Alpha Natural Resources 10-Q 7 May 10 2010 Q1 Quarterly report Financial data

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) (USD $)
In Thousands, except Share data	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Revenues
Coal revenues	$831,266	$425,803
Freight and handling revenues	64,788	46,054
Other revenues	25,950	14,102
Total revenues	922,004	485,959
Costs and expenses
Cost of coal sales (exclusive of items shown separately below)	575,067	303,025
Freight and handling costs	64,788	46,054
Other expenses	15,684	10,849
Depreciation, depletion and amortization	95,127	40,205
Amortization of acquired coal supply agreements, net	65,957	0
Selling, general and administrative expenses (exclusive of depreciation, depletion and amortization shown separately above)	47,789	16,466
Total costs and expenses	864,412	416,599
Income from operations	57,592	69,360
Other income (expense)
Interest expense	(22,120)	(9,853)
Interest income	680	625
Miscellaneous income (expense), net	(204)	116
Total other expense, net	(21,644)	(9,112)
Income from continuing operations before income taxes	35,948	60,248
Income tax expense	(21,278)	(13,627)
Income from continuing operations	14,670	46,621
Discontinued operations
Loss from discontinued operations before income taxes	(1,047)	(7,251)
Income tax benefit	418	1,594
Loss from discontinued operations	(629)	(5,657)
Net income	$14,041	$40,964
Basic earnings per common share:
Income from continuing operations	0.12	0.67
Loss from discontinued operations	$0	-0.08
Net income	0.12	0.59
Diluted earnings per common share:
Income from continuing operations	0.12	0.66
Loss from discontinued operations	$0	-0.08
Net income	0.12	0.58
Weighted average shares-basic	119,892,529	69,884,930
Weighted average shares-diluted	121,876,328	70,696,455

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (USD $)
In Thousands	3 Months Ended Mar. 31, 2010	12 Months Ended Dec. 31, 2009
Current assets:
Cash and cash equivalents	$493,835	$465,869
Trade accounts receivable, net	307,381	232,631
Inventories, net	206,604	176,372
Prepaid expenses and other current assets	194,069	176,953
Total current assets	1,201,889	1,051,825
Property, equipment and mine development costs, net	1,077,198	1,082,446
Owned and leased mineral rights, net	1,955,790	1,985,855
Owned lands	92,132	91,262
Goodwill	357,868	357,868
Acquired coal supply agreements, net	328,700	396,491
Other non-current assets	147,320	157,024
Total assets	5,160,897	5,122,771
Current liabilities
Current portion of long-term debt	33,500	33,500
Trade accounts payable	151,236	143,400
Accrued expenses and other current liabilities	246,632	258,293
Total current liabilities	431,368	435,193
Long-term debt	751,637	756,753
Pension and postretirement medical benefit obligations	690,159	682,991
Asset retirement obligations	194,835	190,724
Deferred income taxes	322,798	316,464
Other non-current liabilities	162,900	149,357
Total liabilities	2,553,697	2,531,482
Commitments and Contingencies (Note 13)
Stockholders' equity:
Preferred stock - par value $0.01, 10.0 million shares authorized, none issued	0	0
Common stock - par value $0.01, 200.0 million shares authorized, 121.6 million issued and 121.0 million outstanding at March 31, 2010 and 120.8 million issued and 120.5 million outstanding at December 31, 2009	1,216	1,208
Additional paid-in capital	2,212,856	2,194,305
Accumulated other comprehensive income	4,799	5,812
Treasury stock, at cost: 0.6 million and 0.3 million shares at March 31, 2010 and December 31, 2009, respectively	(24,550)	(8,874)
Retained earnings	412,879	398,838
Total stockholders' equity	2,607,200	2,591,289
Total liabilities and stockholders' equity	$5,160,897	$5,122,771

Parenthetical Data For Condense

Parenthetical Data For Condensed Consolidated Balance Sheets (USD $)
Share data in Millions, except Per Share data	Mar. 31, 2010	Dec. 31, 2009
Stockholders' equity:
Preferred stock - par value (in dollars per share)	0.01	0.01
Preferred stock - shares authorized (in shares)	10	10
Preferred stock - shares issued (in shares)	0	0
Common stock - par value (in dollars per share)	0.01	0.01
Common stock - shares authorized (in shares)	200	200
Common stock - shares issued (in shares)	121.6	120.8
Common stock - shares outstanding (in shares)	121	120.5
Treasury stock, at cost (in shares)	0.6	0.3

1_Condensed Consolidated Statem

Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $)
In Thousands	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Operating activities
Net income	$14,041	$40,964
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation, depletion and amortization	104,538	46,066
Amortization of acquired coal supply agreements, net	65,957	0
Mark-to-market adjustments for derivatives	885	(238)
Stock-based compensation	8,706	3,225
Employee benefit plans, net	15,437	2,141
Deferred income taxes	(6,853)	3,791
Other, net	(321)	110
Changes in operating assets and liabilities:
Trade accounts receivable, net	(74,750)	1,466
Notes and other receivables	11,859	671
Inventories, net	(30,232)	(18,777)
Prepaid expenses and other current assets	21,481	(3,187)
Other non-current assets	3,346	2,822
Trade accounts payable	8,389	(10,576)
Accrued expenses and other current liabilities	935	(24,692)
Pension and postretirement medical benefit obligations	(6,773)	149
Asset retirement obligations	(1,063)	(802)
Other non-current liabilities	7,668	617
Net cash provided by operating activities	143,250	43,750
Investing activities:
Capital expenditures	(60,879)	(18,136)
Purchase of acquired company	0	(1,750)
Purchases of marketable securities	(50,560)	0
Sales of marketable securities	12,320	0
Purchase of equity-method investment	(3,000)	0
Other, net	819	124
Net cash used in investing activities	(101,300)	(19,762)
Financing activities
Principal repayments of note payable	0	(5,416)
Principal repayments on long-term debt	(8,375)	(54)
Proceeds from exercise of stock options	3,332	0
Excess tax benefit from stock-based awards	6,735	0
Common stock repurchases	(15,676)	(2,022)
Net cash used in financing activities	(13,984)	(7,492)
Net increase in cash and cash equivalents	27,966	16,496
Cash and cash equivalents at beginning of period	465,869	676,190
Cash and cash equivalents at end of period	493,835	692,686
Supplemental cash flow information:
Cash paid for interest	16,234	6,579
Cash paid for income taxes	$0	$13,630

Business and Basis of Presentat

Business and Basis of Presentation
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Business and Basis of Presentation	(1)Business and Basis of Presentation Business Alpha Natural Resources, Inc. and its consolidated subsidiaries (the Company or Alpha) are primarily engaged in the business of extracting, processing and marketing steam and metallurgical coal from surface and deep mines, and mainly sell to electric utilities, steel and coke producers, and industrial customers. The Company, through its subsidiaries, is also involved in marketing coal produced by others to supplement its own production and, through blending, provides its customers with coal qualities beyond those available from its own production. On July31, 2009, Alpha Natural Resources, Inc. (Old Alpha) and Foundation Coal Holdings, Inc. (Foundation) merged (the Merger) with Foundation continuing as the surviving legal corporation of the Merger. Subsequent to the Merger, Foundation was renamed Alpha Natural Resources, Inc.For financial accounting purposes, the Merger was treated as a reverse acquisition and Old Alpha was treated as the accounting acquirer. As a result, Foundations financial results are not included in the three months ended March 31, 2009. Basis of Presentation The accompanying interim condensed consolidated financial statements of the Company are unaudited and prepared in accordance with the rules and regulations of the United States Securities and Exchange Commission (SEC) for Form 10-Q.Such rules and regulations allow the omission of certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America as long as the statements are not misleading.In the opinion of management, these interim condensed consolidated financial statements reflect all normal and recurring adjustments necessary for a fair presentation of the results for the periods presented.Results of operations for the three months ended March 31, 2010 are not necessarily indicative of the results to be expected for the year ending December31, 2010. These interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company included in its Annual Report on Form 10-K for the twelve months ended December 31, 2009, filed March 1, 2010 and included on Form 8-K filed on March 15, 2010. The Companys condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of the Companys condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates and assumptions include inventories; mineral reserves; allowance for non-recoupable advanced mining royalties; asset impairments; environmental and reclamation obligations; acquisition accounting; pensions, postemployment, postretirement medical and other

New Accounting Pronouncements

New Accounting Pronouncements
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
New Accounting Pronouncements	(2)New Accounting Pronouncements New Accounting Pronouncements Adopted In June2009, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No.167, Amendments to FASB Interpretation No.46(R), which modifies how a company determines when an entity that is insufficiently capitalized or is not controlled through voting (or similar rights) should be consolidated. The guidance clarifies that the determination of whether a company is required to consolidate an entity is based on, among other things, an entitys purpose and design and a companys ability to direct the activities of the entity that most significantly impacts the entitys economic performance. The guidance requires an ongoing reassessment of whether a company is the primary beneficiary of a variable interest entity. It also requires additional disclosures about a companys involvement in variable interest entities and any significant changes in risk exposure due to that involvement. In December 2009, the FASB issued Accounting Standards Update (ASU) 2009-17 (ASU 2009-17), which codified the guidance of Statement 167. The Company adopted the guidance on January 1, 2010. As of March 31, 2010, the Company did not have material interests in any variable interest entity. In January2010, the FASB issuedASU 2010-6, Improving Disclosures About Fair Value Measurements (ASU 2010-6), which requires reporting entities to make new disclosures about recurring or nonrecurring fair-value measurements including significant transfers into and out of Level 1 and Level 2 fair-value measurements and information on purchases, sales, issuances, and settlements on a gross basis in the reconciliation of Level 3 fair- value measurements. ASU 2010-6 is effective for annual reporting periods beginning after December15, 2009, except for Level 3 reconciliation disclosures which are effective for annual periods beginning after December15, 2010. ASU 2010-6 relates solely to disclosures in the financial statement notes and will not have an effect on the Companys financial position or results of operations. See Note 8 regarding the Companys fair value disclosures.

Earnings Per Share

Earnings Per Share
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Earnings Per Share	(3)Earnings Per Share The number of shares used to calculate basic earnings per common share is based on the weighted average number of the Companys outstanding common shares during the respective periods. The number of shares used to calculate diluted earnings per common share is based on the number of common shares used to calculate basic earnings per share plus the dilutive effect of stock options and other stock-based instruments held by the Companys employees and directors during each period and the Companys outstanding 2.375% convertible senior notes due 2015 (the Convertible Notes) when these are convertible into the Companys common stock. The ConvertibleNotes, which were issued in April 2008, become dilutive for earnings per common share calculations when the average share price for the quarter exceeds the conversion price of $54.66.The shares that would be issued to settle the conversion spread are included in the diluted earnings per common share calculation when the conversion option is in the money.For the three months ended March 31, 2010 and 2009, the conversion option for the Convertible Notes was not in the money, and therefore there was no dilutive earnings per common share impact. The following table provides a reconciliation of the weighted-average shares outstanding used in the basic and diluted earnings per share computations for the periods presented: Three Months Ended March31, 2010 2009 Weighted average shares - basic 119,892,529 69,884,930 Dilutive impact of stock options and restricted stock plans 1,983,799 811,525 Weighted average shares - diluted 121,876,328 70,696,455

Inventories, net

Inventories, net
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Inventories, net	(4)Inventories, net Inventories, net consisted of the following: March31, December31, 2010 2009 Raw coal $ 23,447 $ 19,180 Saleable coal 137,160 112,004 Equipment purchased for resale 1,910 1,489 Materials and supplies, net 44,087 43,699 Total inventories, net $ 206,604 $ 176,372

Marketable Securities

Marketable Securities
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Marketable Securities	(5)Marketable Securities Short-term marketable securities, included in Prepaid expenses and other current assets, consisted of the following: March31, 2010 Unrealized Cost Gain Loss Fair Value Short-term marketable securities: US treasury and agency securities $ 40,908 $ 2 $ (7 ) $ 40,903 Corporate debt securities 34,376 7 - 34,383 Total short-term marketable securities: $ 75,284 $ 9 $ (7 ) $ 75,286 December31, 2009 Unrealized Cost Gain Loss Fair Value Short-term marketable securities: US treasury and agency securities $ 22,338 $ - $ (15 ) $ 22,323 Corporate debt securities 7,180 - (2 ) 7,178 Total short-term marketable securities: $ 29,518 $ - $ (17 ) $ 29,501 Long-term marketable securities, with maturity dates between one and two years, included in Other non-current assets, consisted of the following: March 31, 2010 Unrealized Cost Gain Loss Fair Value Long-term marketable securities: US treasury and agency securities $ 82,199 $ - $ (96 ) $ 82,103 December 31, 2009 Unrealized Cost Gain Loss Fair Value Long-term marketable securities: US treasury and agency securities $ 89,828 $ - $ (343 ) $ 89,485

Long-Term Debt

Long-Term Debt
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Long-Term Debt	(6)Long-Term Debt Long-term debt consisted of the following: March31, December31, 2010 2009 Term loan due 2011 $ 276,375 $ 284,750 7.25% senior notes due 2014 298,285 298,285 2.375% convertible senior notes due 2015 287,500 287,500 Debt discount (77,023 ) (80,282 ) Total long-term debt 785,137 790,253 Less current portion 33,500 33,500 Long-term debt, net of current portion $ 751,637 $ 756,753 Alpha Credit Facility The Company has a credit facility consisting of a $650,000 secured revolving credit line and a $335,000 secured term loan due 2011 (the Alpha Credit Facility). As of March 31, 2010, letters of credit in the amount of $93,633 were outstanding under the revolving credit line, and the Companys term loans due 2011 had a carrying value of $274,690, net of debt discount of $1,685, with $33,500 classified as current portion of long-term debt. On April 15, 2010, the Company and its lenders amended and restated the Alpha Credit Facility (the Amend and Extend). The Amend and Extend, among other things, extends the maturity of $236,800 of the then outstanding term loans and $554,000 of existing revolving credit facility commitments from July 7, 2011 to July 31, 2014. The Amend and Extend added $300,400 of additional revolving credit facility borrowing capacity with a maturity of July 31, 2014, to increase the aggregate principal amount available to be drawn under the revolving credit facility at the close of the Amend and Extend to $950,400, of which $96,000 was not extended and will mature on July 7, 2011. Additionally, the Amend and Extend increases the amount of the accordion feature of the Alpha Credit Facility to $400,000, all of which will be availablefor the Company to exercisefollowing the closing of the Amend and Extend. Furthermore, the Amend and Extend makes other changes to the Alpha Credit Facility, including increases to certain baskets under the negative covenants to provide the Company greater financial and operating flexibility. Accounts Receivable Securitization As of March 31, 2010, letters of credit in the amount $143,474 were outstanding under the A/R Facility and no cash borrowing transactions had taken place. As outstanding letters of credit exceeded borrowing capacity as of March 31, 2010, the Company was required to provide additional collateral in the form of $35 of restricted cash, which is included in Prepaid expenses and other current assets, to secure outstanding letters of credit.

Asset Retirement Obligation

Asset Retirement Obligation
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Asset Retirement Obligations	(7)Asset Retirement Obligations As of March 31, 2010 and December 31, 2009, the Company had recorded asset retirement obligation accruals for mine reclamation and closure costs (including perpetual water treatment) totaling $208,816 and $205,632, respectively. The portion of the costs expected to bepaid within a year of $13,981 and $14,908, as of March 31, 2010 and December31, 2009, respectively, is included in Accrued expenses and other current liabilities. There were no assets that were legally restricted for purposes of settling asset retirement obligations at March 31, 2010 or December 31, 2009.These regulatory obligations are secured by surety bonds. Changes in the asset retirement obligations were as follows: Total asset retirement obligations at December 31, 2009 $ 205,632 Accretion for the period 4,357 Revisions in estimated cash flows 53 Expenditures for the period (1,226 ) Total asset retirement obligations at March 31, 2010 $ 208,816 Less current portion 13,981 Long-term portion $ 194,835

Fair Value of Financial Instrum

Fair Value of Financial Instruments and Fair Value Measurements
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Fair Value of Financial Instruments and Fair Value Measurements	(8)Fair Value of Financial Instruments and Fair Value Measurements The estimated fair values of financial instruments are determined based on relevant market information. These estimates involve uncertainty and cannot be determined with precision. The following methods and assumptions are used to estimate the fair value of each class of financial instruments. The carrying amounts for Cash and cash equivalents, Trade accounts receivable, net, Prepaid expenses and other current assets, Trade accounts payable, Accrued expenses and other current liabilities approximate fair value due to the short maturity of these instruments. Long-term Debt: The fair value of the Convertible Notes was estimated using observable market prices as these securities are traded. The fair value of the 2014 Notes and the term loan due 2011 is estimated based on a current market rate of interest offered to the Company for debt of similar maturities. The estimated fair values of long-term debt were as follows: March 31, 2010 December 31, 2009 Carrying Carrying Amount Fair Value Amount Fair Value Term loan due 2011(1) $ 274,690 $ 270,848 $ 282,739 $ 279,055 7.25% senior notes due 2014(2) 297,060 304,996 296,990 302,014 2.375% convertible senior notes due 2015(3) 213,387 336,964 210,524 325,953 Total long-term debt $ 785,137 $ 912,808 $ 790,253 $ 907,022 (1) Net of debt discount of $1,685 and $2,011 as of March 31, 2010 and December 31, 2009, respectively. (2) Net of debt discount of $1,225 and $1,295 as of March 31, 2010 and December 31, 2009, respectively. (3) Net of debt discount of $74,113 and $76,976 as of March 31, 2010 and December 31, 2009, respectively. ASC 820 requires disclosures about how fair value is determined for assets and liabilities and a hierarchy for which these assets and liabilities must be grouped, based on significant levels of inputs as follows: Level 1 Quoted prices in active markets for identical assets or liabilities; Level 2 Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and Level 3 Unobservable inputs in which there is little or no market data which require the reporting entity to develop its own assumptions. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The following tables set forth by level, within the fair value hierarchy, the Companys financial and non-financial assets and liabilities that were accounted for at fair value on a recurring and non-recurring basis as of March 31, 2010 and December 31, 2009, respectively.As required by ASC 820, financial and non-financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Companys assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value a

Derivative Financial Instrument

Derivative Financial Instruments
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Derivative Financial Instruments	(9)Derivative Financial Instruments Forward Contracts The Company manages price risk for coal sales and purchases through the use of coal supply agreements. The Company evaluates each of its coal sales and coal purchase forward contracts to determine whether they meet the definition of a derivative and if so, whether they qualify for the normal purchase normal sale (NPNS) exception prescribed by ASC 815-10-10. The majority of the Companys forward contracts do not qualify as derivatives. The majority of contracts that do qualify as derivatives also qualify for the NPNS exception based on managements intent and ability to physically deliver or take physical delivery of the coal. Contracts that qualify as derivatives and do not qualify for the NPNS exception are accounted for at fair value and accordingly, the Company includes the unrealized gains and losses in current period earnings or losses. Swap Agreements Commodity Swaps The Company uses diesel fuel and explosives in its production process and incurs significant expenses for the purchase of these commodities. Diesel fuel and explosives expenses represented approximately 7% of cost of coal sales for the three months ended March 31, 2010. The Company is subject to the risk of price volatility for these commodities and as a part of its risk management strategy, the Company enters into swap agreements with financial institutions to mitigate the risk of price volatility for both diesel fuel and explosives. The terms of the swap agreements allow the Company to pay a fixed price and receive a floating price, which provides a fixed price per unit for the volume of purchases being hedged. As of March 31, 2010, the Company had swap agreements outstanding to hedge the variable cash flows related to 70% and 49% of anticipated diesel fuel usage for calendar year 2010 and 2011, respectively. The average fixed price per swap for diesel fuel hedges is $2.33 per gallon and $2.39 per gallon for calendar year 2010 and 2011, respectively. As of March 31, 2010, the Company had swap agreements outstanding to hedge the variable cash flows related to approximately 74% of anticipated explosives usage in the Powder River Basin for calendar year 2010. All cash flows associated with derivative instruments are classified as operating cash flows in the Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2010 and 2009. The Company sells coalbed methane through its Coal Gas Recovery business.The revenues derived from the sale of coalbed methane are subject to volatility based on the changes in natural gas prices.In order to reduce that risk, the Company enters into pay variable, receive fixed natural gas swaps for a portion of its anticipated gas production in order to fix the selling price for a portion of its production.The natural gas swaps have been designated as qualifying cash flow hedges. As of March 31, 2010, the Company had swap agreements outstanding to hedge the variable cash flows related to approximately 80% of anticipated natural gas production in 2010. Interest Rate Swap The Company has variable rate debt outstanding and is subject to interest rate risk ba

Income Taxes

Income Taxes
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Income Taxes	(10)Income Taxes The total income tax expense (benefit) provided on pretax income was allocated as follows: Three Months Ended March 31, 2010 2009 Continuing operations $ 21,278 $ 13,627 Discontinued operations (418 ) (1,594 ) Total $ 20,860 $ 12,033 A reconciliation of the statutory federal income tax expense at 35% to income from continuing operations before income taxes and the actual income tax expensefrom continuing operationsis as follows: Three Months Ended March 31, 2010 2009 Federal statutory income tax expense $ 12,582 $ 21,086 Increases (reductions) in taxes due to: Percentage depletion allowance (15,469 ) (7,667 ) State taxes, net of federal tax impact (210 ) 1,490 Deduction for domestic production activities (1,887 ) (569 ) Change in valuation allowance - (839 ) Change in law - Medicare Part D Subsidy 25,566 - Other, net 696 126 Income tax expense from continuing operations $ 21,278 $ 13,627 The Patient Protection and Affordable Care Act (PPACA) and the Reconciliation Act were signed into law in March 2010. As a result of these two acts, tax benefits available to employers that receive the Medicare Part D subsidywill beeliminated beginning in years ending after December31, 2012. Since the acts were signed into law in the current quarter, ASC 740 Income Taxes, requires that the effect of the tax law change be recorded immediately as a component of tax expense. During the three months ended March 31, 2010, the income tax effect related to the acts was a reduction of $25,566 to the deferred tax asset related to the postretirement prescription drug benefits.

Employee Benefit Plans

Employee Benefit Plans
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Employee Benefit Plans	(11)Employee Benefit Plans The Company sponsors or participates in several benefit plans for its employees, including postemployment health care and life insurance, defined benefit and defined contribution pension plans, and workers compensation and black lung benefits.In connection with the Merger, the Company assumed all of the employee benefit plans of Foundation (the Foundation Plans) and is contractually obligated to continue to provide similar or improved benefits to those Foundation Plans for a period of eighteen months after the Merger date. Components of Net Periodic Pension Costs The components of net periodic benefit costs are as follows: Three Months Ended March 31, 2010 2009 Service cost $ 2,074 $ - Interest cost 3,656 - Expected return on plan assets (3,239 ) - Net periodic benefit cost $ 2,491 $ - Components of Net Periodic Costs of Other Postretirement Benefit Plans and Black Lung The components of net periodic benefit costs are as follows: Three Months Ended March 31, 2010 2009 Service cost $ 3,087 $ 694 Interest cost 9,302 855 Expected return on plan assets (20 ) - Amortization of prior service cost 550 592 Amortization of net actuarial gain 29 - Net periodic benefit cost $ 12,948 $ 2,141 In March2010, the PPACAwas enacted, potentially impacting the costs to provide healthcare benefits to the Companys eligible active and certain retired employees and workers compensation benefits related to occupational disease resulting from coal workers pneumoconiosis (Black Lung). The PPACA has both short-term and long-term implications on healthcare benefit plan standards. Implementation of this legislation is planned to occur in phases, with plan standard changes taking effect beginning in 2010, but to a greater extent with the 2011 benefit plan year and extending through 2018. Plan standard changes that could affect the Company in the short term include raising the maximum age for covered dependents to receive benefits, the elimination of lifetime dollar limits per covered individual and restrictions on annual dollar limits per covered individual, among other standard requirements. Plan standard changes that could affect the Company in the long term include an excisetax on high cost plans and the elimination of annual dollar limits per covered individual, among other standard requirements. The Company is currently analyzing this legislation to determine the full extent of the impact of the required plan standard changes on employee healthcare plans and the resulting costs. Beginning in 2018, the PPACA will impose a 40% excise tax on employers to the extent that the value of their healthcare plan coverage exceeds certain dollar thresholds. The Company anticipates that certain government agencies will provide additional regulations or interpretations concerning the application of this excise tax. Until these regulations or interpretations are published, it is impractical to reasonably estimate the impact of the excise tax on future healthcare costs or postretirement benefit obligations. Accordingly, as of March31, 2010, the Comp

Stock-Based Compensation Awards

Stock-Based Compensation Awards
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Stock-Based Compensation Awards	(12)Stock-Based Compensation Awards At March 31, 2010, the Company had three types of stock-based awards outstanding: restricted stock, restricted share units (both time-based and performance-based), and stock options. Stock-based compensation expense from continuing operations totaled $8,706 and $3,225, for the three months ended March 31, 2010 and 2009, respectively.For the three months ended March 31, 2010 and 2009, approximately 70% and 72%, respectively, of stock-based compensation expense from continuing operations is reported as Selling, general and administrative expenses and approximately 30% and 28%, respectively, of stock-based compensation expense from continuing operations was recorded as a component of Cost of coal sales. During the three months ended March 31, 2010, the Company awarded certain of its executives and key employees 336,529 time-based restricted share units and 265,636 performance-based restricted share units.The time-based share units vest, subject to continued employment, ratably over three-years or cliff vest after three years (with accelerated vesting upon a change of control and certain retirement scenarios). The performance-based share units awarded under the Plans cliff vest after three years, subject to continued employment and the satisfaction of the performance criteria (with accelerated vesting upon a change of control and certain retirement scenarios). The 265,636 performance-based restricted share units awarded during the three months ended March 31, 2010 have the potential to be distributed from 0% to 200% of the awarded amount, depending on the actual results versus the pre-established performance criteria over the three-year period. On March 30, 2010, the Company filed its Notice of Annual Meeting of Stockholders and Proxy Statement, to be held on May 19, 2010, which includes a proposal to approve the 2010 Long-Term Incentive Plan (the 2010 LTIP).The principal purpose of the 2010 LTIP is to advance the interests of the Company and its stockholders by providing incentives to certain eligible persons who contribute significantly to the strategic and long-term performance objectives and growth of the Company. The 2010 LTIP provides for a variety of awards, including options, stock appreciation rights, restricted stock, restricted share units (both time-based and performance-based), and any other type of award deemed by the Compensation Committee in its discretion to be consistent with the purposes ofthe 2010 LTIP. In November 2008, the Board of Directors authorized the Company to repurchase common shares from employees (upon the election by the employee) to satisfy the employees minimum statutory tax withholdings upon the vesting of restricted stock and restricted share units (both time-based and performance-based).Shares that are repurchased to satisfy the employees minimum statutory tax withholdings are recorded in Treasury stock at cost, and these shares are not added back into the pool of shares available for grant of the respective plans the shares were granted from. During the three months ended March 31, 2010 and 2009, the Company repurchased 344,250 and 106,739, respectively, of comm

Commitments and Contingencies

Commitments and Contingencies
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Commitments and Contingencies	(13)Commitments and Contingencies (a) General Estimated losses from loss contingencies and legal expenses associated withcontingencies are accrued by a charge to income when information available indicates that it is probable that an asset has been impaired or a liability has been incurred and the amount of the loss can be reasonably estimated. If a loss contingency is not probable or reasonably estimable, disclosure of the loss contingency is made in the consolidated financial statements when it is at least reasonably possible that a loss will be incurred and the loss is material. (b) Commitments In connection with the Merger, the Company assumed the obligations for a federal coal lease, which contains an estimated 224.0 million tons of proven and probable coal reserves in the Powder River Basin. The lease bid was $180,500, payable in five equal annual installments of $36,108. The first two installments were paid in 2009 and 2008 by Foundation. The three remaining annual installments of $36,108 each are due on May 1, the anniversary date of the lease in 2010, 2011 and 2012. (c) Contingencies Extensive regulation of the impacts of mining on the environment and of maintaining workplace safety, and related litigation, has had or may have a significant effect on the Companys costs of production and results of operations. Further regulations, legislation or litigation in these areas may also cause the Companys sales or profitability to decline by increasing costs or by hindering the Companys ability to continue mining at existing operations or to permit new operations. (d) Guarantees and Financial Instruments with Off-Balance Sheet Risk In the normal course of business, the Company is a party to certain guarantees and financial instruments with off-balance sheet risk, such as bank letters of credit, performance or surety bonds, and other guarantees and indemnities related to the obligations of affiliated entities which are not reflected in the Company's Condensed Consolidated Balance Sheets.Management does not expect any material losses to result from these guarantees or other off-balance sheet financial instruments. In connection with the Merger, Neweagle Industries, Inc., Neweagle Coal Sales Corp., Laurel Creek Co., Inc. and Rockspring Development, Inc. (collectively, Sellers) became indirect wholly owned subsidiaries of the Company. The Sellers sell coal to Birchwood Power Partners, L.P. (Birchwood) under a Coal Supply Agreement dated July 22, 1993 (Birchwood Contract). Laurel Creek Co., Inc. and Rockspring Development, Inc. were parties to the Birchwood Contract since its inception, at which time those entities were not affiliated with Neweagle Industries, Inc., Neweagle Coal Sales Corp. or Foundation. Effective January 31, 1994, the Birchwood Contract was assigned to Neweagle Industries, Inc. and Neweagle Coal Sales Corp. by AgipCoal Holding USA, Inc. and AgipCoal Sales USA, Inc., which at the time were affiliates of Arch Coal, Inc. Despite this assignment, Arch Coal, Inc. (Arch) and its affiliates have separate contractual obligations to provide coal to Birchwood if Sellers fail to perform. Pursuant to an Agreement Rele

Comprehensive Income

Comprehensive Income
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Comprehensive Income	(14) Comprehensive Income Total comprehensive income is as follows for the three months ended March 31, 2010 and 2009: Three Months Ended March31, 2010 2009 Net income $ 14,041 $ 40,964 Change in fair value of cash flow hedge related to interest rate swaps, net of tax effect of $0 and ($8) for the three months ended March 31, 2010 and 2009, respectively - 24 Adjustments to unrecognized losses and amortization of employee benefit costs, net of tax effect of $2,319 and ($153) for the three months ended March 31, 2010 and 2009, respectively (3,696 ) 462 Change in fair value of cash flow hedges, net of tax effect of ($1,564) and ($2) for the three months ended March 31, 2010 and 2009, respectively 2,520 6 Change in fair value of available-for-sale marketable securities, net of income tax of ($103) and $0 for the three months ended March 31, 2010 and 2009, respectively 163 - Total comprehensive income $ 13,028 $ 41,456 The following table summarizes the components of accumulated other comprehensive income at March 31, 2010 and December 31, 2009: March31, December31, 2010 2009 Adjustments to unrecognized gains and losses and amortization of employee benefit costs, net of taxes of ($3,783) and ($6,102) as of March 31, 2010 and December 31, 2009, respectively 1,437 5,133 Unrealized losses on cash flow hedges, net of taxes of ($2,116) and ($552) as of March 31, 2010 and December 31, 2009, respectively 3,419 899 Change in fair value of available-for-sale marketable securities, net of income tax benefit of $37 and $140 as of March 31, 2010 and December 31, 2009, respectively (57 ) (220 ) Total accumulated other comprehensive income $ 4,799 $ 5,812

Segment Information

Segment Information
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Segment Information	(15)Segment Information The Company discloses information about operating segments using the management approach, where segments are determined and reported based on the way that management organizes the enterprise for making operating decisions and assessing performance.The Company periodically evaluates its application of accounting guidance for reporting its segments. The Company extracts, processes and markets steam and metallurgical coal from surface and deep mines for sale to electric utilities, steel and coke producers, and industrial customers. The Company operates only in the United States with mines in Central Appalachia, Northern Appalachia, and the Powder River Basin. Prior to the Merger, Old Alpha had only one reportable segment, Coal Operations, which included operations in Central and Northern Appalachia. As a result of the Merger, the Company changed its organizational structure and re-evaluated its reportable segments.Based on a review of the required economic characteristics, the Company aggregated its operatingsegments into two reportable segments: Western Coal Operations, which consists of two Powder River Basin surface mines as of March 31, 2010 and Eastern Coal Operations, which consists of 38 underground mines and 22 surface mines in Central and Northern Appalachia as of March 31, 2010, as well as the Companys road construction business which operates in Central Appalachia and its coal brokerage activities. In addition to the two reportable segments, the All Other category includes an idled underground mine in Illinois; expenses associated with closed mines; Dry Systems Technologies; revenues and royalties from the sale of coalbed methane and natural gas extraction;equipment sales and repair operations; terminal services; general corporate overhead and corporate assets and liabilities. The Company evaluates the performance of its segments based on EBITDA from continuing operations, which the Company defines as Income from continuing operations plus Interest expense, Income tax expense, Amortization of acquired coal supply agreements, net and Depreciation, depletion and amortization, less Interest income and Income tax benefit. All prior period segment information has been reclassified to conform to the currentpresentation. Segment operating results and capital expenditures from continuing operations for the three months ended March31, 2010 andtotal assets as of December31, 2009 were as follows: Eastern Western Coal Coal All Operations Operations Other Consolidated Total Revenues $ 777,009 $ 134,091 $ 10,904 $ 922,004 Amortization of acquired coal supply agreements, net $ 44,137 $ 21,820 $ - $ 65,957 Depreciation, depletion, and amortization $ 76,871 $ 14,854 $ 3,402 $ 95,127 EBITDA from continuing operations $ 209,469 $ 20,727 $ (11,724 ) $ 218,472 Capital expenditures $ 49,801 $ 5,950 $ 5,128 $ 60,879 Goodwill $ 304,900 $ 47,681 $ 5,287 $ 357,868 Total assets $ 3,654,956 $ 716,454 $ 751,361 $ 5,122,771 The following table presents a reconciliation of EBITDA from continuing operations to Income from conti

Discontinued Operations

Discontinued Operations
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Discontinued Operations	(16)Discontinued Operations Kingwood Mining Company, LLC On December 3, 2008, the Company announced the permanent closure of Kingwood.The decision was a result of adverse geologic conditions and regulatory requirements that rendered the coal seam unmineable at this location. The mine stopped producing coal in early January 2009 and Kingwood ceased equipment recovery operations at the end of April 2009.Beginning in the first quarter of 2009, the results of operations for the current and prior periods have been reported as discontinued operations. The following table reflects the activities for Kingwoods discontinued operations for the three months ended March 31, 2010 and 2009: Three Months Ended March 31, 2010 2009 Total revenues $ - $ 2,907 Costs and expenses (1,047 ) (10,158 ) Loss from operations (1,047 ) (7,251 ) Income tax benefit from discontinued operations 418 1,594 Loss from discontinued operations $ (629 ) $ (5,657 ) The assets and liabilities of Kingwood Mining Company, LLC as of March 31, 2010 and December 31, 2009 are shown below: March31, December31, 2010 2009 Current assets $ - $ - Property, plant, and equipment, net 1,156 1,636 Other assets 440 442 Total assets of discontinued operations 1,596 2,078 Current liabilities 3,589 4,830 Noncurrent liabilities 10,996 10,166 Total liabilities of discontinued operations 14,585 14,996 Net liability $ (12,989 ) $ (12,918 )

Mergers and Acquisitions

Mergers and Acquisitions
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Mergers and Acquisitions	(17)Mergers and Acquisitions Merger with Foundation Coal Holdings, Inc. On May11, 2009, Old Alpha and Foundation executed an agreement and plan of merger pursuant to which Old Alpha was to be merged with and into Foundation, with Foundation continuing as the surviving corporation of the Merger. On July31, 2009, the Merger was completed and Foundation was renamed Alpha Natural Resources, Inc. The fair value of common stock issued was determined by the closing price of Old Alphas common stock on the day of the Merger. The total purchase price has been preliminarily allocated to the net tangible and intangible assets of Foundation. The allocation of the purchase price has not been finalized due to the final calculation of deferred taxes, therefore, the amounts that have been recorded are provisional and will remain as such until a final tax return is filed for Foundation, which is anticipated to occur by the end of the second quarter of 2010. The following unaudited pro forma information has been prepared for illustrative purposes only and assumes the Merger occurred at the beginning of the period being presented. The unaudited pro forma results have been prepared based on estimates and assumptions, which the Company believes are reasonable; however, they are not necessarily indicative of the consolidated results of operations had the Merger occurred at the beginning of the period presented, or of future results of operations. The unaudited pro forma results for the three months ended March31, 2009 are as follows: ThreeMonths EndedMarch31, 2009 Total revenues As reported $ 485,959 Pro forma $ 880,511 Income (loss) from continuing operations As reported $ 46,621 Pro forma $ (11,954 ) Earnings per share from continuing operations-basic As reported $ 0.67 Pro forma $ (0.10 ) Earnings per share from continuing operations-diluted As reported $ 0.66 Pro forma $ (0.10 )

Supplemental Guarantor and Non-

Supplemental Guarantor and Non-Guarantor Financial Information
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Supplemental Guarantor and Non-Guarantor Financial Information	(18)Supplemental Guarantor and Non-Guarantor Financial Information On July 30, 2004, Foundations subsidiary, Foundation PA (the 2014 Notes Issuer), issued the 2014 Notes. The 2014 Notes were guaranteed on a senior unsecured basis by Foundation Coal Corporation (FCC), an indirect parent of Foundation PA, and certain of its subsidiaries. As a result of the Merger, Foundation PA and FCC became subsidiaries of the Company. On August 1, 2009, in connection with the Merger, Foundation PA, the Company and certain of its subsidiaries (which were also former subsidiaries of Old Alpha) (the New Subsidiaries) executed a supplemental indenture (the Third Supplemental Indenture), which supplements the indenture dated as of July 30, 2004 as supplemented, governing the 2014 Notes. Pursuant to the Third Supplemental Indenture, the Company assumed the obligations of FCC in respect of the 2014 Notes and, along with the New Subsidiaries, became obligated as guarantors on the indenture governing the 2014 Notes. On August1, 2009, in connection with the Merger, FCC merged with and into the Company. In accordance with the indenture governing the 2014 Notes, the Guarantor Subsidiaries under the 2014 Notes, referred to as the 2014 Notes Guarantor Subsidiaries, are each of the direct and indirect wholly owned subsidiaries of the Company, other than the Issuer Subsidiary and the Non-Guarantor Subsidiary. The Company and the 2014 Notes Guarantor Subsidiaries have fully and unconditionally guaranteed the 2014 Notes, jointly and severally, on a senior unsecured basis. Presented below are condensed consolidating financial statements as of March 31, 2010 and December 31, 2009and for the three months ended March 31, 2010 and 2009, based on the guarantor structure that was in place at March 31, 2010. As the Merger was treated as a reverse acquisition and Old Alpha was treated as the accounting acquirer, Old Alphas historical financial statements are the historical financial statements of the Company for comparative purposes. As a result, Parent in the tables below refers to Old Alpha in reference to dates prior to the Merger and to the Company in reference to dates following the Merger, and refers to the Company as a guarantor of the 2014 Notes; information is presented for 2014 Notes Issuer only for dates following the Merger because the 2014 Notes Issuer was a subsidiary of Foundation prior to the Merger; and information for 2014 Notes Guarantor Subsidiaries prior to the Merger includes only those 2014 Notes Guarantor Subsidiaries that were subsidiaries of Old Alpha prior to the Merger. "Non-Guarantor Subsidiary" refers, for the tables below dated as of and for the periods ended March 31, 2010, to ANR Receivables Funding LLC, a wholly-owned indirect subsidiary of the Company formed on March 25, 2009 in connection with the A/R Facility, that was not and is not a guarantor of the 2014 Notes. Separate consolidated financial statements and other disclosures concerning the 2014 Notes Guarantor Subsidiariesare not presented because management believes that such information is not material to holders of the 2014 Notes or related guarantees. Alpha Natural Resources, Inc.

Subsequent Events

Subsequent Events
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Subsequent Events	(19)Subsequent Events On April 15, 2010, the Company amended and extended the maturity of its secured credit facility. See Note 6.

Document Information

Document Information
	3 Months Ended Mar. 31, 2010
Document Information [Text Block]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	2010-03-31

Entity Information

Entity Information (USD $)
	3 Months Ended Mar. 31, 2010	May. 04, 2010	Jun. 30, 2009
Entity [Text Block]
Entity Registrant Name	Alpha Natural Resources, Inc.
Entity Central Index Key	0001301063
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$1,300,000,000
Entity Common Stock, Shares Outstanding		121,067,302
Document Fiscal Year Focus	2,010
Document Fiscal Period Focus	Q1