Alpha Appalachia (MEE) DEFA14A Additional proxy soliciting materials

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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(Rule 14a-101)

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MASSEY ENERGY COMPANY

(Name of Registrant as Specified in Its Charter)

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The following information was prepared for and presented to Institutional Shareholder Services on May 1, 2006, and may be presented to shareholders, investors and analysts in the future.

Presentation to Institutional

Shareholder Services

May 2006

Massey Energy Company

1

Disclaimer

FORWARD-LOOKING

STATEMENTS:

Certain

statements

in

this

presentation

are

forward-looking

as

defined

by

the

Private

Securities

Litigation

Reform

Act

of

1995.

Due

to

known

and

unknown

risks,

the

Company’s

actual

results

may

differ

materially

from

its

expectations

or

projections.

Factors

potentially

contributing

to

such

differences

are

described

in

further

detail

at

the

conclusion

of

this

presentation

and

in

the

Company’s

Annual

Reports

on

Form

10-K

and

Quarterly

Reports

on

Form

10-Q.

2

SECTION 1

Performance and Business Strategy of the Company

5

SECTION 2

Review of Third Point’s Proposals

19

SECTION 3

Massey’s

Director Nominees and Corporate Governance

Structure

28

Table of Contents

3

Don L. Blankenship

Chairman, Chief Executive

Officer and President

Baxter F. Philips, Jr.

Executive Vice President and

Chief Administrative Officer

Introduction

William R. Grant

Lead Director and Chairman

of the Audit Committee

4

Current Business

Strategy is Focused on

Building Long-Term

Value for Shareholders

Company is

Responsive to

Shareholder Concerns

Experience of

the Boards Nominees

•

Strong performance of the Company

•

Emphasis on creating long-term, lasting shareholder

value

•

Background to the proxy contest

•

Review of shareholder proposals

•

Action taken

•

Qualifications of director nominees

Company has a Strong

Corporate Governance

Structure in Place

•

Active role and independence of the Board

•

Shareholder-friendly defense profile

•

Executive pay/compensation structure that

maximizes accountability and aligns executives’

incentives with shareholder interest

Agenda

5

SECTION 1

Performance and Business

Strategy of the Company

6

Note:

1   Massey operating and financial information as of FYE 2005 unless otherwise noted

2   Excludes refinancing cost

Massey

Snapshot

1

Utility

69%

Metallurgical

22%

Industrial

9%

Mining Type

Tons Sold by Market

Sales Breakdown

42.3 million tons shipped

Domestic

83%

Exports

17%

42.3 million tons shipped

43.1  million tons produced

Surface

43%

Underground

57%

•

Massey is an industry leading coal company

-

largest in Central Appalachia

-

fourth

largest

in

US

ranked

by

produced

coal

revenues

-

sixth largest in US ranked by tons

•

2005

produced

coal

revenues

of

$1.8

billion

and

EBITDA

of

$426

million

2

•

Shipments of 42.3 million tons in 2005 from 22 processing and shipping centers

in Central

Appalachia

•

Massey owns or controls 2.3 billion tons of metallurgical and steam quality coal

reserves

•

Approximately 5,709 employees; 97% union free

7

Coal Fundamentals and Demand

•

Internationally, coal represents approximately 24.4% of primary

energy consumption, according to the World Coal Institute

•

In

the

United

States

in

2005,

Platts

estimates

that

coal

generated

approximately 52% of the electricity produced

•

Most abundant fossil fuel—coal represents approximately 70% of

the United States’

fossil fuel reserves (on a Btu basis), according to

the U.S. Department of Energy

•

Least expensive fossil fuel for electricity generation—less than

one-third the cost per million kilowatt hours than oil and natural

gas

•

Although coal’s primary end use is electricity generation, it is also

used as a resource or raw material in many industries, including

steel, cement and paper

•

Global economic expansion is expected to drive continued strong

demand, especially in fast-growing economies such as China and

India

•

Recognition as energy source of the future—Energy Policy Act of

2005 favors coal as a future energy source

8

•

Leading coal producer in Central Appalachia

•

Poised to benefit from improved industry fundamentals

–

Large, high quality, diverse reserve base

–

Modern equipment fleet

–

Extensive infrastructure and transportation system

–

Low level of long-term liabilities compared to peers

–

Strong, experienced management team

•

Diverse customer base and long-standing customer relationships

•

Demonstrated ability to grow through strategic reserve acquisitions         

Investment Highlights

9

Notes:

1   Starting

in

2001,

the

SEC

required

Massey

to

show

reserves

on

an

“as

received”

basis,

which

includes

the

moisture

in

the

coal

on

a

delivered

basis

This

change

increased

the

reported

reserves

by

approximately

6.5%.

2   CAGR

represents

the

compounded

annual

growth

rate

which

measures

the

smoothed

year-over-year

growth

rate

of

coal

reserves

from

1987

to

2005

Coal

Reserves

Tripled

(1987–2005)

1

720

710

736

784

760

971

1,088

1,411

1,499

1,549

1,763

1,820

2,100

1,920

2,273

2,206

2,218

2,293

2,260

0

500

1,000

1,500

2,000

2,500

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

19992000

2001

2002200320042005

Demonstrated Ability to Grow Through

Strategic Reserve Acquisitions

10

Production Has Tracked Reserve Growth

Produced Tons Sold

Massey is able to adjust production in response to market conditions

13.7

16.0

16.7

15.8

17.5

19.3

19.4

23.0

26.2

30.7

31.2

31.4

30.0

32.9

3.8

5.2

7.1

11.6

13.6

16.3

18.2

14.9

14.0

13.0

10.9

9.6

10.4

9.4

17.5

21.2

23.8

27.4

31.1

35.6

37.6

37.9

40.2

43.7

42.1

41.0

40.4

42.3

0

5

10

15

20

25

30

35

40

45

92

93

94

95

96

97

98

99

00

01

02

03

04

05

Utility/Industrial Coal

Metallurgical Coal

11

Massey

has

a

very

strong

reserve

base

relative

to

its

peer

group

and

is

well

positioned for continued growth and sustainability

Source:  Company reports

Note:

1 Reserve life defined as 12/31/05 reserve base divided by 2005 production

2005 comparable reserve life

1

Reserve Life Supporting Future Growth

65

61

52

26

24

26

24

41

46

-

10

20

30

40

50

60

70

12

Underground mining poses its own challenges

Coal Sector Challenges

13

Massey has consistently expanded margins

Source:  Company reports

Proven Ability to Maintain Margin

30.14

30.85

31.44

33.74

36.52

36.33

37.57

42.07

41.88

41.75

42.39

26.97

28.56

28.66

29.14

30.20

30.99

31.76

34.73

33.95

37.20

36.90

30.74

28.66

25.00

30.00

35.00

40.00

45.00

Q1 2003

Q2 2003

Q3 2003

Q4 2003

Q1 2004

Q2 2004

Q3 2004

Q4 2004

Q1 2005

Q2 2005

Q3 2005

Q4 2005

Produced Coal Revenue / Ton

Average Cash Cost / Ton

14

Despite all of these challenges, Massey has proven its ability to grow EBITDA at

a faster pace than its peers

2003-2005

EBITDA

growth

(CAGR)

1,2,3,4

Source:  Company reports

Note:

1 EBITDA

as

disclosed

in

10k

2 Massey

EBITDA

excluding

charges

related

to

the

Company’s

debt

repurchase

and

exchange

offers

of

$212.4

million

in

2005

3 CNX

adjusted

for

$327

million

gain

on

sale

of

CNX

Gas

4 Includes

only

comparables

that

were

public

since

2003

Proven Ability to Grow EBITDA

59

54

46

21

45

-

10

20

30

40

50

60

70

15

Massey generates the highest EBITDA per ton shipped relative to its peers

…

with superior EBITDA margin

Relative

2005

EBITDA

1,2

per

tons

shipped

Relative

2005

EBITDA

1,2

margin

(%)

Source:  Company reports

Note:

1

Massey

EBITDA

excluding

charges

related

to

the

Company’s

debt

repurchase

and

exchange

offers

of

$212.4

million

in

2005

2

Consol

EBITDA

adjusted

for

$327

million

gain

on

sale

of

CNX

Gas

Superior Performance

10.1

8.5

7.2

3.6

3.5

4.6

2.1

5.4

5.6

-

3.0

6.0

9.0

12.0

24.3

19.3

18.7

11.6

8.9

15.6

8.7

16.4

17.2

-

5

10

15

20

25

30

16

On a relative basis, Massey compares favorably to the majority of its peer

group and would expect to be significantly advantaged in the future by low

levels of legacy liabilities

2005 legacy liabilities as a percentage of

net worth

1,2

Source: Company reports

Note:

1 Net worth defined as shareholders equity less intangibles

2 Arch,

Foundation

&

Peabody

shareholders

equity

and

intangibles

as

of

March

31,

2006

Low Legacy Liabilities

2005 labor structure

347

265

144

49

38

60

27

106

129

-

50

100

150

200

250

300

350

400

100

100

97

92

87

61

60

56

8

13

39

40

44

3

0

20

40

60

80

100

Union Free

Union

17

130%

310%

0

100

200

300

400

500

600

Dec-00

Apr-02

Aug-03

Dec-04

Apr-06

S&P Materials Index

MEE

310%

108%

0

100

200

300

400

500

600

Dec-00

Apr-02

Aug-03

Dec-04

Apr-06

MEE

S&P Smallcap 600

Total Returns to Shareholders

Since the spinoff, Massey has outperformed the broader industry indices

Source:

FactSet

as of April 21, 2006

Note:

1   The

S&P

Materials

Index

consists

of

companies

with

GICS

code

1510

which

are

in

the

S&P

small

cap

600

index.

This

data

is

only

available

from

12/29/00

Compared

to

S&P

Materials

Index

1

Compared

to

S&P

Smallcap

600

18

After an extended period of out-performance compared to its eastern peers,

Massey is still performing in-line despite the recent difficulties

Source: FactSet, Bloomberg as of April 21, 2006

Notes:

1   Western producers index includes Peabody, Arch Coal, Foundation Coal (December 04)

2   Eastern producers index includes Alpha Natural Resources (February 05), James River (July 04), Consol and ICG (November 04)

3   US Big Sandy spot coal price used as benchmark for eastern coal and US PRB 8800 spot price used as benchmark for western coal

Total Return Over the Past 3 Years

Total Returns to Shareholders

Indexed Coal price performance –

Over Past 3 Years

3

0

50

100

150

200

250

300

350

400

Apr-03

Jan-04

Oct-04

Jul-05

Apr-06

Eastern Coal

Western

Coal

244

181

0

100

200

300

400

500

600

700

800

Apr-03

Oct-03

Apr-04

Oct-04

Apr-05

Oct-05

Apr-06

MEE

Western

Coal

Index

¹

Eastern Coal Index

²

724

416

412

19

SECTION 2

Review of Third Point Proposals

20

September

2005

November

2005

January 2006

•

Third Point supported JANA’s proposal that the Company increase its

leverage by $1.5 billion to repurchase its shares in a Dutch auction tender

offer

•

Massey hired financial and other advisors to undertake a review of the

recapitalization alternatives, including those raised by JANA and

Third Point

•

The Company announced a capital restructuring plan that removed

approximately 6.8 million shares or 7.5% of the diluted shares

outstanding,

more

than

twice

the

average

3.2%

repurchased

by

S&P

500

companies. The Company also announced a $500 million share

repurchase program when free cash flows became available

•

Third Point filed a preliminary proxy statement soliciting proxies for the

election of two Third Point nominees to the Company’s Board

•

Third Point’s proposal is for Massey to accelerate and possibly expand

the Company’s $500 million share repurchase program

•

Senior management met with Third Point at the Howard Weil

Energy Conference

Background to the Proxy Contest

•

On

January

19,

2006,

a

fire

broke

out

at

the

Aracoma

mine,

resulting

in

two fatalities and disrupting production

•

Company

lowered

its

2006

guidance

to

shipments

of

between

44

and

47

million tons

March 2006

October 2005

•

Management spoke with JANA and Third Point to discuss their proposal

21

Debt/LTM

EBITDA

(x)

1

Debt/2006E

EBITDA

(x)

1

Debt/Cap.

(%)

1

Massey would have been the highest levered company among its peers

Note:

1

Balance sheet data as of September 30, 2005 and LTM EBITDA adjusted for non-recurring items

Source: Company reports, I/B/E/S as of November 15, 2005

Proposal for $1.5 Billion Accelerated

Buyback—Credit Impact

3.4

1.8

1.5

1.3

1.2

1.1

0.7

0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

3.1

2.7

2.3

2.3

2.1

2.1

0.5

5.7

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

CAPP

Producers

68

66

55

50

47

41

30

139

0

20

40

60

80

100

120

140

22

"

"

•

The capital restructuring program consists of:

–

Cash Tender Offer for $132mm 4.75% Convertible due 2023 to

effectively repurchase shares

–

Induced conversion for all of the $175mm 2.25% Convertible due 2024

–

Completed $760mm Private Notes Offering with a $300 million

restricted payment basket

•

The Board authorized $500 million share repurchase program in line with the

amount that is anticipated to become available under the restricted payment

basket over the next 3-5 years

•

As expected, Massey’s credit rating was downgraded by Moody’s and S&P

Massey Transaction Summary

On November 15, 2005, Massey announced a capital restructuring program to

reduce outstanding shares by 7.5% and authorized a share repurchase

program

We view the potential size of the share repurchase as reasonable and

are relieved that MEE did not overextend itself by significantly

levering

the

balance

sheet

today

in

order

to

repurchase

shares

CSFB

11/16/05

The ratings on Richmond, VA –

based coal producer Massey Energy

reflects its limited geographic diversity…

and aggressive financial

leverage.

The

ratings

also

reflect

favorable

industry

conditions

and

a

high

percentage

of

metallurgical

coal

sales.

S&P

12/01/05

"

"

23

While the Board remains committed to maximizing shareholder value under

the authorized $500 million share repurchase program, the current capital

structure limits Massey’s ability to do the entire repurchase at this time

Share Repurchase Considerations

•

Massey’s existing $335 million 6.625% Senior Unsecured Notes

due 2010

–

share repurchases are restricted to the amount of availability in the

restricted

payments

basket

(approximately

$60mm

at

this

time)

•

To undertake a larger share repurchase, Massey would need to

tender for the existing $335 million senior notes at a significant

premium

–

estimated tender cost of $16 million and incremental interest

expense of approximately $4 million/year

•

Even if Massey tenders for the existing $335 million senior notes,

given the restricted payment basket of the $760 million 6.875%

Senior Unsecured Notes, Massey can only undertake a share

repurchase of up to $300 million plus 50% of cumulative net

income

•

For illustrative purposes, the following pages assume a $500

million share repurchase and tendering for the $335 million senior

notes without the refinancing of the $760mm 6.875% Senior

Unsecured Notes

•

Additional considerations for a debt financed share repurchase

include:

–

possible two-notch credit downgrade

–

deteriorated credit metrics and weaker capital structure

–

refinance existing 6.625% notes at approximately 7.5%

24

Source: Company reports, I/B/E/S as of April 26, 2005

Notes:

1

Arch, Foundation & Peabody balance sheet data as of March 31, 2006. All others as of December 31, 2005

2

Massey

pro

forma

assumes

$750

million

of

new

debt

is

raised

to

pursue

a

$500

million

share

buyback

and

tender

for

existing

6.625%

notes at

104.75,

resulting

in

incremental

debt

of

$415

million

and

$515

million

of

net

debt

(portion

of

proceeds

of

share

buyback

assumed

to

come

from

cash

on

hand)

3     Massey EBITDA excluding charges related to the Company's debt repurchase and exchange offers of $212.4 million in 2005

4     Consol EBITDA adjusted for $327 million gain on sale of CNX Gas

Massey would be the highest levered company among its peers

Debt/2005

EBITDA

(x)

1,2,3,4

Debt/2006E

EBITDA

(x)

1,2

Debt/Cap.

(%)

1,2

Proposal for $500 million Accelerated

Buyback—Credit Impact

CAPP Producers

CAPP Producers

3.6

3.6

3.5

2.6

2.3

2.0

1.6

0.7

0.5

3.8

-

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

1.9

1.7

1.7

1.5

1.3

1.3

1.3

0.5

0.3

2.7

-

0.5

1.0

1.5

2.0

2.5

3.0

70

65

57

57

46

39

28

7

46

83

-

10

20

30

40

50

60

70

80

90

25

Proposed accelerated equity repurchase though debt issuance is likely to

cause a further 2-notch downgrade

Proposal for $500 million Accelerated

Buyback—Credit Impact

% CAPP

20%

5%

12%

100%

12%

80%

72%

100%

Outlook

Stable/Positive

Stable/Positive

Stable/Stable

Stable/Negative

na/na

Stable/Stable

Under Review/Developing

na/na

Source: Bloomberg, S&P, Moody’s

CNX

BTU

ACI

MEE

FCL

ANR

JRCC

MEE

Current

Proposal

Moody's

S&P

B2

B1

Caa

B3

Ba3

Ba2

Ba1

CCC

B-

B

B+

BB-

BB

BB+

`

26

•

Permitting for mines in Central Appalachia is a lengthy and time-

consuming process, due to regulations, particularly regarding

environmental issues

•

Thinning

coal

seams,

transportation

disruptions,

and

the

lack

of

skilled

underground miners heighten the challenge of operating in this area

•

Central Appalachian coal will lose market share to the Illinois Basin

and Northern Appalachian coal-producing regions over the next five

years

as

more

utilities

install

emission

equipment

to

remove

the

high

sulfur content in the coal from these regions

•

Central Appalachia coal production costs will continue to increase as

coal companies move into thinner coal seams

•

Difficulty in obtaining surety bonds, environmental lawsuits and

increased regulation have contributed to higher cost and declining

production

Source:

Moody’s report dated November 15, 2004 and S&P report dated August 9, 2005

Credit Rating Agencies’

Views

Operating challenges of Central Appalachia

27

•

Given Massey’s current share price, the Company has announced

the commencement of a share repurchase program

–

Proposal: undertake up to a $50 million share repurchase in

the open market immediately

–

Monitor opportunities to buy back more shares as operating

cash flows improve

Company’s Proposal

28

SECTION 3

Massey’s Director Nominees and

Corporate Governance Structure

29

Active Role

of the Board

The Board has four committees (number of members) to facilitate

active oversight on the following areas:

–

Audit Committee (6)

–

Compensation Committee (4)

–

Governance and Nominating Committee (8)

–

Safety, Environmental and Public Policy Committee (4)

All of the foregoing committees are chaired and staffed by

independent directors 

Independence

of the Board

In 2005, there were 23 committee meetings and 8 Board meetings

8 out of 9 directors on the current Board are independent

The Governance and Nominating Committee reviews the

independence of its directors every year

The Company has an independent Lead Director who presides over

the meetings of the independent directors that occur prior to each

regularly scheduled meeting of the Board of Directors

Defense 

Profile

The Company does not have a poison pill

Cumulative voting is allowed in the election of directors, which

benefits minority stockholders

At the upcoming 2006 annual shareholders’ meeting, the Board is

proposing to lower the requirement for amendment of the

Company’s restated Bylaws by shareholders from 80% to 67% of

the total outstanding shares

The Company has a strong corporate governance and culture in place

that prioritizes shareholder interest

Corporate Governance Structure

30

Company believes that each of its Director nominees is well-qualified to be a

credible, valuable and independent voice on the Board, and brings a unique set

of skills and experiences needed on the Board at this time

Dr. John C. Baldwin

Mr. James B. Crawford

Chancellor E. Gordon Gee

Relevant

Experience

President & CEO of the CBR Institute

for Biomedical Research, Inc.,

affiliated with Harvard Medical School

Broad experience previously leading

various organizations over many years

Has a medical and healthcare

background

Chairman of InterAmerican Coal

Holding N.V. and a consultant to Evan

Energy Investments, LC, both

international coal companies

Founder of James River Coal Company

and served as its Chairman and CEO

for 15 years

Past President & CEO of Transco

Coal Company and past EVP of A.T.

Massey Coal Company, Inc.

Chancellor of Vanderbilt University

since 2000

Has been Chancellor or President of

several other nationally renowned,

public and private universities over 

25 years

Judicial Fellow and Senior Staff

Assistant to the former Chief Justice of

the United States

Has a legal and educational training

background

Other

Directorships

Board member since 11/15/04

Serves as a director for another

NYSE company

Director for 12 years of a large trust

company with a focus on energy

Serves on the audit committee of three

companies

Board member since 2/7/05

Has served as a Director or trustee of

private companies, banks, and industry,

civic and other organizations

Board member since 11/30/00, when

the Company became a stand-alone

public entity

Director for many years of four other

NYSE companies

Director or trustee for numerous

national and other organizations

Qualifications

Degrees from Harvard College and

Stanford University

Rhodes scholar

Graduate of the Stanford Law School

program for public company directors

and officers

Authored over 400 publications, and

delivered over 350 lectures

Graduate of the New York University

Graduate School of Business

Degree in economics from

Colby College

Law and education degrees from

Columbia University

Attended multiple public company

programs of the National Association

of Corporate Directors

Co-authored six books and over 25

published papers and articles

Qualifications of Massey's

Director Nominees

The current Board of Directors is highly qualified to oversee Massey’s management

team as well as the Company’s long-term strategy to create shareholder value

31

Massey Leadership and Oversight

•

Massey’s senior executive management has an average of 24 years of

experience in the industry and is highly qualified to:

enhance profitability through continued safety improvements, productivity

gains and cost containment

adjust production in response to changes in market conditions

expand use of more productive and lower-cost mining methods

form strategic contractual arrangements with major customers

complete “Tuck in”

acquisitions where attractive

Highly Qualified Leadership Team

32

Base

Salary

Determined by the Compensation Committee by reviewing the guidance pay within the compensation

peer group and taking into consideration any extenuating circumstances

The Compensation Committee considers (i) the term of any employment contract with the executive, if

any, (ii) the recommendation of the CEO, (iii) salary norms, (iv) the person’s experience and (v) an

assessment of each executive’s performance and contribution to the Company 

Annual

Incentive

Program

Approximately 100 of the Company’s employees participate in this program, including all of its top

level executive officers

Compensation for attainment of Company and individual performance objectives 

Determinants of the target amounts include Earnings Before Interest and Taxes, specific performance

goals (such as coal production, coal shipments, cost containment, coal reserve acquisitions, safety

performances, etc.) and discretion of the Compensation Committee

Long-Term

Incentive

Program

Approximately 250 employees participate in this program, which consists of:

–

cash incentives awards that are based upon meeting earnings or other financial targets

–

stock options that have value only if shareholder value is increased

–

restricted stock awards

–

restricted unit awards

LTIP Awards are typically granted once a year to cover a 3-year performance period

Change in Control

Severance

Agreements

Standard change of control severance agreements with all of its Named Executive Officers and

approximately 40 other key employees to retain them in the event of uncertainty surrounding a

potential or actual change in control by providing attractive incentives to continue working for the

Company during such time

Agreements with CEO

and CAO

To retain and incentivize the Company’s top executives

During 2005, the Compensation Committee approved agreements with its top two officers to retain

their services and incentivize their efforts to enhance shareholder value

The Compensation Committee has established executive compensation

programs it believes attract, retain, develop and motivate the Company’s highly

qualified executive team. The Compensation Committee periodically reviews the

competitiveness of its executive compensation programs with the guidance of an

independent consulting firm. The current structure includes:

Executive Compensation Structure

33

•

Massey’s management and Board are committed to a business

strategy that has generated above-average shareholder returns

•

Current business strategy focuses on creating long-term,

sustainable shareholder value in the face of the volatility and

issues inherent in operating in Central Appalachia

•

Board believes that accelerating the $500 million share

repurchase with new debt today is not fiscally prudent nor is

it in the long-term interest of shareholders

-

the Board is committed to a share repurchase program

when cash flows are realized

-

the Company is already executing the program beginning

with the $50 million announced

•

Massey’s director nominees and the remainder of the Board

have played an active and independent role in the stewardship

of the Company

•

The Company has a strong corporate governance structure

and culture that prioritizes shareholder value

•

The Company under its current management and Board is

well positioned to continue its proven track record

Closing Remarks

34

Disclaimer

FORWARD-LOOKING STATEMENTS: Certain statements in this presentation are forward-looking as defined

by the Private Securities Litigation Reform Act of 1995.  Such forward-looking statements are based on facts and

conditions

as

they

exist

at

the

time

such

statements

are

made

as

well

as

predictions

as

to

future

facts

and

conditions

the

accurate

prediction

of

which

may

be

difficult

and

involve

the

assessment

of

events

beyond

the

Company’s control. Caution must be exercised in relying on forward-looking statements. Due to known and

unknown risks, the Company’s actual results may differ materially from its expectations or projections. Factors

potentially contributing to such differences include, among others: market demand for coal, electricity and steel

which could adversely affect the Company’s operating results and cash flows; future economic or capital market

conditions; deregulation of the electric utility industry; competition in coal markets; inherent risks of coal mining

beyond the Company’s control, including weather and geologic conditions; the Company’s ability to expand

mining capacity; the Company’s production capabilities; the Company’s plan and objectives for future operations

and expansion or consolidation; failure to receive anticipated new contracts; customer cancellations of, or

breaches to, existing contracts; customer delays or defaults in making payments; the Company’s ability to

manage production costs; the Company’s ability to timely obtain necessary supplies and equipment; the

Company’s ability to attract, train and retain a skilled workforce; fluctuations in the demand for, price and

availability of, coal due to labor and transportation costs and disruptions, governmental policies and regulatory

actions, legal and administrative proceedings, settlements, investigations and claims, foreign currency changes

and other factors; and greater than expected environmental and safety regulation, costs and liabilities. The

forward-looking statements are also based on various operating assumptions regarding, among other things,

overhead costs and employment levels that may not be realized. While most risks affect only future costs or

revenues anticipated by the Company, some risks might relate to accruals that have already been reflected in

earnings.

The

Company’s

failure

to

receive

payments

of

accrued

amounts

could

result

in

a

charge

against

future

earnings. Information concerning those factors is available in the Company’s Annual Reports on Form 10-K and

Quarterly Reports on Form 10-Q.

NON-GAAP INFORMATION: Included in this presentation are EBITDA results, which is defined as income

before interest and taxes, depreciation, depletion and amortization. Although EBITDA is not a measure of

performance calculated in accordance with generally accepted accounting principles, management believes that

it

is

useful

to

an

investor

in

evaluating

the

Company

because

it

is

widely

used

in

the

coal

industry

as

a

measure

to

evaluate a company’s operating performance before debt expense and as a measure of its cash flow. EBITDA

does not purport to represent operating income, net income or cash generated by operating activities and should

not be considered in isolation or as a substitute for measures of performance in accordance with generally

accepted accounting principles. In addition, because EBITDA is not calculated identically by all companies, the

presentation here may not be comparable to other similarly titled measures of other companies. Reconciliations

of adjusted EBITDA can be found in the Company’s earnings press release for the relevant periods.