
|
|
-
|
10,117
|
Loss on early
extinguishment of debt
|
-
|
-
|
7,425
|
|
2,022
|
40,464
|
Amortization of
acquired intangibles, net
|
11,297
|
9,166
|
4,148
|
|
39,206
|
5,056
|
Estimated income tax
effect of above adjustments
|
3,467
|
(13,563)
|
(20,621)
|
|
(25,570)
|
(87,115)
|
Discrete tax benefit
from state statutory tax rate and apportionment change, net of
federal tax impact
|
-
|
-
|
-
|
|
-
|
(2,524)
|
Discrete tax charge
from valuation allowance adjustment
|
15,388
|
43,655
|
205,067
|
|
196,646
|
207,681
|
Discrete tax benefit
from reversal of reserves for uncertain tax positions
|
-
|
-
|
-
|
|
(8,090)
|
-
|
Adjusted
net loss
|
$
(111,629)
|
$
(118,307)
|
$
(115,227)
|
|
$
(334,042)
|
$
(474,763)
|
|
|
|
|
|
|
|
Weighted
average shares
--diluted
|
221,574,489
|
221,491,811
|
220,981,272
|
|
221,400,658
|
220,883,103
|
|
|
|
|
|
|
|
Adjusted
diluted income (loss)
per common share
|
$ (0.50)
|
$ (0.53)
|
$ (0.52)
|
|
$ (1.51)
|
$ (2.15)
|
|
|
|
|
|
|
|
(1) For the
twelve months ended December 31, 2014, net loss includes a gain of
$250.3 million from the sale of the Alpha Shale joint venture to
Rice Energy.
|
|
|
|
|
|
|
|
This information is
intended to be reviewed in conjunction with the company's filings
with the U.S. Securities and Exchange Commission.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/alpha-natural-resources-announces-results-for-fourth-quarter-and-full-year-2014-300035003.html
SOURCE Alpha Natural Resources, Inc.