Regions Southwest Virginia

Alpha Natural Resources reports fourth-quarter loss

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Bristol-based Alpha Natural Resources Inc. reported a four-quarter net loss of $733 million, or $3.34 per diluted share, after recording a $745 million goodwill impairment charge.

By comparison, the coal company reported net income of $10.8 million, or 9 cents per diluted share, in the fourth quarter of 2010. 

Excluding goodwill impairment and other adjustments, the fourth quarter 2011 adjusted loss from continuing operations was $16 million, or 7 cents per diluted share.

The company recorded a $745 million goodwill impairment charge in the fourth quarter of 2011. During the quarter, domestic and international coal markets declined as a result of slowing economic activity, fuel switching for electricity generation because of low-priced natural gas, and recently U.S. environmental regulations that discourage the use of coal.

As a result of these changes, the implied fair value of goodwill at several reporting units was determined to be less than its carrying value, necessitating the impairment charge.  This non-cash charge will not impact the company’s ongoing business operations.

Earnings before interest, taxes, depreciation, depletion and amortization (EBITDA) from continuing operations for the fourth quarter 2011 was a loss of $493.7 million, compared to positive EBITDA of $154.7 million in the year ago period. 

Excluding goodwill impairment and other adjustments, the fourth quarter Adjusted EBITDA from continuing operations was $260.8 million. 

The company’s full year 2011 revenue and adjusted EBITDA from continuing operations were $7.1 billion and $1.21 billion, up 81 percent and 50 percent, respectively, from 2010.

 


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