form10-q.htm


SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
 
 
 
þ
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2007
OR
 
 
 
o
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                                                             to                                                              
Commission File No. 1-32423
ALPHA NATURAL RESOURCES, INC.
(Exact name of registrant as specified in its charter)
 
 
 
Delaware
 
02-0733940
(State or other jurisdiction of
 
(I.R.S. Employer
incorporation or organization)
 
Identification Number)
 
 
 
One Alpha Place, P.O. Box 2345, Abingdon, VA
 
24212
(Address of principal executive offices)
 
(Zip Code)
Registrant’s telephone number, including area code:
 (276) 619-4410
     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. þ Yes ¨ No

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

þ Large accelerated filer      o Accelerated filer      ¨ Non-accelerated filer

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
¨ Yes þ  No

     Number of shares of the registrant’s Common Stock, $0.01 par value, outstanding as of July 31, 2007 — 65,512,287.




 


TABLE OF CONTENTS
 
 
 
 
  
 
 
Page
 
  
PART I
 
 
 
  
 
 
 
 
  
Item 1. Financial Statements
 
  
 
  
 
  2
 
  
 
  3
 
  
 
  4
 
  
 
  6
 
  
 
  25
 
  
 
  37
 
  
 
  37
 
  
 
 
  
 
  
PART II
 
  
 
  
 
 
  
 
  
   39    
 
  39
 
  
 
  39
 
  
 
  39
 
  



 Item 1. Financial Statements
ALPHA NATURAL RESOURCES, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (Unaudited)
(In thousands, except share and per share amounts)
 
 
June 30,
 
 
December 31,
 
 
 
2007
 
 
2006
 
Assets
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
8,655
 
 
$ 
33,256
 
Trade accounts receivable, net
 
 
146,525
 
 
 
171,195
 
Notes and other receivables
 
 
6,166
 
 
 
6,466
 
Inventories
 
 
90,447
 
 
 
76,844
 
Prepaid expenses and other current assets
 
 
39,574
 
 
 
50,893
 
Total current assets
 
 
291,367
 
 
 
338,654
 
 
 
 
 
 
 
 
  
 
Property, plant, and equipment, net
 
 
681,571
 
 
 
637,136
 
Goodwill
 
 
20,547
 
 
 
20,547
 
Other intangibles, net
 
 
10,185
 
 
 
11,720
 
Deferred income taxes
 
 
93,563
 
 
 
94,897
 
Other assets
 
 
48,965
 
 
 
42,839
 
Total assets
 
$
1,146,198
 
 
$ 
1,145,793
 
 
 
 
 
 
 
 
  
 
Liabilities and Stockholders’ Equity
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
  
 
Current liabilities:
 
 
 
 
 
 
  
 
Current portion of long-term debt
 
$
3,230
 
 
$ 
3,254
 
Note payable
 
 
7,088
 
 
 
20,941
 
Bank overdraft
 
 
11,065
 
 
 
23,814
 
Trade accounts payable
 
 
68,217
 
 
 
75,986
 
Deferred income taxes
 
 
6,940
 
 
 
7,601
 
Accrued expenses and other current liabilities
 
 
84,901
 
 
 
90,594
 
Total current liabilities
 
 
181,441
 
 
 
222,190
 
 
 
 
 
 
 
 
  
 
Long-term debt, net of current portion
 
 
434,816
 
 
 
421,456
 
Workers’ compensation benefits
 
 
9,086
 
 
 
7,169
 
Postretirement medical benefits
 
 
53,669
 
 
 
50,712
 
Asset retirement obligation
 
 
81,611
 
 
 
69,495
 
Deferred gains on sale of property interests
 
 
3,429
 
 
 
3,885
 
Other liabilities
 
 
16,277
 
 
 
26,837
 
Total liabilities
 
 
780,329
 
 
 
801,744
 
Minority interest 
 
 
980
 
 
 
—
 
Commitments and contingencies
                
Stockholders’ equity:
 
 
 
 
 
 
  
 
Preferred stock — par value $0.01, 10,000,000 shares authorized, none issued
 
 
—
 
 
 
—
 
Common stock — par value $0.01, 100,000,000 shares authorized, 65,517,630 and 64,964,287 shares issued and outstanding at June 30, 2007 and December 31, 2006, respectively
 
 
655
 
 
 
650
 
Additional paid-in capital
 
 
218,121
 
 
 
215,020
 
Accumulated other comprehensive loss
 
 
(14,381
)
 
 
(19,019
) 
Retained earnings
 
 
160,494
 
 
 
147,398
 
Total stockholders’ equity
 
 
364,889
 
 
 
344,049
 
 
 
 
  
 
 
 
  
 
Total liabilities and stockholders’ equity
 
$
1,146,198
 
 
$ 
1,145,793
 
 
 
 
 
 
 
 
See accompanying notes to condensed consolidated financial statements.







ALPHA NATURAL RESOURCES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income (Unaudited)
(In thousands, except share and per share amounts)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three months ended
 
 
Six months ended
 
 
 
June 30,
 
 
June 30,
 
 
 
2007
 
 
2006
 
 
2007
 
 
2006
 
Revenues:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Coal revenues
 
$
386,130
 
 
$
437,323
 
 
$
763,060
 
 
$
861,854
 
Freight and handling revenues
 
 
41,588
 
 
 
50,935
 
 
 
84,799
 
 
 
97,327
 
Other revenues
 
 
6,548
 
 
 
8,053
 
 
 
13,778
 
 
 
19,470
 
Total revenues
 
 
434,266
 
 
 
496,311
 
 
 
861,637
 
 
 
978,651
 
Costs and expenses:
 
 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
Cost of coal sales (exclusive of items shown separately below)
 
 
320,807
 
 
 
345,505
 
 
 
630,062
 
 
 
676,391
 
Freight and handling costs
 
 
41,588
 
 
 
50,935
 
 
 
84,799
 
 
 
97,327
 
Cost of other revenues
 
 
4,768
 
 
 
5,445
 
 
 
10,396
 
 
 
13,396
 
Depreciation, depletion and amortization
 
 
37,855
 
 
 
34,207
 
 
 
73,644
 
 
 
67,841
 
Selling, general and administrative expenses (exclusive of depreciation and amortization shown separately above)
 
 
13,982
 
 
 
18,013
 
 
 
27,221
 
 
 
34,652
 
Total costs and expenses
 
 
419,000
 
 
 
454,105
 
 
 
826,122
 
 
 
889,607
 
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
 
 
Income from operations
 
 
15,266
 
 
 
42,206
 
 
 
35,515
 
 
 
89,044
 
 
 
 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
Other income (expense):
 
 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
Interest expense
 
 
(10,030
)
 
 
(10,786
)
 
 
(20,023
)
 
 
(21,063
)
Interest income
 
 
457
 
 
 
171
 
 
 
1,094
 
 
 
358
 
Miscellaneous income, net
 
 
512
 
 
 
213
 
 
 
554
 
 
 
296
  
Total other income (expense), net
 
 
(9,061
)
 
 
(10,402
)
 
 
(18,375
)
 
 
(20,409
)
Income before income taxes and minority interest
 
 
6,205
 
 
 
31,804
 
 
 
17,140
 
 
 
68,635
 
Income tax expense
 
 
1,502
 
 
 
8,676
 
 
 
4,131
 
 
 
18,296
 
Minority interest
 
 
(44
) 
 
 
—
 
 
 
(87
) 
 
 
—
 
Net Income
 
$
4,747
 
 
$ 
23,128
 
 
$ 
13,096
 
 
$ 
50,339
 
 
 
 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
Net income per share
 
 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
Basic and diluted:
 
$
0.07
 
 
$ 
0.36
 
 
$
0.20
 
 
 $
0.79
 
                                 
See accompanying notes to condensed consolidated financial statements.










ALPHA NATURAL RESOURCES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
 
 
 
 
 
 
 
 
 
 
 
Six months ended
 
 
 
June 30,
 
 
 
2007
 
 
2006
 
Operating activities:
 
 
 
 
 
 
 
 
Net income
 
$
13,096
 
 
$ 
50,339
  
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
 
 
    
Depreciation, depletion and amortization
 
 
73,644
 
 
 
67,841
  
Amortization of debt issuance costs
 
 
1,140
 
 
 
1,132
  
Accretion of asset retirement obligation
 
 
3,123
 
 
 
2,246
  
Change in fair value of derivative instruments
 
 
(840
) 
 
 
(4,336
)
Share based compensation
 
 
4,064
 
 
 
9,945
  
Amortization of deferred gains on sales of property interests
 
 
(493
)
 
 
(488
)
Amortization of deferred gain on railroad incentives
 
 
—
  
 
 
(154
)
Gain on sale of fixed assets, net
 
 
(1,650
)
 
 
(134
)
Loss on settlement of asset retirement obligation
 
 
—
 
 
 
322
  
Provision for non-recoupable advance royalties
 
 
189
 
 
 
469
 
Minority interest
 
 
(87
) 
 
 
—
 
Deferred income taxes
 
 
(854
) 
 
 
5,274
 
Other
 
 
196
 
 
 
116
 
Changes in operating assets and liabilities:
 
 
 
 
 
 
 
 
Trade accounts receivable
 
 
24,512
  
 
 
(12,198
)
Notes and other receivables
 
 
(1,036
) 
 
 
4,558
  
Inventories
 
 
(6,857
) 
 
 
4,349
  
Prepaid expenses and other current assets
 
 
8,647
  
 
 
3,325
 
Other assets
 
 
(6,831
)
 
 
(1,934
)
Trade accounts payable
 
 
(6,339
)
 
 
(20,891
) 
Accrued expenses and other current liabilities
 
 
(1,866
)
 
 
(14,227
)
Workers’ compensation benefits
 
 
1,941
  
 
 
(928
)
Postretirement medical benefits
 
 
4,125
 
 
 
4,413
 
Asset retirement obligation
 
 
(3,327
) 
 
 
615
  
Other liabilities
 
 
(2,189
) 
 
 
773
 
Net cash provided by operating activities
 
 
102,308
 
 
 
100,427
  
                 







ALPHA NATURAL RESOURCES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (Unaudited) — (Continued)
(In thousands)
 
 
 
 
 
 
 
 
 
 
 
Six months ended
 
 
 
June 30,
 
 
 
2007
 
 
2006
 
Investing activities:
 
 
 
 
 
 
 
 
Capital expenditures
 
$
(71,655
)
 
$ 
(84,000
)
Proceeds from disposition of property, plant, and equipment
 
 
2,559
 
 
 
264
 
Purchase of equity investment
 
 
(147
)
 
 
(107
)
Purchase of net assets of acquired companies
 
 
(43,890
)
 
 
(28,273
)
Collections on note receivable from coal supplier
 
 
—
 
 
 
3,000
 
Other
 
 
(630
) 
 
 
—
  
 
 
 
 
 
 
 
 
 
Net cash used in investing activities
 
 
(113,763
)
 
 
(109,116
)
 
 
 
 
 
 
 
 
 
Financing activities:
 
 
 
 
 
 
 
 
Repayments of notes payable
 
 
(13,853
)
 
 
(50,232
)
Proceeds from issuance of long-term debt
 
 
15,000
 
 
 
200,000
 
Repayments on long-term debt
 
 
(1,664
)
 
 
(171,806
)
Decrease in bank overdraft
 
 
(12,749
)
 
 
(2,649
) 
Distributions to prior members of ANR Holdings, LLC subsequent to Internal Restructuring
 
 
—
  
 
 
(2,400
)
Proceeds from exercise of stock options
 
 
120
 
 
 
954
 
 
 
 
 
 
 
 
 
 
Net cash used by financing activities
 
 
(13,146
)
 
 
(26,133
) 
 
 
 
 
 
 
 
 
 
Net decrease in cash and cash equivalents
 
 
(24,601
)
 
 
(34,822
) 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents at beginning of period
 
 
33,256
 
 
 
39,622
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents at end of period
 
$
8,655
 
 
$ 
4,800
 
                 
See accompanying notes to condensed consolidated financial statements.








ALPHA NATURAL RESOURCES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
June 30, 2007
 (In thousands, except percentages and share data)

(1) Business and Basis of Presentation

Organization and Business

Alpha Natural Resources, Inc. and its operating subsidiaries (the “Company”) are engaged in the business of extracting, processing and marketing coal from deep and surface mines, located in the Central and Northern Appalachian regions of the United States, for sale to utility and steel companies in the United States and in international markets.

Basis of Presentation
 
The accompanying interim condensed consolidated financial statements have been prepared in accordance with U.S generally accepted accounting principles for interim financial reporting. Accounting measurements at interim dates inherently rely on estimates more than at year-end; however, in the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Results of operations for the six months ended June 30, 2007 are not necessarily indicative of the results to be expected for the year ending December 31, 2007. Certain prior period amounts have been reclassified to conform to the current period presentation. These financial statements should be read in conjunction with the audited financial statements and related notes as of and for the year ended December 31, 2006 included in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission.
 
(2) Earnings Per Share

Basic earnings per share are computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share are computed using the treasury method by dividing net income by the weighted average number of shares of common stock and dilutive common stock equivalents outstanding during the period. Common stock equivalents include the number of shares issuable upon exercise of outstanding options less the number of shares that could have been purchased with the proceeds from the exercise of the options based on the average price of common stock during the period. Restricted shares which have not vested at the end of the reporting period are excluded from the calculation of basic earning per share. The number of stock options which were not included in the calculation of diluted earnings per share because to do so would have been antidilutive in the six months ended June 30, 2007 and 2006 was 1,010,502 and 1,109,693, respectively. The number of restricted shares which were not included in the calculation of diluted earnings per share because to do so would have been antidilutive in the six months ended June 30, 2007 and 2006 was 698,327 and 741,455, respectively.








The computations of basic and diluted net income per share are set forth below:

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended June 30,
 
 
Six Months Ended June 30,
 
 
 
2007
 
 
2006
 
 
2007
 
 
2006
 
Numerator:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
 
$
4,747
 
 
$
23,128
 
 
$
13,096
 
 
$
50,339
 
 
 
 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
Denominator:
 
 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
Weighted average shares — basic
 
 
64,588,324
 
 
 
64,012,586
 
 
 
64,583,769
 
 
 
63,907,353
 
Dilutive effect of stock options and restricted stock awards
 
 
253,374
 
 
 
182,153
 
 
 
205,733
 
 
 
151,109
 
Weighted average shares — diluted
 
 
64,841,698
 
 
 
64,194,739
 
 
 
64,789,502
 
 
 
64,058,462
 
 
 
 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
Net income per basic and diluted share:
 
$
0.07
 
 
$
0.36
 
 
$
0.20
 
 
$
0.79
 
                                 



(3) Inventories
   
Inventories consisted of the following:

 
 
 
 
 
 
 
 
 
 
 
June 30,
 
 
December 31,
 
 
 
2007
 
 
2006
 
Raw coal
 
$
8,444
 
 
$
8,868
 
Saleable coal
 
 
67,830
 
 
 
53,428
 
Equipment for resale
    
2,101
      
1,774
  
Materials and supplies
 
 
12,072
 
 
 
12,774
 
 
 
 
 
 
 
 
 
 
Total inventories
 
$
90,447
 
 
$
76,844
 
 
 
 
 
 
 
 







(4) Long-Term Debt
 
     Long-term debt consisted of the following:
 
 
 
 
 
 
 
 
 
 
 
June 30,
 
 
December 31,
 
 
 
2007
 
 
2006
 
Term loan
 
$
246,250
 
 
$
247,500
 
10% Senior notes due 2012
 
 
175,000
 
 
 
175,000
 
Capital lease obligations
 
 
1,096
 
 
 
1,510
 
Revolving credit facility
    
15,000
      
—
  
Other
    
700
      
700
  
Total long-term debt
 
 
438,046
 
 
 
424,710
 
Less current portion
 
 
3,230
 
 
 
3,254
 
Long-term debt, net of current portion
 
$
434,816
 
 
$
421,456
 
 
 
 
 
 
 
On June 28, 2007, the Company’s subsidiaries, Alpha NR Holding, Inc. (“Holdings”) and Alpha Natural Resources, LLC (“ANR LLC”), entered into an amendment and consent (the “Amendment”) to the Credit Agreement, dated as of October 26, 2005 (the “Credit Agreement”), among Holdings, ANR LLC (as borrower), the lenders and issuing banks party thereto from time to time, and Citicorp North America, Inc., as administrative agent and as collateral agent for the lenders and issuing banks. The Amendment amended the Credit Agreement to, among other things, permit the merger of Holdings into its direct parent, the Company.  The Company assumed the obligations of Holdings under the Credit Agreement and related guaranty and collateral agreement and became a parent guarantor of the 10% Senior Notes due 2012 co-issued by ANR LLC and Alpha Natural Resources Capital Corp in 2004. The Amendment also increased the maximum amount of permitted receivables financing from $75,000 to $150,000.

The Credit Agreement and the Senior Notes each place restrictions on the ability of ANR LLC and its subsidiaries to make distributions or loans to the Company. At June 30, 2007, ANR LLC had net assets of $350,023 and, except for allowable distributions for the payment of income taxes, administrative expenses and, in certain circumstances, dividends or repurchases of common stock of the Company, the net assets of ANR LLC are restricted.

All of the Company borrowings under the credit facility are at a variable rate, so the Company is exposed to the effect of rising interest rates. As of June 30, 2007, the Company has a $246,250 term loan outstanding with a variable interest rate based upon the 3-month London Interbank Offered Rate (“LIBOR”) (5.36% at June 30, 2007) plus the applicable margin (1.75%, at June 30, 2007). To reduce the Company's exposure to rising interest rates, effective May 22, 2006, the Company entered into a pay-fixed, receive variable interest rate swap on the notional amount of $233,125 for a period of approximately six and one-half years. In effect, this swap converted the variable interest rates based on LIBOR to a fixed interest rate of 5.59% plus the applicable margin defined in the debt agreement for a portion of our term loan. The Company accounts for the interest rate swap as a cash flow hedge and changes in fair value of the swap are recorded to other comprehensive income (loss). The critical terms of the swap and the underlying debt instrument that it hedges coincide, resulting in no hedge ineffectiveness being recognized in the income statement during the quarter ended June 30, 2007. Settlements paid on the swap agreement for the six months ended June 30, 2007 were $274. The fair value of the swap at June 30, 2007 is an obligation of $2,250 ($1,693 net of tax) and is reflected in other liabilities in the consolidated balance sheet. As interest expense is accrued on the debt obligation, amounts in accumulated other comprehensive loss related to the derivative hedging instrument are reclassified into earnings to obtain a net cost on the debt obligation of 5.59% plus the applicable margin.

(5) Asset Retirement Obligation
 
At June 30, 2007 and December 31, 2006, the Company has recorded asset retirement obligation accruals for mine reclamation and closure costs totaling $90,025 and $77,292, respectively. The portion of the costs expected to be incurred within a year in the amounts of $8,414 and $7,797 at June 30, 2007 and December 31, 2006, respectively, are included in accrued expenses and other current liabilities. At June 29, 2007, the Company acquired certain coal mining assets and assumed certain obligations in West Virginia from Arch Coal, which included asset retirement obligations of $12,107. These regulatory obligations are secured by surety bonds in the amount of $145,642 at June 30, 2007 and $138,013 at December 31, 2006. Changes in the reclamation obligation were as follows:



 
 
 
 
 
Total asset retirement obligation at December 31, 2006
 
$
77,292
 
 
 
 
 
 
Accretion for the period
 
 
3,123
 
Sites added during the period
 
 
867
 
Expenditures for the period
 
 
(3,328
)
Change in estimates during the period
 
 
(36
) 
Acquisition during the period
 
 
12,107
 
Total asset retirement obligation at June 30, 2007
 
$
90,025
 


(6) Share-Based Compensation Awards

     Stock option activity for the six months ended June 30, 2007 is summarized in the following table:

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted-
 
 
 
 
 
 
 
Weighted-
 
 
Average
 
 
 
 
 
 
 
Average
 
 
Remaining
 
 
 
Number of
 
 
Exercise
 
 
Contract
 
 
 
Shares
 
 
Price
 
 
Life (Years)
 
Outstanding at December 31, 2006
 
 
1,137,398
 
 
$
16.64
 
 
 
 
 
Forfeited/Cancelled
 
 
(114,841
)
 
$
15.57
 
 
 
 
 
Exercised
    
(12,055
)
  
$
13.77
          
Outstanding at June 30, 2007
 
 
1,010,502
 
 
$
16.81
 
 
 
7.55
 
                         
Exercisable at June 30, 2007
 
 
348,369
 
 
$
17.11
 
 
 
7.55
 
 
 
 
 
 
 
 
 
 
 
 
The aggregate intrinsic value of options outstanding at June 30, 2007 was $4,022 and the aggregate intrinsic value of exercisable options was $1,282. The total intrinsic value of options exercised during the three months ended June 30, 2007 and 2006 was $70 and $243, respectively, and for the six months ended June 30, 2007 and 2006 was $70 and $361, respectively.  Cash received from the exercise of stock options during the three months ended June 30, 2007 and 2006 was $120 and $544, respectively, and $120 and $954 during the six months ended June 30, 2007 and 2006, respectively. As of June 30, 2007, $3,879 of unrecognized compensation cost related to stock options is expected to be recognized as expense over a weighted-average period of 2.53 years.

Restricted Stock Awards

Non-vested share award activity for the six months ended June 30, 2007 is summarized in the following table:

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted-
 
 
 
 
 
 
 
Average
 
 
 
Number of
 
 
Grant Date
 
 
 
Shares
 
 
Fair Value
 
Non-vested shares outstanding at December 31, 2006
 
 
471,341
 
 
$
21.34
 
Granted
 
 
606,277
 
 
 
12.75
 
Vested
 
 
(125,925
)
 
 
21.04
 
Forfeited
 
 
(47,633
) 
 
 
15.18
 
Non-vested shares outstanding at June 30, 2007
 
 
904,060
 
 
$
15.94
 
                 
 
The fair value of non-vested share awards is estimated based on the average of the high and low market stock price on the date of grant, and, for purposes of expense recognition, the total number of awards expected to vest is adjusted for estimated forfeitures. As of June 30, 2007, there was $11,148 of unamortized compensation cost related to non-vested shares, which is expected to be recognized as expense over a weighted-average period of 2.09 years.






Performance Units
 
2007 Award
 
The Company granted 373,422 performance share awards during the first six months of 2007, of which 330,519 remain outstanding as of June 30, 2007. Recipients of these awards can receive shares of the Company's common stock at the end of a performance period which ends on December 31, 2009, based on the Company's actual performance against pre-established operating income goals, strategic goals, and total shareholder return goals. In order to receive the shares, the recipient must also be employed by the Company on the vesting date. The performance share awards represent the number of shares of common stock to be awarded based on the achievement of targeted performance and may range from 0 percent to 150 percent of the targeted amount. The grant date fair value of the awards related to operating income targets is based on the closing price of the Company's common stock on the New York Stock Exchange on the grant date of the award and is being amortized over the performance period. The awards related to strategic goals do not meet the criteria for grant date pursuant to SFAS No. 123R and the Company has assessed the likelihood of achieving the performance goal as not probable at June 30, 2007. The fair value of the awards related to total shareholder return targets is based upon a Monte Carlo simulation and is being amortized over the performance period. The Company reassesses at each reporting date whether achievement of each of the performance conditions is probable, as well as estimated forfeitures, and adjusts the accruals of compensation expense as appropriate. At June 30, 2007, the Company has assessed the operating income and total shareholder return targets as probable of achievement. As of June 30, 2007, there was $3,779 of unamortized compensation cost related to the 2007 performance share awards which is expected to be recognized over the period ending December 31, 2009.
 
Share-based compensation expense measured in accordance with SFAS 123R totaled $1,393 ($1,048 on a net-of-tax basis, or $0.02 per basic and diluted share) and $6,112 ($4,600 on a net-of-tax basis, or $0.07 per basic and diluted share) for the three months ended June 30, 2007 and 2006, respectively.  Share-based compensation expense measured in accordance with SFAS 123R totaled $4,028 ($3,031 on a net-of-tax basis, or $0.05 per basic and diluted share) and $9,945 ($7,485 on a net-of-tax basis, or $0.12 per basic and diluted share) for the six months ended June 30, 2007 and 2006, respectively.
 
Approximately 70% of share-based compensation expense is reported as selling, general and administrative expenses, approximately 30% is reported as a component of cost of sales, and both are included in the Corporate and Eliminations category for segment reporting purposes (Note 10).  At June 30, 2007, approximately $192 of stock-based compensation costs was capitalized as a component of inventories. Under SFAS 123R, the Company is required to report the benefits of income tax deductions that exceed recognized compensation as cash flow from financing activities. Such excess tax benefits were insignificant for the periods ended June 30, 2007 and 2006.
 
(7) Derivative Financial Instruments
 
Derivative financial instruments are accounted for in accordance with SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities. SFAS No. 133 requires all derivative financial instruments to be reported on the balance sheet at fair value. Changes in fair value are recognized either in earnings or equity, depending on whether the transaction qualifies for hedge accounting and if so, the nature of the underlying exposure being hedged and how effective the derivatives are at offsetting price movements in the underlying exposure.
 
The Company accounts for certain forward sale and forward purchase contracts that do not qualify under the “normal purchase and normal sale” exception of SFAS No. 133 as derivatives and records these contracts as assets or liabilities at fair value. These contracts do not currently qualify for hedge accounting. Accordingly, changes in fair value for forward sales and forward purchase contracts have been recorded in revenue and cost of sales, respectively. At June 30, 2007, the Company had unrealized gains (losses) on open sales and open purchase contracts of $1,817 and ($1,847), respectively. These amounts are recorded in prepaid expenses and other current assets and accrued expenses and other current liabilities, respectively.
 
The Company has utilized interest rate swap agreements to modify the interest characteristics of a portion of the Company's outstanding debt. The swap agreements essentially convert variable-rate debt to fixed-rate debt and have been designated as cash flow hedges.
 
The Company is also exposed to the risk of fluctuations in cash flows related to its purchase of diesel fuel. The Company has entered into two financial diesel fuel swap agreements to reduce the volatility in the price of diesel fuel for its operations for the last six months of 2007. The diesel fuel swap agreements are not designated as a hedge for accounting purposes, and therefore the changes in the fair value for these contracts have been recorded in cost of sales. The unrealized gain or loss is recorded in other current assets or other current liabilities, respectively, depending upon the market value of the swap agreement.
 
Approximately 4,000 gallons or 29 percent of the Company's remaining anticipated 2007 fuel usage has been fixed with the swap agreements.  At June 30, 2007, the Company had unrealized gains on open purchased contracts of $1,018. This amount was recorded in other current assets in the consolidated balance sheet at June 30, 2007.







 (8) Postretirement Benefits Other Than Pensions

The following table details the components of the net periodic benefit cost for the Company’s retiree medical plan (the Plan):

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 
Six Months Ended
 
 
 
June 30,
 
 
June 30,
 
 
 
2007
 
 
2006
 
 
2007
 
 
2006
 
Service cost
 
$
536
 
 
$
859
 
 
$
1,496
 
 
$
1,920
 
Interest cost
 
 
820
 
 
 
766
 
 
 
1,526
 
 
 
1,413
 
Amortization of net actuarial (gain) or loss
 
 
(47
) 
 
 
85
 
 
 
—
 
 
 
93
 
Amortization of prior service cost
 
 
599
 
 
 
489
 
 
 
1,167
 
 
 
1,136
 
Net periodic benefit cost
 
$
1,908
 
 
$
2,199
 
 
$
4,189
 
 
$
4,562
 
                                 

Employer contributions for postretirement medical benefits paid for the six months ended June 30, 2007 and 2006 were $65 and $0, respectively. Employee contributions are not expected to be made and the Plan is unfunded.
 
Two of the Company’s subsidiaries are required to make contributions to the 1974 UMWA Pension Plan and Trust and/or the 1993 UMWA Benefit Plan.  The contributions made to these plans for the three months and six months ended June 30, 2007 were $353 and $734, respectively.

(9) Related Party Transactions As of December 31, 2006

The Company had the following receivable balances from affiliated parties as of December 31, 2006:

 
 
 
 
 
 
 
 
 
December 31,
 
 
 
 
2006
 
AMCI
 
 
$
5,097
 
Robindale Energy & Subsidiary
 
 
 
11
 
Total
 
 
$
5,108
 
           

AMCI is no longer a related party. During 2006, AMCI sold a significant number of shares of Company common stock to reduce its holdings to below five percent and its designee on the Company's Board of Directors resigned effective January 3, 2007. Also, Robindale Energy is no longer a related party since its 50% owner is no longer the Company's Executive Vice President. As of December 31, 2006, $5,097 of receivables from AMCI is included in trade accounts receivable, net. The majority of the AMCI receivables as of December 31, 2006 relate to coal sales transactions in the normal course of business.
     




 (10) Segment Information

     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 the Central Appalachian and Northern Appalachian regions. The Company has one reportable segment: Coal Operations, which as of June 30, 2007, consisted of 34 underground mines and 28 surface mines located in Central Appalachia and Northern Appalachia. Coal Operations also includes the Company's coal sales function, which markets the Company's Appalachian coal to domestic and international customers. The All Other category includes the Company's equipment sales and repair operations, as well as other ancillary business activities, including terminal services, coal and environmental analysis services, and leasing of mineral rights. In addition, the All Other category includes the operations of the Company's road construction businesses and the lime processing business recently acquired and being developed by the Company. The Corporate and Eliminations category includes general corporate overhead and the elimination of intercompany transactions. The revenue elimination amount represents inter-segment revenues. The Company evaluates the performance of its segment based on EBITDA which the Company defines as net income plus interest expense, income tax expense, depreciation, depletion and amortization, less interest income.

Operating segment results for the three months ended June 30, 2007 and segment assets as of June 30, 2007 were as follows:

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate
 
 
 
 
Coal
 
All
 
and
 
 
 
 
Operations
 
Other
 
Eliminations
 
Consolidated
Revenues
 
$
430,456
 
 
$
13,690
 
 
$
(9,880
)
 
$
434,266
 
Depreciation, depletion, and amortization
 
 
36,504
 
 
 
1,064
 
 
 
287
 
 
 
37,855
 
EBITDA
 
 
66,795
 
 
 
871
 
 
 
(13,989
)
 
 
53,677
 
Capital expenditures
 
 
26,200
 
 
 
235
 
 
 
643
 
 
 
27,078
 
Total assets
 
 
1,261,122
 
 
 
122,202
 
 
 
(237,126
)
 
 
1,146,198
 
 
Operating segment results for the six months ended June 30, 2007 were as follows:

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate
 
 
 
 
Coal
 
All
 
and
 
 
 
 
Operations
 
Other
 
Eliminations
 
Consolidated
Revenues
 
$
852,320
 
 
$
28,546
 
 
$
(19,229
)
 
$
861,637
 
Depreciation, depletion, and amortization
 
 
70,848
 
 
 
2,262
 
 
 
534
 
 
 
73,644
 
EBITDA
 
 
134,058
 
 
 
2,967
 
 
 
(27,225
)
 
 
109,800
 
Capital expenditures
 
 
69,797
 
 
 
803
 
 
 
1,055
 
 
 
71,655
 
Total assets
 
 
1,261,122
 
 
 
122,202
 
 
 
(237,126
)
 
 
1,146,198
 

Operating segment results the three months ended June 30, 2006 and segment assets as of June 30, 2006 were as follows:

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate
 
 
 
 
Coal
 
All
 
and
 
 
 
 
Operations
 
Other
 
Eliminations
 
Consolidated
Revenues
 
$
489,605
 
 
$
15,339
 
 
$
(8,633
)
 
$
496,311
 
Depreciation, depletion, and amortization
 
 
32,072
 
 
 
1,435
 
 
 
700
 
 
 
34,207
 
EBITDA
 
 
92,998
 
 
 
2,209
 
 
 
(18,581
)
 
 
76,626
 
Capital expenditures
 
 
32,430
 
 
 
60
 
 
 
71
 
 
 
32,561
 
Total assets
 
 
1,098,569
 
 
 
90,418
 
 
 
(135,495
) 
 
 
1,053,492
 

Operating segment results for the six months ended June 30, 2006 were as follows:

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate
 
 
 
 
Coal
 
All
 
and
 
 
 
 
Operations
 
Other
 
Eliminations
 
Consolidated
Revenues
 
$
962,174
 
 
$
34,825
 
 
$
(18,348
)
 
$
978,651
 
Depreciation, depletion, and amortization
 
 
63,132
 
 
 
3,414
 
 
 
1,295
 
 
 
67,841
 
EBITDA
 
 
187,711
 
 
 
4,894
 
 
 
(35,424
)
 
 
157,181
 
Capital expenditures
 
 
76,872
 
 
 
6,025
 
 
 
1,103
 
 
 
84,000
 
Total assets
 
 
1,098,569
 
 
 
90,418
 
 
 
(135,495
) 
 
 
1,053,492
 





Reconciliation of total segment EBITDA to net income:

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 
Six Months Ended
 
 
 
June 30,
 
 
June 30,
 
 
 
2007
 
 
2006
 
 
2007
 
 
2006
 
Total segment EBITDA
 
$
53,677
 
 
$
76,626
 
 
$
109,800
 
 
$
157,181
 
Interest expense
 
 
(10,030
)
 
 
(10,786
)
 
 
(20,023
)
 
 
(21,063
)
Interest income
 
 
457
 
 
 
171
 
 
 
1,094
 
 
 
358
 
Income tax expense
 
 
(1,502
)
 
 
(8,676
)
 
 
(4,131
)
 
 
(18,296
)
Depreciation, depletion and amortization
    
(37,855
)
    
(34,207
)
    
(73,644
)
    
(67,841
)
Net income
 
$
4,747
 
 
$
23,128
 
 
$
13,096
 
 
$
50,339
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The Company markets produced, processed, and purchased coal to customers in the United States and in international markets. Export revenues totaled $153,404 and $299,869 or approximately 35% of total revenues for each of the three months and six months ended June 30, 2007. Export revenues were $171,914 and $358,449 or approximately 35% and 37%, respectively, of total revenues for the three and six months ended June 30, 2006.

(11) Commitment and Contingencies

(a) 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 and performance or surety bonds. No liabilities related to these arrangements are reflected in the Company's condensed consolidated balance sheets. Management does not expect any material losses to result from these guarantees or off-balance sheet financial instruments. The amount of bank letters of credit outstanding as of June 30, 2007 was $87,094. The amount of surety bonds currently outstanding related to the Company's reclamation obligations is presented in Note 5 to the condensed consolidated financial statements. The Company has provided guarantees for equipment financing obtained by certain of its contract mining operators totaling approximately $1,335. The estimated fair value of these guarantees is not significant.

 (b) Litigation

     The Company is involved in various legal proceedings from time to time in the normal course of business. In management’s opinion, the Company is not currently involved in any legal proceeding which individually or in the aggregate could have a material effect on the consolidated financial condition, results of operations and/or cash flows of the Company.




 (12) Income Taxes

A reconciliation of the statutory federal income tax expense at 35% to income before income taxes and minority interest and the actual income tax expense is as follows:

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 
Six Months Ended
 
 
 
June 30,
 
 
June 30,
 
 
 
2007
 
 
2006
 
 
2007
 
 
2006
 
Federal statutory income tax expense
 
$
2,172
 
 
$
11,131
 
 
$
5,999
 
 
$
24,023
 
Increases (reductions) in taxes due to:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Percentage depletion allowance
 
 
(1,682
)
 
 
(5,077
)
 
 
(3,807
)
 
 
(9,941
)
Extraterritorial income exclusion
 
 
—
  
 
 
(469
)
 
 
—
  
 
 
(882
)
Deduction for domestic production activities
 
 
6
  
 
 
(101
)
 
 
(28
)
 
 
(266
)
State taxes, net of federal tax impact
 
 
94
 
 
 
806
 
 
 
288
 
 
 
1,771
 
Share-based compensation
 
 
201
 
 
 
1,199
 
 
 
385
 
 
 
2,229
 
Change in valuation allowance
 
 
651
 
 
 
986
 
 
 
1,142
 
 
 
989
 
Other, net
 
 
60
 
 
 
201
 
 
 
152
 
 
 
373
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income tax expense
 
$
1,502
 
 
$
8,676
 
 
$
4,131
 
 
$
18,296
 
                                 

 
The Company has concluded that it is more likely than not that deferred tax assets, net of valuation allowances, currently recorded will be realized. The amount of the valuation allowance takes into consideration the Alternative Minimum Tax system as required by SFAS No. 109. The Company monitors the valuation allowance each quarter and makes adjustments to the allowance as appropriate.
 
The Company adopted the provisions of Financial Standards Accounting Board Interpretation No. 48 Accounting for Uncertainty in Income Taxes (“FIN 48”) an interpretation of FASB Statement No. 109 (“SFAS 109”) on January 1, 2007. As a result of the adoption of FIN 48, the Company recognized no adjustment in the unrecognized income tax benefits that existed at December 31, 2006. On January 1, 2007, the Company had approximately $1,754 of unrecognized tax benefits accrued and of this amount $1,437 would affect the effective tax rate if recognized. The Company does not anticipate that total unrecognized benefits recorded as of January 1, 2007 will significantly change during 2007.
 
The Company's policy is to classify interest and penalties related to uncertain tax positions as part of income tax expense. As of January 1, 2007, the Company had not recorded any accrued interest expense since no additional cash taxes are projected to be due as a result of the uncertain tax positions.
 
Tax years 2005 and 2006 remain open to federal and state examination. The Internal Revenue Service initiated a corporate income tax audit during first quarter 2007 for the Company's 2005 tax year.  The audit is still in the initial stages. No adjustments have been proposed to date, and the Company expects the examination to last through the first quarter of 2008.

(13) Comprehensive Income

 Total comprehensive income is as follows for the three months ended June 30, 2007:
 
Net Income
 
$
4,747
 
Decrease in fair value of cash flow hedge, net of tax effect of $(1,384) for the period
 
 
(4,209
)
Decrease in SFAS 158 adjustment related to postretirement medical and black lung obligations, net of tax effect of $(141) for the period
 
 
(409
)
Total comprehensive income
 
$
129
 

Total comprehensive income is as follows for the six months ended June 30, 2007:
 
Net Income
 
$
13,096
 
Decrease in fair value of cash flow hedge, net of tax effect of $(1,231) for the period
 
 
(3,437
)
Decrease in SFAS 158 adjustment related to postretirement medical and black lung obligations, net of tax effect of $(297) for the period
 
 
(880
)
Total comprehensive income
 
$
8,779
 
 

The following table summarizes the components of accumulated other comprehensive loss at June 30, 2007:
 
Fair value of cash flow hedge, net of tax effect of $557
 
$
1,693
 
SFAS 158 adjustment related to black lung obligations, net of tax effect of $121
 
 
369
 
SFAS 158 adjustment related to postretirement medical obligations, net of tax effect of $4,048
 
 
12,319
 
Total accumulated other comprehensive loss
 
$
14,381
 

 

 (14) Mingo Logan Acquisition
 
On June 29, 2007, the Company completed the acquisition of certain coal mining assets in western West Virginia from Arch Coal, Inc. known as Mingo Logan for $43,890 including working capital and assumed liabilities.  The Mingo Logan purchase consists of coal reserves, two mines and a load-out and processing plant and will be managed by Cobra Natural Resources, LLC, an indirect wholly- owned subsidiary of the Company.

The following table summarizes the preliminary estimates of fair values of the assets acquired and liabilities assumed at the date of acquisition:

Current assets
  
$
6,748
  
Property, plant, and equipment
  
$
$
44,947
4,402
  
Intangible assets
    
     Total assets acquired
  
$
56,097
  
Asset retirement obligation
  
$
(12,107
)
Other liabilities
  
$
(100
)
     Total liabilities assumed
  
$
(12,207
)
     Net assets acquired
  
$
43,890
  
         

Estimates of fair value are subject to adjustment based upon completion of an independent third-party valuation.









(15) New Accounting Pronouncements

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measures” (“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring fair value and enhances disclosures about fair value measures required under other accounting pronouncements, but does not change existing guidance as to whether or not an instrument is carried at fair value. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007. The Company is currently reviewing the provisions of SFAS 157 to determine the impact on the Company's financial statements.
 
In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (SFAS 159”). SFAS 159 permits entities to choose to measure many financial instruments and certain other items at fair value. The objective is to expand the use of fair value measurements in accounting for financial instruments. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. The Company is currently reviewing the provisions of SFAS 159 to determine the impact on the Company's financial statements.

In April 2007, the FASB issued FASB Staff Position (“FSP”) FIN 39-1, “Amendment of FASB Interpretation No. 39.” This FSP amends paragraph 10 of Interpretation 39 to permit entities to offset fair value amounts recognized for either a receivable representing the right to reclaim cash collateral or a payable representing an obligation to return cash collateral, if such receivable or payable arises from derivative instruments executed with the same counterparty under the same master netting arrangement. FSP FIN 39-1 also requires entities to make an accounting policy decision to offset fair value amounts in accordance with FIN 39-1 and apply the policy consistently. An entity may not offset fair value amounts recognized for derivative instruments without offsetting fair value amounts recognized for the right to reclaim cash collateral or the obligation to return cash collateral. FSP FIN 39-1 is effective for financial statements issued for fiscal years beginning after November 15, 2007, however earlier application is permitted. The Company is currently reviewing the provisions of the FSP to determine the impact on the Company’s financial statements.
 
On January 1, 2007, the Company adopted the provisions of FIN 48, which clarifies the accounting for uncertainty in income tax positions. This interpretation requires the Company to recognize in the consolidated financial statements only those tax positions determined to be more likely than not of being sustained upon examination, based on the technical merits of the positions. The adoption of FIN 48 did not result in an adjustment to the Company's financial statements.
 

 
 
 
(16) Supplemental Guarantor/Non-Guarantor Financial Information

On June 28, 2007, Holdings was merged into the Company and the Company assumed the obligations of Holdings under the Credit Agreement and related guaranty and collateral agreement and became a parent guarantor of the $175,000 10% Senior Notes due 2012 (the Senior Notes). The payment obligations under the Senior Notes, issued jointly by our subsidiary Alpha Natural Resources, LLC and its wholly-owned subsidiary Alpha Natural Resource Capital Corp. in 2004, are unsecured, but are guaranteed fully and unconditionally on a joint and several basis by the Company and all its subsidiaries other than the issuers of the notes and our recently formed subsidiary, Gallatin Materials, LLC.  The following financial information sets forth separate financial information with respect to the Company, the issuers, the guarantor subsidiaries and the non-guarantor subsidiary. The principal elimination entries eliminate investments in subsidiaries and certain intercompany balances and transactions.
 
Unaudited Supplemental Condensed Consolidating Statement of Income for the Three Months Ended June 30, 2007:
                                                   
       
Parent
    
Co-Issuers
Guarantors
Non-Guarantor
Eliminations
Consolidated
Revenues:
                                                
 
Coal sales revenue
$
-
    
$
-
    
$
386,130
    
$
-
    
$
-
    
$
386,130
  
 
Freight and handling revenues
-
      
-
      
41,588
      
-
      
-
      
41,588
  
 
Other revenues
    
-
      
-
      
6,548
      
-
      
-
      
6,548
  
 
  Total revenue
    
-
      
-
      
434,266
      
-
      
-
      
434,266
  
Cost and expenses:
                                                
 
Cost of coal sales
  
-
      
-
      
320,807
      
-
              
320,807
  
 
Freight and handling costs
-
      
-
      
41,588
      
-
      
-
      
41,588
  
 
Cost of other revenue
  
-
      
-
      
4,172
      
596
      
-
      
4,768
  
 
Depreciation, depletion and amortization
-
      
-
      
37,853
      
2
      
-
      
37,855
  
 
Selling, general and administrative expenses
291
      
1,212
      
12,449
      
30
      
-
      
13,982
  
 
Total costs and expenses
291
      
1,212
      
416,869
      
628
      
-
      
419,000
  
                                                   
Income from operations
  
(291
)
    
(1,212
)
    
17,397
      
(628
)
    
-
      
15,266
  
Other income (expenses):
                                              
 
Interest expense
  
-
      
(10,057
)
    
(111
)
    
-
      
138
      
(10,030
)
 
Interest income
    
37
      
348
      
210
      
-
      
(138
)
    
457
  
 
Equity earnings
    
6,503
      
17,424
      
(584
 )    
-
      
(23,343
)
    
-
  
 
Miscellaneous income, net
-
      
-
      
512
      
-
      
-
      
512
  
 
Total other income (expense), net
6,540
      
7,715
      
27
      
-
      
(23,343
)
    
(9,061
)
 
Income (loss) before income taxes and minority interest
6,249
      
6,503
      
17,424
      
(628
)
    
(23,343
)
    
6,205
  
Income tax expense
    
1,502
      
-
      
-
      
-
      
-
    <