Alpha Natural Resources Announces Results for Third Quarter 2012

       Alpha Natural Resources Announces Results for Third Quarter 2012

- Third quarter 2012 revenue of $1.6 billion and adjusted EBITDA of $179
million

- Comprehensive plan to strategically reposition company includes
restructuring actions expected to reduce annual overhead costs by $150 million

- In October 2012, Alpha successfully issued $500 million 9.75% senior notes
due 2018 and repurchased approximately $123 million of 3.25% convertible
senior notes due 2015

- Alpha updates 2012 guidance and 2013 contracted sales position

- Total liquidity of $1.6 billion at quarter-end, and $2.0 billion as of
October 26, 2012 following completion of the senior notes issuance and the
repurchase of convertible senior notes

PR Newswire

BRISTOL, Va., Nov. 2, 2012

BRISTOL, Va., Nov. 2, 2012 /PRNewswire/ -- Alpha Natural Resources, Inc.
(NYSE: ANR), a leading U.S. coal producer, reported a third quarter loss of
$46 million or $0.21 per diluted share, compared with net income of $63
million or $0.28 per diluted share in the third quarter of 2011. Excluding
items detailed in the attached "Reconciliation of Adjusted Net Income (Loss)
to Net Income (Loss)," the third quarter adjusted net loss was $36 million or
$0.16 per diluted share, compared with adjusted net income of $76 million or
$0.34 per diluted share for the third quarter last year.

Earnings before interest, taxes, depreciation, depletion and amortization
(EBITDA) for the third quarter of 2012 was $144 million, compared with EBITDA
of $276 million in the year ago period. Excluding items detailed in the
attached "Reconciliation of EBITDA and Adjusted EBITDA to Net Income (Loss),"
Adjusted EBITDA was $179 million, compared with Adjusted EBITDA of $377
million in the third quarter of 2011.

Quarterly Financial & Operating Highlights

(millions, except per-share and per-ton amounts)
                                                 Q3       Q2         Q3^2
                                                          2012
                                                 2012                2011
 Coal revenues                                   $1,455.7 $1,565.3   $1,997.9
 Net (loss) income                               ($46.1)  ($2,234.7) $62.6
 Net (loss) income per diluted share             ($0.21)  ($10.14)   $0.28
 Adjusted (loss) net income^1                    ($35.7)  ($72.1)    $76.1
 Adjusted (loss) net income per diluted share^1  ($0.16)  ($0.33)    $0.34
 EBITDA^1                                        $143.9   ($2,383.7) $276.2
 Adjusted EBITDA^1                               $178.5   $186.6     $376.6
 Tons of coal sold                               27.9     26.8       31.2
 Weighted average coal margin per ton            $7.73    $6.57      $10.76
 Adjusted weighted average coal margin per ton^1 $7.68    $8.16      $14.30

   These are non-GAAP financial measures. A reconciliation of adjusted net
   income (loss) to net income (loss), a reconciliation of both EBITDA and
1. adjusted EBITDA to net income (loss), and a reconciliation of adjusted cost
   of coal sales per ton to cost of coal sales per ton are included in tables
   accompanying the financial schedules.
   Adjusted to reflect certain immaterial corrections and the impact of
2. retrospective adjustments made as a result of applying acquisition
   accounting for Massey.

"Market conditions for both metallurgical and thermal coal have been
challenging throughout much of 2012, and continued in the third quarter," said
Kevin Crutchfield, Alpha's chairman and CEO. "In the face of these market
headwinds, Alpha has taken swift and decisive actions to right-size our
operational footprint and our cost structure. In September, we announced a
plan to reduce our annualized production rate by an additional 16 million
tons. These actions are being taken in a pricing environment where we
estimate that the majority of U.S. thermal coal would be uneconomic to produce
at today's spot market prices and, similarly, metallurgical coal has fallen to
levels at which a significant percentage of worldwide supply is uneconomic."

To ensure that Alpha's operations and cost-base are appropriately aligned with
the current market environment, approximately 50 percent of the planned
reduction in tonnage will come from the Powder River Basin, where the company
plans to adjust production to match currently committed and priced volumes for
2013. Another 40 percent of the reduction will come from the higher-cost
Eastern thermal coal production base in Central Appalachia, and the remainder
of the cutbacks will comprise lower-quality metallurgical coal that is
uneconomic in today's market. These restructuring actions began in September
and will be phased in through early 2013. Once fully implemented, all of the
production cutbacks and restructuring actions are expected to result in a $150
million annual reduction in the company's recurring overhead costs, in
addition to other cost of coal sales reductions due to mine idlings and
production curtailments.

"This restructuring is a difficult but necessary step, impacting approximately
1,200 positions and the communities where we operate," Crutchfield said. "We
never take such actions lightly, but our goal remains to emerge from the
current headwinds in an even stronger position within our industry, which
ultimately will benefit all our constituents."

Alpha's recent financing activity is a significant step in the company's plan
to strengthen Alpha's position within the industry. In October, the company
successfully issued $500 million of 9.75% senior notes due in 2018. A portion
of the proceeds were used to repurchase approximately $123 million of the 2015
3.25% convertible senior notes, and the remainder, net of fees, serves to
improve the company's liquidity and financial flexibility. As of October 26,
the date our convertible senior tender offer was closed, Alpha had total
liquidity of $2.0 billion, including approximately $900 million of cash and
marketable securities.

"Finally, even in this challenging environment, we never lose sight of Running
Right and engaging all employees in the pursuit of a safe and well run
workplace," Crutchfield said. "In the third quarter, several of our mine
rescue teams took home awards from the national mine rescue competition, with
our Kingston White team placing first overall in Division 2. Also, our AMFIRE
Centre County Strip mine was recently awarded the esteemed Sentinels of Safety
Award. I would like to commend our entire workforce for their continued focus
on Running Right and watching out for one another."

Financial Performance

  oAlpha's total revenues in the third quarter were $1.6 billion compared
    with $2.3 billion in the third quarter of 2011, and coal revenues were
    $1.5 billion compared with $2.0 billion in the third quarter last year.
    The decrease in coal revenues compared with the year-ago period was
    driven primarily by lower metallurgical coal revenues due to a 23 percent
    decline in average per ton realizations and an 18 percent decrease in
    shipment volumes, as well as a 23 percent decrease in Eastern steam coal
    shipment volumes. Those decreases were partially offset by a 13 percent
    increase in Western coal revenues on higher volumes and higher per ton
    realizations compared with last year. Other revenues and freight and
    handling revenues were $24 million and $154 million, respectively, during
    the third quarter of 2012 versus $97 million and $214 million,
    respectively, during the third quarter of 2011. Other revenues for the
    third quarter of 2012 included $16.5 million from a cash buy-out of a coal
    supply agreement.
  oDuring the third quarter of 2012, Alpha shipped 13.2 million tons of
    Powder River Basin (PRB) steam coal, 9.8 million tons of Eastern steam
    coal and 4.9 million tons of metallurgical coal. Average per ton
    realization for PRB shipments rose to $12.87 in the third quarter of 2012,
    compared with $11.98 in the year-ago period. The average realization per
    ton for Eastern steam coal shipments was $66.40, compared with $67.07 last
    year, and the average per ton realization for metallurgical coal decreased
    to $129.96 in the third quarter of 2012, compared with $168.49 in the
    third quarter of 2011.
  oTotal costs and expenses during the third quarter of 2012 were $1.7
    billion compared with $2.2 billion in the third quarter of 2011. Cost of
    coal sales during the quarter was $1.3 billion, compared with $1.7 billion
    in the third quarter of 2011.

Adjusted cost of coal sales in the East, which excludes various items detailed
in the reconciliation table in the "Supplemental Sales, Operations and
Financial Data" section of the release, averaged $75.93 per ton, compared with
$74.21 in the second quarter of 2012 and $76.38 in the third quarter last
year. The sequential increase in Eastern cost of coal sales per ton primarily
reflects the impact of lower overall Eastern shipment volumes and a
proportionally smaller contribution from the Pittsburgh #8 longwall mines due
mainly to a September longwall move at the Cumberland mine and miner vacations
during the quarter. These factors were somewhat offset by a lower cost mix of
operations in Central Appalachia due to restructuring and related efficiency
enhancements. The year-over-year decrease in adjusted cost of coal sales per
ton in the East is primarily the result of the impact of lower metallurgical
coal prices on variable costs and lower purchased coal costs and volumes, as
well as restructuring and related efficiency enhancements, somewhat offset by
lower overall shipment volumes.

The cost of coal sales in the West averaged $9.40 per ton, down from $11.01 in
the second quarter of 2012 and $10.34 in the third quarter of 2011. The
sequential and year-over-year decreases in Western costs of coal sales per ton
were primarily attributable to higher shipment volumes and decreased
overburden movement due to Alpha's revised near-term production outlook. 

Selling, general and administrative expense in the third quarter of 2012 was
$50 million, compared with selling, general and administrative expense of $76
million in the third quarter last year, which included approximately $8
million of merger-related expenses. Depreciation, depletion and amortization
(DD&A) during the quarter was $239 million, compared with $249 million in
third quarter of 2011. Net amortization of acquired intangibles was a $12
million benefit in the third quarter of 2012, compared with an $81 million
benefit in the third quarter last year. 

  oAlpha recorded a net loss of $46 million or $0.21 per diluted share during
    the third quarter of 2012 compared with net income of $63 million or $0.28
    per diluted share during the third quarter of 2011. Excluding items
    detailed in the attached "Reconciliation of Adjusted Net Income (Loss) to
    Net Income (Loss)," Alpha's adjusted third quarter net loss was $36
    million or $0.16 per diluted share, compared with adjusted net income of
    $76 million or $0.34 per diluted share in the third quarter of 2011.
  oAlpha's third quarter 2012 EBITDA was $144 million, compared with EBITDA
    of $276 million in the prior-year period. Excluding items detailed in the
    attached "Reconciliation of EBITDA and Adjusted EBITDA to Net Income
    (Loss)," Adjusted EBITDA was $179 million in the third quarter of 2012,
    compared with Adjusted EBITDA of $377 million in the third quarter of
    2011.

Year-to-Date Results

  oFor the first nine months of 2012, Alpha reported total revenues of $5.4
    billion, including $4.7 billion in coal revenues, compared with total
    revenues of $5.0 billion and coal revenues of $4.4 billion during the
    first nine months of 2011. The year-over-year increase in both total
    revenues and coal revenues is primarily attributable to the inclusion of
    the former Massey operations for a full nine months in 2012, compared to
    four months in 2011, which more than offset production cuts implemented
    during the first three quarters of 2012 and lower average realizations per
    ton for metallurgical coal.
  oDuring the first nine months of 2012, Alpha's coal shipments totaled 82.9
    million tons, compared with 75.2 million tons in the year-ago period.
    Metallurgical coal shipments were 15.4 million tons year-to-date, up 11
    percent compared to the 13.9 million tons shipped during the first nine
    months of 2011. Shipments of PRB coal and Eastern steam coal were 35.2
    million tons and 32.4 million tons, respectively, during the first nine
    months of 2012, compared with 36.1 million tons and 25.3 million tons
    during the first nine months of 2011. With the exception of shipments of
    PRB coal, these year-over-year increases are primarily due to inclusion of
    the former Massey operations for full nine months in 2012, partly offset
    by 2012 actions to reduce production. 
  oFor the first nine months of 2012, the company-wide average realization
    was $56.24 per ton and the adjusted average cost of coal sales was $47.79
    per ton, resulting in a $8.45 per ton (or 15 percent) adjusted coal
    margin. By comparison, company-wide average realizations in the first
    nine months of 2011 were $58.46 and the adjusted average cost of coal
    sales was $43.19, resulting in a $15.27 per ton (or 26 percent) adjusted
    coal margin. The decrease in coal margin was primarily attributable to
    lower per ton realizations and therefore lower margins on metallurgical
    coal shipments.
  oYear-to-date Alpha recorded a net loss of $2.3 billion or $10.49 per
    diluted share, including the pre-tax impact of goodwill and asset
    impairment and restructuring charges totaling $2.6 billion. Excluding the
    various items detailed in the attached "Reconciliation of Adjusted Net
    Income (Loss) to Net Income (Loss)," Alpha's adjusted net loss was $165
    million or $0.75 per diluted share for the first nine months of 2012,
    compared with adjusted net income of $308 million or $1.82 per diluted
    share for the first nine months of 2011. EBITDA for the first nine months
    of 2012 was a loss of $2.0 billion, and Adjusted EBITDA, which excludes
    the various items detailed in the attached "Reconciliation of EBITDA and
    Adjusted EBITDA to Net Income (Loss)," was $575 million, compared with
    EBITDA and Adjusted EBITDA of $578 million and $959 million, respectively,
    during the first nine months of 2011.

Liquidity and Capital Resources

Operating cash flow for the quarter ended September 30, 2012 was $170 million,
compared with operating cash flow of $242 million in the third quarter of
2011. The decrease in operating cash flow was primarily attributable to
reduced shipment volumes of metallurgical coal and Eastern steam coal, as well
as lower average per ton realizations on metallurgical coal shipments during
the third quarter of 2012. Capital expenditures for the third quarter of 2012
were $87 million, versus $142 million in the comparable period last year.

At the end of the third quarter of 2012, Alpha had total liquidity of
approximately $1.6 billion, which includes the $500 million minimum liquidity
that must be maintained according to the terms of our secured credit
facility. Alpha's liquidity as of September 30^th, 2012, consisted of an
aggregate $550 million of cash, cash equivalents and marketable securities,
plus $1.1 billion available under the company's secured credit facilities.
Total long-term debt, including the current portion of long-term debt at
September 30, 2012, remained at approximately $3.0 billion.

Following quarter-end, Alpha successfully issued $500 million of 9.75% senior
notes due 2018. A portion of the proceeds were used to repurchase
approximately $123 million of the 3.25% convertible senior notes due in 2015
pursuant to a tender offer that was launched concurrent with the $500 million
notes offering and expired on October 25, 2012. The remaining proceeds from
the $500 million notes offering, net of fees, served to increase cash on the
balance sheet, increasing Alpha's total liquidity to approximately $2.0
billion as of October 26, 2012 and providing additional financial flexibility.

Market Overview

The global seaborne metallurgical coal market has been characterized by excess
supply, weak demand and falling prices which, based on spot market
transactions, are below production costs for a meaningful portion of the
world's supply. This market weakness has driven a rapid supply response, and
producers in the U.S., Australia and elsewhere have curtailed up to 30 million
tons of annualized production, representing more than 10 percent of the global
seaborne supply of metallurgical coal. Taken together with renewed
expectations of increasing infrastructure spending in China, we expect this
recent supply response may restore the market to a more balanced supply/demand
picture in the near-term. Alpha has responded to the deterioration in market
conditions, reducing our production of lower quality metallurgical coal by
three to four million tons on an annual run-rate basis through a series of
cutbacks announced throughout 2012. When the market rebounds from its recent
weakness, Alpha has the capability to ramp up its metallurgical coal shipments
and take advantage of opportunities in this highly cyclical market.

The thermal market in the United States has rebounded from its low point in
the Spring of 2012 when coal reached its lowest proportional level of
electricity generation in four decades, and nationwide utility inventories
peaked at an estimated 213 million tons due to the combined and inter-related
forces of weak winter burn and natural gas prices that were briefly below $2
per thousand cubic feet (MCF). However, the improvement has been gradual, and
inventories remain elevated, falling to 191 million tons by the end of
September, a level still well above the historical average. Despite the
inventory drawdown, an improvement in coal's share of electricity generation
into the upper 30 percent range, and the expectation of a return to $4 per MCF
gas in 2013, the domestic market for steam coal remains weak. Alpha estimates
that, if all domestic steam coal were re-priced at today's spot market prices,
over two-thirds of all shipment volumes would be uneconomic. In light of this
market environment, Alpha announced plans in September to curtail production
in the Powder River Basin (PRB) and Central Appalachia. In the PRB, the
company plans to continue to ship those tons that are currently committed and
priced to provide acceptable profit levels until the market comes back into
balance. In Central Appalachia, where Alpha believes steam coal demand has
been structurally reduced due to plant retirements and competition from
natural gas, the company is idling high cost thermal coal production to create
a sustainable thermal coal business that can profitably dispatch throughout
the business cycle.

In terms of exports, the U.S. is on pace for a record year with export volumes
reaching 88 million tons by the end of August, including 40 million tons of
steam coal, a 66 percent year-over-year increase, and 48 million tons of met,
a modest 3 percent year-over-year increase. However, slack demand and ample
supply have resulted in lower seaborne prices, and, as expected, U.S. exports
have slowed since mid-year in the face of these cyclical market headwinds.
Looking past the current market downturn, seaborne demand for both met and
thermal coal is expected to grow in the mid-single digits in 2013 and beyond.
Alpha is well-positioned to take advantage of future growth in the seaborne
market with more export terminal capacity than any other U.S. producer, at 25
million to 30 million tons of potential annual throughput, and the company is
on pace to more than double thermal exports in 2012 to approximately five
million tons. Alpha will seek to expand its export thermal business while
ensuring that it has sufficient capacity to take advantage of the relatively
higher-margin export opportunities for its metallurgical coal, with Alpha
already ranking third globally in annual shipment volumes.

Outlook

For 2012, Alpha's guidance for total shipment volumes remains unchanged at
100-115 million tons, including 20-23 million tons of Eastern metallurgical
coal, 38-44 million tons of Eastern steam coal, and 42-48 million tons of
Western steam coal. During the third quarter of 2012, Alpha priced 950,000
tons of metallurgical coal for delivery in 2012 at average realizations of
approximately $96 per ton. As of October 25, 2012, based on the midpoint of
guidance, 91 percent of Alpha's 2012 Eastern metallurgical coal shipment
volume was committed and priced at an average per ton realization of $133.20,
and 5 percent was committed and unpriced. Also based on the midpoint of
guidance, Alpha's 2012 Eastern steam coal shipment volume was 100 percent
committed and priced at an average per ton realization of $66.02, and 100
percent of Alpha's 2012 Western steam coal shipment volume was committed and
priced at an average per ton realization of $12.89. Guidance for adjusted
cost of coal sales in 2012 also remains unchanged from prior guidance and is
anticipated to range from $74.00 to $78.00 per ton in the East and from $10.50
to $11.50 per ton in the West. Likewise, guidance ranges for selling, general
and administrative expense and for depletion, depreciation and amortization
expense in 2012 remain unchanged at $210 million to $225 million, and $1.05
billion to $1.15 billion, respectively. Guidance for interest expense in 2012
increased to a range of $190 million to $195 million to reflect the $500
million senior notes offering and the repurchase of approximately $123 million
of the 3.25% convertible senior notes due 2015, both completed in October
2012. Alpha's guidance for 2012 capital expenditures is unchanged in the
range of $450 million to $600 million.

As of October 25, 2012, Alpha had 2.9 million tons of Eastern metallurgical
coal committed and priced for 2013 at average per ton realizations of $129.78
and 11.2 million tons of Eastern metallurgical coal committed and unpriced.
As of the same date, Alpha had 16.7 million tons of Eastern steam coal
committed and priced at average per ton realizations of $66.30 and 3.2 million
tons committed and unpriced, and in the West, Alpha had 37.9 million tons
committed and priced at average realizations of $12.87 per ton.

Guidance

(in millions, except per-ton and percentage amounts)
                                            2012
Average per Ton Sales Realization on
Committed and Priced Coal Shipments^1,2
 West                                    $12.89
 Eastern Steam                           $66.02
 Eastern Metallurgical                   $133.20
Coal Shipments^3                            100.0 – 115.0
 West                                    42.0 – 48.0
 Eastern Steam                           38.0 – 44.0
 Eastern Metallurgical                   20.0 – 23.0
Committed and Priced (%)^4                  99%
 West                                    100%
 Eastern Steam                           100%
 Eastern Metallurgical                   91%
Committed and Unpriced (%)^4,5              1%
 West                                    0%
 Eastern Steam                           0%
 Eastern Metallurgical                   5%
West – Cost of Coal Sales per Ton           $10.50 – $11.50
East – Cost of Coal Sales per Ton^6         $74.00 – $78.00
Selling, General & Administrative Expense^7 $210 – $225
(excluding merger-related expenses)
Depletion, Depreciation & Amortization      $1,050 – $1,150
Interest Expense                            $190 – $195
Capital Expenditures^8                      $450 – $600



   NOTES:
1. Based on committed and priced coal shipments as of October 25, 2012.
   Actual average per ton realizations on committed and priced tons recognized
2. in future periods may vary based on actual freight expense in future
   periods relative to assumed freight expense embedded in projected average
   per ton realizations.
3. Eastern shipments in 2012 include an estimated 2.0 to 3.0 million tons of
   brokered coal.
4. As of October 25, 2012, compared to the midpoint of shipment guidance
   range.
   In 2012, committed and unpriced Eastern tons include approximately 1.1
5. million tons of metallurgical coal subject to market pricing and
   approximately 0.1 million tons of steam coal subject to market pricing.
   Excludes merger-related expenses, non-cash charges for the fair value
   adjustment of acquired coal inventory, UBB charges and weather-related
6. property damage. Alpha has not reconciled the adjusted Eastern cost of
   coal sales per ton to Eastern cost of coal sales per ton because
   merger-related expenses, a necessary reconciling item, cannot be reasonably
   predicted, and Alpha is unable to provide guidance for such expenses.
   Alpha has not reconciled the adjusted selling, general & administrative
7. expense to selling, general & administrative expense because merger-related
   expenses, a necessary reconciling item, cannot be reasonably predicted, and
   Alpha is unable to provide guidance for such expenses.
   Includes the annual bonus bid payments on the Federal Lease by Applications
8. for the Eagle Butte and Belle Ayr mines of $36.1 million and $42.1 million,
   respectively.

About Alpha Natural Resources
With $7.1 billion in total revenue in 2011, Alpha Natural Resources ranks as
America's third-largest coal producer by revenue and third-largest by
production. Alpha is the nation's largest supplier of metallurgical coal used
in the steel-making process and is a major supplier of thermal coal to
electric utilities and manufacturing industries. In 2011, the Company had
more than 200 Customers on five continents. More information about Alpha can
be found on the company's Web site at www.alphanr.com.

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

  oworldwide market demand for coal, electricity and steel;
  odecline in coal prices;
  oour liquidity, results of operations and financial condition;
  oregulatory and court decisions;
  ochanges in environmental laws and regulations, including those directly
    affecting our coal mining and production, and those affecting our
    customers' coal usage, including potential carbon or greenhouse gas
    related legislation;
  oreductions or increases in customer coal inventories and the timing of
    those changes;
  oglobal economic, capital market or political conditions, including a
    prolonged economic recession in the markets in which we operate;
  ochanges in safety and health laws and regulations and the ability to
    comply with such changes;
  oinherent risks of coal mining beyond our control;
  oour ability to obtain, maintain or renew any necessary permits or rights,
    and our ability to mine properties due to defects in title on leasehold
    interests;
  othe geological characteristics of the Powder River Basin, Central and
    Northern Appalachian coal reserves;
  ocompetition in coal markets;
  oour assumptions concerning economically recoverable coal reserve
    estimates;
  ochanges in postretirement benefit obligations, pension obligations and
    federal and state black lung obligations;
  oincreased costs and obligations potentially arising from the Patient
    Protection and Affordable Care Act;
  oour ability to negotiate new UMWA wage agreements on terms acceptable to
    us, increased unionization of our workforce in the future, and any strikes
    by our workforce;
  oavailability of skilled employees and other employee workforce factors,
    such as labor relations;
  opotential instability and volatility in worldwide financial markets;
  ofuture legislation and changes in regulations, governmental policies or
    taxes or changes in interpretation thereof;
  odisruption in coal supplies;
  oour production capabilities and costs;
  oour ability to integrate successfully operations that we have acquired or
    developed with our existing operations, including those of Massey, as well
    as those operations that we may acquire or develop in the future, or the
    risk that any such integration could be more difficult, time-consuming or
    costly than expected;
  oour plans and objectives for future operations and expansion or
    consolidation;
  othe consummation of financing transactions, acquisitions or dispositions
    and the related effects on our business;
  ouncertainty of the expected financial performance of Alpha following the
    acquisition of Massey;
  oour ability to achieve the cost savings and synergies contemplated by the
    acquisition of Massey within the expected time frame;
  odisruption from the acquisition of Massey making it more difficult to
    maintain relationships with customers, employees or suppliers;
  othe outcome of pending or potential litigation or governmental
    investigations, including with respect to the Upper Big Branch explosion;
  othe inability of our third-party coal suppliers to make timely deliveries
    and the refusal by our customers to receive coal under agreed contract
    terms;
  oour relationships with, and other conditions affecting, our customers,
    including the inability to collect payments from our customers if their
    creditworthiness declines;
  ochanges in and renewal or acquisition of new long-term coal supply
    arrangements;
  orailroad, barge, truck and other transportation availability, performance
    and costs;
  oavailability of mining and processing equipment and parts;
  odisruptions in delivery or changes in pricing from third party vendors of
    goods and services that are necessary for our operations, such as diesel
    fuel, steel products, explosives and tires;
  ofair value of derivative instruments not accounted for as hedges that are
    being marked to market;
  oour ability to obtain or renew surety bonds on acceptable terms or
    maintain self bonding status;
  oindemnification of certain obligations not being met;
  ocontinued funding of the road construction business, related costs, and
    profitability estimates;
  orestrictive covenants in our secured credit facility and the indentures
    governing our outstanding debt securities;
  ocertain terms of our outstanding debt securities, including any
    conversions of our convertible senior debt securities, that may adversely
    impact our liquidity;
  oour substantial indebtedness and potential future indebtedness;
  osignificant or rapid increases in commodity prices;
  oreclamation and mine closure obligations;
  oterrorist attacks and threats, and escalation of military activity in
    response to such attacks;
  oinflationary pressures on supplies and labor;
  outilities switching to alternative energy sources such as natural gas,
    renewables and coal from basins where we do not operate;
  oweather conditions or catastrophic weather-related damage; and
  oother factors, including the other factors discussed in the "Management's
    Discussion and Analysis of Financial Condition and Results of Operations",
    and "Risk Factors" sections of our Annual Report on Form 10-K for the year
    ended December 31, 2011, and Quarterly Reports on Form 10-Q for the
    quarters ended March 31, 2012 and June 30, 2012.

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

FINANCIAL TABLES FOLLOW

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

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







Alpha Natural Resources, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In Thousands Except Shares and Per Share Data)
(Unaudited)
                        Three Months Ended           Nine Months Ended
                        September 30,                September 30,
                        2012          2011(1)        2012          2011(1)
Revenues:
 Coal revenues      $ 1,455,702   $ 1,997,933    $ 4,660,541   $ 4,395,803
 Freight and          154,450       213,834        597,157       480,760
handling revenues
 Other revenues       23,657        96,986         158,833       160,966
 Total revenues    1,633,809     2,308,753      5,416,531     5,037,529
Costs and expenses:
 Cost of coal sales
(exclusive of items     1,259,174     1,683,902      4,080,964     3,525,886
shown separately
below)
 Freight and          154,450       213,834        597,157       480,760
handling costs
 Other expenses       13,357        54,239         43,194        111,045
 Depreciation,
depletion and           238,894       249,253        797,516       485,002
amortization
 Amortization of
acquired intangibles,   (11,682)      (80,618)       (64,480)      (63,563)
net
 Selling, general
and administrative
expenses (exclusive                                             
of
depreciation,     49,604        75,643         160,626       332,598
depletion and
amortization shown
separately above)
 Asset impairment     13,676        -              1,028,610     -
and restructuring
 Goodwill             -             -              1,525,332     -
impairment
 Total costs and   1,717,473     2,196,253      8,168,919     4,871,728
expenses
Income (loss) from      (83,664)      112,500        (2,752,388)   165,801
operations
Other income
(expense):
 Interest expense     (47,345)      (49,148)       (139,313)     (94,726)
 Interest income      1,328         930            3,749         2,987
 Loss on early
extinguishment of       -             (5,212)        -             (9,768)
debt
 Miscellaneous        353           309            1,619         334
income, net
 Total other       (45,664)      (53,121)       (133,945)     (101,173)
expense, net
Income (loss) before    (129,328)     59,379         (2,886,333)   64,628
income taxes
Income tax benefit      83,182        3,225          576,765       (2,244)
(expense)
Net income (loss)     $ (46,146)    $ 62,604       $ (2,309,568) $ 62,384
Income (loss) per
common share:
 Basic income
(loss) per common     $ (0.21)      $ 0.28         $ (10.49)     $ 0.37
share:
 Diluted income
(loss) per common     $ (0.21)      $ 0.28         $ (10.49)     $ 0.37
share:
Weighted average
shares outstanding:
 Weighted average     220,417,448   224,394,487    220,167,198   166,931,448
shares--basic
 Weighted average     220,417,448   226,281,985    220,167,198   168,833,010
shares--diluted

(1) The results for the three and nine months ended September 30, 2011 have
been restated to reflect the impact of certainadjustments made to the
provisional opening balance sheet of Massey and certain immaterial corrections
recorded in the first six months of 2012.
This information is intended to be reviewed in conjunction with the company's
filings with the U.S. Securities and Exchange Commission.







Alpha Natural Resources, Inc. and Subsidiaries
Supplemental Sales, Operations and Financial Data
(In Thousands, Except Per Ton and Percentage Data)
(Unaudited)
                     Three Months Ended                    Nine Months Ended
                                                           September 30,
                     September   June 30,     September    2012        2011
                     30, 2012    2012         30, 2011
Tons sold (1):
 Powder River      13,219      10,161       12,556       35,152      36,054
Basin
 Eastern steam     9,849       11,043       12,723       32,368      25,255
 Eastern           4,860       5,595        5,900        15,353      13,883
metallurgical
 Total         27,928      26,799       31,179       82,873      75,192
Average realized
price per ton sold
(2)(9):
 Powder River    $ 12.87     $ 12.96      $ 11.98      $ 12.92     $ 11.94
Basin
 Eastern steam   $ 66.40     $ 65.05      $ 67.07      $ 66.32     $ 66.91
 Eastern         $ 129.96    $ 127.83     $ 168.49     $ 134.15    $ 163.90
metallurgical
 Weighted     $ 52.12     $ 58.41      $ 64.08      $ 56.24     $ 58.46
average total
Coal revenues:
 Powder River    $ 170,160   $ 131,733    $ 150,483    $ 454,334   $ 430,485
Basin
 Eastern steam     653,948     718,416      853,361      2,146,788   1,689,802
 Eastern           631,594     715,132      994,089      2,059,419   2,275,516
metallurgical
 Total coal   $ 1,455,702 $ 1,565,281  $ 1,997,933  $ 4,660,541 $ 4,395,803
revenues
Adjusted cost of
coal sales per ton
(3)(7)(8)(11)(12):
 Powder River    $ 9.40      $ 11.01      $ 10.34      $ 10.39     $ 10.20
Basin
 East (4)        $ 75.93     $ 74.21      $ 76.38      $ 75.34     $ 73.58
 Adjusted
weighted average   $ 44.44     $ 50.25      $ 49.78      $ 47.79     $ 43.19
total
Adjusted weighted
average coal       $ 7.68      $ 8.16       $ 14.30      $ 8.45      $ 15.27
margin per ton (9)
Adjusted weighted
average coal         14.7%       14.0%        22.3%        15.0%       26.1%
margin percentage
(10)
Cost of coal sales
per ton
(3)(7)(11)(12):
 Powder River    $ 9.40      $ 11.01      $ 10.34      $ 10.39     $ 10.20
Basin
 East (4)        $ 75.84     $ 76.78      $ 82.30      $ 76.65     $ 79.56
 Weighted     $ 44.39     $ 51.84      $ 53.32      $ 48.54     $ 46.30
average total
Weighted average
coal margin per    $ 7.73      $ 6.57       $ 10.76      $ 7.70      $ 12.16
ton (5)
Weighted average
coal margin          14.8%       11.2%        16.8%        13.7%       20.8%
percentage (6)
Net cash provided
by (used in)       $ 170,298   $ (31,280)   $ 242,358    $ 305,647   $ 537,232
operating
activities
Capital            $ 87,348    $ 119,470    $ 142,261    $ 332,592   $ 314,929
expenditures
(1) Stated in thousands of short tons.
(2) Coal revenues divided by tons sold. This statistic is stated as free on
board (FOB) at the processing plant.
(3) Cost of coal sales divided by tons sold. The cost of coal sales per ton
only includes costs in our Eastern and Western Coal Operations.
(4) East includes the Company's operations in Central Appalachia (CAPP) and
Northern Appalachia (NAPP).
(5) Weighted average total sales realization per ton less weighted average total
cost of coal sales per ton.
(6) Weighted average coal margin per ton divided by weighted average total sales
realization per ton.
(7) Amounts per ton calculated based on unrounded revenues, cost of coal sales
and tons sold.
(8) For the three and nine months ended September 30, 2012 and September 30,
2011 and the three months ended June 30, 2012, adjusted cost of coal sales per
ton for Eastincludes adjustments to exclude the impact of certain non-cash
charges that resulted from recording Massey's beginning inventory at fair value,
merger-related compensation and severance expenses, merger-related expenses for
contract matters, costs related to UBB and expenses related to the impact of
weather-related property damage loss.
(9) Weighted average total sales realization per ton less adjusted weighted
average total cost of coal sales per ton.
(10) Adjusted weighted average coal margin per ton divided by weighted average
total sales realization per ton.
(11) Adjusted cost of coal sales per ton, adjusted weighted average coal margin
per ton and adjusted weighted average coal margin percentage for our Eastern
Operations are reconciled to their unadjusted amounts as follows:
                     Three months ended                    Nine months ended
                     September   June 30,     September    September   September
                     30, 2012    2012         30, 2011     30, 2012    30, 2011
Adjusted cost of
coal sales per     $ 75.93     $ 74.21      $ 76.38      $ 75.34     $ 73.58
ton-East
Impact of
merger-related       0.01        1.81         3.36         0.72        4.61
expenses
Impact of UBB        (0.10)      0.76         0.57         0.54        0.42
expenses
Impact of changes
in estimated
future costs of      -           -            1.99         -           0.95
water treatment at
closed mines
Impact of
write-off of         -           -            -            0.05        -
weather-related
property damage
Cost of coal sales $ 75.84     $ 76.78      $ 82.30      $ 76.65     $ 79.56
per ton-East
(12) The results for the three and nine months ended September 30, 2011 have
been restated to reflect the impact of certainadjustments made to the
provisional opening balance sheet of Massey and certain immaterial corrections
recorded in the first six months of 2012.
This information is intended to be reviewed in conjunction with the company's
filings with the U.S. Securities and Exchange Commission.







Alpha Natural Resources, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets and Supplemental Liquidity Data
(In Thousands)
(Unaudited)
                                           September 30,   December 31, 2011
                                           2012            (1)
Cash and cash equivalents                $ 342,204        $ 585,882
Trade accounts receivable, net             455,238          641,975
Inventories, net                           457,195          492,022
Short-term marketable securities           207,199          80,342
Prepaid expenses and other current         570,699          747,854
assets
 Total current assets                 2,032,535        2,548,075
Property, equipment and mine development   2,316,640        2,812,069
costs, net
Owned and leased mineral rights and        7,442,438        8,284,328
land, net
Goodwill, net                              755,859          2,281,191
Long-term marketable securities            757              20,489
Other non-current assets                   556,902          647,893
 Total assets                       $ 13,105,131     $ 16,594,045
Current portion of long-term debt        $ 80,605         $ 46,029
Trade accounts payable                     301,266          504,059
Accrued expenses and other current         924,913          1,359,160
liabilities
 Total current liabilities            1,306,784        1,909,248
Long-term debt                             2,912,528        2,922,052
Pension and postretirement medical         1,188,680        1,214,724
benefit obligations
Asset retirement obligations               899,157          743,613
Deferred income taxes                      961,001          1,507,923
Other non-current liabilities              739,211          921,441
 Total liabilities                    8,007,361        9,219,001
Total stockholders' equity                5,097,770        7,375,044
 Total liabilities and              $ 13,105,131     $ 16,594,045
stockholders' equity
                                           As of
                                           September 30,   December 31,
                                           2012            2011
Liquidity ($ in 000's):
 Cash and cash equivalents             $ 342,204        $ 585,882
 Marketable securities with maturities   207,199          80,342
of less than one year
 Marketable securities with maturities   757              20,489
of greater than one year
 Total cash, cash equivalents and     550,160          686,713
marketable securities
 Unused revolving credit and A/R         1,059,400        1,114,700
securitization facilities (2)
 Total liquidity                    $ 1,609,560      $ 1,801,413

(1) During the six months ended June 30, 2012, the Company recorded certain
adjustments to the provisional opening balance sheet of Massey.Accordingly,
the December 31, 2011 balance sheet was adjusted to reflect these changes as
if they were recorded on the acquisition date inaccordance with generally
accepted accounting principles related to acquisition accounting. The Company
also recorded the effects of certain immaterialcorrections which are also
reflected in the December 31, 2011 balance sheet.
(2) The revolving credit facility is subject to a minimum liquidity
requirement of $500 million.
This information is intended to be reviewed in conjunction with the company's
filings with the U.S. Securities and Exchange Commission.







Alpha Natural Resources, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In Thousands)
(Unaudited)
                                               Nine Months Ended September 30,
                                               2012              2011(1)
Operating activities:
 Net income (loss)                         $ (2,309,568)   $   62,384
 Adjustments to reconcile net income
(loss) to net cash provided byoperating
activities:
 Depreciation, depletion, accretion and   878,924           529,825
amortization
 Amortization of acquired intangibles,    (64,480)          (63,563)
net
 Mark-to-market adjustments for           (12,820)          (57,392)
derivatives
 Stock-based compensation                 3,945             55,856
 Employee benefit plans, net              56,033            45,305
 Goodwill impairment                      1,525,332         -
 Asset impairment and restructuring       1,028,610         -
 Loss on early extinguishment of debt     -                 9,768
 Deferred income taxes                    (577,744)         (5,801)
 Other, net                               (16,271)          16,064
 Changes in operating assets and                               -
liabilities:
 Trade accounts receivable, net           186,737           (169,509)
 Inventories, net                         34,826            122,530
 Prepaid expenses and other current       170,642           21,486
assets
 Other non-current assets                 (729)             (23,528)
 Trade accounts payable                   (195,607)         82,222
 Accrued expenses and other current       (342,838)         (93,463)
liabilities
 Pension and postretirement medical       (35,667)          (89,530)
benefit obligations
 Asset retirement obligations             (37,611)          (13,457)
 Other non-current liabilities            13,933            108,035
Net cash provided by operating activities      305,647           537,232
Investing activities:
 Cash paid for acquisition, net of cash      -                 (711,387)
acquired
 Capital expenditures                        (332,592)         (314,929)
 Acquisition of mineral rights under         (53,501)          (65,013)
federal leases
 Purchases of marketable securities          (419,275)         (350,617)
 Sales of marketable securities              307,137           434,349
 Purchase of equity-method investments       (10,100)          (8,000)
 Other, net                                  7,420             (4,672)
Net cash used in investing activities          (500,911)         (1,020,269)
Financing activities:
 Principal repayments of long-term debt      (30,000)          (1,307,834)
 Proceeds from borrowings on long-term       -                 2,100,000
debt
 Principal repayments of capital lease       (3,862)           -
obligations
 Debt issuance costs                         (6,737)           (84,306)
 Excess tax benefit from stock-based         -                 -
awards
 Common stock repurchases                    (6,985)           (206,381)
 Proceeds from exercise of stock options     170               4,079
 Other                                       (1,000)           -
Net cash (used in) provided by financing       (48,414)          505,558
activities
Net increase (decrease) in cash and cash     $ (243,678)     $   22,521
equivalents
Cash and cash equivalents at beginning of    $ 585,882       $   554,772
period
Cash and cash equivalents at end of period   $ 342,204       $   577,293

(1) The results for the nine months ended September 30, 2011 have been
restated to reflect the impact of certainadjustments made to the provisional
opening balance sheet of Massey and certain immaterial corrections in the
first six months of 2012.
This information is intended to be reviewed in conjunction with the company's
filings with the U. S. Securities and Exchange Commission.







Alpha Natural Resources, Inc. and Subsidiaries
Reconciliation of EBITDA and Adjusted EBITDA to Net Income (Loss)
(In Thousands)
(Unaudited)
                  Three Months Ended                      Nine Months Ended
                                                          September 30,
                  September   June 30,       September    2012          2011
                  30, 2012    2012           30, 2011
Net income      $ (46,146)  $ (2,234,656)  $ 62,604     $ (2,309,568) $ 62,384
(loss)
Interest          47,345      46,534         49,148       139,313       94,726
expense
Interest income   (1,328)     (1,324)        (930)        (3,749)       (2,987)
Income tax
expense           (83,182)    (449,798)      (3,225)      (576,765)     2,244
(benefit)
Depreciation,
depletion and     238,894     272,850        249,253      797,516       485,002
amortization
Amortization of
acquired          (11,682)    (17,286)       (80,618)     (64,480)      (63,563)
intangibles,
net
 EBITDA         143,901     (2,383,680)    276,232      (2,017,733)   577,806
Goodwill          -           1,525,332      -            1,525,332     -
impairment
Asset
impairment and    13,676      1,010,878      -            1,028,610     -
restructuring
UBB expenses      (1,539)     12,893         10,636       25,697        16,417
Change in fair
value and
settlement of     28,581      (8,027)        (55,168)     (15,385)      (53,956)
derivative
instruments
Merger related    (6,101)     29,224         102,532      26,488        372,187
expenses
Loss on early
extinguishment    -           -              5,212        -             9,768
of debt
Changes in
estimated
future costs of   -           -              37,137       -             37,137
water treatment
at closed mines
Impact of
write-off of      -           -              -            2,300         -
weather-related
property damage
 Adjusted     $ 178,518   $ 186,620      $ 376,581    $ 575,309     $ 959,359
EBITDA



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







Alpha Natural Resources, Inc. and Subsidiaries
Reconciliation of Adjusted Net Income (Loss) to Net Income (Loss)
(In Thousands Except Shares and Per Share Data)
(Unaudited)
                  Three Months Ended                          Nine Months Ended
                                                              September 30,
                  September     June 30,       September      2012          2011
                  30, 2012      2012           30, 2011
Net income      $ (46,146)    $ (2,234,656)  $ 62,604       $ (2,309,568) $ 62,384
(loss)
Goodwill          -             1,525,332      -              1,525,332     -
impairment
Asset
impairment and    13,676        1,010,878      -              1,028,610     -
restructuring
UBB expenses      (1,539)       12,893         10,636         25,697        16,417
Amortization of
acquired          (11,682)      (17,286)       (80,618)       (64,480)      (63,563)
intangibles,
net
Change in fair
value and
settlement of     28,581        (8,027)        (55,168)       (15,385)      (53,956)
derivative
instruments
Merger related    (6,101)       29,224         102,532        26,488        372,187
expenses
Impact of
write-off of      -             -              -              2,300         -
weather-related
property damage
Loss on early
extinguishment    -             -              5,212          -             9,768
of debt
Changes in
estimated
future costs of   -             -              37,137         -             37,137
water treatment
at closed mines
Estimated
income tax        (10,401)      (405,407)      (6,202)        (398,519)     (78,636)
effect of above
adjustments
Discrete tax
charge from
valuation         (2,048)       21,300         -              20,706        -
allowance
adjustment
Discrete tax
charge from
state statutory
tax rate          -             (6,397)        -              (6,397)       -
change, net of
federal tax
impact
Discrete tax
charge from
non-deductible    -             -              -              -             5,961
transaction
costs
 Adjusted net $ (35,660)    $ (72,146)     $ 76,133       $ (165,216)   $ 307,699
income (loss)
 Weighted
average           220,417,448   220,295,415    226,281,985    220,167,198   168,833,010
shares--diluted
 Adjusted
diluted
earnings (loss) $ (0.16)      $ (0.33)       $ 0.34         $ (0.75)      $ 1.82
per common
share

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





SOURCE Alpha Natural Resources, Inc.

Website: http://www.alphanr.com
Contact: Investors, Todd Allen, CFA, Vice President, Investor Relations,
+1-276-739-5328, tallen@alphanr.com or Media, Ted Pile, Vice President,
Corporate Communications, +1-276-623-2920, tpile@alphanr.com
 
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